What are dApps and How Do They Enable a True Free Market?

The world economy is facing a gigantic hurdle that threatens our future: too much money and power is being controlled by too few people.

On an existential level, it creates an environment of uncertainty and dependence. What will our overlords decide for us today? Is there anything we can do about it? How do we decide our own fates without plugging into systems designed to take away our agency? Without a high threshold for doubt and instability, most people would prefer to stick to their routine, which is completely understandable and acceptable.

So for those of us attempting to challenge the status quo, it presents a unique challenge on top of what’s already in front of us: how do we create seamless, user-friendly systems that appeal to a broad audience? With enough appeal to pull them away from the entrenched systems in place?

Every question comes down to decentralization. So let’s break down that concept and apply its implications to the market and to the economy as a whole.

The First Modern, Decentralized Market: Industrial America

In fact, there was a time when America could have been considered decentralized. I’m not picking a side or an ideology here. But the simple fact is that, among other factors, American free-market capitalism won out over soviet market planning for one clear reason: two heads are better than one. In other words, crowdsourcing information and ambition over a large number of individuals and entrepreneurs is more effective than allowing a few people in a room to try to anticipate and puppeteer an economy with millions of players.

You can see the parallel here between a small group of people trying to plan the economy and a small group of CEOs and politicians trying to control the economy.

There was a time when innovation drove prosperity. Improvements to society and productivity were a crucial component of capitalism when there was still so much room to grow. Huge steps forward in our quality of life were easy to quantify. There were many bad products, mostly in medicine, but also many good products. For decades, the best product would often come out on top. So a truly free market would be great; if we had one. However, America hasn’t been able to confidently make that claim in a long time.

What Went Wrong

There is such a thing as too much freedom. That may sound like a contradiction when the goal is a free market, but the confusion comes from a vague definition of the word “freedom”.

A little before the 90s, America introduced the first antitrust laws to stop monopolies. A rule was added. A freedom was taken away to provide a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.”

A freedom was taken away… to allow free trade. The two definitions of freedom here are 1. The ability to do whatever you want at all times, and 2. Unhindered access to the functions of a system. For example, the freedom to move your shoulder in its joint does not mean you can or should pop it out and spin it around your head.

Our freedom to do whatever we wanted created an environment where what we wanted was to completely dominate the market and put an end to free trade. Today, it isn’t always the best product that wins. The product that wins is often the one with the strongest support system. And as improvements to quality of life are becoming harder and harder to quantify, people are starting to prioritize wants over needs, allowing companies to become massive by pandering to people’s desires instead of to the growth of humanity.

The Fix: Decentralized, Trustless Applications

How do we allow for a truly free market without creating an environment where a small handful of people can do whatever they want at any time without any reasonable amount of accountability?

You integrate the rules of the game into the tools of the game.

What we do with decentralized apps is make platforms that can only be used in a way that obeys the rules. Chess is considered a perfect game because it is perfectly balanced without any exploitable loopholes. It is a good game because it has rules and limitations. These rules allow players to compete to the edge of their abilities, making for a thrilling, productive experience.

But unlike board games, dapps can’t be flipped over in frustration, and no pieces can be moved when someone isn’t looking. Participation is synonymous with compliance. And unlike board games, the community can decide on new rules that benefit everyone equally, and not just a few players.

The Power of Consensus-Based Governance

Dapps are governed by consensus. This means that the community decides what’s best for its own environment. Let’s say there’s a platform that charges a fee for entry to prevent bad actors from spamming the system. But now that fee is too high, preventing good actors from getting over that hurdle. In today’s society, the big players in the game would keep those fees in place to prevent competition. They may even raise the fees even higher, claiming to be trying to help keep the bad guys out, when in reality they are stifling the economy to keep themselves on top.

In a decentralized economy, the community would instead vote to lower those fees just enough to keep out the bad actors and to allow the good ones to flourish. And that number could be tweaked as many times as needed.

The best part is, the entire community would have access to that decision-making process, putting every possible intelligent mind to the task of improving the system. It’s amazing what people can do in large numbers. A research team gamified protein folding and distributed it among thousands of players who eventually cracked the code. Shia Labeouf tried to live-stream a flag flapping in the wind, but people kept taking it down, so he eventually moved it to the desert where it would be impossible for the community to deduce where it was. They still figured it out where it was based on the flight patterns in the sky above it. Not necessarily the best use of their time, but amazing nonetheless.

Crowdsourcing innovation and ideas is the most effective way to not only make the best possible systems, but to ensure that those systems work for everyone and can adapt over time. If we can transform the economy into a giant game of d-commerce, we can once again participate in a free market. The most free market the world has ever seen.

We need to democratize our economy from the ground up and force the big players to play by our rules or quit the game.

Some people tend to think that individual innovators or thought leaders are the ones who create the great products and corporations of our time. Bill Gates, Jeff Bezos, and Elon Musk surely are intelligent people, but they have huge teams of brilliant minds working under them. How many other brilliant minds are scattered across the country?

Across the world?