When you do not give everything today, there might not be a tomorrow. - xh3b4sd
A thought I want to lead with this week is a seemingly lucky accident unfolding in front of our eyes. Based on rough estimates, there have been about 8,000 generations of humans wandering this planet for the past 200,000 years. During the past 10 years we have seen two very different technologies emerge in meaningful ways. One of them are blockchain networks. The other is machine learning. As of today it may not appear like blockchain networks and machine learning have much to do with one another. I think we are going to need both technologies, at the same time, in order to preserve the human race long term. The reason for this are all the coordination problems arising from competent agents that are able to operate autonomously within free markets. Following along those lines of thinking we are opening up a huge can of worms by making several assumptions. Let us assume we need free markets. We need them because they brought us the civilized world that many enjoy today. Let us assume machine learning leads to competent autonomous agents. It does because machine learning models are mere open source commodities that anyone can train and run. Let us assume blockchain networks solve for coordination within adversarial environments. They do because blockchain networks secure hundreds of billions in economic security already, all the while the smartest minds on the planet try to exploit them every single day. Moving forward, competent autonomous agents are unlikely to be regulated away by the rule of law. Not only is the rule of law an insufficient tool to address this particular problem, but also, removing machine learning from your toolbox represents the lack of competitive advantage that no nation state can do without anymore on the geopolitical stage. We cannot do without machine learning anymore, which means that we have to address the problem of living with it. This is all so fascinating to me because the solution for living inside a machine learning enabled world turns out to be the very coordination technology that, by accident, happens to be developed at the exact time that we need it the most. We have been here for 200,000 years and while we were stumbling into the most powerful technology after the atomic bomb, it just so happens that we are also stumbling into its required counterpart at the very same time. We get to ask now how this kind of confluence is even possible to occur. The word confluence is defined as the junction of two rivers, especially rivers of approximately equal width. And we are left here wondering how the two most significant rivers of our lifetime can possibly merge into something that gives us a fighting chance on our evolutionary trail. The human mind is quite bad at comprehending large quantities, but, the magnitude of the paradigm shifts unfolding during our lifetime is as monumental as it can be. The value proposition that blockchain networks have to offer for the human race are so vast, we cannot put a price tag on it. And we are only at the beginning of it all. Slowly, and then all at once. Talk about magic.
Back to some boring numbers. Total crypto marketcap hit the 2 trillion mark again since we lost it back around April 2022. On Ethereum we saw a new high of over 20 million USD generated in fees within a single day. Blockchains sell blocks. ETH/USD broke up into the resistance range between 1700 and 3300. It will be interesting to observe whether it can manage to stay there. On a global scale it looks like the 4 year liquidity cycle is in full effect. Just like clock work. On a cautionary note, Jeff Bezos sold 4 billion USD in Amazon shares this past week. Those kind of things matter eventually if markets get into more overheated territory.
I noticed a couple of days ago, that an interesting form of governance attack has happened recently. There was a proposal up for voting in the ApeDAO community. My rough understanding is that the vote decided about a particular technology to be used by the ApeDAO community. Polygon appeared to have bought a bunch of APE tokens in order to vote for the very technology that Polygon itself benefits from the most. This was not a vote of merit. This was a vote of self interest. A clear cutthroat executive decision. It's kind of funny, but I came to wonder how immature our governance mechanisms still are, to allow short term incentivized actors to move the needle like that. It does not take much to imagine how some form of time weighted governance could potentially mitigate such governance attacks to happen in the first place. We know that whale games are being played all the time. So I am wondering why nobody has come up with a better solution for this yet. I am sure that time weighted governance brings its own problems with it. In any event I would be curious to see more studies and experiments in this field.
Reporting from the Farcaster front again. It looks like mints are the new likes in consumer crypto. We can frame a mint as a superlike that may signal stronger preference and creator support. I am not fully sold that NFT mints solve all of our problems just yet. I think that especially monetization will always work in powerlaw distributions, and NFTs will not change that. That means, you are not likely to earn more money only because you are using NFTs. That is not the point. The point of NFTs will rather be ownership, reputation and loyalty in the digital age. Those aspects provide communities with a vast design space that is still mostly undiscovered. If we believe that the world economy will operate on blockchain networks in the future, which we do, then NFTs are cookies on steroids, and you will like it.