A Crypto Utopia In Our Future

On fighting skepticism by trying to envision a possible utopian crypto future; or how I learned to stop worrying and love the hodl!

There's this annoying trend I've noticed about myself. When you're of a particular bent of mind, you get used to looking at the world analytically. The upside is, it works great for anything that already exists, which explains the links and notes and research in my normal essays. The downside is, it makes you naturally skeptical for anything net-new. For me, recent examples are on crypto and the creator economy, two areas that I actually do think are pretty intriguing, but which have chasms so wide you could park Ever Green several times over.

This is an attempt at the opposite. I'm going to try and paint a picture of the crypto utopia that I think is possible. There has been a ton written about the amazing possibilities of a crypto future, but no clear vision of what the world actually can look like. Most writing is overly specific — making crypto sound like another new toy — or too vague, like the ramblings of a bad science fiction writer.

It spans highly technical aspects (specifics of token exchange) and incredibly high minded rhetoric (we'll solve all of banking). It's fait accompli in what I've read to almost assume the right answer is crypto, without asking why we're not stitching three easy APIs to do it instead. And it's also an easy answer to fall for, considering those who make it often have made massive fortunes from the asset price surge!

Normally, I'd be skeptical and dismissive. In fact, I was!

This time, I've decided to write down what I think a crypto future could look like — and why I'm excited to see it. This is by definition speculative, but I'm rooting for this future!

At the heart of the crypto is the idea that power corrupts, and absolute power corrupts absolutely. Trust here is antithetical to power, in concept and potentially in practice. As Spiderman says, "with great power comes great responsibility", and it's really easy to see that responsibility doesn't come automatically. So whether that power comes from centralization, there's a clear reason to fight against it.

So here, my three pillars to help determine this future - trust, decentralisation and interoperability. None of them are maximally desirable in and of themselves, but when they play against each other, cool stuff can emerge.

  • Crypto's primary pitch, starting from the whitepaper from Satoshi, has been to try and figure out a way to make computation work at scale to bring about trust. A key part of the crypto ambition is that each action made on the system is stored in a way that's verified. This verification brings with it trust, because once written you can't lie about that action. This is enhanced by the fact that every action taken is immutably recorded.

  • Decentralisation was a watchword here because that way you're not reliant on any single trusted authority to make the decisions on your behalf. Whether this is seen as an escape from oppression or freedom from interference, the removal of an authority also removes the bottleneck of single-point information processing. There's echoes to the BitTorrent craze of the past which helped information distribution work at scale against the bottleneck of a single uploader or downloader, and this has similar effects. This means you can use it for things you couldn't use things for before - like embedding voting or easier ways to run governance processes.

  • Interoperability is part of the promised land that provides the benefit of using chains everywhere. Whether it's the ability to talk across multiple blockchains or the ability to swap information back and forth, what would've required a complete retooling of legacy systems can now be provably coded in. Even the beginnings like Polkadot (the blockchain for blockchains) can be imagined to scale!

Financialisation of everything

The first and biggest impact is supposed to be DeFi - standing for Decentralised Finance, in essence a movement to bring most of the financial world and its participants to the crypto economy, just without the actual authorities who currently make the rules. Think JP Morgan without Jamie Dimon calling the shots, or Robinhood without Vlad calling the shots. The current wisdom is that these actors act as gatekeepers to the financial markets, and end up playing exclusionary or censorial roles. But the interesting part would be to look at these as building blocks to plug and play anywhere. When you think about the key transactions that form the backbone of our finance system, you end up with the following set of semi-mechanical processes:

  • Lending - needs either collateral, data for risk management

  • Insurance - needs understanding of risk models in aggregate

  • Asset mgmt - needs ways to invest the asset to deliver > average returns

  • Micro payments - needs a way to split a payment amongst several others

  • Markets - needs liquidity, a buyer and seller, market makers and brokers and exchanges can be made redundant

  • Payments - need a source, destination, pipe and a common ledger for accounting

Putting these into a set of legible protocols is arguably highly valuable and will go a step beyond "embedded finance" of today. The transformative potential here comes from the fact that a robust set of protocols for all worldwide financial transactions replaces the patchwork of broken systems cobbled together since the dawn of the internet. So, if I want to send money to my dad abroad, I will be able to do it with my wallet and an address. If it needs to be converted into fiat over there, it should be as simple as linking up your bank account. And any FX conversions should also be done semi-automatically, to the point that you shouldn't have to make those decisions regularly.

The benefit here is that everyone has a simultaneous access to a multi-currency account with automated rules for transactions and optimisations, which can receive and send money easily and in a highly divisible fashion, and which has an inbuilt asset manager. What used to take seven different accounts, multiple account managers and a ton of middlemen can potentially be replaced with something as smooth as how you send email. The abstraction of complexity from the user level is the key to all increased usage, and this will be no different.

Similarly if you want to get a loan, one of the biggest problems is to get the collateral lined up. If the information around your transactions and your income is sitting in a shared ledger, it should be easier to get the relevant data that would help assess risk. Crypto enthusiasts like to talk about money quite a bit, and this is an area where it does play. The current financial and economic system has tons of monetisable assets - some hidden and some not. Each new era has been our identification of new assets (collateralised debt, credit cards, mortgages on homes, student loans) and creating instruments around it. The problem is that each asset creation requires one of a few authorities to create it and sign off on using it. If you're a startup CEO who's raised $10m, even a few years ago, getting a mortgage or a credit card was no easy feat! That's a market failure because you're relying on a few gatekeepers to figure out a new asset and to act on it. Under the crypto system this gets opened up and democratised, and most importantly, programmable by anyone.

For example, if I'm getting a remortgage on my house, and my house is already on-chain, getting information on is provenance becomes as easy as a git pull. Getting current valuation becomes simple enough to run a market exercise to see bids. And if that risk was also analysable automatically, then we get to a point where, similar to a credit card pre-authorisation, we can get a loan.

Would that be revolutionary? I bet it would! Crypto here enables the financialization of everything and destroys access to gatekeepers as a limiting factor*.*

What this means is that the benefits of financial markets (price discovery, instant clearing of different opinions, mutual trade bringing win-win benefits, cross-temporal discounting) can be brought to bear for everything else.

My biggest argument against this is that making markets in everything is incredibly hard, and liquidity is difficult to come by, but with algorithmic price discovery and automated market making this might not be such a massive barrier, as long as there's a mechanism to control volatility enough to keep things usable.

Tokenisation, or markets in everything

The idea of having a token that denotes your ownership and impact on any project is a great idea to atomise economic benefits and governance. It's a great way to help create an easy analogy to the market world to show the true commercial possibilities. And it's also a mistake.

I think the usage of the word "coin" of "token" for a lot of the benefits from blockchain also makes us use it the same way we use those words in real life "fiat" parlance. We think of issuing coins and owning tokens and trading coins and minting coins, all of which seem like they are using the outdated language of dig-up-gold-from-the-ground to something that has very little similarity.

What this means is that even if there are coins, coin-interoperability and coin-transferability are going to become even more important. Do I believe everything will be similar to NASDAQ? No. Because there is no frickin' way that all these coins are going to get anything like the liquidity that'll be needed to make the markets work. But that's okay! There's a reason we don't buy shoes by a second price auction.

I just don't want to own multiple coins for every blog I read or every artist I like or every class I take or every shop I buy at. I can barely track the couple dozen stocks I own with any regularity, and that's literal money. Just using the word "coin" here makes it seem less than it is.

What it does mean is that with a semi-decent method of volatility control and a usable enough interface that blends into the background, so can the coins. If you want it, you can buy it and hoard it and trade it, but for most things in life you're probably not going to care about the asset ownership part of the coin as much as the transactional part.

So if you are the first customer for a new service and you own a (low priced) token to make it work, you have the choice to hold it for potential future gain or just use and exchange it to get what you need.

The benefit of setting money free for instance, like the internet set information free, means that each individual becomes fully capable to owning, storing and sending money to every other node immediately.

But making everything "monetary" has its drawbacks too. Similar to financialisation, markets in everything is a favourite of Tyler Cowen, but in reality there are surprisingly few real markets, since markets require liquidity and informed traders. Those aren't infinite. But the key here isn't that now you can trade Strange Loop Canon tokens the way you do Apple on Nasdaq, but it's that there's an "in game currency" which makes Strange Loop Canon comparable and tradeable against Marginal Revolution.

Backend infrastructure becomes interoperable

Crypto brings a whole new backend infrastructure and in doing so brings the same challenge as all new tech - if a large enough populace adopts it, it could become the genesis of a whole new movement. Currently if you wanted an SAP database to talk with an ERP from Oracle with a data lake that has the transaction data sitting on S3 it'll require you to sacrifice a goat and pay homage to Snowflake and UIPath. That sort of insanity will go poof.

What this means is that even if crypto isn't superior to all other tech, even if it isn't safer/ faster/ better/ cheaper, it still will have a good chance of winning if there's wide enough adoption.

Note this doesn't even require crypto to be massively better in every dimension, it's enough for it to have the benefits of interoperability that the current systems just don't have!

What crypto brings is continuous verification and continuous authentication. That's what drives the costs and the inefficiencies. Are they necessary? It's unclear. After all the whole point of being purists is that you don't dilute the offering. But then there's a reason there are few purists in business.

Consequently, automation!

Things that could theoretically be automated can now practically be automated, without needing the kludge of Zapier or UIPath or Stripe to link them together, which is a game changer. For instance:

  • Rules for lending, collateral management, automated borrowing, insurance, can all be reasonably defined and executed

  • Automated payments for action, like a micro transaction on a content visit, split in any mechanism you can dream up

The benefit here is more than just "hours saved from automation". It's that you can literally have evolutionary contests amongst various groups of rule-sets, and try create something that is better! We already do it, though through painful analog processes, and if this can be sped up the value could be incredible!

It bears saying these are things that are possible today, but requires so much data engineering and stitching together that chances are it would never work. In essence the automation isn't materially different, but the fact that we're all on one database, very loosely speaking, erases a whole bunch of existing coordination problems. If you harken back to the origins of the internet, the same arguments were put forward, and though new problems emerged to a large extent they succeeded.

According to McKinsey, around 30% of work that's done today can be carried out through automated processes. That seems like an understatement, but even that is staggering. Part of what holds automation back is that data, such as it is, is a mess to work with, and systems can't talk easily with each other. That's the beginnings of the size of the prize.

Again, bear in mind none of what I've said above is impossible with today's technology, it's just that the back ends of none of these systems are connected, which means they all have to spend a huge effort trying to ensure everyone can trust everyone else. That's a huge waste!

True benefit of crypto is not just that now you have another currency to pay for Starbucks, but that it takes a bunch of the annoying parts of money away. And not just because of pseudonymity, but because if money gets smarter we don't need to spend so much time trying to figure it out.

Content and identity

The future is one where everyone would be constantly creating versions of their output for consumption. The problem is of course when consumption becomes a transaction and financialised it can have perverse consequences. But just as you don't care about your "all you can eat data" plans or how many cups of coffee you drink, this too will blend into background noise.

But instead of your ISP bringing you to Substack to read this essay, there will be a trail of your time spent here, your value in leaving a comment, your help in putting the word out through a tweet or an email share, and the various links that I'd make in an article.

The current threads of making money revolves around ads, paid subscriptions or paywalls. NFTs might add a way to have a free blog that folks can buy, but this too is just a way to enable fans to get autographs, and not a clear business model. Not to mention that giving away your blogposts as an NFT stops you from reusing them (I'm guessing) either.

However the true combination is to not just have NFTs but more complex DAOs here. You can decide if you wanted to get paid per view, per quote, per repost or some absurd combination thereof. I don't know what that outcome would look like, but if someone is citing my essay in an investment memo for a $100m deal, that's different to citing my essay in another Substack. Crypto helps disaggregate those!

One other benefit I think is that currently all monetisation happens overtly, in your face! If we're to truly move into a different economy, all of this has to happen in the background, with roughly similar latencies and similar payouts as the current insanity that's the ad serving complex.

A consequence is that we might be able to get back to the original simplicity of the electronics "plug n play" revolution. We can start saying no to user accounts and logins and passwords and 2FA. Payments as simple as a wallet to wallet transfer. When consuming content becomes as simple and straightforward as surfing the web it has the potential to unleash whole new industries.

We won't all become pseudonymous warriors with professional online personas, but who reads/ watches/ plays what and how suddenly becomes just an abstracted layer rather than a clear friction point.


The crypto utopian future in some ways is the original dream of the internet. Those who create get the fruits of their creation. Communities that can organically evolve around ideas or concepts of people. Communication and coordination that truly gets easier at scale, enough to run whole systems without human intervention. Automation that can finally deal with actual problems of automation rather than dealing with system interoperability pains. The outcrop of making an entire swathe of infrastructure seamless is hard to predict, but we could really get to capture the high-minded ideals of Tim Berners-Lee for the net or Peter Thiel with Paypal and make them real.

Paraphrasing Shakespeare, it has the potential to make all the world tradeable and all the men and women merely speculators. But that still leaves enough and more room to experiment.

I also understand why the smart techies I know are obsessed by this. It's kind of the same reason they were obsessed by AI a few years ago. Because here you have the potential to throw a logic layer atop a whole bunch of industries that you couldn't do before. I'd written before:

There's a problem with coders everywhere where they feel all annoyances and corner cases are due to inadequate specification.

Even though I had thought this would cause some efforts to fail and was inadequate in itself, I now think it's probably the best starting point you could have. After all, startups are an exercise in navigating the ideaspace. So if you can break through with even a subset of ideas or logic flows that can work in the real world, that's real value that's unlocked.

I still don't think it will completely replace fiat money or even that this is the dominant currency of the future. What I do believe is that it's the equivalent of "in game currency" but for real economic activities, a sort of rewards card that's actually usable and has real economic value. One that's editable and tradeable and allows the holder differential access to various compute platforms in a way that requires multiple logins and an IAM solution today. And that's powerful.

That could make the boundaries of firms more porous, and create new ways to make money from your knowledge. If you thought Facebook was going to become big, owning a piece of it earlier own as a token could've been useful. If you were a MySpace fan you could've still used Facebook but just not held onto it. Those sorts of quasi-owner transactions being unlocked is a big plus.

What this also means is that I have no idea, nor do I have much confidence, in whether it will be Bitcoin that'll make the cut or Ethereum or Dogecoin or something else entirely. But I've become far more sanguine about the possibility of us solving the technical problems that I wrote about before.

Sometimes startups, even industries being started up, are like children. You can smother them with the pressure of undue expectations. What I've written above is enough to take a giant chunk of value out of the Nasdaq. You don't need to shoot to replace the US GDP too.

The problems we see it solving today are interesting, but they're not critical. Yes you can mint an article into an NFT and give fractional shares from that to folks whose content you linked to, like Packy did. But that's not the hard bit, either technically or financially. The hard bit is to do it all seamlessly. The hard bit is the mammoth this little moeritherium evolves into.

My original hesitation was at least partially induced by the hyperbolic sales pitches for crypto and Bitcoin by folks who aren't unbiased. After all, the flip side of "skin in the game" is "talking your own book". That still remains, but I'm much more eager to see what the new world brings. We started with the first couple internet waves to put computerised logic onto the world, this could very well be the glue that enables us to actually do that!