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"No ethnographic studies have shown that any present or past society has used barter without any other medium of exchange or measurement, and anthropologists have found no evidence that money emerged from barter. They instead found that gift-giving (credit extended on a personal basis with an inter-personal balance maintained over the long term) was the most usual means of exchange of goods and services. Nevertheless, economists since the times of Adam Smith (1723–1790) often inaccurately imagined pre-modern societies as examples to use the inefficiency of barter to explain the emergence of money, of "the" economy, and hence of the discipline of economics itself."
https://en.wikipedia.org/wiki/Barter
Anyone else find something distastefully cynical in the description of "gift-giving" as "credit extended on a personal basis with an inter-personal balance maintained over the long term"? I'm not saying its wrong exactly, it just tastes awful.
It might be a naive attempt at describing the rituals through a cold economic grid. Or it might just be a cynical view of life.
That said, I think a lot of economy is rooted in emotional bonding. I'm helping a lot of neighbors (people that saw me growing up). Offer my time for free since most of their issues are trivial computer stuff. They want to pay me even when it's a 3 minute check and there was nothing to do. Many times they say they don't want to feel indebted. Even though I clearly state that I'm really happy to spend time doing this for free, and will really have no future request to them because I moved a usb cable or something like that. Money is a kind of shared agreement on help here. If you don't use an intermediate medium, you get deeper but also messier relationship because no one is sure how the other party feels and if they'll think they will want more retribution later. With good and intimate relationships it's rarely an issue because you know they'll provide, there's no risk no fear.. but with many people you run into it's creating a lot of unknowns.
This is what killed my interest in crypto. I was fascinated by the idea of money as a technology, but in reality, money is a culture.
Interesting.. My only real interest "in" crypto now is the idea of ubiquitous planet wide management of petty stuff (ala vechain supply chain management). To me there's so many lame jobs, waste and friction that could be absorbed by systems like these, because a lot of inefficiencies are just information tracking and forwarding.
As a society we love to talk about meals (menu, conversation, ritual) and don’t like to talk about the output stage which is just as important and has just as many rituals.
I’m glad there is a Wikipedia page that discusses the reciprocity of non-cash relationships. It’s an enormously important element of social societies (of humans and other species) and is probably 60% of the content of advice columnists (my child isn’t calling me / I have a clingy friend / I didn’t get invited to a party though the hosts were at my house for dinner …)
No, that's what gifts are for in some cultures. They _come_ with strings attached, and everyone is aware of the deal, and it's how it's worked _always_.
Where things break down if one party expects to receive a "no strings attached gift" and one is expecting to participate in a complex system of social and economic credit balance.
Do they have gift bailiffs who come and take your couch if you can't give an expected gift at some point? What's the interest rate on gifts?
I'm not sure how to make the above sound less snarky - I'm genuinely interested in how this stuff compares to more formalized systems of debt in modern societies.
> Do they have gift bailiffs who come and take your couch if you can't give an expected gift at some point?
Small groups of people (tribes, essentially) can and do use peer pressure (ostracisation) to enforce the agreed upon social contracts.
IOW, if you get a reputation as a non-giver amongst your group of friends and family who are all givers, they'll soon stop associating with you.
> Do they have gift bailiffs who come and take your couch if you can't give an expected gift at some point?
You become a bad neighbor and everybody stops helping you. Things may get as bad as nobody trusting you at all, and you becoming the escape goat for some problem.
People organize this way up to today, even in mature economies. There's mystery to solve.
The main difference is I suppose is the gift giving perceived as an obligation or an expression of caring and love. If you are culturally conditioned on one of these interpretations I presume the other feels plain wrong.
If it's an obligation, then I suppose the retributive action (if any) from not meeting this obligation probably depends on the society and the event. Different societies have different responses to individual who don't play by the rules.
In general even non-literate human societies are pretty good in carrying a common ledger of who-owes-what-to-whom.
I suggest the book "Debt the first 5000 years" by David Graeber on the details.
But overall, when traveling, check the local customs around gifts from a cultural guide :)
It has a long history in anthropology. If you take a course in anthropology, especially if the focus of the course is on the so-called "primitive tribes" who were the focus of so much research in the early and mid 20th Century, then you realize "gift-giving" is, in this field, a bit of technical jargon, given a very specific meaning in this kind of research.
2 people in my own family do this. it's absolutely horrific and has cost me the relationships with both.
I believe in this context, the “gifts” are primarily staple goods that people need to survive. So, reciprocal balance takes on a level of urgency when one party finds themself in need.
You feel this way because debt has been demonized for centuries.
Since I figure there would be some scalability problems, I like this bit from the wiki:
"Anthropologists have argued, in contrast, "that when something resembling barter does occur in stateless societies it is almost always between strangers.""
Heck, even with the classical understanding of barter leading to the creation of money, it's not like fiat money immediately replaced it.
Do you think that guy that runs an organisation called "Hustle Fund" is that interested in those details.
https://en.wikipedia.org/wiki/The_Nature_of_the_Firm
: Coase (1937)
"The traditional economic theory of the time suggested that, because the market is "efficient" (that is, those who are best at providing each good or service most cheaply are already doing so), it should always be cheaper to contract out than to hire.
Coase noted, however, that there are a number of transaction costs to using the market; the cost of obtaining a good or service via the market is actually more than just the price of the good. Other costs, including search and information costs, bargaining costs, keeping trade secrets, and policing and enforcement costs, can all potentially add to the cost of procuring something via the market. This suggests that firms will arise when they can arrange to produce what they need internally, and somehow avoid these costs."
https://arxiv.org/abs/cs/0109077
: Coase's Penguin, or Linux and the Nature of the Firm, Benkler (2001)
"Specifically, I suggest that nonproprietary peer-production of information and cultural materials will likely be a ubiquitous phenomenon in a pervasively networked society. I describe a number of such enterprises, at various stages of the information production value chain."
(OK, so that's just a couple of quotes and I haven't advanced a thesis, but the thesis is "yes, possibly, provided the market costs can be addressed", and it looks like the article highlights that the _search costs_ for developers are incredibly high. Defi or not.)
Super interesting, i rarely find these perspective on economic cost of the economy itself. And then there's the human cost.. I have this feeling that every economic component acts as a silo that forbid people to share important information (due to competition or just incompetence) which seems very detrimental in the long run.
I've read this take a number of time and I really think the VC crowd is mostly missing the point when it comes to why DAOs etc are able to get such good talent.
1. I would wager a good amount of people working on DAOs would never have gotten a job at Google. This isn't poaching the top tier talent from FAANGS but rather unlocking an ignored pool of talent because they lack traditional credentialism. To wit one of our investors is a co-founder of Sushiswap. Knowing them I don't think its possible they would have ever been considered for a FAANG position.
2. People mostly just want to work when and where they want with clear objectives and a chance to earn a good chunk of what their labor produces. I would argue for many that having a decent equity stake in a startup that is worldwide remote solves for this.
I keep hearing about this war for talent over and over and even though we're functionally a nobody seed stage startup I've never felt it because from day 1 we've been worldwide remote and asycnh. People say they can't find developers but the last time we posted a job we got 300+ applications in less than 24 hours and probably 1/3rd were reasonably qualified. DAOs are fine. I think they'll exist to some degree moving forward, but it isn't the end all be all I think some folks make it out to be.
"2. People mostly just want to work when and where they want with clear objectives and a chance to earn a good chunk of what their labor produces. I would argue for many that having a decent equity stake in a startup that is worldwide remote solves for this."
So true. And the challenge to this, at least in Europe, has nothing to do with technology - it's a legal challenge. The process of issuing and trading shares of a company is super simple in itself, it's the regulation that makes it hard.
And since securities regulations apply to things like profit-sharing tokens... then, good job, you just solved nothing and made the tech 10x harder.
> 2. People mostly just want to work when and where they want with clear objectives and a chance to earn a good chunk of what their labor produces. I would argue for many that having a decent equity stake in a startup that is worldwide remote solves for this
Do you run into a lot of overhead managing all the different laws in each country for full-time employment and equity compensation?
So far no. There's lots of companies that help achieve this now such as remote.com that make it significantly easier.
Also have to be noted, that the change to make bucketloads of cash from shitcoin peddling is something the traditional corps can't offer. Yeah for sure something like sushiswap requires talent, but it is only couple of years old and is already churning out millions if not billions. With many other business lines the same work/reward rate just isn't there.
It's very strange to me that people in the decentralized web3 world mention transparency while on their next breath talk about anonymity as part of the culture. People have been anonymous in the crypto world because they've been targeted by hacker-thieves and robbed of their digital assets/currency. If you're a high-caliber software developer who creates highly-coveted DAO programs, you will be a target and consequently need to protect your identity. On the other hand, if you're a malicious actor, you also benefit by the anonymity and can introduce various measures into the DAO that advance your own personal interests at the cost of the rest. With anonymity, you avoid being held accountable by any legal system. There was a major DAO project that ended horribly bad. Were the bad actors held accountable?
I've been part of the space since years, and regarding the anonymity argument, I've never heard that anonymity protects against crypto-thieves. May be true though.
But, I think generally it's wrong too. Neither does it mean that when you're a prolific dev, you're crypto rich. Or that you have to display your richness to everyone.
The main reason I think people have opted to be anonymous is to avoid regulation.
I've written a dedicated blog post about this topic:
https://timdaub.github.io/2021/10/08/detokenization-or-anony...
Does the author (whose company is namechecked five times in the article) have any data to support the thesis that DAOs (explained nowhere in the article) would resolve the talent problem? Plenty of vaguely inspirational messages in the article, but not much of substance.
"Plenty of vaguely inspirational messages" I totally agree, but this a much bigger trend with job postings around the start-up ecosystem. Sorry guys, but nobody (or the majority of people) is really "on a mission to democratize X", or "to great the best customer experience in ..." It's really not exciting at all, because when you finally cut through the crap that is trying to sell you a "mission", the ultimate goal is to bring tons of profit to the VCs and founders of the given start-up. So, just don't lie to me on my face, in fact, I much rather respect the guys being completely honest "we created this company to get stinky rich, there's no mission behind it, nobody could really love to spend their entire day comparing insurance plans (for example)".
"Mission" is a euphemism for a non-monetary reward. There are lots of these in many businesses. Which is fine until mission becomes an excuse to keep down wages, and expressing belief in the mission becomes a piece of flair.
The latter situation is rampant in the so-called helping professions.
Or better yet, "We're here to make money first, and if we can make the world better in the process, then that's even better". I'm sure this mindset is what most of the "missions" come down to anyway, if at all.
It can be the other way round. It's been interesting watching Ecologi grow exactly this way. They want to plant trees and do what they can to right the world, and the best path they see to do that is to make use of VC to get there.
And OpenCollective who sought and found the 'least predatory' form of VC and are now looking into an "Exit to Community" [0].
[0]
https://news.ycombinator.com/item?id=29239910
Remember the DAO hack in 2017? I think whoever was responsible for it was a hero because they showed that the claims peddled by Buterin/Wood are at best utopian, and at worst fraudulent. The idea that code is law and there is no centralized actor who can control the network fails because bugs exist. Buterin showed the world the emperor has no clothes, and the underpants are full of skid-marks, when deciding to fork.
A hard fork was the only rational thing he could have done and how any other centralized actor would have responded. But by doing so all the previous talk about decentralization and "code-is-law" mumbo-jumbo was exposed for what it is.
So whoever did this should be celebrated from saving the world from a much bigger shock that would have eventually happened once it would have been actually adopted by real market players. If you hack a system like IOTA, OneCoin, Ethereum and show the world that it's just a bunch of scammers who talk about things they wish the system to be, as opposed to what it realistically can be (or presently is), they are doing the world a favor by educating the rest of us.
We do not talk enough about what a grift the whole Ethereum platform is. I guess it is because people are just tired of it because we've already had at least 6+ years of pointing it out. Not just Ethereum's Wood/Buterin but many others (the guys behind the IOTA foundation making claims about contracts with Microsoft, Volkswagen and Cisco that never existed). They all suffer from the same issue which is very prevalent in Tech. They have been trying to _"fake it before they make it"_ for too long and can no longer walk it back. When people do this the whole thing becomes bigger than them, it goes from an idea to a prank to a worldwide scam[1] from which you have no choice other than doubling down on your lies.
[1] see the story of _Dr Ruja Ignatova_ - "The Missing Crypto Queen"
https://www.bbc.co.uk/programmes/p07nkd84/episodes/downloads
<- the major difference between Ruja and Buterin is that Ruja was a McKinsey consultant who didn't understand technology. This makes Buterin a far more successful (and more dangerous) player. Buterin is what Ruja could have been if she wouldn't have had to trust others in defining the technological aspect/parts of OneCoin.
(copy-pasting)
The DAO was a very extraordinary event that occurred under very unique and unrepeatable circumstances.
1. Ethereum had just launched. There was a sense of everything being in beta.
2. The Ethereum stakeholder set was very small, so obtaining consensus for such a controversial hard fork was much easier to accomplish than it would be today.
3. The economy on Ethereum was very small, so
a) a hard fork was far less disruptive than it would be today.
b) an undermining of Ethereum's commitment to neutrality/immutability jeapardized far fewer decentralized application projects than it would today.
4. Smart contracts were completely new, so there was a sense that people could be forgiven for their mistakes.
5. The Ethereum Foundation had promoted the idea of a DAO on their website, and several Ethereum founders had promoted the specific DAO that ended up being hacked. These facts made the DAO appear to be more than a completely third party app.
Ethereum is very different today than it was in 2016, and a DAO-scale mishap would never lead to a hard fork again.
That's arguably even worse though, it's the Ethereum Foundation acknowledging the principle that DAO code is law and people deserve the contracts they sign up for is fundamentally nonsense, but taking the position that malicious actions mattered only when early adopters were the people hurt and people behind the Ethereum foundation were personally embarrassed by them.
I may not have conveyed my point effectively. What I was implying is that the EF may have inadvertedly gave the impression that the DAO had its blessing. If something is presented as part of the official protocol, then people will assume that a hack will lead to a rollback.
In general, I think given how ambitious the DAO was, the rollback can be excused.
It's hard to stress how new a universal smart contract execution environment were at the time. Until outside of a few extremely niche communities, the idea had never been discussed, let alone experimented on, before Ethereum was introduced.
And the DAO was a very complex smart contract, that every one jumped in with intuition about the vulnerabilities of smart contracts.
Reminds me of another story this week about a bug in a smart contract leading to $30 million being stolen. The term smart contract is starting to feel a bit ironic and I wouldn't be surprised if the name gets changed at some point.
There seems to be a world of difference between an information-based organisation, which would be very easy to outsource because the on-boarding and offboarding could be very fast (literally hours)
However, try doing the same for technical people who will almost always require onboarding for a significant period of time before they can be super-productive (at least on existing work) and there is a lot of risk here.
It also doesn't talk about those who claim "we really believe in your mission" and in reality are a PITA and you lose a couple of months, after which you need to let them go and find someone else.
Lastly, this seems a luxury for those who are wealthy enough that they can enjoy the idea of mission-first and profits second. Most businesses cannot afford to do this in the same way, they need the money to pay the bills.
Those complaints aside, I like it as an ideal and it is probably a good practice for most businesses to know what their mission is.
I think history has something to share here: This is not a new idea. Open Source communities, Co-ops, Friendly Societies, Mutuals, Building Societies, Investment Clubs, Slicing Pie, Vestd, to name a few already existing ideas that are remarkably similar.
It's not a new idea but it's an evolution on that (a flexible collection of the items you listed in one). DAOs are a great organizational and (depending on the implementation) a funding tool.
For a particular example, open source projects typically have funding issues and users typically want new features. This is a great way to get funding while also giving users the ability to vote on new features priorities, etc.
I feel this still could be better implemented with stripe + database .
The purpose of involving crypto is (a) riding the hype wave and (b) access to "dark" money that you neither know nor care where it comes from.
don't forget (c) cashing out and running away before it all falls apart so somebody else is left holding the bag.
While simplifications of complex ideas are often necessary to begin an essay, this level of simplification does violence to the historical reality. Having read a lot of economic history, to read this essay's simplifications, I feel a bit like John Derbyshire, when he asked, at the end of "Unknown Quantity: A Real and Imaginary History of Algebra," was it possible to get useful work done with Category Theory? Is there any level of abstraction that goes too far? Likewise, here I would ask, if you have to simplify reality this much to start your essay, then maybe you should rethink your whole thesis?
"_For centuries, work has been incredibly inefficient. In the “barter era”, one person would do work in exchange for someone else’s work. E.g. I’ll make you a silver fork in exchange for salt and spices. There were many things challenging about this type of economy. 1) There was no common currency to transact and understand value, and 2) on a macro level, it was hard to know whether your good or service was really needed and whether it was going up or down in value. E.g. Is there a surplus of spices? Should I be spending time in spices or something else this year?_"
I have a dozen criticisms of this essay, but maybe the most obvious is that I still ask myself these questions several times a year, and I'm definitely not living in a barter economy. Indeed, these questions seem more likely to be asked in a monetary economy that's already seen considerable specialization of labor -- one person is making a silver fork, and another person is harvesting spices. This is the world of, say for instance, Britain in 1800 AD, not 1800 BC.
“Debt: the first 5000 years” makes a convincing history-based argument that the barter economy never existed, and that it’s an invention of economists post facto to justify the existence of money.
Basically people in small societies would be in debt to each other and they would use that as a way to conduct “trade”.
Interesting but the mega trend is something different IMHO.
I'm more interested in the rise of one person startups enabled by first class of the shelf open source and SaaS tooling.
This author claim that the main challenge for startups is attracting and retaining talents. They hypothesize that building the organization around shared values and like-minded people would solve the attraction and retention problem. They then present DAOs as a way to solve the problem.
I think these ideas are interesting, but I am not sure I agree with the main hypothesis: does providing shared values solve the talent problem? Good values are definitely a part of choosing to work at a certain company, but that is not all. Monetary compensation, culture, career possibilities and experiences are part of it.
I feel that the concept of DAOs offers much more than what the author present. If I understand it correctly, DAOs offer a programmatic way to organize the decision making and wealth sharing between the participants. Compared to the traditional way (contracts+lawyers+notar), it becomes much cheaper and faster to make decision, distribute and re-distribute wealth and ownership. Basically, DAOs have the potential to remove friction in all what is organizational for a startup. This opens new possibilities for wealth sharing and decision making processes in the organization.
Some ideas about what DAOs could allow.
The developer guild: A group of peoples (devs, ux, business dev) meet online and form a temporary DAO and start taking contracts. The DAO would give the participants 1) a programmatic way to divide the money they make 2) vote on directions to take (hire/fire decision, take/fire clients, pay of each participant given the contribution..)
The startup: Two co-founders decide to build a b2b saas in some vertical. They build a DAO. Start taking investor money which comes with voting rights about certain issues (hire/fire CEOs, hire/fire C- level execs, equity). Similarly, they start hiring founding engineers which a certain voting power in the DAO around certain issues (should we optimize for growth or get dividends, should we fire the C-levels..), which also get to choose whether to trade equity for salary. The level of democracy in each startup would be different. Some would give employees some voting rights about big decision, some only about wealth distribution..
The DAO in the second example would allow 1) new ways of governance inside the organization (compared to the board->CEO->organization) 2) new ways of wealth and risk sharing inside the organization (probably benefiting employees) 3) a friction-less lawyer-less way of doing both of these.
I don't know if all of this makes sense, I am thinking out loud here, and I honestly doesn't know much about DAOs.
The key question is this: how are votes enforced when they impact non-blockchain related actions?
That is, Who pays the taxes on the people that get hired? How is non-blockchain income distributed? Who do you sue if a vote violates a labor law? How does the DAO purchase or pay for services from non-blockchain entities?
If a DAO token is "equity" then it will fall under security regulations of various nations. In addition, it cannot _be_ equity unless the DAO is also a registered company in some jurisdiction.
Nothing, literally _nothing_, you described there needs a DAO to happen.
In fact replace the string "DAO" with "corporation" and everything still makes perfect sense - because what you are describing _is_ a common-or-garden corporation.
This article ignores the fact that many people outside the "founder-bubble" would happily trade less autonomy/self-determination for the peace of having someone (or an organization) telling you what to do and giving you a predictable path into the future.
Nothing in DAOs is new. Look at 30 year-old open-source projects, or books like "Reinventing organizations" from Laloux. And as such, it's fair to believe that DAOs will work to the extent that all other previous attempts at distributed organizations have.
In short: it works for some people, in some cases.
The idea being discussed here is being branded a 'decentralised' startup to make it sound sexy and crypto, but honestly, to me it feel like 'open source' covers the idea better.
It's not straight open source. It's open source with stakeholders. For example if Signal was operated by a DAO, thet would have never added the crypto payments because that's something seemingly everyone except the founders disagreed with.
It gives stakeholders (dao participants, aka users that are more involved), a say in the direction of the project.
Wasn't it clear already centuries ago that deciding by consensus results in risk averse, mild, uninteresting solutions?
You don't need a DAO for that.
A basic unincorporated association would be enough. Perhaps a (limited liability) company if you wanted the entity to have legal personality.
First of all I must disclaim that I do like the folks from hustle fund. They do seems like a genuine VC.
Next, the war for talent can be easily solved if you pay more. Same as the market for tomatoes.
You are trying to convince the farmer that there is a mission (special kind of salad) for the tomatoes , hence he should sell you the tomatos for 50% off.
On a practical note, is anyone here a member of Friends With Benefits DAO? (yea not what you think if you haven't heard of it before!).
Curious to understand the value people are getting from being part of that network which at the time of writing costs a sizable ~ $7800 to join for full membership.
highly recommend the missing cryptoqueen podcast. the parallels of the motivation/aim between the people behind OneCoin and things like the Ethereum or IOTA is very clear.
Have listened to it, It is excellent and anyone investing or building in the crypto space should listen to it. However I don't buy that Vitalik Buterin = Dr Ruja.
I don't think Ruja / Buterin are the same. But I do believe there was a point when Ruja believed that she could actually create a currency. Once she invited MLM grifters to peddle something they didn't understand and were hugely successful in it, it became an opportunity to continue the grift. The parallel is that both started something that has become too big to fail in the eyes of the founders. Ruja is 100x the grifter that Buterin is but both used an approach where they have been promising something for so long that it's hard to walk back on that "promise". That type of personality is very common in Tech I think
I think this can be generalized to open source projects now having a significant new source of funding: tokens.
Decentralized digital tokens fit the ethos of open source communities better than any previous form of money. You can issue them to party living anywhere in the world, with no trusted third party intermediary, and without asking for any identifying information from the pseudonymous recipient.
We truly live in the age of Dunning-Kruger and there is no space, other than anti-vax, where the effect is more visible, than crypto and anything adjacent.