Permissionless III, Day 2

In 1848, Brigham Young commissioned the minting of gold coins ("Mormon gold," as they came to be known) to circulate as currency in the newly settled territory of Utah.

The first coins — just 49 of them — were minted in Salt Lake City using gold dust brought back by members of the Mormon Battalion who had participated in the California Gold Rush.

Modest as it was, Young had realized that to create a sovereign community, early Mormons had to not only go somewhere very remote, very cold, and very unpopulated, but create their own sovereign money, as well.

Thanks to cryptocurrency, that process may be about to get a lot easier.

As Balaji Srinivasan mapped out in a talk at Permissionless, advances in both cryptography and cryptocurrency have made possible a new kind of "techno-democracy" in which geographically dispersed but like-minded people might choose to live together in "network states" governed by smart contract.

These states would gain legitimacy through popularity — Balaji envisions a near future in which the President of a network state receives many millions more votes than the President of the United States, creating a "techno-democratic flippening" of historic importance.

"People will say these aren't real elections just like they said Bitcoin and Ethereum aren't real currencies," he predicted, "but if enough people believe in them, they are."

What kind of network state would crypto people create for themselves?

Bryan Pellegrino of LayerZero Labs would likely worry that it wouldn't be sufficiently cypherpunk.

In a cri-de-coeur talk at Permissionless, Pellegrino lamented that "most people in crypto today just don't care" about crypto's original values.

Bitcoin and Ethereum turned the cypherpunk ethos of personal freedom and privacy into "decentralized, permissionless systems that give individuals real sovereignty."

If that sovereignty were to be extended into one of Balaji's network states, however, it's unclear how many crypto people would choose to digitally emigrate because Pellegrino believes the industry has lost its way.

"Immutability, censorship resistance, and permissionlessness aren't just buzzwords," Pellegrino reminded us. "These are the only unique properties that make crypto fundamentally different."

In Pellegrino's telling, the crypto industry has been getting progressively further away from what makes it different by making concessions on those unique properties — sacrificing immutability, for example, for the convenience of centralization (as in the case of layer-2 blockchains controlled by multi-sigs).

If the industry continues to make these concessions — often in the name of either venture-capital profitability or regulatory compliance — "we're going to end up with a system that's even worse than the one we're trying to replace."

"Stop compromising on the things that make crypto crypto," he implored the crowd.

"Build things that cannot be corrupted. Build things that will change the world."

I imagine Brigham Young must have said something similar.

The rest of the second day of Permissionless proceeded along more conventional lines, with lots of talk about building, much of which I think even a cypherpunk like Pellegrino would approve of.

(I also hear some talk about prices that he definitely would not have approved of — mostly initiated by me.)

Modular blockchains, layer-3s, ZK proofs, chain abstraction, intents, and marketplaces for compute were among the newer crypto things discussed in detail by some of the industry experts who are building them.

The most consequential crypto things currently being built may prove to be those designed with an eye towards the coming age of artificial intelligence: The Crypto x AI track at Permissionless was full of ideas on how "crypto-economic incentives" can be leveraged to create a decentralized ecosystem of open-source AI.

This is worthy work because the alternative, as Greg Osurii of Akash described it, is living in a form of "digital feudalism."

AI will have god-like power to influence the way people think, he told us, and crypto-incentivized coordination mechanisms may be the only thing to keep that power accruing to just a handful of tech giants.

I'm not yet sure how confident I should be that it's crypto that will keep us from that dystopian fate.

But a day speaking to the people assembled at Permissionless was at least reassuring that the crypto industry is still trying to build good things — some of which might change the world (or save it, even).

— Byron Gilliam

Erratum: Yesterday I failed to include Utah in the short list of US states that legally recognize DAOs — an eagle-eyed reader informs me that DAOs have been welcome here since the start of the year. Thanks for the correction!

P.S. Join us at 5 PM tonight for Karate Combat at the Salt Palace Convention Center, Hall E! Get ready for an action-packed night as your favorite crypto influencers, David Hoffman and Kain Warwick, face off in an epic battle!

Don't wait, grab your ticket now! Just click "have an access key?" and enter Permissionless50 to secure yours.

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