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Gunther Sonnenfeld, March 11 2022


As federal agencies try to play catch up with rapidly developing Web3 blockchain protocols, the time has come to set the record straight on what is viable, and what isn't viable, for the economy moving forward.

The U.S. Biden administration just issued a long-awaited Executive Order on cryptocurrencies.

It's a rather innocuous set of mandates, although the request for the Treasury Department to create a report on the “future of money,” including how the current financial system might not meet consumer needs, is of particular interest.

Before getting into the broader implications of what this means, it is important to note that we should probably not use Bitcoin as an example of "what to do" in terms of using it as a replacement for central bank FIAT.  While examples such as the Bitcoin City in La Unión, El Salvador show some promise for alternative approaches, none of these efforts have revealed a fully structured emerging economic model that clearly breaks from traditional thinking or mechanics, and that which can be sustained.

In other words, the design of said systems looks great, but the underlying mechanics are still seriously flawed. I've written extensively about solving the Bitcoin problem, and why we need to make a strong case for the development of sound currencies, some of which I've discussed in this interview.

All in all, a vision for a new economic system is prescient. A few years ago, my group (Novena) took a stab at this, providing real world use cases involving distributed ledgers, what autonomous decentralization actually looks like, and how people and companies can share resources and profits in the near future.

                                                                      [You can access the full report here]

Keep in mind, that in order to understand what's possible, it is also important to understand what isn't working, which is why we've maintained contact with operators of the current (old) system.

By no means am I advocating for central planning, in any way shape or form, but it is critical to get a sense of what the financial blind spots really are. Before we throw the baby completely out with the bath water, we need to have a solid alternative infrastructure in place.

The net-net: We're getting there, but we're not quite ready yet.

Written by

Gunther Sonnenfeld

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