How changing the narrative around crypto, DeFi, and web3 is about more than capturing market share or getting new users.
According to a recently released report from the World Economic Forum on global risk, the world is facing the emergence of polycrisis. The tentacles of these multi-pronged threats will likely spread, grab, and consume things like security, prosperity, and opportunity over the next ten years.
A polycrisis, unlike just a regular crisis, has the distinction of being synergistic, which means the end result will be even more impactful than just facing one disaster at a time.
It’s heavy stuff, but worth thinking about. It also makes sense to put some of the pending global risk in the context of crypto, DeFi, and web3.
Why? Because crypto, DeFi, and web3 represent frontier information and financial technologies. They represent a way forward — or an alternative to the current path we are on (even if they also have their own set of risks).
Crypto and company, when deployed at scale, have the capacity to address some of the biggest risks — open digital access and digital equity — identified as looming global risks.
But before we jump into that, let’s first remember the context in which we are operating — and take a minute to remember how we got to where we are now.
The crypto context
It’s hard to focus on viable solutions in the face of all of the doom and gloom of the global risks report.
What’s particularly disconcerting is that the data (in this case responses to sentiment questions by people with specific domain expertise) indicate a painful short-term trend (like the next few years) but a more optimistic long term trend of risk management (like 10+ years).
But one way to start thinking about all of the potential digital risks is to think about what kinds of systems are already in-flight, which brings us back to the crypto industry, which is now nearing a decade-and-a-half old.
One way to think about the importance and usefulness of crypto-enabled technologies — or the digital revolution that the creation of bitcoin inspired — is that they create a new kind of infrastructure that is both secure and open, and individually-oriented and global in reach.
What makes crypto-enabled technologies game changing is that they are designed around their own economies.
Rather than advertising, economies-of-scale, or digital monopolies, crypto technologies have built in network incentives that provide for their upkeep and maintenance, incentive network use and adoption, and provide productive assets in the form of network fees and other economic activities.
Emerging crypto networks can do for the homogenous command and control structure of the internet what residential-level solar panels can do for the energy grid.
In other words, take something that exists as a flat network and make it dynamic and more responsive or capable for individual needs.
The problems outlined in the World Economic Forum’s Global Risk Report are big, serious problems. What’s worse, is that the risks have the potential to only exacerbate other issues.
Some of the biggest issues in the digital domain facing the planet, according to the report, include:
- Risk > A lack of evenly distributed digital access.
- The crypto alternative: Legitimate crypto projects are permissionless and open to all. Open crypto networks can be vetted, analyzed, forked (or copied and then modified into a new version), and generally be accessible to anyone with an internet connection.
- Risk > Digital power concentration
- Risk > Misinformation
- The crypto alternative provides a new way to build the news and media (and influencer) landscape by helping reinforce, verify, and confirm digital reputation and expertise. Also, blockchain-based reporting could make news stories more transparent and verifiable (which prevents things like deep fakes). Lastly, web3 news and social media can be built around creator economies that encourage accuracy and legitimacy (web2 platforms optimized for reach and virality to sell more ads).
- Risk > Information infrastructure vulnerabilities
- The crypto alternative creates digital infrastructure that works best when it is decentralized and distributed, making it more resilient. Crypto networks can also be designed to be interoperable and products and services can move across major networks when/if needed (this just happened with several major NFT platforms).
The new, new narrative
If there is a silver lining to the risks raised in the WEF report — at least in the digital domain — it’s that there are certainly risks developing, but there are also new tools to address the risks.
Some of the tools, like the oldest crypto networks, have been in development for over a decade and are finally reaching a point of maturity and market saturation where they will make a meaningful difference in the future.
This all not to say that crypto, or other frontier digital technologies, will be a silver bullet to all of the global risks.
If we learn any lessons from 2022, it’s the new technologies and the new products and services based on those new technologies can be contorted and leveraged for greed and influence.
It’s important to note, that another of the WEF’s potential risk vectors, is a bubble called “adverse outcomes of frontier technologies.”
Although that bubble was probably created in case the AI bots take over the world in the next decade, it also serves as a reminder that unless properly executed, crypto and related technologies can also lead to unintended consequences — including just developing really complex systems for managing wildly speculative assets and collectibles that have no real utility.
But, in the face of an emerging polycrisis, taking some action is better than taking no action. And crypto is the best alternative for making a better internet.