Cryptoledgers are a zero-sum engine

NOTE HXA7241 2022-02-20T09:19Z

WWW's consensus mechanism shows cryptoledgers' lack: they have neither a consensus gradient nor any consensus calculus. They offer only the constraints of machinised inequality concentration and harvesting. (754 words)


One thought you might see in promotion of ‘Web3’ is to compare it with the original WWW as to a more primitive technology, and intimate that cryptoledgers now offer a mechanism of consensus that WWW never had. But really it is the opposite way around. WWW had the advantage of a consensus mechanism that cryptoledgers lack.

The WWW obviously, to great scale, drew people together into a new system ‒ but how? Its incremental assembleability is often noted ‒ that each part can be built and added without a requirement of whole function ‒ but does not bitcoin, eg, have that too? There is an important difference. WWW is a system of gift exchanges, whereas bitcoin demands immediate reciprocation. With the WWW, you put up your own website, and simply give access to all. Many people are drawn to use it, of which a tiny minority ‒ yet still more than the one original author ‒ will then be inspired to put up their own website, and so are pulled into the system. What catalyses the growth in that cycle is the (one-to-many) asymmetry of gifting at its core.

But is not unilaterally offering to accept bitcoin equivalent to offering the content of a website? Initially it will of course only be few people who choose to pay and participate back, but so it is with WWW users. But with the WWW the value is always ahead of and larger than the participation: all people who do not pay by bitcoin get nothing, but all people reading the website get the value. WWW has a ‘consensus gradient’, and cryptoledgers do not. (Unless you count the single self-exploitative brute lure of gambling …).

The absolute heart of the engine of infotech is ‘abstractional leverage’ ‒ in concrete terms: the magic of limitless copies. You work once, then the value can be infinitely magnified. But the heart of cryptoledgers is rigidly maintaining scarcity. Look at the signature advance of bitcoin: it solved the double-spending problem. But think what that means: it stops info being copied! It puts crypto-strength locks on the wellspring of info abundance ‒ that is its essential basic operation.

Cryptoledgers contain no mechanism in themselves for using, channelling, organising, understanding info-abundance. Consequently, the only way they can produce value is by manipulating and exploiting inequality: you get value only by transferring it from others. Cryptoledgers have nothing else in themselves; they are only a purification of that rivalry mechanism.

WWW induces consensus because its basic operation is to enhance and spread material by which people can find similarities and coherence in their interests and pursuits. People sometimes prospectively (wishfully) defend cryptoledgers by claiming that the internet or WWW took years to really take off. No: WWW's fundamental mechanism of abstractionally expansive gift-exchange was working immediately and is so just as much today. Cryptoledgers at their core have nothing of this.


The informational source of value is not in shuffling it around, but in grouping agents around it and hence finding efficiencies in commonalities ‒ as WWW does for people. And similarly the key to consensus is not the static state of it, but in its construction.

Cryptoledgers are not a ‘protocol for consensus’, not in the substantial sense. They are a protocol for recording consensus. That is a big difference: to record, you have to have already agreed. Cryptoledgers are a virtualised notary: they record consensus; they do absolutely nothing to help arrive at any. Consensus is a reducing, filtering operation ‒ it converts many to one. Where is that many-to-one operation in cryptoledgers? It is not there. But how you find or build consensus in the first place, from a mass of disparate and divergent agents, that is the real problem. And it is one for which cryptoledgers offer no assistance.


There is a brasher and seemingly simplistic diagnostic, but it truly does tell you what you need ‒ when you observe that the big proponents of cryptoledger stuff are hucksters, scammers, opportunists, and VCs. They have but a feeble understanding, but they can smell the basic game of it. It is machinised inequality concentration and harvesting, shorn of the drag of material overheads. And so also shorn of the compensatory innovation-driving of real markets.

Cryptoledgers are not a system for consensus. Delete that from your mind and replace it with this much more truthful motto: cryptoledgers are a zero-sum engine.