Using cryptoeconomics to bridge divisions

The last few years have been unsettling with political upheaval and the rise of hate groups.

Technology isn’t helping, with AI-enhanced filter bubbles and “fake news” deepening divisions.

However, these same tools can be used to bring people together if the incentives are right.

Ascending “Mount Stupid”

Crypto aficionados will be familiar with the Dunning-Kruger effect, where the uninformed learn a little and think they know everything, aka “Mount Stupid”.

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This can lead to some of the more vexing battles, from near-religious debates over hard forks to clashes between Bitcoin maximalists and Vitalikons.

Rationality often rapidly departs in online debates as the context of each participant can become the sticking point, particularly when it is part of a broader identity.

Descending “Mount Stupid”

One of the most effective ways to engage with others is to build from points of commonality, the context of others, a persuasion technique known as pacing and leading.

Context is what gives information value and transforms it into knowledge. However, the brightest minds of our generation are working to understand our contexts, how we think, just to serve us targeted ads. To give us more of what we want to see and hook us onto their platforms.

This misalignment of incentives, has also allowed hate groups to exploit these systems to radicalise susceptible individuals faster than ever, as well as allowing politicians to spread fear and hate for their own agendas.

However, there is a growing movement to use technology, especially technology which impacts how we think, in an ethical way, from AI to cryptocurrency that exhibits huge network effects.

This is because currency, properly constructed, is something that can incentivise specific outcomes.

Money — the most powerful story?

Currency only has value within the context that we give it — the narrative or the story, as historian Yuval Noah Harari refers to it, that communities tell that allows it to be exchanged in a trustless manner.

Bitcoin has benefited from the story of being an uncensorable store of value, particularly attractive in countries with unstable governments or capital controls.

The story is now changing to one of an asset used to diversify portfolios of investments, presaging the institutional investment wave.

Both stories drive the price of Bitcoin to incentivise mining coins, the process by which transactions are verified on the blockchain without an intermediary, as they incentivise “hodling “over spending like conventional, inflationary, currency.

The story of Bitcoin

Ethereum has a different story, one of a system where you can use crypto-economics, a combination of cryptographic algorithms and economic incentives, to create decentralised networks with memory.

This allowed the creation of a second layer, custom tokens, tokens that have attracted over $2.7 billion to fund the development of an incredible array of uses.

Most of these tokens are likely to be worthless they can substituted by Ethereum or even Bitcoin once both blockchains ramp up in terms of scaling transactions, atomic swaps and off-chain calculations, meaning you may as well hold Bitcoin or Ethereum.

Uniting against hate

However, if you take your time to build a private economy, you can build some truly interesting incentives.

In the case of our Ananas project, we wanted to model what different groups actually believed in a common format to bridge the widening gaps connecting users to the relevant resources.

The platform is based on a hyper-relational database created by our partners Grakn.ai where “knowledge graphs” can be mapped and augmented by artificial intelligence to deliver the right resources at the right time.

This allows communities to collate, create or even enhance resources that represent them, with these datasets becoming more representative over time through the consensus mechanisms, reflecting real world communities and the diversity within them.

Thus you can have curated, dynamic, datasets of what Salafi Muslims or Tea Party Republicans think, essential contextual information against waves of disinformation.

The first project powered by this platform is a “Living Quran”, where you can see the interpretation of the Quran and the context of every element within or across viewpoints.

This will make life much more difficult for Islamophobes and Islamic Extremists, which is A Good Thing.

This “objective subjective” approach recognises there are many contexts and stories that drive us, rather than the “objective” view of Wikipedia or the community commons of projects like Steemit or Lunyr, which serve a different purpose.

#CryptoForGood

The Ethereum token infrastructure has allowed us to build a token that tracks the perceived value of the platform that contributors receive, potentially uniting hugely disparate to build something impactful and necessary.

As crypto-economics matures, there are likely to be more community tokens and approaches that drive positive behaviour to tackle problems rather than make a quick buck.

This is the real innovation, using blockchain technology to bring disparate groups together to build great things, that will deliver sustainable value to our society for years to come.

Emad is Co-CIO of Capricorn Fund Managers and Co-founder of Ananas, a UK-based charity using cryptocurrency to create a decentralized global knowledge base for peace.