Crisis & Crypto: Bacon Coins, Pizza DAOs
Breakdowns Build Blockchains
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Hi everyone 🥁!
Most forget: crypto is a crisis technology.
Remember: Crypto’s cradle was the financial collapse (2008). In Ukraine, bitcoin is now a war effort.
Breakdowns build blockchains.
With Biden’s “Go-Big-On Web 3” Executive Order, do you know where we stand on big problems and solution frontiers in blockchain? 🤔
Good news: I hit up Ethereum’s Biggest Party to get you the beat.
Drum roll please 🎶…
As always, scroll to bottom for amazing jobs.
WTF: NFT, DAO, CBDC
Blockchain innovation is crisis response. As I see it:
NFTs are creator class response to failed internet economics 👨🎨
DAOs are post-Industrial disdain for org charts ⚙️🤖⚙️
Bitcoin is a financial protest— against banks 🏦
Ethereum is a broader rejection—of lawyers, notaries, contracts 🧑💼
Two illustrations today: 1) the hegemony of the U.S. dollar (vs. Bacon Coins 🥓 ) and 2) the attractiveness of modern orgs (vs. PIZZA DAOs 🍕).
Crisis 1: The USD and Bacon Coin Beauty Pageant
So: at ETHDenver I went to a party DJ’ed by Tiësto. The bouncer refused dollars, but accepted Bacon Coin. A rejection of “In God We Trust” for “Bring Home the Bacon” (yes the literal motto of the $1.4m market cap coin) is telling.
The U.S. dollar has worn the crown of world’s favorite (i.e. reserve) currency for a while now (since 1944 / Bretton Woods).
Favoritism, of course, is a consensus— not a contract ( 🥰🚫✍️). There are now ~180 fiat (gov-backed) currencies in the world, but more astoundingly there are 12k+ crypto currencies. 87 countries (w/ 90 percent of global GDP) are exploring a Central Bank Digital Currency (CBDC)— of which 14 countries, including China, are near launch. 📲🪙
While I call this a “Beauty Pageant," The Atlantic Council more appropriately describes this as a “Race for the Future of Money:”
Here’s what you need to know: a US CBDC (i.e. Fed-backed crypto) is coming, very soon. I met at ETHDenver the Chief Innovation Officer of the Federal Reserve (@Sunayna - she’s awesome). It will surprise you—as it surprised me—that not only is the Fed’s CIO “into” crypto, she got into crypto way, way before any of us (in 2008!). She was also way ahead of the President, publishing the Fed’s pathway to a coin earlier in January.
In my (and only my) view: we are about to get the digital dollar (with major moves within 12 months). Evidence: 1) the Executive Order, 2) Congress’ 35+ bills on crypto/blockchain in 2021, 3) MOST relevantly, the hiring of Sunayna.
Breakdowns build blockchains: with the US dollar on trial, it’s only a matter of time. ⏳
Crisis #2: DAOs and the Great Resignation
I met a molecular biologist in the Mile High. “You wouldn’t believe how hard it is to get a grant from the NIH,” he said. And it’s true: even though the NIH backs $32b in research a year, winning grants is like winning GRAMMYs (blackbox orgs, blackbox decisions). “So, yeah: I am 100% going to submit for research funding from a DAO.” 🧬🔬⚗️🥼🧪🧫
Good news for scientists: DeSci “DecentralizedScience” has arrived, and it’s well profiled already by a16z.
Versus an NIH (centralized decisions), DAOs (decentralized decisions) reject one of the most enduring legacies of the Industrial Revolution: the org chart.
Basically DAOs reject this:
and instead DAOs embrace this:
The accelerant crisis for DAOs is, surely, the “Great Resignation,” or the “Big Quit.” According to the Economic Policy Institute:
In Denver, I was talking to a founder of one of the world’s first big DAOs, appropriately called “The DAO.” When he founded the DAO in ~2016, there weren’t many (maybe 10). Today, there are ~4K DAOs with ~$8b in treasuries.
For perspective, the $8b collective “purse” / treasuries of DAOs is near equivalent to the amount of cash on hand that Coca Cola has.
It is no mistake a pinnacle talent crisis coincides with paradigm organizational re-imagination. There are record label DAOs (e.g. Good Karma Records), science-funding DAOs, and yes (my favorite) PIZZA DAOs (which recently threw a $300K worldwide pizza party).
The point: when people ask me “what are DAOs?” I return the question, and ask “what are organizations?”
As I see it, orgs are basically 1) Decisions and 2) Protocols for making them, or rules. Typical organizations concentrate decision rights in bosses and boards. DAOs distribute decision rights equitably based on many "voting mechanisms". 🗳
Some DAOs make decisions based on weighted algorithms, weighted on the basis for example of “contribution.” In a record label DAO, if a member is a lawyer they might gain (lose) influence based on how many contracts they write. Similarly, a graphic design member might gain (lose) influence based on how many album covers or concert posters they create for the roster.
DAOs put on trial long-held assumptions on the idea that we need C-Suites and Management as decision making vehicles. Soon— but not very soon— we may see org charts be put on trial broadly, just as we are already seeing the dollar be put on trial narrowly.
Crypto is punk rock, not classical music
Many of you know I come from a touring music background—and that my band launched one of the first music stores selling songs for Bitcoin in 2013. 🎸
Now a decade in the space—going to dev meetups in Berlin in ‘15, bitcoin mines in Beijing in ‘18, running first-of-kind trials in blockchain—I can say this:
As institutional money flows into crypto at breakneck speed ($9.3b 2021 +36%YoY), it can start to feel like the innovation culture is more like classical music than what it originally was: punk rock. 🎻🚫🎸
Don’t forget: this is a protest technology. L1 or L3, blockchain is code for crisis.
Keep “crisis” top of mind when you are thinking crypto. Breakdowns build blockchains.
👷♂️👷👷♀️💻💻💻
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