Crypto as a Public Good: Liberty

You may remember Vitalik's EthCC address, in which he discussed the need for a broader Ethereum ecosystem that transcends just finance. That DeFi is great, but we can do DeFi, and other stuff too. In line with the overtones of his talk, he references the article Positive Sum Worlds: Remaking Public Goods by Toby Shorin, Laura Lotti, and Sam Hart:

 "Colloquially, these market primitives are sometimes described as 'public infrastructure,' but if blockchains serve a 'public' today, it is primarily one of decentralized finance. Fundamentally, these tokenholders share only one common object of concern: price."
 Now, that said, that's really confused me right because to me like the purpose of these projects is not price - the purpose of these projects is utility. Price is nice, but price should only ever come as a consequence of utility.

So what utility are these projects providing? In general terms, many crypto projects fulfill several of the same needs: a need for liberty, a need for privacy, a need for censorship resistance. There are several specific benefits to individual projects that cannot be abstracted across the genre, but practically all crypto and Web3 projects aim to fulfill the public needs for freedom, privacy, and speech. In this article, we examine some of the ways in which the services of the past are failing to provide, or even actively suppressing freedom, and how crypto projects can guarantee it.

The public shall have liberty and privacy, or they shall make their own

Crypto projects have a tendency to enforce unrestricted access and use, that services should be available to all, without requiring permission from any central authority. This is in stark contrast to many of the existing institutions of Web2 and traditional finance: banks have demonstrated that they are willing and able to restrict their users in whatever ways they want, big tech companies have no problem holding your account hostage (warning: Facebook link) until they receive a copy of your government issued ID.

Seriously, ask around. Practically everyone in the crypto space has horror stories of dealing with banks and/or big tech, and even more people outside crypto do as well. These industries have effectively created (or resurrected) the need for liberty in social and financial activity, though it is not always recognised as such.

People are fed up with these giants siphoning their agency.

Big tech companies (and governments, which aren't always that different) have long been collecting data on... just about everything, and this collection of data has far reaching implications. It is, in many cases, an avenue for profit, but it has more direct consequences on human behavior as well.

Jeremy Bentham realized more than 200 years ago, with the "panopticon"—his hypothetical prison, that the possibility of observation can be used to exert practically as much control as the observation itself. And this possibility is manifested—very literally—in the mass collection of data that is perpetuated by big tech companies and governments, today.

To exist and move with any degree of freedom on the internet, your data must be surrendered, you must accept cookies, privacy policies, terms of service. And this universal collection of data results in a sort of digital panopticon, on a much grander scale than that of any single prison, which subsumes the entirety of the Web2 internet. The possibility of observation will exist in this medium as long as your data continues to be gathered, and so too will the coercive nature of the observation. The entirety of Web2 acts as a sort of machine that exerts control over its users, because your data is vulnerable to human inspection any time it leaves your control, and there's nothing but corporate policies getting in the way of a government official doing the inspection.

In some ways, the failures of Web2 can be used as inspiration for the crypto tech of Web3, and the problems most in need of solving. Privacy and liberty are inextricably linked, and gains in one reflect gains in the other. The Web3 ecosystem is much less mature than that of Web2, and the experience is not without issues, but it does provide freedom. This is an area where Web2 will be completely unable to outcompete Web3, because Web2 relies on the collection of data to function, and cannot meet the public need for privacy and freedom.

The public has judged Web2, and found it wanting. This is practically a tautology, because Web3 is borne of communities unsatisfied with the Web2 landscape that have started building something better. The public judges Web2, the public builds something better. Has already built, in some cases.
 With Vitalik's call for a broader Ethereum ecosystem, more crypto social projects, and Ethereum single sign-on, the crypto landscape is poised for some serious development. L2s are launching, projects are being announced, and all of them share a thread tying them to the promise of an internet of liberty.

Footnotes

Want a more detailed look at how crypto tech enables individual autonomy and self sovereignty? Check out this dedicated post.

How about an argument that privacy is a prerequisite for not only autonomy, but societal progress as well? Please enjoy The Case for Pseudonymity, by Sue Donim.