I recently reread Daniel Suarez’s Daemon, a book about a sort of rogue AI (termed “The Daemon”) created by a dying programmer. Originally published in 2006 it’s dated in some ways, a bit pulpy in execution, but interesting to think about.

Mathew Sobol (the creator of the Daemon) evidently decided that civilization in it’s current configuration was doomed by the extreme amount of centralization and wanted to save humanity from a “1000 year dark age”. Sound familiar? If it does it’s because the concepts are an interesting mashups between the premise of The Foundation Series by Isaac Asimov and the more contemporary conclusions of The Sovereign Individual.

Anyway, I was thinking about the current baby formula shortage (wikipedia link - I try to avoid linking news sites which frequently break links), which is essentially a self inflicted wound due to extreme centralization of production. Is it safe to have only a handful of factories producing a necessary ingredient to civilization? What happens if literally a single one of those factories goes offline? Sadly we are running that experiment.

How about during the pandemic? Just to name one example of many - how enlightening was it to find out that all the PPE is made in China and if you don’t make it locally you just won’t be able to get it?

Forces of Decentralization

In the book Sobol’s Daemon says it’s trying to build a decentralized alternative to civilization before it collapses. What are some of the strong forces of decentralization now? I’d argue there are several but they all stem from the internet.

The ones in particular I will single out are cryptocurrency networks. And it really only makes sense to talk about the very strongest crytpocurrency networks. Their value abides by Metcalfe’s Law in many ways and the 2 networks that are very large in terms of node count and total value are Bitcoin and Ethereum.

Other interesting decentralized networks with many nodes would be Bittorent (decentralized file sharing), Helium (decentralized internet access), and Tor (decentralized private browsing).

Incentivized Decentralization

The most interesting thing about specifically Proof Of Work cryptocurrencies like Bitcoin and Ethereum however is that there is a very strong monetary incentive to tie this decentralization into the real world. How?

You are starting seeing it now, but Bitcoin, because it can be mined with electricity is actually incentivizing people to produce their own electricity as cheaply as possible in order to spend it toward mining. It’s an incentive system that is actively causing people to decentralize our very fragile and highly centralized power grid.

Things in the real world are happening in response to this masterless, decentralized incentive system. It’s as if Sobol’s Daemon is alive directing players around the map.

The Decline of the Centralized Nation States

If you’re familiar with The Sovereign Individual (link above) some of the conclusions are

• The “Nation State” is outmoded
• Democracy is unsustainable in our technocentric world
• People will vote with their feet & wallets and exit failing states
• The Internet & the Information Economy will destroy the current world order

I think we are seeing this all happen. The western powers go from one financial crisis to next, entire industries are bailed out every few years, societal issues spring up like mushrooms in spring and those in charge appear to be losing control.

Just some examples of “losing control”: every election is now contested, inflation is out of control, high levels of fraud in government programs (PPP program, unemployment, etc), a shortage of a new good every month, increasingly desperate attempts at control (the new Disinformation Governance Board at DHS), selective enforcement of existing laws, and increasing levels of crime just to name a few things.

As centralized powers continue to accelerate into collapse under their own weight, we can watch the decentralized powers continue to gain traction.

At the root of these will need to be decentralized monetary systems and Bitcoin’s strong incentives are causing people to spontaneously build around it. It’s as if it’s being directed by an intelligence, just like Sobol’s Daemon. As a society, we need a lot more than just of monetary system but more will come.