Bitcoin gave the world a template for decentralised coordination and cryptographically-provable scarcity, control and provenance. Ethereum contributed the template for a cryptographically-trusted, decentralised world-computer.
Combining these properties created something new: programmable value, or colloquially crypto. Bits of software (even able to take direct actions in the physical world) can transact with one another, directly. The atomic units of this new programmable value are called smart contracts.
Crypto unbundles software. Today we pay companies to use the software they create, because we trust companies with our money. When software can trust can trust software, entirely new value-chains will be formed that don’t neatly align to the boundaries of traditional companies.
Crypto is eating software; the result will eat the rest of the physical world.
By unbundling software (decomposing software into its constituent modules), and making money programmable (giving developers trust that they will be rewarded for the value they create), crypto will unlock a global Cambrian explosion of human creativity in software, and radically alter our ideas what a corporation is.
Value is what we exchange for work, to have things done in the world, or receive the results of another’s work. Dollars and gold store value, but they are dumb, static, and lifeless. Your USD balance, sitting on a bank server, moves instantly, but are lifeless numbers in a database, manipulated unilaterally at the whim of a bank, without trace. Love it or hate it, monetary policy is also a similarly unilateral “marking up” of numbers in databases.
With crypto, each token can have a sovereign programmatic mind. The open-source nature of smart contracts and the security of cryptography ensures that code will only do what it says it will, and only for whomever possesses the keys. With crypto, monetary policy is shaped through open-source development and evolutionary pressures.
Where Paul Krugman thought the internet would be no more impactful than the the fax machine, it’s now obvious that the internet is bigger than the fax machine. The fax (where it still exists) is a feature inside the internet.
Old dollars were just numbers moved by an unconscious internet. The internet is billions of times faster than shipping disks by Interstate, of course, but bandwidth and latency are the only real differences between the two; lifeless bit-carrying, both.
Crypto is living, thinking, energy and information, as unconstrained as the internet itself.
It will shrink and grow into systems bigger and smaller than we’ve yet imagined.
Eventually, it will subsume the internet.
Resistance is futile.