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💯 Value

What is value? This is, in a sense, the ultimate question. So, how can we use our new thinking skills based on complementary opposites to break it down and come to some useful insights?

💡 Take a moment to pause here and consider it for yourself before reading further...

We can begin by asking, "What destroys value?" Some suggestions include: inefficiency, disagreement, fear, deception, dispersion, hatred.

Hopefully you can begin to see why playing with pattern is such a valuable and powerful means of thinking. Instead of egotistically presupposing we can drive straight into a coherent answer, the idea is to explore the space of seeming opposition as this, more often than not, sheds light in surprising ways on the original question. In the same way that building trustless protocols means defining clearly what it means to cheat; we can come to understand far more about value by considering first what it is not.

If it is not inefficiency, disagreement, fear, deception and hatred, then it seems like trust in clearly shared truths lies at the core of how we might generate valuable interactions between people.

Consensus

So, how do we create shared truth? The simple answer is: through fiction. People tend to look down on fiction, even though it is really just the lie which reveals truth. What matters most in terms of true value generation is the efficiency of the language you employ to tell your fiction.

The legal fiction of the firm resulted in orders of magnitude improvement in our ability to generate value based on new kinds of transactions. It has also ended up being extractive and corrupt, because legal text must be parsed and interpreted by humans, who are error-prone and easy to manipulate; and because legal text is - in fact - enforced by the threat of violence which relies on the asymmetric power of a nation state.

Blockchains implement a new kind of mathematical consensus fiction. The core question remains: how many people can reliably share in the truth your fiction reveals, for this defines the constraints of what kinds of value can be generated with it.

Narrative

Tribal narratives allowed truth to be shared between ~150 people. These evolved into religious myths around the time of the agricultural revolution. It's no coincidence that, concomitant with the spread of the first major religious myths, came the development of writing; the primary use of which was tracking debt. Myth alone is not enough to hold societies larger than your average tribe together: it needs to be paired with a shared record, built around succinct and significant symbols.

Without tracing the whole history, one can see how our ability to create value has always been tied to the ways in which we tell stories about, and with, our shared records. However, prior to the feedback loop outlined in trust, the record was maintained by someone, which gives them enormous power and means everyone else is incentivized to try and manipulate them.

Because blockchains allow us to define succinctly our shared truths, and because the record itself is shared across all participants, there is a whole new "trust space" we can explore, searching for more valuable kinds of transactions impossible within merely legal fictions.