Misunderstanding the Micro
Complex systems with no understandings of the individuals
Over the past few months I’ve been studying systems, mathematics and physics with increasing interest and its helped me see parallels that explain a lot of phenomena on-going in crypto at the moment that I thought I’d try to articulate here.
"Written in 1945, Hayek correctly pointed out a possibly worrisome trend of generating an increasingly complex and interconnected structures of information, without controlling or understanding their individual elements.”
We’re almost 80 years since the prediction and Hayek’s prediction is on-point. The pandemic exposed huge gaps in our understandings of global supply chains, international monetary policy, global health and countless more systems. The current monetary macro uncertainties are a lot of that complexity trying to find equilibrium.
Now, bringing this back to blockchains. I view blockchains as frontier future societies that have capable for enormously great positive change. However, just like Hayek pointed out in 1945, we’ve already unable to understand individual elements and therefore reason about the global interconnected system in inaccurate ways.
A lot of narratives that get peddled on Crypto Twitter are basically bullshit that fall apart if you ask 3 reasonable questions about their core assumptions. However, asking these questions can be very difficult if you don’t have a solid understanding of the components that make them. Structurally this is hard especially given how tribal and non-interdisciplinary majority of crypto players can be. Most people aspire to be maintain just one perspective such as investor, builder, <bags> maximalists, writer, governor etc. Without a magnitude of perspectives to look at a problem you can become blind to how the system operates as a global.
The Merge is a great example of this since it requires the perspective of:
Consensus mechanism developers
However, when certain perspectives aren’t considered and the event in question is a very large one… chaos ensues. Crypto is going to struggle to make changes if those with the most influence have the most narrow perspectives.
Another example is liquidity mining, it’s taken us almost 2-3 years to fully understand how all the various individual elements involved can create very suboptimal outcomes for everyone involved. However, at the start everyone thought liquidity mining was a great idea. Imagine how much more we could have innovated in the past 2-3 years as an industry if we just spent some more time thinking and questioning narratives?
Crypto is a complex system, but it is a fully digital & transparent one which means we should be able to move a lot quicker than complex systems in the real world.
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