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Initiatives Web3

Making Sense of Crypto & Web3: Announcing our new initiative

Web3 is becoming a huge phenomenon, but represents a crisis of sensemaking with a welter of terminology and conflicting claims. Today, Life Itself Labs is launching a new collaborative initiative “Making Sense of Web3” to address this. It provides introductions to key concepts and ideas along with in-depth exploration of the claims for its social and economic impact.

Introduction

The claims made for web3 (and crypto) are bold and polarizing – from “it will revolutionize governance” to “it’s a complete waste of time”. Making sense of these claims is important so that we can make good decisions about where we devote our energy – particularly for those of us involved in social change.

Moreover, this is a topic that speaks to deep-seated aspirations for social and economic change. Exploring those aspirations is important as well as the methods by which they can be realized – whether by web3 or not.

Our approach is distinct in a few respects. First, we are an open, collaborative project. Second, we seek to combine open-minded and open-hearted inquiry with rigorous analysis.

Concretely, our approach starts with collecting and steel-manning the key claims made for web3 through conscious, critical and open dialog with a diverse set of experts. Net, we tease out the underlying hypotheses and assumptions and engage in rigorous and constructive critique. Finally, we look at the overall aspirations of the web3 movement and examine how these might be achieved, whether through improvements to blockchain-based approaches or by other means.

In this article, we set out the “crisis in sensemaking” that motivates this project. We provide details about our approach and why we think it could be helpful. Finally, we conclude with an invitation to participation.

Big, controversial and sensemaking is hard

Crypto and Web3 has become a massive phenomenon, with very big claims made about its actual and potential impact. Claims that go far beyond traditional technology boosterism – better, faster – promising instead radical transformation of our economic and social systems.

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Explainer: Web3 and Cryptocurrency

Web3 is generally understood as a potential “next generation” internet based on decentralized, blockchain-based systems. It is often used to encompass a number of ideas and technologies including DAOs, NFTs and cryptocurrencies.

Cryptocurrency is a decentralized digital currency which uses cryptography, typically in the form of a blockchain, to secure transactions. Major examples include Bitcoin and Ethereum.

Note that we’ll use “web3” as a catch-all for both from hereon.

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Controversial and polarizing: At the same time, there is an exceptional level of disagreement about these claims, even on basic points or definitions. The topic is highly controversial and even polarizing, with strong pro and anti camps. For example, within the tech community it is one of the most controversial topics in recent decades. Significantly, disagreement cuts across classic ideological lines – there are pro/anti libertarians as well as pro/anti socialists.

Evaluation and sensemaking are hard: Finally, and relatedly, web3 exists at the confluence of several major areas of thought (computer science, economics, political economy, law) which are complex, largely synthetic (rather than analytic), and grounded in value judgements. This complexity and interdisciplinarity means few people have enough time or expertise to really delve into the underlying issues, especially those who would normally play a major role in our collective sensemaking such as journalists. 

It is also the case that by their nature synthetic statements are generally far harder to answer conclusively than analytic ones. The synthetic-analytic distinction refers to the fact that the claims of synthetic disciplines such as economics are true or false because of facts about the world, rather than just logically following from their meaning. For example “state intervention in the economy is bad” (a synthetic statement) is true or false for a different reason than “2 + 2 = 4” (an analytic statement). 

This difficulty in obtaining conclusive answers applies doubly to synthetic truths which are grounded in normative value judgements. The above statement about the economy is normative in that it prescribes how things should be. This makes such statements rest on how we understand moral concepts such as freedom and fairness, in a way that other, observational synthetic statements (e.g. “it’s 27 degrees celsius today”) do not. The discourse around web3 is peppered with claims rooted in deep questions around ethics and how we should organize society. These factors combine to make web3 a topic that is difficult to make sense of.

The stakes are high, making sense matters and we’re struggling

The stakes are high and sensemaking matters: claims for the impact of web3 are very large – on both positive and negative sides. Making sense of this topic is therefore important: if we can’t make sense of it how can we choose what to do? Moreover, as a topic with societal and global implications it requires societal and global action (e.g. regulation). This means we want not only individual sensemaking but collective sensemaking and agreement.

We are struggling to make sense, especially together: However, this is an area where sensemaking is struggling, even on basic issues. Moreover, it is hard in general here because the phenomenon touches on multiple, complex and “synthetic” areas such as politics and economics. And collective sensemaking is clearly struggling as evidenced by the level of disagreement and controversy in the area.

This risks polarization resulting in stasis and further degradation of our sensemaking capacities: Without good sensemaking we risk polarization. There is a real threat of splitting into oppositional factions which replicate the dynamics of the current culture-war. This can lead to stasis, blocking either the necessary support or adequate prevention of web3’s expansion by stifling productive discourse. This situation is concerning wherever you stand in the debate.

A lot of energy and attention are going into this area: There is also a lot of energy and attention being channeled into this area, especially from progressive, social change-oriented groups. This is energy that could be used elsewhere (i.e. it has an opportunity cost). If web3 can’t deliver on its promise this would be a significant waste of energy. Furthermore, given some of the elevated claims, there is a risk that disappointments here would not only tarnish web3 but reduce the energy for other types of change-making. Whilst there are opportunity costs to any action, they are particularly important in the context of web3 precisely because so much energy and good-will are being channeled here.

This is a runaway phenomenon presenting special risks and requiring special attention: Finally, this is a “runaway phenomenon” with exponential growth in interest, use and investment. To take just one illustrative example, blockchain-based assets are the fastest growing asset class we have ever seen in human history; The crypto market cap — the value of all the cryptocurrency tokens in circulation — is currently sitting at $2.6 trillion, according to CoinMarketCap data. This huge velocity of expansion means web3 has the potential to significantly impact the organization of society. It also renders the risks of wasted resources and energy even greater, as our “spend” is increasing so rapidly. Furthermore, runaway phenomena present special risks because things can happen before we notice and have time to react (e.g. AI, climate change, nuclear weapons). The need for discourse and understanding, in other words, is not one that can wait.

We need better sensemaking. How do we get there?

We need to make good choices regarding crypto and web3, both individually and collectively. Be that to support, improve or curb it. More broadly, we need to make good choices in terms of allocating our attention, energy and money.

Finally, this should happen in as constructive, intersectional and (de-polarizing) way as possible.

We think good sensemaking begins by clarifying and agreeing on the questions we want to ask — and, a process for answering them. Here are our starting questions:

  1. What are the distinct narratives and claims that are made about web3?
  2. Based on the theory and evidence at our disposal, how should we evaluate these claims?
  3. Given our evaluations, what should we do?
    1. Should we support (and/or improve), or curb the use of web3 technology?
      1. How does this differ across different uses (e.g. DAOs vs NFTs)?
      2. How should we do this?
    2. If we do need to curb the uses of web3 technology, where else should we direct our attention, energy and resources to more effectively realize the positive aims underpinning them?

And here is our full structured tree of questions:

Structured tree of questions

Our approach: steel-manning, structure and transparency

We intend to take a distinctive approach. It has three key, layered components:

  • Distinguishing the key claims and the associated underlying aspirations
  • Transparently structuring those claims into hypothesis trees and evaluating them
  • A “conceptual underlay” with definitions and introductions to key terms and ideas

We explore each of these in turn and provide this diagram to illustrate our ideas.

A three-layered approach

First, we distinguish the key claims being made and the underlying aspiration behind them. For example, “blockchain allows for easier collaborative decision making” connects to an aspiration of more democratic governance. This brings clarity to the discussion: claims are atomic, well-defined and separate but connected to aspirations.

Second, we transparently structure and steel-man the claims. In particular, using hypothesis trees we can break down a larger claim into sub-claims. For example, “blockchain allows for easier collaborative decision making” could break down into the claims: “a major problem for collaborative decision making is creating and tracking votes, especially at scale” and “blockchain makes it easier to create and track votes”. We combine this structured approach with the principle of generosity or steel-manning: creating the best version of any claim or thesis.

Teasing apart the different aspects of an overall claim in this manner helps in two ways. First, it makes them easier to evaluate. Second, it makes transparent the reasoning behind any evaluation (including differing evaluations – for example, if I disagree with the overall claim we can now see whether it is because I disagree with subclaim one or subclaim two).

Third, we provide a high quality “conceptual underlay” with definitions and introductions to key terms and ideas ranging from things like blockchain itself to public goods and the free rider problem. This conceptual underlay serves two purposes.

First, it provides a basic introduction for those coming to the topic with simple, neutral summaries of the key ideas and terms. Second, it provides a base “layer” that underpins the evaluative work and the overall sensemaking effort. For example, suppose you want to evaluate the claim that DAOs can help address the climate crisis. To do that you are going to need contextual material about public goods, free rider problems – as well as information on what a DAO is! In addition, this is an area where meanings of key terms are crucial and often ill-defined, for example what exactly do we mean by “collaboration” or “freedom” (and is our meaning shared)? By providing reference material and common definitions we can ground and inform the debate and avoid “talking past each other”.

An example of a DAO making claims regarding “saving the planet”

Finally, this reference layer is also useful beyond claim evaluation. One of the exciting things about crypto and web3 is it engages with old, profound social and political questions such as the nature of money or the best form of government. However, in the excitement of novelty there can be a lack of awareness of existing literatures and historical precedents – which risks reinventing the wheel or, worse, repeating old mistakes. A solid conceptual background can help reduce these risks and improve the overall quality of discussion.

Ultimately, our approach is guided by the aspirations of the web3 movement. We tease out the different strands of the web3 discourse and examine them in their own right. We also assist in fulfilling these aspirations, showing where web3 efforts need to be improved and presenting alternatives where appropriate. By structuring and presenting our enquiry in this way we can make the large volume of web3 content less overwhelming, and easier to grasp.

What’s already happening

An online home for this initiative is already up at: https://web3.lifeitself.us/. This will act as our core sensemaking tool, hosting an expanding set of resources structured around the different threads of the web3 discourse. Over time this will develop into a wiki-like tool providing an overview of the major theses around web3 as well as the surrounding conceptual context.

We are also developing an ongoing series of “sensemaking dialogs” to explore the diverse views of the topic and to do some  live, collaborative sensemaking. Several of these are already online including dialogs with Jordan Hall, Stephen Diehl, Richard Bartlett and Stephen Reid.

We have also started the claims classifications and have a preliminary start on the “conceptual underlay” of definitions and key ideas.

Taxonomy of Aspirations and Claims

Get involved

This is an effort at collective sensemaking and we’re keen to involve collaborators and contributors. We already have a range of expert partners and contributors and we’d love to have more! Here are some of the ways you can get involved:

  • Contribute to the library, for example by adding articles and research on web3 and background topics.
  • Write up key concepts and ideas.
  • Proof edit articles and transcribe dialogs.
  • Share the work with others

We’d also love to have feedback either by our forum or by emailing [email protected]. For example:

  • Are there particular topics or areas you think we should cover?
  • Do you disagree with any of our assessments? Have we missed or misunderstood something?
  • Do you have feedback on how we structure or present the thinking?