“The token society assumes that most people will not be required to work to produce food, shelter, and other necessities. In such an economy, most human work will focus on serving and entertaining other humans.” - Dror Poleg, author of the newsletter, Rethinking
The novel The Unincorporated Man by Dani and Eytan Kollin gives us a glimpse into a world dominated by social tokens.
Their society takes place 300 years in the future where every person, by law, is incorporated. Shares are issued for every person on the planet. Just like today when a public company IPOs. There are no taxes. The government owns 25% of a person at birth: parents own the other 25%, and the rest of the shares flood the open market where any person can buy stock in any other individual.
Every person in this society yearns for “majority.” That is, where they own >50% of their shares. Without that control, you’re at the whim of your shareholders who think of nothing else but maximizing profit. If you don’t have a majority, you can’t choose where to go to school, or what job to have, or where to live; your shareholders choose that for you. In this world, people LOVE the incorporation system. It creates accountability and social stability. Other people have skin in your game. They want to see you succeed.
Here’s a great example: in the “old world” (our world today), a kid in a war torn nation has no path out. You might donate to a charity helping alleviate suffering, and feel good about yourself for 5 minutes before forgetting about the poor child. Did you really help? In the Incorporated Society, people buy shares in that kid and invest time, effort, and real dollars to ensure his or her future success. Their flourishing is directly tied to yours. It’s a useful incentive system to optimize for direct value creation.
This fictional world contains very different social norms and ways of interacting than ours does today.
But, we’re planting the seeds to create huge changes in how we interact with each other through blockchain and crypto technology. Most of these changes are incredible! If you look at what’s happening, crypto opens new possibilities like:
People can make a living playing video games or hanging out online all day long. Traditional ideas of what it means to work have been shifting; oftentimes towards consumption and away from generally agreed upon value creation (like earning a living playing a video game on Twitch vs. manufacturing clothing).
These new technologies have already changed the way millions of people interact online; crypto holds the possibility to alter the way we interact in the physical world too.
I’ve gone back and forth on whether the benefits and freedom this new shift unlocks for us outweighs the potential to unravel useful social technologies.
Personal social tokens sit at the center of this dilemma. These cryptocurrencies are issued by an individual. I can issue a social token, and anyone can buy my token online. Just like a company issuing stock.
On one hand, personal social tokens enable people to create their economies, have their fans participate in upside from their projects, and create incentive structures where token holders and the issuer of the token all benefit when the value of the token rises. The creator (or issuer) is in control of what they build; they can capture the value of any project or creative endeavor with an incentivized fan base. It opens the floodgates for people to pursue anything they care about and get paid to do it, provided there’s a big enough audience for it.
The downside: it sets a precedent that ANY transaction, no matter how small, can be financialized. This is already happening.
Either way you look at it, mass adoption of social tokens would change the underlying fabric of how we interact with each other.
We can start small with how blockchain technology and crypto already impacts us today, and then look further down the road at the consequences when everyone has a social token, just like in the world of The Unincorporated Man.
In his essay, the Crypto Future of Work, Dror Poleg explores how crypto is upending the traditional ideas of work. Historically, work had a practical purpose, like providing food or shelter; the “meaning” of the work was secondary. Crypto flips the idea of work on its head. Blockchain technology enables people to work on things that are often “useless or frivolous.” An example would be people playing a video game like Axie Infinity as their full time job because investors can speculate on the tokens they earn. You can also imagine this getting pushed to other domains: getting paid to watch Netflix, try the newest coffee blend, or online shop. The main idea being what we know as work, usually reserved for the creation of value, turns into a consumer activity.
This isn’t to say that traditional jobs are perfectly oriented towards value creation, or even more desirable than “consumer” activities.
Many people today have traditional jobs that could be considered “bullshit jobs”; a job where you know you create nothing of value. In other words, a paper pusher. There’s a famous video where billionaire investor Carl Icahn talks about taking over a railroad company and fires 12 floors of people because he couldn’t figure out what they did at the company. The crazy part is, no one who got fired seemed to care! They were released from jobs they knew didn’t matter.
So you might think that blockchain and crypto could solve this problem; at least people can find meaning playing video games and online shopping, right?
To a degree that’s true. But think about it this way: when was the last time you asked your neighbor to help you with groceries? Or offered to help someone build new furniture? I definitely don’t: that’s what Amazon Prime or Task Rabbit is for! Crypto and tokens take these transactions previously supported by friends and family and create mini economies around them. It’s becoming the native currency of the internet. Poleg writes about how “radical examples of this dynamic are visible in some corners of the internet, where people pay other people to say their names, smile at them, and give them attention.” In other words, everything becomes financialized in a transaction.
Soon your job could be smiling at lonely strangers who make their money playing a video game. We’ll enter into a Brave New World Huxley warned about, where “people will ...adore the technologies that undo their capacities to think.” It could be a subtle oppression: the promise of easy transactions at the cost of meaningful relationships.
We won’t have to think about how to create valuable things, make another person laugh, or court a romantic partner. We’ll consume, then pay to “experience” those feelings with no effort.
This might not be ideal; we already have deep societal issues around atomisation and degradation of culture. We’ve traded extreme individualism, optionality and freedom in exchange for our communities and sense of shared purpose.
Crypto projects promise to solve these issues. Every other day you’ll see tweets about new, vibrant Discord communities, people flowing between projects where their skills are most needed, and the ability to control your own online destiny.
This is partially true; the positive freedom to DO something has never been higher. But is the freedom that pushes us towards complete financialization of everything, including the most minor human interactions, something we want?
This is already happening today with no clear solution in sight. If social tokens take off, and become a new medium in which we express ourselves and our culture, we may find ourselves deep in a hole we can’t get out of.
“The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. But no price is too high to pay for the privilege of owning yourself.” - Rudyard Kipling
We’ve already seen the benefits and new types of human interactions crypto and blockchain technology unlock.
Social tokens are a different beast. They can fundamentally alter our social technologies and change how we interact with both strangers and those closest to us.
A decade ago, something like this already happened as a gimmick by Mike Merrill, who sold shares in himself to investors almost. But adoption of this model by millions of people could be as transformative as the adoption of smartphones. It’s an interesting thought experiment to explore from first principles how this could shake out.
We can use the ideas we saw earlier from The Unincorporated Man: in this world, what new social technologies emerge here that overpower the ones we might want to keep?
The most interesting dynamics exist between shareholder and token originator (what we’ll refer to as the person with their shares, or tokens, issued). In the “Unincorporated Man’s” world, shareholders place token originators into positions best suited for their skills that optimize shareholder return. It doesn’t matter what the person wants; if they don’t own the majority of their tokens, they’re legally bound to do this. If Poleg is right, we could have professional smilers, attention givers, and hand shakers forced into these roles. Why try to find a partner, or stay close with your parents, when you can easily get the desired transaction from someone financially incentivized to provide it to you?
The fluctuation of token prices can also lead to perverse incentives between family members and friends. What happens when you know your friend is going through a bad breakup? Or about to lose their job? Do you “stay in them” and keep buying their tokens if their price dips, or short them? There are frequent examples of these dilemmas, even between children and parents, in the fictional world of the Unincorporated Man.
We’re clearly not at this extreme yet with social tokens - smart contracts that manage the token can be created with any rules the token originator wants. They could keep 51% of the total token supply forever.
Samo Burja wrote that the social technology of trusting your neighbors came from the widespread adoption of Christianity — this enabled the creation of large scale enterprises built on the trust that your business partner would do what they said they were going to do. Blockchain technology bypasses this social technology: it’s built with trust baked in, so you don’t need to worry about who’s on the other side. If trust is no longer relevant, what do we have then?
Social tokens therefore reverse the undercurrent of this social technology - how do you know your friends and family want what’s best for you when they have a financial incentive for you to do something else? Trustless contracts and tokens devolve into trustless connections with people supposedly close to you. Interactions become transactions that can be captured for value.
Prevalence of social tokens in this way removes us from our foundational human desires. The ability to have loving relationships; the ability to create value; the ability and desire to help others.
Is this what we ought to want? More disconnection from our nuclear families and friends? Do we simply abandon human nature and humanity for the comforts and the abundant consumerism and financialization in the metaverse that Poleg anticipates?
French sociologist Jean Baudrillard described and worried about the idea of sign-value: the value an object gives to its possessor in the form of status rather than the value of the thing itself. He noted it eroded personality and identity: everything just becomes about status, and thus interchangeable. We enter a simulation where the illusion of status triumphs over the reality itself.
This is the dominant form of value we see in the Unincorporated Man’s world. This is what ALL value could look like in a world dominated by personal social tokens.
Here we come to the crux of Baudrillard’s idea: if simulation has triumphed over the real and feels more real than underlying reality itself, people flock to that simulation and escape the reality, which ends up becoming a wasteland.
This is the basic premise of the popular book Ready Player One; and we’re already building the blocks in the metaverse that lay the foundation to this type of world. Personal social tokens could help accelerate it both on and offline.
Peter Thiel wrote about this state in his essay the Straussian Moment; it’s the End of History, when everything administers itself in a never ending reality away from reality, like the soma induced “happiness” states in Brave New World. Humanity and human nature is officially abandoned.
That doesn’t mean we have to go down exactly this path though.
We could pick and choose which benefits we want from social tokens and build smart contracts that push us towards these outcomes. Maybe we want to use them to align incentives and improve outcomes for people already at a disadvantage; maybe we use them to help creators bootstrap their businesses.
On the other side, we can deliberately avoid using them to monetize every possible transaction and avoid creating transactional relationships that should be reserved for the closest of relationships. Social tokens hold enormous potential. We should just be honest about what we might lose if we go full throttle without considering what we’re running over.
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