Oh man… so much to unpack here. Sorry for the rant, but it’s my best attempt at sharing ideas that aren’t just dismissive and pessimistic but aren’t overly optimistic either. Hopefully as more research and experiments are carried out theories on cryptoeconomics will become much more actionable and articulate!
Regarding gadgets and stuff that can be used as building blocks to do stuff in the real world, let’s try to break it down by first principles and then build it up from there.
Tools: things like hash functions, encryption algorithms, tokens (note: a toke by itself is not an incentive, but simply an exchangeable entry in a ledger), random number generators, etc…
Tools can be used to build things, often called mechanisms or gadgets: commit/reveal schemes, signature attestation, public/private key systems, state machines, zero knowledge proofs, PoW/PoS games, etc…
Protocols are then small mechanisms/gadgets that can be composed into bigger things (just like sheet rock, doors, and concrete are combined to make a house): digital signatures + hard puzzles = PoW, random oracle + committed stakes = PoS, commit/reveal schemes = voting, public/private key systems enable secure accounts and messaging / data transfer, etc…
These examples are EXTREMELY simplified and not to be used as a ground truth for any type of analysis or categorization, but the idea I’m trying to communicate is that larger outcomes like “save the world” are made up of lots of moving parts that are made up of moving parts that are made up of moving parts, etc… This is often why people refer to the blockchain space as being in the infrastructure phase and not the end user or world changing phase; people are still figuring out the basics and building foundations for more to come.
Regarding smaller markets for charity type stuff, I recommend these:
My current thinking on charity through marginal price discrimination is that while it’s awesome (literally my favorite post in the blockchain space, ever) any mechanism that enables you to give discounts to something like a charity or those who contribute to a public good can also be used to promote censorship and cartel like behavior. Since all transactions and accounts on Ethereum are public, it would be trivial to create an “in” group and an “out” group to make prices higher or restrict access for anyone you don’t like (say if your account holds a competitors token – all the way up to a Chinese Citizen Score, but for the blockchain). A large player in the space (like Consensys) could do this. Not that I think they will anytime soon, but they could… Networks that have privacy on by default (future Zcash, Monero, and Grin) have a chance to resist a lot of this censorship type behavior, but cartels can still form in any environment that promotes collusion, albeit less effectively and with more information asymmetry.
This is sad… and I’m hoping that by studying and exploring cryptoeconomics we can contribute to creating outcomes that are win/win for all parties involved (positive sum), rather than a win for a few parties who control power/norms and a loss for everyone else (zero-sum). I really really like positive sum games and would like to find better ways to promote collaboration and innovation in the commons, but as you can see with the ethresear.ch discussion, it’s much harder motivate a group to do something that benefits them all than it is to motive an individual to respond to a bribe/reward, esp at scale: and Ethereum is all about scaling lol.
Btw, in any positive sum games participants create value whereas in zero-sum games participants compete to control value that is already there. I strongly believe that any successful blockchain community needs to be positive sum and directed towards innovation, otherwise the energy will be directed inwards resulting in a civil war and fork (as we see all to often).
While the outlook for altruism within the Ethereum (or any blockchain) community is not rosey… there is work that was done that shows that collective maintenance of the commons is possible! but only in small groups that establish reputation and hold each other accountable (consequences not just for today but the future as well). This was explored in the idea of Common Pool Resource groups, which earned Elinor Ostrom a nobel prize:
Conditions necessary for a stable CPR:
- Clearly defined boundaries
- Congruence between appropriation and provision rules and local conditions
- Collective-choice arrangements allowing for the participation of most of the appropriators in the decision making process
- Effective monitoring by monitors who are part of or accountable to the appropriators
- Graduated sanctions for appropriators who do not respect community rules
- Conflict-resolution mechanisms which are cheap and easy to access
- Minimal recognition of rights to organize (e.g., by the government)
- In case of larger CPRs: Organisation in the form of multiple layers of nested enterprises, with small, local CPRs at their bases.
If you can figure out how make this scale, you might just have a billion dollar idea but in order for it to scale you’ll have to understand the various tools you can use to build gadgets, which you can then combine into systems, which… if people actually use them beyond mere speculation, can then slowly change people’s thinking and actions over time… which is where the real scaling happens.