An interesting development in the blockchain space has been the concept of crypto cities. El Salvador recently announced the creation of Bitcoin City, Nevada announced a blockchain smart city on a 67,000-acre site known as Innovation Park, Miami wants to establish the MiamiCoin and transform the city into the world’s cryptocurrency innovation hub, and blockchain company CityDAO just bought 40-acres in Park County Wyoming to build an entire city from scratch on the Ethereum blockchain. This raises the question of what the difference is between Gopher’s approach compared to these projects.
To make this comparison, we will examine crypto city projects since they have been widely applauded amongst global crypto communities and garnered strong support from big names in the industry. CityDAO is one of the most radical ideas but the wider global trend is following CityDAO’s approach as we can hear voices from all corners of the globe announcing their own version of building crypto cities from scratch on an empty plot of land. The fundamental idea is that the current system including city governments, infrastructure, funding, building design and more is broken and inefficient, thus it is best to leverage blockchain technology and decentralization to build a completely new city with new laws, governance, new infrastructure including a new token economy so communities can have a larger voice as well as voting power in the city they are building. The belief is, that this type of city built around decentralization and blockchain technology will lead to more economic equality, trust and efficiency.
More economic equality
One of the main arguments put forth by crypto city projects and projects in general that aim for decentralization is the notion that by using blockchain technology and DAOs, it will lead to democratization and thus more economic equality. But what is economic equality? We first need to have a clear definition of what exactly constitutes economic equality and the term economic equality needs to be made precise. If we think of blockchain tech and voting mechanisms of DAOs purely from a computational perspective, equality can be measured based on the computational or voting outcome producing a certain value. Based on this, economic equality can be defined by the input and output value or input and output of economic resources. Economic equality can hence be attributed to a form of Aristotelian proportional equality, meaning equality in the treatment and distribution of goods to a person or community's needs, and that unequal claims to distribution also ought to be considered proportionally. But this still leaves the question open as to who is due what. This an important question to consider but a complex one to answer as the input of economic value might not always be equal since input can not purely be measured in quantitative value. Inequality in the input value can exist since people making inputs into the blockchain or vote in DAOs have fundamental different abilities, resources, net worth and circumstances beyond their control such as social position, political power and intelligence. For example a person might have more compute power or has special knowledge to leverage certain arbitrage situations in the system that would allow that person to end up with a different value output than others when all are making the same value input.
More trust
The notion of trust within blockchain systems, smart contracts and decentralized technologies is an important one. Just as we attributed economic equality to input and output to produce a certain value within the system, we need to ask the question when it comes to trust or more trustworthy transaction on the blockchain, what value does trust have? Some argue that in a system with more trust, where trust is coordinated and computed based on the immutability of blockchain transactions, trust enhances cooperation, and makes cooperation less complex than cooperation without trust. Trust also produces autonomy and independence from one another. It seems that the advent of smart contracts is making trust obsolete, and that for example a crypto city formed around a DAO will make governance of the city more trustworthy and will lead to more cooperation and hence produce a more desired output value. But the important question still remains of whether people put trust in the smart contract or technology itself, or in the people operating and creating the system? That leads to the question of when can trust be established with a guarantee or very high degree of certainty? Based on the many dimensions of trust, this question still remains too complex to answer.
More efficiency
Efficiency of the system leading to increased output and value creation is another aspect that we need to examine. By using blockchain tech and decentralization, the argument is that crypto cities such as CityDAO that are being established from scratch will become very efficient with regard to economic output. Instead of going through traditional centralized municipalities or government which are often inefficient when it comes to public policy, funding, building regulations and zoning for example, DAOs will make the process less complex and decisions can be reached faster. Resources can be placed into areas that really need them and moved more efficiently through the system. And since the entire system and city infrastructure is built around efficient blockchain systems including a DAO, the belief is that the output value that can be measured in infrastructure and buildings produced, homes built and governments and laws established, will be greater when compared to the output value of traditional cities. This is still to be seen, but when it comes specifically to systemic efficiency, for example increasing asset liquidity by changing forms of property ownership or the way real estate assets are held or transferred, it can be easily shown that by reducing certain bottlenecks in the current system and using blockchain tech, the new system could operate more efficiently. But when it comes to city and community building, we are talking about changing human efficiency, which is much more difficult to accomplish for some of the same reasons as outlined in the section about economic equality.
One of the ways to approach this problem of human efficiency and trust when building a crypto city, is the idea of de-risking by placing the location into a remote deserted area that has crypto friendly laws, and by starting with a piece of land from scratch. The hope is, by starting from scratch, the project is taking the path of least resistance to have a higher chance of success and to reach human efficiency. Another advantage of starting from scratch with a plain plot of land is that the project can garner early support from like-minded people, and that the early backers including the larger community as it grows can all live and establish this crypto city together, all striving toward a common ideal and ideology. It’s very similar to a large group of like-minded people all packing up their bags and moving to an island to start their own community or country because they are fed up with the current community they are part of, with the hopes of building something better. This concept of community around a certain ideology is also multi dimensional as people in the blockchain space are not only part of digital communities online, but they also physically and geographically live amongst certain communities. The question then becomes what is the value of a community or is there any value in current or traditional communities? Supporters of crypto cities I’m sure place some value in current communities, but they see greater value in a future community around a new crypto city governed by a DAO. Evidence for this is, that for example recently all the NFT citizenships of CityDAO sold out.
Gopher’s approach
Based on these three notions of economic equality, trust and efficiency, Gopher’s approach is fundamentally different compared to other crypto city projects. As laid out above, economic equality and trust are very complex, and therefore it is difficult to say with a high degree of certainty if blockchain and DAOs are really the answer to bringing more economic equality or more trust to a blockchain enabled system than current established systems of value transformation and governance. Blockchain systems are ultimately designed and operated by real humans, humans who are driven by emotions and desires such as love, greed and fear. Even if the system is perfectly designed, the value output would not result in real economic equality since people are driven by these emotions and as stated above, inequality will exist simply due to fundamental differences in human abilities.
The area that Gopher believes very strongly in however, is around the notion of efficiency and community building. And though it is very difficult to create efficiency when you are not only dealing with systemic efficiency but also human efficiency amongst many other dimensions that come into play when building a better city, the one thing that most of us and most projects can agree on is that ultimately we want to build better communities. Technology is great, digitization creates systemic efficiencies and blockchain might perhaps bring more trust and cooperation to current systems, but all of this is meaningless if it does not lead to better human interaction, a better society, and a better community. A better community also does not necessarily mean one that is economically strong with a free flowing value chain built on top of blockchain tech. Better should simply be defined as happiness, so a better community is one where a majority of the community members are truly happy to be part of the community. We also need to consider currently existing communities that we are already part of, and how to make them better. Building something new and shiny from scratch is easy. Solving problems in existing communities and making those more efficient is much harder. But if the ultimate goal is to create a more happy community, the latter option of implementing small blockchain enabled communities within existing communities is more impactful, meaningful and also leads to more value output of happiness. When you are building a crypto city from scratch, you are only making the newly formed community happy, but the project itself has no real impact or meaning on the surrounding communities. Perhaps in the future when the city grows in size, it could start benefitting the surrounding communities. But until then, it has no real impact.
From an efficiency standpoint, building a crypto city from scratch starting with a plot of land is also not very efficient. Everything has to be created from scratch and things have to be voted on and governed by a DAO. For the enormous amount of decision making that needs to take place when building a city, DAOs seem to be ill equipped, and will likely be very slow in processing decision making and reaching consensus. Plus, most people simply don’t want to make decisions. It’s for this reason that most people will buy a home that is already built, and few people want to built a home from scratch regardless if the work will be handled by contractors. Most people don’t have the time and don’t want to deal with this sort of stuff. Leveraging existing infrastructure of existing communities seems more practical and efficient. But again, the important point is to create the highest amount of value output which is happiness, and this can only be achieved by placing small blockchain enabled communities within current existing communities, thereby making not only the participating blockchain community happier, but by also making the city and community in which the project will be implemented a much happier community.
Conclusion
In conclusion, though there a many other aspects to consider when building cities leveraging blockchain technology, we examined some approaches of current crypto city projects to see if using blockchain tech and decentralization would lead to creating a system or city with more economic equality, more trust and more efficiency. We further presented arguments of why the notion of creating economic equality and more trust is a complex one, and thus ought not to form the basis of why a crypto city should be built. Further, the notion of establishing efficiency comes with its own set of complexities especially when considering human efficiency. Creating systemic efficiency using blockchain tech and decentralization on the other hand is much less complex and should be pursuit whenever it can be shown that it can solve current systemic problems and bottlenecks. The ultimate goal of all projects including Gopher however seem to be the pursuit of happiness and establishing a happy community more so than establishing economic equality, more trust and more efficiency and we showed that the approach Gopher has taken is to integrate with existing communities, instead of building new crypto cities from scratch. Therefore, bringing value and happiness to exiting communities presents an opportunity for the greatest value output and in the context of the larger society is much more impactful.
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