Decentralising Capital. Solution to capitalism

and

Jan 01, 2021

Capitalism is not a bad thing. Nor is it a bad word. IF AND ONLY IF we all started at the same starting point.

The problem with capitalism today is that some people are simply born more fortunate and that puts them significantly ahead of the curve.

As capitalism suggests, it requires capital. There are 2 ways we make a living today — using capital to earn wages or using labour to earn wages. For example, allowing your land to work for you by receiving rental on land (capital) or using your time to work for you by receiving wages on time basis (labour).

Evolution of Capital

While we think of capital as land, money or other fixed assets, the good news is that capital is about to change.

The capital of the future lies in digital capital. It could be digital tools like algorithms, quant-finance models or machine learning tools. Hence, going down this path, you'd realise that the evolution of capital tend towards those with existing capital to begin with.

The amount of capital, resources, time and skills required to build a quant-finance model is not something you can find on the street. Thus, this becomes disadvantageous to people exchanging labour for wages.

This enhances the inequality that we see today.

Open-source Web 3 to the rescue

This is where tokens, web3 and open-sourced system come into the picture.

In short, we are making these digital capital available for everyone

How? The code, mechanisms, math, algorithm, general smart contract code are all open-sourced and available to use. This levels out the playing field and allows everyone to start on the same point.

Instead of struggling to get the digital capital, the digital capital is open-sourced and available for anyone to use.

The key now becomes "how do I use these resources available?"

In the book, we guide you through the economic principles to be considered and how the various mechanisms are used in DeFi. Together, they form the foundation to use these digital resources available and build a robust internal economy.

More specifically, read chapters 2 and 3 for the evolution of economics and understand the new ways of coordination and incentives in a tokenised economy.