Trinity vs. Unity

We must always bear in mind an important difference between a centralized economy and a decentralized one. It’s about boundaries. In a centralized economy, the boundary is around institutions. In a decentralized economy, the boundary is around the individual. The individual boundary is a boundary of agency – and it is established, not by physical force or coercion, but by consensus – a decentralized, noncoercive, trustless consensus mathematically held up by cryptographical witness and mechanism-established incentive designs (such as Proof-of-Work or Proof-of-Stake).

Understanding such difference is crucial in understanding what it means to be a decentralized blockchain economy. In the centralized economy, the boundary is a divider or separator – a wall, a moat – it means to keep counterparties apart in a zero-sum way. The counterparties are insiders and outsiders. One means business when crossing that boundary between the inside and the outside. A change or transaction happens when the boundary is crossed. The transactions are zero-sum because one side’s gain is the other sides’ loss. The boundary and the spoils are distinctive entities in a centralized economy – most of the institutional economics are devoted in studying them – e.g., organizational behavior is the study of boundary and everything else, finance, monetary policy, are studies regarding spoils, in a way. Boundary in the centralized economy also acts as an enforcer – unauthorized crossing of the boundary warrants punishment. Laws and policies distinguish the roles of individuals, corporations and other institutional entities and treat them differently. The centralized regime is an alliance of powers – among them the trinity of boundary, spoil and enforcer – to keep the zero-sum game in check, and great houses (institutions) fat and guarded.

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⁴⁰ As the world economy tumbles amid the Great Pandemic, the attitude toward cryptocurrency is already becoming polarized among world governments, while economically troubled small states like El Salvador embraces Bitcoin as their savior, many bigger, powerful governments have finally begun to crack down on cryptocurrencies.

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In the decentralized blockchain economy, the boundary is not a divider or separator, it is an interface for communication and cooperation; and since transactions are posted as part of the witness that constitutes consensus, they are part of the boundary too – in other words, boundary and spoil is the same entity in a decentralized blockchain economy. There is still a defensive aspect of the boundary – individual boundary in a decentralized economy is a line of defense against malicious attacks and protector of privacy. But the defensive boundary functions not by coercion like that of the centralized world (by laws and other centralized powers), but by the same (and only) construction of the boundary – cryptographical witness and incentive mechanisms. The trinity of boundary, spoil and defense converge to forge the only material existence of the decentralized economy – the blockchain itself – ergo, the trinity becomes unity.

Etch this unto your mind.

This unity is what we mean when we say something like on-chain. Because there is nothing else. The decentralized blockchain economy is on-chain. If it is not on-chain, there is no business and no economy. That’s why we’ve gone through all the trouble to talk about the blockchain scalability curse, the layer 2 solution called Rollups, and finally, why Metis DAO, with built-in functionality parallelism, can enable true adaptive replication with DAC economy, beyond simple predicate liveness of the first gen blockchain apps – because these are all on- chain. Without unity, there will be no truly decentralized blockchain economy – that’s why creating 13,000 different cryptocurrencies41 won’t stack up much against the centralized economic regime – because:

(a) All those cryptocurrencies can’t just be lumped together to be called unity – unity only comes through a coherent blockchain; sorry, but that’s how decentralization works.

(b) Much of the speculative activities (the so-called “cryptocurrency economy”) are not on- chain – again, there is no unity in this case.

Therefore they are nothing more than parasites latched onto the centralized economy, and rightly so to be perceived that way from any angle. That is why The Metis Way, is the right way.