Society and Cryptocurrency; How Technology and Politics are Interconnected

Inventions in Information Technology

Thiel, the co-founder of PayPal, has also pointed out that innovations today predominantly happen in the domain of information technology. This of course is not surprising. Within the first two decades of the twenty-first century computers have become a ubiquitous feature of the human world. Data is power and everything is connected. We are indeed living in the very world that cybernetic pundits like Norbert Weiner and John Von Neumann had predicted in the middle of the twentieth century. It therefore makes sense that the most significant innovations today are happening in the field of computational technologies, with research in areas like internet-of-things (IOT), AI, deep learning, and quantum computing leading the frontier. 

Our Children Know Nothing Other

Today’s children are born and brought up in a computationally connected world. They have never experienced a society bereft of smartphone devices and apps. But their grandparents and great grandparents have. And that was just a couple of generations ago — because these massive changes have occurred over only a handful of decades now. The exponential rate at which our species is constructing a world of advanced complex systems has obviously created a natural impetus for engineering equally advanced tools and models to handle this complexity.

Perhaps that is why information technology is so appealing for politicization right now. Technology has relevance and capital value in relation to almost every industry in the world today. It makes sense that a great deal of money and political power is being pumped into tech innovation. After all, computers are the basic foundation of all modern technologies. From medicine to politics, education to social science, economics to entertainment, and even art to religion — our world is literally getting increasingly hardwired into a computational framework that is evolving rapidly as we speak. Blockchain and cryptocurrency are thus not unsurprising developments in the areas of commerce and economics. What is more relevant is their pertinence to social organization!

The politics of Crypto—a thought experiment

It is common to cite the internet and cryptocurrency as analogous examples of technological paradigm shifts. Likewise, as a technology, AI has also been compared to blockchain since the former creates a computational framework for applications like IOT, while the latter does the same for cryptocurrencies. Researchers in this area have noted that an integration of AI and blockchain is the most disruptive technological change that we can expect in the immediate future. Smart and decentralized systems are about to radically redefine the way we live and work. The COVID-19 pandemic has already begun to set some of these changes in motion. 

Going back to Thiel’s political take, we can loosely modify it in the context of this article and say that the spirit of blockchain — which is somewhat like AI —is communist while the essence of cryptocurrency is libertarian. Admittedly, this oversimplified thought experiment presents the concept of cryptocurrency as some sort of a chimera born out of the intercourse between communist and libertarian ideologies. But if we entertain this idea, then one can imagine that the best possible scenario could be an ideal ‘combination’ of ‘positive’ characteristics sub-selected from ‘both’ political models. On the contrary, the worst possible combination could easily turn out to be a disaster engine. 

Anarchy vs Communism

In the debate at Stanford University’s Hoover Institute (where Peter Thiel made the aforementioned statement on the politics of these technologies) LinkedIn cofounder, Reid Hoffman responded with an interesting counter-perspective. The latter suggested that AI represents control, while cryptocurrency is rooted in anarchy. Although from this perspective, it is hard to define what a cross between anarchy and control would look like. This does certainly provide food-for-thought as far as the long term social implications of these technologies go. 

While both perspectives (Thiel’s as well as Hoffman’s) are somewhat simplistic, they bring forth the underlying notion that technology and politics are indeed intertwined in complex ways. And thus a deeper appreciation of the interrelationships between the two is pivotal to progress in both areas. Notwithstanding the pace at which technology is advancing, this is particularly crucial in today’s times because politicization of tech-power directly impacts the societies that we are evolving into. Since economic systems today are being paved with data-drive information highways leading into the future, these concerns are directly relevant to the world of cryptocurrencies and other applications of blockchain technology. 

Blockchain for Building Homeostatic Systems

In biology there is a principle called homeostasis, which characterizes all living systems on earth. Homeostasis is the tendency of a biological system to maintain its internal and external state through constant and dynamic adaptations to changing circumstances and conditions. It is driven by an astronomical number of intricate feedback loops that work together towards maintaining equilibrium. A well known example is how our body regulates its internal core temperature and maintains it at the average baseline of 37 degree celsius in response to ambient conditions. As a result, when this equilibrium set-point is not maintained, it is cause for alarm. Likewise, social homeostasis is observed in insects which sustain the collective equilibrium of their colonies by optimizing their interactions with each other through regulatory feedback mechanisms that are encoded in their biological program.

 When we consider this concept in the context of social organization and economics, blockchain and cryptocurrencies bring forth (at least in theory) a potential framework for engineering homeostatic systems. This potential depends on the proper optimization of computational power to overcome the inherent limitations that human beings are normally constrained by. Although, these ideas will be explored in more detail in a future article, for now, I would like to conclude with this line from Alvin Toffler’s book, Future Shock: “Knowledge is the most democratic source of power.”