Beyond Bitcoin: The Cryptocurrency Boom Opens A Door For Black America
I first began hearing about cryptocurrencies back in 2015 and conducted some heavy research into potentially investing in different coins and tokens in 2016. Like many people, I didn't take it seriously and focused on other revenue streams. 2017 has been called by many the 'Year of the Altcoin,' because many other cryptocurrencies not named Bitcoin shot to such high prices that their growth actually outpaced Bitcoin's by the end of the year! These include token systems such as Ripple(XRP), Stellar (XLM), and NEM.
Anyone who takes the time to dig into this sector realizes how many opportunities there are and how easy it can be to get lost in the mountain of various investment assets.
Where Is The Value?
The true power in crypto and the reason why it's all the rage as we start a new year is because of its ability to create value out of nothing by only using computer code and algorithms. Gone are the days when money and wealth could only be generated by centralized banks such as the Federal Reserve printing more paper currency. What I mean by that is the old ways of looking at intrinsic value has shifted. Some critics of cryptocurrencies proclaim that virtual currencies are worthless because there are no inherent, or intrinsic, values within them. I disagree with that. The value in crypto's can be expressed in many different ways.
One of the ways cryptocurrencies provide value is through the algorithms that define them which can be designed to provide varying levels of privacy and anonymity for the user's. This provides technological value that fiat currencies cannot provide.
Another way cryptocurrecies can provide value is through the creation of tokens that can be handed out to all users that gives everyone the right to vote equally. Instead of having a system based on the amount of money they have or how much you've invested in the platform. Any system can be created and built to allow for universal suffrage and collective cooperation in decisions that are made that impact everyone within the platform. This goes beyond Bitcoin and simply having a currency with the hopes that one day there will be mass adoption and the currency is used everywhere in the world. This is about creating a revolutionary and disruptive ecosystem built on the blockchain.
There have been a number of good articles written explaining even more ways Bitcoin and Altcoins have intrinsic value. One could say they have value in their limited supply. Every cryptocurrency has a max supply and depending on the amount in circulation, you can get an idea or how easy or difficult it might be for that asset to increase exponentially in value over time. This is unlike fiat currencies which are printed without end - decreasing the value of the paper money over time.
One could also say their value lies in the "mining" process by which new coins/tokens are obtained. This varies system-to-system and there are pros and cons of each. You will often hear terms like 'Proof-of-Work' (PoW) and 'Proof-of-Stake' (PoS) as well as other types of "Proofs." These are basically different ways by which blocks are solved and currency is given out. Some new blockchain platforms like Steemit use something they call 'Proof-of-Brain' as a way to provide value and curate the growth of their cryptocurrency called Steem. The mining on this social media platform doesn't come from computers and GPU rigs, but the content on the site itself. So Steemit is similar to Reddit and Medium in that content is upvoted with a monetary value. So you effectively are paid in cryptocurrency for the content you create.
There is tons of value in Bitcoin and Altcoins. They don't have to be backed by a central bank or standing army to be worth something. The value is in the technology itself - the blockchain. On certain blockchains, smart contracts can be built and therein lies the real engine of disruption we need in the black community.
What Are Smart Contracts?
Smart contracts are what elevates cryptocurrencies beyond simple coins that can be mined, collected, and traded. They are autonomous, pre-written forms of protocol that serve as agreements that can be executed without a third party or middleman. Smart contracts will have a profound impact on industries like banking, law, insurance, financial services, real estate, and yes...governance. Anything in the real world that is done, where two or more parties make an agreement where there is any sort of exchange of any kind, can be pre-written in a smart contract. The wonderful thing is they are transparent in their operation and immutable in their structure. This means no one can go behind your back and alter a smart contract that has already been written and agreed upon.
Ethereum (ETH) is the most widely used platform specifically built for the creation of smart contracts, but it's far from the only one.
At their most basic level, smart contracts can store information of any kind, perform calculations, and send money from one person to another if conditions are met. More advanced functions of smart contracts are discussed below.
Benefits of Smart Contracts
- Autonomy: biased third parties acting as middlemen can be made a thing of the past through the inherent independence of the contract itself.
- Trust: the smart contract is encrypted on a shared ledger than all can see and verify.
- Redundancy: due to the sharing of the ledger, the contract is duplicated on the blockchain and therefore can never be "lost."
- Safety: the encryption factor of the contract makes it nearly impossible to hack.
- Speed: once the conditions are met, the smart contract self-executes with no need for outside influence. Saving all parties involved precious time.
- Savings: smart contracts save you money by cutting out expensive and potentially biased middlemen.
- Precision: there is no worry in details being forgotten, left out, or not followed because the contract executes based on how it was coded to execute.
- Transparency: when it comes to banking, law, and governance, smart contracts enable a level of transparency that rival most mainstream institutions and watchdog organizations. The intrinsic value of built-in transparency cannot be understated and could severely weaken, if not effectively abolish, corruption in its entirety.
Decentralized Autonomous Organizations (DAOs)
We have to ask ourselves, what are some of the biggest threats facing the black community globally? No matter where you look whether it's the United States, Europe, South America, the Caribbean, or Africa - black people are suffering. We are suffering from generations and centuries of systemic and systematic oppression. We have been held back and live in a system built by men many years ago who had no intention of sharing the wealth they created with the very labor they sought to exploit.
Decentralized Autonomous Organizations can help solve a major social problem. As stated above, the value in crypto comes not simply from the ability to convert virtual currency and tokens into fiat currency. A lot of the value comes from the problems that token system helps to solve.
Smart Contracts are the foundations of DAO's. DAO's are simply more complex versions of a basic smart contract. So instead of having one contract for one task, you might have a stack of smart contracts that perform a variety of functions under one umbrella. There are companies building platforms right now that are making decentralized autonomous organization-building very easy and user friendly. One of those companies is called Aragon(ANT) and another one is named district0x(DNT).
The creation of a DAO can take many different forms. You can build a DAO to function as a business in the form of a corporation or co-op. You might sometimes see people refer to this type of DAO as a DAC (or decentralized autonomous corporation). Then you could build a collection of DAO's to function as a polity - a virtual state/virtual organized community. This is what is known as a decentralized autonomous government, or DAG.
Decentralized Autonomous Governments (DAGs)
A Decentralized Black Polity As Decentralized Reparations
Many will ask, "what is the point of all of this?" The better question is, what problems need to be solved in the black community that are not, and perhaps cannot, be solved in the current system? What problems need solving that could be solved through the formation of a virtual black polity built on a blockchain?
The biggest, and most obvious, problem the formation of a black DAG would address is the issue of racism. Racism is built-in bias and any DAG would be encrypted with trust and transparency (see above), two things real-world racism needs to thrive. Racism, at its core, is about shutting people out and treating people differently than others are treated. It means tipping the scale in one direction over another. That is one of the main annoyances smart contracts are designed to prevent...the influence of biased middlemen. So if there's a project you want to start that you think will add value to the DAG, or if there's a DAO you want to build to work within the DAG, there will be no racist loan agent or racist politician to hold you back from progress.
For instance, let's say you and a group of friends want to start a business within the decentralized government. You could start a DAO within the DAG and there might be benefits for doing such a thing within this virtual society because you'd be expanding the ecosystem. The funds to get the DAO off the ground could come from the coffers of the DAG Treasury. DASH, a very popular cryptocurrency platform, has its own governance system and Treasury that does this right now...so this technology isn't theoretical. People are already using things like it on crypto networks.
Obviously, there would still be racism in the non-virtual world, but we'd have our very own colony. This wouldn't be some work of fantasy, we would not be role-playing (unless you wanted to). This would be an entire ecosystem built on tokens of value. So as the wealth circled around in the DAG and increased in value over time, that could be converted to real-world currency and used for all sorts of things in the real world. Racism isn't as much of an issue when you have resources to properly combat it and a black DAG would be a major, wealth-generating resource.
The second problem a black DAG would address is the issue of stunted upward mobility and a worsening racial wealth gap. Social mobility is the ability for a person, family or group, to elevate themselves into higher strata's in society. How social mobility would be handled in the DAG would need to be worked out. Would we try to build a classless society, or would there be a social hierarchy? It would ultimately depend on how the internal assets (currency and tokens) would be obtained. I will have to elaborate on this in a later post.
One thing that can be stated as fact though is that the creation of such a polity would come with its own form of wealth-building unlike anything seen before. The source of the current racial wealth gap stems from advantages whites had over blacks due to blacks being locked out of certain programs during the Jim Crow era. This system, by its very nature, would allow everyone to be equal.
The third problem a black DAG would address is the lack of organizational unity that has always held back the community since the time of slavery. In order for this to work, it would require a level of coordination and strategy within the black community. This would be a virtual revolution, and revolutions require action from the collective. It would not need the involvement of millions, that will come with time. Several thousand committed citizens would be required. In a future article, Proof-of-Citizenship will be discussed and the role of the citizens of the DAG will be as well.
The fourth problem a black DAG would address is the issue of reparations for descendants of the African diaspora. Reparations, as the issue is currently understood, should be reframed as centralized reparations. Meaning, the only way reparations are given to blacks in America for instance, or blacks in Haiti, is by a central government agreeing to release those resources to us. In the case of Haiti, it would have to come from the French government. There are all sorts of problems and pitfalls with this. One dilemma is mentioned above and that is the roadblock of racism and biased middlemen who will get in the way of any such agenda.
I am thoroughly supportive of reparations, so much so that I don't really even think there's much to be debated. Yet, I see the problems that will come about in trying to receive reparations in the near future. It may turn out that the only way to get reparations might be to allow black people to build a decentralized black polity that is autonomous and 100% transparent.
This would qualify as decentralized reparations because the reparation itself would be in the form of the DAG. The black blockchain-backed polity, and eventual legitimate recognition of this polity globally as a government, would be a form of reparations that no one could complain about.
The common complaints against reparations today range anywhere from, "we can't afford it," to "my ancestors didn't own slaves, so why should I pay for it." Even when you're talking about land, there's no amount of land that can replace what was never given to us in the earlier days of America after the Civil War when we were promised 40 acres and a mule.
However, no one loses anything if reparations comes in the form of a decentralized autonomous government. White people don't have to pay for anything, and black people are given semi-autonomous independence. It's a true win-win situation.
Looking To The Future
I will have to take time to develop this concept further over future articles. Forming an independent government would require time, patience and lots of people. As I alluded to above, we could either use currently-existing platforms to try to build this, or build a blockchain of our own. If we're "keeping it black," then the latter would be the best option, but also the most difficult.
DAO's are very much in their technological infancy, people are still working on projects of their own. DAG's are even more rare.
What cannot be denied is that cryptocurrencies have opened up a number of doors for black people. Even if we are in a bubble, bubbles popping doesn't mean the entire sector goes away. It just means the companies that weren't real die and the ones that are survive and can be got for cheap. So the threat of the crypto bubble bursting does not mean blockchain technology is going to go underground and die. It's here to stay.
- What do you think about the idea of black people forming DAO's and a DAG using blockchain technology?
- What do you think the DAG should be called?
- How should the society be structured?
- What are some DAO's that would have to be created for a DAG to function? Remember a DAG can be seen as a collection of DAO's. DAO's are stacks of interconnected smart contracts.