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Your Crypto Won’t Get You Too Far
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Continuing our series on what it would take for PricelessDAO to be an independent state (or Network State), the issue of a national currency needs to be addressed. Priceless Economics recognizes the absurdity of putting prices on everything, eschewing free market economics as the “best” way to manage an economy.
Why a Monetary Currency?
In fact, monetary pricing is completely outdated. Money used to be an important proxy. Humans needed it to indicate the trade value of things because it was impossible to actually manage the things we wanted to manage. For example, let’s say you want to make sure nobody goes hungry. Until a decade ago, it would have been impossible to actually monitor food and manage food distribution directly. You needed money. You could give some money (or food vouchers) to human beings and they could use those at a shop to acquire food.
That made sense then.
But now, you could actually manage the food distribution directly. What if an economy measured only two things: meals per day and the distance food traveled? Distance traveled is a proxy for ecological impact, preservatives needed, and stimulation of local economies. (You could do all that without proxies, but distance would be the minimum viable proxy for those things.) We have the technology to measure that directly right now, and you could create any number of systems of distribution that would ensure that people got food. The systems could measure anything from nutritional value to ecological impact to food waste to whether the donations of food were coming from farms, charities, governments or neighbors.
This is just one example of why you don’t need a monetary currency, a carbon credit, or an impact claim that translates to a “value” in fiat currency. Just measure the thing you want to measure, not some proxy.
Will this take some creative thought and experimentation? Yes, it will. But what’s the point of creating a value-based Nation State unless you are willing to change your definition of “value”?
The folly of your own crypto
The Network State definition states that a Network State requires its own integrated cryptocurrency, but I fail to see the need or the helpfulness of the cryptocurrency. What does it matter whether you are using USD, BTC, XMR, ZCASH, ATOM, or AVAX? They are all instantly interchangeable.
The best example to date of an attempt at noncontiguous use of a cryptocurrency is the SEEDS community. Despite having gathered a high-quality international group of individuals and having a shared sense of values, the currency has never been available on exchanges, and price fixing has been the norm. People who receive SEEDS have trouble using them for anything—because the community doesn’t have any real goods.
While the problems SEEDS face epitomize the problem of cryptocurrency, the problems are hardly unique. The bear market for cryptocurrency and the recent censorship at the Layer 1 level of Ethereum show how dependent all cryptocurrencies are to the default economy. Compare the graph of BTC with the graph of RUB against the dollar. You’ll see very quickly that what matters is food and gas, not faith and PoW.
It turns out that if your Network State doesn’t have all of its own resources (or at least one resource the rest of the world is dependent on), your currency is only valuable in terms of its exchange for the default currency. That’s why if you want money in your Network State, you might as well use any currency out there. But if you want value, you better wean yourself off of those proxies and use the real thing.
The price of freedom
If you want a Network State that truly has the freedom to express its own values, it needs its own measures of value. It needs it’s own physical resources. The Network State gets that right, in terms of the need for a Network State to have physical locations.
But to have real freedom, you need more than neighborhoods and tech entrepreneurs. You need cloud servers, communications infrastructure, food, water, transportation, hardware development, and power. Without those things, you are nothing. You need a shared economy that can provide sufficiency to its citizens. That’s where real measures become essential.
As we think of the freedom of our Network States, our DAOs and the Web3 industry as a whole, it’s essential that we start measuring the essentials. How much land do we own as a group? What goods are we producing to sustain ourselves if our currencies are outlawed? How are we thinking about solving scarcity problems as a group? Well, as the Tornado Cash situation shows us, we thought a lot and complained a lot but did very little.
Alternatives to cryptocurrency
Traditionally, a city-state or nation-state was responsible for providing resources to its citizens. In today’s economy, that can be done through financial means, but that means dependence on fragile supply chains that may not share your Network State’s values.
At Priceless, we’ve been looking at alternatives to market economics. We’ll discuss of that in future blogs, but if you’re curious, here are some of our references:
Creativity, audacity, and long-term thinking. Priceless.