Crypto's Three Body Problem

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The 2008 financial crisis incited a new era of institutional distrust. The public was forced to confront the unthinkable: that the monetary system itself was no longer working in their interest. The Occupy movement was one expression of the public unrest, while others turned to Bitcoin and the promise of an incorruptible money powered by self-executing software as an alternative to fiat institutions. However, where we once talked about separating money from state, now we hear of crypto states and constitutions. Political rhetoric in crypto has turned from state avoidance to state mimicry, with democratic voting models and public goods as primary concerns. Underpinning this slippage is a new ideological refrain: that crypto is the next “leviathan,” comparable to the state in its ability to instantiate immutable rights. According to some, blockchains will replace the state’s monopoly on violence with a credibly neutral decentralized cryptographic infrastructure, allowing for the creation

Crypto's Three-Body Problem Crypto's Three-Body Problem Authors Published January 15 2024 Crypto's animating purpose was to develop incorruptible institutions. However, various attempts to embed these structures in a broader social fabric, from DAOs to crypto-network states, have largely failed. We draw from Lawrence Lessig's legal theories to explain why. Protocol designers work with markets and code but frequently ignore the vital institutional functions served by social norms and the law itself. The absence of these regulatory functions considerably limits the forms of pro-social behavior t

Crypto's Three Body Problem

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