Crypto Is Persona Non Grata on the Hill. What to Do?
Cryptocurrency (crypto) has become persona non grata in the capital due to the FTX collapse. Choice samples from among innumerable current vilifications:
David Z. Norris, CoinDesk’s chief insights columnist,
And Casey Michael at
“... FTX’s stupendous collapse shines a light on just how symbiotic the entire crypto industry now is with the world of offshore finance – and how open the entire industry is to fraudsters and scammers, with offshore havens racing to offer crooks the kinds of allowances, and lack of regulation, they need to thrive.”
All fair. But the critics are missing the forest for the trees, potentially to America’s great detriment. Blockchain, the invaluable technology underlying crypto, is not crypto. We are now very much at risk of having the next Congress throw out the baby with the bathwater.
If America is going to be relevant to the future of blockchain, our political leaders and policymakers must get crystal clear on the distinction between blockchain and crypto. Currently, they are confused.
They do not grasp the essential nature of the blockchain. We are thus poised for a policy disaster that will set America back, maybe forever, on one of the world’s potentially most valuable emerging technologies.
What layer one blockchains are currently domiciled in the US? For our
Ethereum isn’t based here. Avalanche isn’t. Cosmos isn’t.
Apart from RChain Cooperative, a Washington State Cooperative (of which the lead co-author was the principal founder), no significant layer one blockchain has been brave enough to domicile itself in the US.
Why not? Legislative and regulatory risk.
In the game played on the world’s stage, it isn’t SBF who is playing Slim Shady to crypto’s gangster rap. It’s the US Congress. Congress still does not grasp the Internet (TCP/IP, Web1) and the Worldwide Web (HTTP; Web2).
It needs to understand that Web3, which will be built, if at all, on the blockchain, is all about fault tolerance.
The Real Value of the Technology
The decentralized nature of these layer-one networks is a side effect of their fault tolerance. That has profound implications for the US position in global network services.
America is fumbling its leadership in the blockchain space – blockchain as a computing platform, not as a “cryptocurrency.” This could well cost its leadership, its dominance … and the attendant prosperity in this sector. And, without exaggeration, this is an issue of national security.
What is important about Bitcoin is not its use as an alternate currency nor as a purported store of value. What is important about Bitcoin is its resilience.
The nature of its (admittedly brutally inefficient) consensus mechanism means that if 10 nodes go down, 100 more, running anywhere in the world, can take their place.
That means that it is resilient (fault tolerant) not only against governments and gangsters but against failures that will stem from imminent environmental disasters.
This feature makes it a crucial step in a process leading to a fault-tolerant global computational infrastructure that we can use to coordinate as various existential disasters come at us.
What is important about Ethereum is not its use as “programmable money.” What is important about Ethereum is its improvement of the genetic blueprint of Bitcoin.
It took the software architecture used in every Internet-facing API — from Google to the Guardian — and showed how to combine it with Bitcoin’s consensus innovation to make a resilient and defensible – if not scalable – compute infrastructure.
Every Internet-facing API has for more than a decade been protecting their APIs from denial of service attacks by issuing tokens.
They just weren’t cryptographically significant tokens. Combining tokenized network security with a decentralized consensus creates the blueprint for a defensible, resilient — though not scalable — compute infrastructure.
Were it to be made scalable, it constitutes a design pattern for a vastly more valuable Web offering, and a real global compute infrastructure we can use to coordinate.
At the architectural level, it only takes a few modifications to get a better fit for the goal of a scalable and resilient coordination infrastructure.
Networks like RChain improve Ethereum’s genetic blueprint using a much more energy-efficient consensus and a mathematically rigorous concurrent execution mechanism. Astonishingly, this same mechanism expands smart contract capability to provide a query language for on-chain data.
In this way, not only do we get near limitless scaling, but we get a searchable blockchain so that Web3 is not a step backward, but a step forward with an expansion of searchable Internet resources.
The leadership of this “Superweb” is what America is at risk of forfeiting to
Blockchains > Crypto
The critics are right that speculation-driven crypto belongs in a museum, relegated to a dust-collecting corner of the Internet.
That way performance-oriented technological developments, like RChain, can get the oxygen they deserve, and the US can regain the technological, economic, national security, and even moral high ground.
If Bill Gates and John Doerr are correct, we are facing threats requiring an unprecedented degree of social coordination on a global scale. And now, just at the moment we need an exponential lift in our capacity to coordinate a concurrency-enabled blockchain, comes along, giving us a blueprint for a resilient, defensible, scalable, searchable global computational infrastructure.
It would be a national tragedy if, distracted by the hoarding impulses typically associated with thrift stores and unregulated speculation markets, we were to waste this opportunity. We know what will happen if Congress fumbles this opportunity. It’s looking increasingly likely it will.
Can Congressional leadership see the need for legislation inhibiting the collusion opportunities inherent in the current generation of the crypto sector while unleashing the imprisoned lightning of a concurrency-enabled blockchain?
Leaders who can grasp this will have the power both to build back better and make America great again.
Greg Meredith and Ralph Benko were recently recognized by HackerNoon as “2022 contributor of the year” on the topic of scaling.
Lucius Gregory (Greg) Meredith, the founder of RTech, is a mathematician, the discoverer of the rho-calculus, a co-inventor of OSLF (Operational Semantics in Logic Form), and the inventor of the ToGL approach to graph theory.
Ralph Benko, an advisor to RTech and other enterprises, is co-author of several critically acclaimed books, including Redefining the Future of the Economy:governance blocks and economic architecture, and is a former White House official.
Photo from Unsplash by Andy Feliciotti
Lucius Gregory Meredith and Ralph Benko