Industry Reflection: From Not Doing Evil to Being Evil, Wealth Arrives Before Utility

Author: Murtaza

Compiler: Deep Tide TechFlow

Some say that the scale of the internet revolution is so immense that human society finds it difficult to fully assess its pros and cons. However, for me personally, the internet has indeed been very beneficial. The promised advantages of mediation, equality, and connection have been fully realized in my life. Even though the internet occasionally brings some minor issues or annoyances, they are truly insignificant compared to these advantages.

Therefore, whenever I hear about someone designing new extensions or improvements for the digital world, my first reaction is always: Awesome! This was also my initial reaction when I first learned about technologies like Bitcoin, smart contracts, and blockchain. These technologies quickly captured my interest and enthusiasm years ago. As an "outsider" in my field, like many in Silicon Valley, I was also one of the journalists reporting on the Edward Snowden incident in the 2010s, which gave me some liberal tendencies and made me more passionate about these technologies. I soon became a "evangelist" for blockchain and successfully brought many people into this fold.

For reasons I will elaborate on later, and which are related to this article, I no longer enthusiastically recommend cryptocurrencies and blockchain to others. Although I still pay attention to the developments in this industry and even try using some blockchain-based platforms, I find myself more skeptical about my commitment to this industry than I was a few years ago.

However, I still maintain an open mind. For this reason, I recently read Chris Dixon's Read, Write, Own. Besides the attractive cover of the book, I found it made a commendable effort to revitalize a technology that should not be so controversial. Dixon's book also touches on an important debate that will determine whether blockchain can indeed save the internet from the harms of centralization, censorship, and corporate control, or whether it will exacerbate these issues.

Casinos, Computers, and Counterculture

In the past few years, I estimate I have read about 18 to 20 books on cryptocurrencies and blockchain. While some of these books have been helpful to me, I have grown weary of the common exaggerations, arrogance, hollow speculations, and ideological extremism in this field. In contrast, Read, Write, Own is a calm and professional work. Dixon is a clear writer and is evidently someone who understands and cares about the internet.

Read, Write, Own briefly reviews the history of the internet and its evolution from protocols to platforms, then focuses on the issue of corporate control today and how blockchain might address these problems. Dixon offers sharp critiques of the exploitative "cut rates" of large tech companies and the undemocratic nature of the current digital world, which has turned most of us into tenants on content farms.

He also critiques the existing cryptocurrency industry. In the process, he touches on what I believe to be the core issues facing this technology and its future prospects.

As Dixon states, blockchain is currently divided into two realms: "casinos" and "computers," a metaphor I will refer to later. The casino refers to the speculative world where cryptocurrencies have almost become synonymous in the public mind, while computers represent the underlying technology and its promise to build a better internet.

Dixon's book is written for "computer" enthusiasts. He writes with evident passion for the internet—something I happen to share—while reminiscing about an era when passionate nerds focused on improving their little inventions in garages. Dixon portrays blockchain developers as revolutionary outsiders and draws on past stories of geniuses who rose from poverty to success, inviting us to imagine:

"Imagine a Steve Jobs in his twenties, passionate about counterculture, attending the Homebrew Computer Club, a gathering of microcomputer enthusiasts that met monthly in California in the 1970s. Imagine Linus Torvalds as a student at the University of Helsinki in 1991, writing a personal project that would eventually become his namesake Linux operating system. Or imagine Larry Page and Sergey Brin dropping out of Stanford and moving to a garage in Menlo Park in 1998 to turn their web directory project BackRub into Google."

This is the world of computer culture, while the FTX and those dubious Bitcoin influencers that most of us are familiar with represent casino culture. "Computer culture is long-term, while casino culture is not," Dixon writes. "Thus, it is the computer versus the casino that is vying for the narrative of this software movement."

While he rightly points out a fundamental conflict, I believe the issues are far more complex than Dixon describes. The blockchain technology itself is still in a nascent stage akin to that of garage inventors. However, from an economic valuation perspective, it has prematurely surpassed this stage.

As of now, the global cryptocurrency industry has a market value exceeding $2 trillion. Typically, industries of this scale form only after something useful to society has been developed. Yet in this case, wealth has come first, while actual utility still relies on vague promises for the future. Aside from a few commendable exceptions like stablecoins, most of this capital is currently being used to create a massive global casino and tools for evading capital controls, accompanied by endless enticing promises and incentive stories, as if from a book on Narrative Economics.

In my view, this unusual order, where wealth precedes utility, is not merely a small error that will resolve itself over time. It poses a fatal threat to the technology's potential to realize its promise.

Do No Evil, Yet Evil Has Been Done

Google once had a famous corporate slogan: "Don't be evil." While this phrase carries a hint of irony, it also acknowledges that immense power and wealth naturally give rise to moral hazards, potentially leading to actions contrary to the public good. Ultimately, Google changed this slogan and its company name, perhaps because engaging in some unethical behavior seemed an inevitable byproduct of growing into such a massive economic entity.

Dixon believes that blockchain is a technology that can prevent large tech companies from turning evil in the future. He writes: "Blockchain networks turn 'don't be evil' into 'can't be evil.' Their architecture provides strong guarantees that their data and code will always remain open and reconfigurable."

He describes how corporate platforms inevitably enter an "extraction" phase, during which they begin to extract economic benefits from users as much as possible, harming the overall interests of the platform. He makes a compelling argument that if Twitter and Facebook operated as protocols, similar to email, or as blockchain-based services, then no greedy CEO could turn them against their users.

However, while the technology itself is neutral, Dixon's mention of corporate "evil" reminds me of an important issue within the blockchain and cryptocurrency industry: it has already shown signs of evil.

The cryptocurrency industry has its own CEOs, investors, and venture capitalists, many of whom have amassed enormous wealth from this technology with unclear uses. Although it has yet to produce positive changes in the world or the internet, the blockchain industry has been involved in many activities resembling "robber baron" behavior, such as lobbying politicians for favorable policies, elite financial self-dealing, disastrous investor scandals, and other actions typically regarded as the worst in the corporate world.

Moreover, the phenomenon of using cryptocurrencies for ransomware attacks is also rising sharply (many of which go unreported). While this is not a direct indictment of cryptocurrencies themselves, its scale far exceeds that of those currently using cryptocurrencies for noble purposes, such as remitting money to rural villages in Congo that have lost contact with Western Union.

Thus, we face a disturbing reality: this industry has become "evil" before it has truly had a chance to function. Therefore, it is not surprising that the public has lost trust in it. Some may attribute this hostility towards cryptocurrencies to Ludditism, "political correctness," or a primitive resistance to progress, but I believe it is a rational and understandable response to the current situation.

Many blockchain developers attempt to downplay concerns about the status quo by claiming that the technology is still in its "early" stages, or that we are in the "1999 of the internet" (the year is never consistent). Fifteen years have passed since Bitcoin was first launched, and this assertion seems untenable to me. The belief that technology inherently has a purpose and naturally evolves from one stage to another seems more like a religious faith than rational analysis. Historically, many grand promises have failed to materialize, which is actually a more common phenomenon.

Despite the blockchain industry having significant influence in finance and politics, it is estimated that only about 22,000 developers are truly involved in blockchain projects. According to the latest statistics, this number is actually declining.

This does not mean that blockchain technology has lost its vitality or that its prospects are bleak, but it does reflect a problem: the gap between the massive "casino" and the trivial "computer" may be more pronounced than it appears. Those supporting the "casino" have been funding elections and modifying laws to suit their interests, while the "computer" remains idle in some garage.

Revolutionary Suicide

Representatives in the blockchain field often refer to themselves as "inevitable," believing they possess unique knowledge and are persecuted opponents of an untrustworthy and corrupt establishment. I have heard similar rhetoric before.

While reporting on the Syrian civil war, I heard opposition leaders—many of whom were wealthy and had close ties to the global community—strongly criticize the regime they were trying to overthrow. This regime was indeed terrible, and in the early days of the war, the opposition seemed to have compelling reasons for victory. However, things did not unfold as expected. Unfortunately, partly due to the rebels' inability to self-manage and establish attractive governance under their control, most people ultimately chose to support the devils they knew. Many believed that the regime change that was bound to happen in 2011 did not actually occur. Many unfinished revolutions face such a fate.

If the Syrian opposition had been more rigorous in self-reflection, the situation might have been different, and this applies to any human endeavor. I have been waiting for the cryptocurrency industry to engage in some serious self-criticism, as its culture seems more like optimistic corporate propaganda, mixed with ecstatic expectations and other religious sentiments that seem to accompany the birth of new currencies.

Cryptocurrencies were seen as a revolutionary technology upon their emergence, but this revolution seems to have been corrupted. The lack of accountability among many existing supporters and the exploitation of loopholes have led to public alienation, causing people to turn back to the establishment they originally hoped to overthrow. Even after witnessing the actions of many emerging authorities, I have developed a somewhat unexpected fondness for The New York Times and JPMorgan.

Heal Thyself First

You may call me a critic for these sharp comments (in fact, some have called me a "stooge of the establishment," and I estimate that these individuals' net worth is 800 to 1200 times mine). But ultimately, I am writing this article on Paragraph for the benefit of users of Farcaster, a platform I hope to help develop. I do not hate cryptocurrencies or blockchain; I even occasionally dabble in them. Overall, I like the internet and am impressed by some of Silicon Valley's past innovations. I just hope this industry can deliver on its grand promises.

In the face of the crypto realm, we are like a terminally ill patient who needs strong and painful treatment to recover. Responsible regulation is inevitable, but we also need to consider its impact. To allow the technology to continue to develop, speculative elements must be significantly reduced or even completely shut down.

As someone who holds a small amount of cryptocurrency, I do not wish to say this, but in the long run, whether through regulation or industry self-discipline, if its current $2 trillion market value is reduced by 80-90% in the short term, the future of blockchain may be better. This reduction would help clear out the fraudsters and opportunists gathered around the casino, both online and offline, and return public space to those truly committed to the noble vision of "Read, Write, Own." It would also provide the public with an opportunity to re-evaluate blockchain in a more pragmatic way.

Such a prospect may not be welcomed by those who have already become wealthy through cryptocurrencies or those trying to justify their wealth through various political means. But if anyone truly values the lofty ideals of decentralization, disintermediation, and anti-censorship, then the clamor of the casino needs to pause temporarily until the technology can create something of value for society.

We all aspire to achieve great goals, and there is no shame in that. But to achieve these goals, you first need to build the tools that can carry you to your destination.