CRYPTO: A utopia that can buy its own Sovereignty

Power. Sovereignty. Utopia. A recent piece from Daily Fintech points us to Sol, the Puerto Rico crypto billionaires experiment; Bitcointopia, an experimental city in Nevada; and Varyon, an artificial island off the coast of French Polynesia. These attempts at a new world are ostensibly about cryptocurency adoption, but their precedents trace to the DNA of humanity itself. A utopia (or dystopia for that matter) is a dream of the world defined by its impossibility. It may be a guiding light, or it may be a warning, but it is not reality. To carve out a utopian experiment has immediate connotations – cult-like, counter culture, naïve. See the utopias of Russian architects in the clutches of the Soviet Union, building cities on paper that could never be, or today’s techno retreat of Burning Man, where billionaires recreate Mad Max landscapes to feel human outside their corporate castles.

For most of human history, the frontier was a real place. It was the place where water dripped off the world into oblivion, the place where the pantheon of Gods looked down on mankind, a land unconquered by ships and swords. As humanity lifted the fog across the globe, the physical frontier disappeared. Sure, hard military power still applies in redefining borders between neighbors. But there is no more room left for Manifest Destiny, other than in our imagination. From this mental frame, we bring forth economic and technological frontiers, conquering not the Earth, but ourselves. But let’s not be fooled. Sovereignty, that embodiment of lethal force in the hands of the law, may have maxed out across the geography. But control of sovereignty can still be bought. After all, we are human, and our power comes from belief in the source of that power. Economic and technological conquering results in the re-shaping of sovereignty. Facebook’s 2+ billion users are larger than any country on the planet. Does it’s soft power echo across governments? You bet it does. Tech giants spend millions per year in lobbying, driving their desires into the body politic.

At the heart of every tech company with aspiration to go public is a utopia waiting to be unleashed. Uninspired by the political realm, we burn our hearts into capitalism. And these are beautiful creations. But once they taste power over people, once billionaires hold monopolies (e.g., from Bezos to Bitmain), utopias start wanting an army and a police. Small sovereigns and peripheries of large ones give first, yielding their regulatory apparatus to help perpetuate the new paradigm. Want to launch a crypto investment vehicle wrapped in a legal veneer that purports to be of equal stature to European (Malta), American (Puerto Rico) or British (Gibraltar) law? Or maybe build a new bank under custom-made Lithuanian regulation? But it won’t be enough for Crypto, which is not merely information flow, but information married with money. Crypto will buy its way into being a sovereign, if it can’t persuade the incumbent ones to let it be.


Source: Daily Fintech (Crypto utopias), Utopias (SolBitcointopiaVaryon), Lithuania (Fintech bank), Palace of the Soviets

FINTECH: SoFi and Uber Are a Symptom We Must Fix

A deeply disappointing and embarrassing account of SoFi corporate culture was exposed last week. Starting with CEO Mike Cagney and through multiple levels of management, there are serious allegations of sexual harassment, discrimination and disrespect towards women over whom SoFi executives held power. Cagney resigned abruptly to give the company a chance to move past the accusations. The story would be more shocking, were it not a blow-by-blow repeat of Uber. And the fall of Zenefits, driven by aggressive expansion skirting regulations and a frat sales culture, comes to mind.

In defense of its core business, SoFi has published strong statistics around performance in the last quarter -- $134 million in revenue, 60% YoY growth, $3.1 billion in loans. The dangerous implication is that high quality financial performance is what matters, and personality scandals are acceptable (or perhaps do not reflect on the corporate entity). Do we really have to accept cowboy entrepreneurs as a requirement to build high-growth innovative companies? Is a toxic startup ecosystem an acceptable byproduct of chasing growth and hitting revenue numbers?

Change starts from calling things like this out, and understanding that companies operate in a society, not in a vacuum. They are collections of people, and their mission and culture reflects the example set by leadership. Therefore -- leadership matters. Further, when attention is scarce and product choice is infinite, creating a disrespectful culture is terrible business. Consumers can and should vote with their wallets -- Commonbond will be glad to have them. And last, as Fintech companies build increasingly more human judgment into software (think blockchain and artificial intelligence), these biases will become massively amplified. Powerful tools should be built by teams with diverse backgrounds, genders, ethnicities, and wealth levels, or risk perpetuating the mistakes of the old world.