Token Engineering vs. Value Engineering

There is a lingering question we haven’t really answer: is Bitcoin actually centralized?

Empirically[30] and epistemically[25] it can be reasonably argued that Bitcoin does at least inherit some trait of centralization. Now armed with our new insight regarding the 2nd trinity[34] and 2nd unity[35], i.e., the nature between centralized regime of incentive, identity, ownership, and their decentralized counterparts (through the ontological rings of deconstruction and reconstruction), we can henceforth answer the forte of that question in a constructive way – and by doing so, build a better foundation for the field of token engineering⁹⁵.

Bitcoin is the progenitor that broke the ground into the realm of decentralization. Through the Bitcoin backbone protocol⁹⁶, it had built a decentralized system that functions well with primitive liveness[14], but stopped short of the adaptive liveness[18] that is required for cultivating a true, vibrant decentralized economy. Though groundbreaking, Bitcoin dragged many centralized mechanisms along with it, e.g., centralized incentives[33] – the monetizable

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⁹⁴ Karma.

⁹⁵ Towards a practice of token engineering.

⁹⁶ See Exploring the fundamentals of blockchain protocols, and the titular paper itself The Bitcoin Backbone Protocol.

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token – and with that the rest of the progeny of 2nd trinity – centralized identity and ownership. The latter part might come as a shock to the cryptocurrency sect of the blockchain community though. Since Bitcoin and many other cryptocurrencies are considered anonymous (at least semi-anonymous⁹⁷) – a fundamental feature and supposed advantage of cryptocurrency – they at least should have weakened the grip of centralized identity – right? Not really. Anonymity and decentralized finance[18] will save us from centralized exploitation, extortion and oppression – the most proliferated slogan of the cryptocurrency “revolution” – is, unfortunately, a false prophecy. Even if we were to achieve full and all-around anonymity⁹⁸, as long as we let us fall to the siren song of money, identity, and ownership, the tether of centralization will always pull us back in⁹⁹. Retreat to the underground is not real liberation but just another form of control¹⁰⁰.

We must come to the realization that there is nowhere to hide from the iron grip of the centralized regime and their capos – the first[15] and second trinity[34]. There is no escaping the Buddha’s palm¹⁰¹. With such stark reality, how do we go about implement the new purpose of the blockchain[32] – seeding, cultivating and curating the root device for real value? Well, we do what we are meant to do – the Metis Way – if there is nowhere to hide, you hide in higher dimensions; if there is nowhere to go, you go into the higher dimensions – where we build DAC economy and DAC cosmos (which we’ll discuss in the next section) in plain sight.

Since we can’t just go into the wild¹⁰² and renounce money, identity and ownership just yet, we must devise a scheme to siphon resource from the centralized world to support building a decentralized economy. Supposedly that siphoning is the purpose of token engineering, but we must be cautious – many blockchain projects just got hooked into the siphoning act itself, stoned and forgot anything about building a decentralized economy – this pretty much describes most of the first-gen cryptocurrency projects. Among them Ethereum is an outlier and is the only one that enables a path beyond merely siphoning from the centralized cow into building a decentralized economy. Blockchain has not lived up to its potential as an embodiment of real value[32, 32], because it is stuck with the ledger legacy by peddling the pretended value. Maybe a future blockchain generation can iterate beyond a ledger of fake value to become a root device of real value. For now, we have to be content with the siphoning compromise.

The compromise, for now, to coexist with the centralized regime, especially the 2nd trinity of money, identity and ownership, has led us to the unique hybrid mechanism pattern of interaction between two layers of blockchain – the strictly siphoning layer 1 and the hybrid

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⁹⁷ Bitcoin anonymity is hotly debated even from early on in Bitcoin's adoption.

⁹⁸ See Monero and fully homomorphic encryption.

⁹⁹ Just when I thought I was out...they pull me back in.

¹⁰⁰ In sci-fi movie The Matrix, Zion, the one, are just another system of control, in that sense, blockchain is like Zion.

¹⁰¹ In 16th century Chinese mythical novel Journey to the West, the Monkey King Sun Wukong (孫悟空/孙悟空) was tricked by Buddha to believe that he had escaped Buddha’s palm by flying to the end of the world, but the pillars that he found marking the end of the world were actually Buddha’s five fingers – the moral of the story is to be cautious when challenging an all-encompassing power with foolhardiness.

¹⁰² Into the Wild (book).

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layer 2. By carefully orchestrating interactions between the two blockchain layers we could

start cultivating real value with DAC economy under the nose of the centralized regime.

For the real-value[31] conscious participants of DAC economy, token engineering is like walking in fire – we need to be vigilant against pretended value’s power to corrupt. Though tokens are not real value, it is still prudent to design their utilization mechanism around DAC according to the dynamics of the first[16] and second unity[35]. Somehow we need to tame the divergent nature of token as the fake value incentive[33] when it is mixed with spectrum of real value. It is like acquiring an alien microbe cell for function pathways such as mitochondria¹⁰³.

How to cultivate real value with DAC economy? – by programming it, of course. Cryptocurrency always touted itself to be the programmable money – by making money programmable through blockchain technology, the saying goes, cryptocurrency would bring wealth and freedom to the debanked¹⁰⁴, underprivileged people of the world. But money is already programmable – it is already being programmed to exploit, extort and oppress. We don’t need programmable money, we need programmable value. What we need, is not merely token engineering, but value engineering. To make real value programmable – we need DAC to become a programmable device called PVE – Programmable Value Entity.

We need to build a much bigger stage for PVE to thrive – we call it DAC cosmos.