Blockchains allow for the immutable encoding of Capitalism.

We are already seeing a vast number of "traditional" finance applications being written on the blockchain. Applications that reinforce the Capitalist mode of production, in a way that is impossible to ever get rid of.

What are these "applications"?

DAOs (Decentralised Autonomous Organisations)

DAOs are "smart contracts" (code that exists on the blockchain) that encode an organisation wherein there are voting/participation mechanisms. Members can make proposals to execute some series of transactions, members vote, (upon the proposal passing) the transactions get executed.

Why is this bad?

Two reasons.

The first reason: The sheer majority of DAOs that have been created are traditional private ownership organisations. Your power in the organisation is directly proportional to how wealthy you are. Yes, any run-of-the-mill person can hop on and become a member, but this does not differ from traditional publicly-traded corporations in any way whatsoever. I can become a part-owner of Google if I want, but because I am not rich, I will always be out-powered by the mega-rich. Don't let anyone trick you into thinking these DAOs "help the little guy" by providing lower barriers to entry, more transparency, etc. While they do provide more transparency, I would argue that makes little difference to the fact that these organisations in no way empower anyone other than the rich.

The second reason: While DAOs provide more transparency in regards to what the DAO is doing, it provides the polar opposite regarding who is doing it.

How do I exile a corrupt businessman when their only identity is ihateminorities.eth?

Gone are the days when we were able to hold individual rulers accountable for their crimes against humanity.

Lending and Borrowing

This is probably one of the only areas that I see a non-negligible benefit for ordinary people (kind of). Decentralised lending and borrowing protocols allow you to freely lend your money in a way that doesn't allow you to get ripped off by a big bank. For example, I can put my USD into app.aave.com and get far more interest than any bank would ever give me.

Obviously this only matters if I'm privileged enough to actually be able to save up USD.

It obviously means nothing for most people.

Perpetual Swaps

Gambling for rich people. A good way to lose your life savings if you aren't already buffered with a lot of wealth.

Synthetic assets

Ways to "invest" in to stocks/cryptos/etc without actually owning it. Not much to say here.

Prediction markets

Decentralised betting platforms are still betting platforms. They still allow the average joe to get addicted and lose all their money.

Remember, once the majority of the financial world switches to using blockchain technologies, it will never be possible to get rid of it. Blockchains are "immutable".

Is there any reason why I should not be scared of this?

Provide me with any way you could stop, get rid of, or end this immutable & permanent hardcoding of Capitalism, and I will explain why it is impossible.

  • OttoThePenHolder [he/him]
    ·
    3 years ago

    Like any network, blockchains are only valuable to people if there’s a mass consensus that they are. If no one wants to trade BTC or run miners, then it no longer has any value.

    The difference here is, on smart contract blockchains, there are financial protocols that actually do something beyond just sending around BTC.

    You are correct in saying that if everybody decides they want to start using Dogecoin, or anything else in the world that meets criteria, as a store of value instead of BTC, then BTC would become worthless. However ETH, on the other hand, is a token for participation in a network that actually does stuff. It does stuff beyond just transferring/trading. It allows our entire financial system to become immutable and anonymous (well, pseudonymous, but practically anonymous).

    Look at myspace these days or any other network that has waned in popularity. Because other networks came along that were deemed as "better". That doesn't mean the fundamental idea of "social media" stopped being widely adopted.

    There’s a bunch of pumping of BTC and other cryptos recently, but the curve will shift into decline at some point. I am not referring to the prices of individual cryptocurrencies. I would argue that this is irrelevant.

    There’s a bunch of pumping of BTC and other cryptos recently, but the curve will shift into decline at some point. The reality of the global markets today, is that there’s lots of cash/value that doesn’t know where to go. The ratcheting of global inequality and the concentration of wealth is driving all kinds of value-store assets to ridiculous levels.

    I agree. As it stands today, cryptocurrencies are mostly used as gambles.

    Blockchain is just a cryptographically sound way to launder wealth into a value-store. I'm sorry, but blockchains have way more use-cases than that. If you replaced "Blockchain" with just "Bitcoin", then you would have more ground.

    If you want to learn more about why I am saying this stuff, a good primer I just found is here: https://ethereum.org/en/defi/