Tokenizing Public Infrastructure Pt 3: Human Needs and Universal Basic Assets
Innovation Through Creative Cryptoeconomic Recombination
|Amentum Capital||Dec 26, 2019|
With both Parts 1 and Part 2 out of the way, I’ll finally boil down and finish up the final part of this series.
Part 1 focused on the general concept of tokenizing the value in public infrastructure projects and why the concept is valuable and worth exploring as long-term.
Part 2 went further to analyze the basic cryptoeconomic primitives and concepts that could be used to expand on those ideas once they’re more mature based on currently available technology.
This final essay will discuss why it’s important we get there, and what that may eventually lead into if we can construct and deploy the mechanisms I’ve described.
Distilling It All Down
Previously we explored what value can be created for local citizens if they can become stakeholders in local public infrastructure projects through direct investment. These investments would be coupled with long-term incentives (like subsidized toll access, and other novel programmatic benefits that could be incorporated in tokenized economies) to create a sustainable ecosystem that benefits both the stakeholders, and the local denizens that will eventually utilize and support those plant assets in their communities.
That of course leads us to what could come next when your local government and services are running off of public chain ledgers like Ethereum; utilizing the general extendability and standardized primitives like discount-tokens, token-curated registries, proof-of-location, digital identity and more to do everything from incentivize commerce, to managing city-planning and determining the cities’/states overall futures. The possibilities are endless, and the potential for experimentation is just as abundant.
These ideas are sometimes utopian sounding, erring on the side of techno-futurism more than something realistic — and to some would appear like nerdy sci-fi concepts that sound better on paper and Twitter discourse than being irresponsibly deployed into the real-world. But, we’re maturing as an industry, and many are sobering up to what is a foolish utopian idealists fever dream, and what would actually be a decent iterative improvement capable of being adapted by local economies. Ideas have moved from just technical feasibility, and have now begun considering the social scalability of their ventures and in what ways could co-opting the assistance of regulators and hurdling the major barrier of education that stands in the way of real change and improvement .
Before fully understanding or considering deploying concepts and experiments like these, it’s important to set the stage and understand the complexities of human inequality and why we’re ultimately in this position.
Here’s a nice tweet that sets that stage…
When seeking to create mechanisms that are designed to improve the social standard, you have to understand the incentives and motivations of those that will serve as the majority of your eventual adoptees. They have challenges that are unique, and we’d be irresponsible investors if we thought we could invest confidently in these new technologies without first understanding who we are ultimately aiming to help the most.
Awareness of Strife & Inequality
In constructing these mechanisms, we first have to accept a few things. When seeking to improve the lives of humans, it requires a deep understanding of societal incentives, and the social scalability/feasibility of what we aim to deploy under existing socio-natural environments.
We are going to be deploying these mechanisms into environments riddled with ulterior motives, pushed by the actions of self-interested persons who are seeking to garner greater output, while utilizing far less resource-related inputs (time/labor/materials/etc).
The presence of blockchain-based incentives that utilize game theory and cryptographically assured incentives can create a sustainable market of participants (crypto-economics in a nutshell), allowing us to eradicate many fundamental problems that cause poverty by lowering the cost of last mile interactions, and incentivizing others to be honest participants in those systems [AI Matters].
We already have online platforms that are employing a slew of products utilizing algorithmic designs, and newer technologies like artificial intelligence and big data to drive policy decisions and strategy [AI Matters]. But, what about the wetware decision makers, the people? Fully understanding the scope of what you are about embark on project wise is never complete until you’ve ensured you’ve considered the human elements, too.
Everyone has personal struggles that play an important role in how they make decisions everyday. Each and every person you meet has personal and interpersonal struggles, too. In a world that stigmatizes mental-illnesses, we often don’t stop to ponder its abundance and considering the possibility of that either it’s a social epidemic, or maybe it was always the norm?
Today you don’t need bad genes or a rotten childhood to go crazy; living in what journalist Sebastian Junger called “an overfed, malnourished, sedentary, sunlight-deficient, sleep-deprived, competitive, inequitable, and socially-isolating environment” may be enough. Being human may be enough. — Elitsa Dermendzhiyska
We’re in a world where we are connected more than ever online; but many still have to struggle with the pain of being physically lonely in new ways in their ever-connected realities. These feedback loops and pangs of loneliness are forcing us to seek companionship, which creates opportunities for group cooperation and protection [Quanta Magazine]. Sometimes those feedback loops present themselves in the form of — what would appear to most — as combative and hateful groups, as many struggle to find a new narrative and community that will make them feel whole in this world of connected, but often socially disconnected, attention seekers.
This hyper connected, disconnectedness has another name, “hypocognition”.
“To recognize hypocognition requires a departure from the reassuring familiarity of our own culture to gain a grasp of the unknown and the missing”. — Scientific American
Hypocognition derives from the ever-present mental strife we all face everyday. Too comfortable in what makes us feel…well comfortable, to ever bothering to a moment to be cognitive of what we could be, or are, missing. Not being aware of what could bolster us and support us sustainably, mostly because — well we simply aren’t aware there’s even a looming problem at all.
They go on further to say:
Perhaps herein lies the greatest peril of hypocognition. It is facing a concept that captures something we cannot fathom, an exotic emotion we cannot grasp, a certain idea that arouses in others fervor and enthusiasm but strikes us as nothing but foreign and bizarre, a certain principle that must, against our own reason, be unreasonable. — Scientific American
So, before you can even begin to understand how to help people, we have to be aware that most — due to the inherent nature’s of people — will be partisan in their inner wants and needs (personal & political), simply because that’s all we can truly be certain (or uncertain) of.You cannot ignore the presence of these naturally and socially derived cognitive inequalities, because the most dangerous and economically deficient minority will always persist, and not catering to these inequalities would be dangerous long-term when left ignored [Quilette].
Since there will continue to be presence of individuals with mental and cognitive limitations and duress (when compared to the majority), there will continue to be individuals who will constantly feel “stuck” due to their limits as societal outliers on the long-tail of genetically granted misfortune. This is why we will continue to be faced with the lingering moral philosophy on what are socially and morally acceptable levels of selfishness as the twenty percent is embattled with the other eighty.
Financial Inequality & Pecuniary Emulation
The very concept of a capitalist nation will eventually breed inequality. That’s unfortunate yes, but that’s simply the ill-reality of statistics — especially if the above factors we discussed hold true.
As a nation we’ve continued to grow this narrative in the news and media since The Great Recession [The Nation]. No longer do we just discuss economic growth in terms of hard numbers, but also their impact on real people, and more recently, the environment (but it would seem many missed that memo).
When you say you want to create something that is accessible to the poor, and the wealthy, are you really? Did you know that poor people and rich people actually experience buying things differently emotionally? And, that a poor person will often derive the same amount of happiness, on average, buying a material item, to feel for a moment a part of something greater that they aspire to (a concept known as pecuniary emulation, if you’re unfamiliar); but, a rich person would often have to pay for an experience to actually obtain the same level of happiness and connectedness of being a part of something greater — chasing the intrigue of novel discovery to feel accomplished in lieu of material gain (that they’ve become too accustomed to). [BPS]
People want the things they can’t have — things that make them feel like someone they are not, or did not think they could be (the hypocognition at place once more). The natural human drive to belong in tribes looks and feels different depending on where you come from and your background.
What we learn is we can’t just stop at emulating the basic foundational needs for a person to succeed, and allowing people more means to just appear wealthy, but also build real wealth and keep those barriers to entry low to feel socially connected given our unique mental positions.
Humans innately will seek social community and bonds, and for much of humanity, these are pivotal functions in experiencing and truly delineating the human condition. It is however the fault of the labor market that many disregard community bonds and social exchange, to instead harden racial and cultural niches in order to be more competitive in the labor work force.
Even once you have managed to make your way out of one socioeconomic status to another, the anxiety of your upward mobility can often manifests stress, too. The very act of surviving and thriving can pain you as well — because often times garnering success means sacrifice, and eventually you have to recapture that sacrifice.
This is an obstacle a person that comes from wealth often gets to avoid, but many fail to realize the struggle of the struggle, AND the struggle of becoming a success, can often be just as hard. A double tax-rate for your socioeconomic/mental condition — especially when you spend your life working harder than others, doing jobs you only choose to do for the money, to get the life you only think will bring you satisfaction.
I’ll close this section with another good tweet:
Something to think about.
Dynamic Human Threat Models
But, who is our opposition? Who stands in the way of making this harsh societal reality and ushering in a replacement system, something at the very least marginally better? Well, you’ll be not surprised to learn our greatest threats are ourselves.
They come politically in the form of partisan group think that disallows and ignores the plea for freedom of expression, or potentially educated feedback from the “opposition”. These threats are derived from fear of the unknown, and only believe in our known-truths instead of seeking to upgrade our mental models for the present-day circumstances. That’s taxing, and remember some are already being double-taxed, they’ll be even harder to reach — and sometimes we’re already overly exhausted mentally from threats that aren’t even really there.
But, who has the energy, resources, and drive to oppose it? Most would say, “Not me.”
Nothing is more scary, or more abundant than, the threats that humans impose on ourselves everyday. These inherent humanistic threats models are the scariest, especially when the malicious party can do things like profit off of your increased lack of productivity [JWWeatherman], forcing you into other profitable models designed for the lower-income wealth earners, like fast-food and addictive sugary energy drinks to make your output (tragically, poetically) lesser overtime (diabetes and heart disease).
Avoidance of political dictatorship, further fueled by economic condition, will need to be an active effort, and will continue as a threat model we are forced to endure everyday. Governance (especially when coupled with immutable databases and systems) could go awry if not maintained appropriately (See: The Crypto Governance Manifesto)
Using Society to Rebuild Society
We’re caught in a constant tug-of-war happening between the financially rich and poor, and the mentally well and unwell; both caught in up in their own mental realities to truly engage and consider each-other effectively without some incentive. The said, the intellectual assets and the physical assets of a localized populace are some of its greatest forms of wealth, and they are utilized and built by both the wealthy and the poor. For instance: though the wealthy subsidize the bulk of the tax-funding to build public infrastructure, it’s still the physical labor of the common that brings it into existence.
It’s easier to extract economic activity when you have a sound foundation or a stable economic base to build on; and if that stable base is both programmatically extendable and flexible, we start to realize what options we actually have that will work, if and only if we work together of course.
Public Infrastructure as a Basic Asset
Regardless of financial and social class, humans that have access to public infrastructure and assets can then self-actualize in order to gain more economic efficiency. The greater access to these sorts of assets, the more productive a populace can be (think of how much economic activity is loss when the NY Transit has delays or goes offline, and how much would be gained if it was more robust and efficient).
The tokenization and digitization of wealth using crypto isn’t going anywhere, we’ve only just begun to scratch the surface on what can be done. But universally accessible and investible basic assets could very well be the foundation that we all need to construct the egalitarian and equitable society we all swear is our motive when shilling this technology, sometimes to the point of ad nauseum. It may often appear we’ve lost our way, but really it’s just the endgame has been muddled or lost in the noise; but know that it’s there and going nowhere because the potential upside for all is just too great to pass up.
The Public Becomes the New Authority
If we can imagine only a fraction of our enlightened ideals, we’ll be that much better off as a global community. If we can realize the vision of changing personal data to work for consumers, rather than against them as a form of labor, we could improve many peoples economic circumstance — an increasingly important task as automation takes a foothold on our ability to create output ourselves.
If we can reimagine the concepts of property; perhaps with new, radical ideas that might at first seem foreign and new, we just may take back control. We believe sound money can be made with software; that Web3 is about owning your data, getting paid for it, because we’ve realize just how valuable it is; sticking to the narrative that financial software should be open, and free.
When we can do all that, while building, and dreaming of how to better help each-other while considering why we even need help in the first place, we just might become the new authority that has enraptured and encapsulated us this whole time — we just weren’t aware who we were and what was happening.
We’re very close to wrestling back our freedom, and more equally distributing opportunity for those that want to make our collective condition, better.
Resource and References
Voluntary Disclosure and Personalized Pricing [Harvard]: https://scholar.harvard.edu/files/vasserman/files/alv_slides.pdf
Mechanism Design for Social Good: https://arxiv.org/pdf/1810.09832v1.pdf
Normal Does Not Exist: https://medium.com/@Ellie_/the-myth-of-normal-babc5c536513
New Evidence For the Necessity of Loneliness [Quanta Magazine]: https://www.quantamagazine.org/new-evidence-for-the-necessity-of-loneliness-20160510/
Unknown Unknowns: The Problem of Hypercognition [Scientific American]: https://blogs.scientificamerican.com/observations/unknown-unknowns-the-problem-of-hypocognition/?sf195704926=1
The Dangers of Ignoring Cognitive Inequality [Quillette]: https://quillette.com/2018/08/25/the-dangers-of-ignoring-cognitive-inequality/
Foundations for Agile Governance: https://www.researchgate.net/publication/299578743_Foundations_for_an_Agile_Governance_Manifesto_a_bridge_for_business_agility
The Rise of the Inequality Industry [The Nation]: https://www.thenation.com/article/the-inequality-industry/
The Experiential Advantage is Not Universal: https://digest.bps.org.uk/2018/09/04/the-experiential-advantage-is-not-universal-the-less-well-off-get-equal-or-more-happiness-from-buying-things/