Translating Web3 from 26th Century Saturn into 21st Century Earth

Have you ever listened to someone talking about Web3, NFTs, or cryptocurrency and thought “this person sounds like an alien from another planet, I have absolutely no idea what they’re talking about"?

You’re not alone. 

The purpose of this article series is to introduce you to how Bloom Network uses Web3, in a way that non-technical people can understand. We probably won’t get it perfect, but we are going to try. 

We also recommend that you check out Metamask's learning articles. They are the most common wallet used on Ethereum, and each article gives you a beginner's introduction to the major concepts.

WTF is Web3

Peer-to-peer ownership of digital resources

“Wait, what’s the difference between web2 and Web3, and what was web1 anyway?”

Web1 was digital document sharing across the internet. It's sometimes called the "read only web". 

Web2 is more about interacting, participating, generating and sharing content. It was basically captured by corporations that are still extracting value out of your content, in an asymmetrical relationship. By asymmetrical, I mean, companies have access to everyone’s data, they control the algorithms and who makes money off that data, and you don’t have ownership rights or shareholder rights.

Web3 is rooted in peer-to-peer relationships. Let’s break down the phrase peer-to-peer, abbreviated P2P, because it is foundational to everything Bloom Network does. “A peer-to-peer (P2P) service is a decentralized platform whereby two individuals interact directly with each other, without intermediation by a third party.” - Investopedia. Napster was peer-to-peer file sharing. Fun fact: artists made more money through Napster than they do through Youtube or Spotify or Apple Music. 

At Bloom, we believe community organizing is peer-to-peer. When you mobilize with your community to make a community garden, or to stop a new oil plant from being installed and make a community-owned solar plant instead, you are working together peer-to-peer. While you might have people who hold specific roles for efficiency’s sake, most community organizing takes care to form diverse power relationships so people are empowered to care for one another and for nature. When it comes to economic relationships, this way of working together is fundamentally different from today’s capitalist economy. Web3 makes peer-to-peer economic relationships possible, and it makes peer-to-peer governance possible.

With Web3, you can co-own digital infrastructure as a user, and have governance power over its development. Instead of Amazon marketplace, you can have a peer-to-peer marketplace of values-aligned companies and services. Instead of credit cards and Stripe taking 3% of all digital payments, you can instead pay a fraction of a cent for a digital payment, or to instantly send money to your family in a different country. Instead of a bank charging you 6% for a loan, you can take out a zero interest loan.

Web3 has created the ability to program community finance structures that better support local, equitable economies and circular resource management, instead of corporations extracting as much value as they can out of everyone and making advertising hellscapes and widespread landscape destruction. This is what we're on about with Bloom. This article is an introduction to a few of the main tools we use to accomplish it.

This series will introduce you to 1) peer-to-peer finance, 2) “NFTs” and how they are much more than just a jpeg, and 3) an introduction to governance on the blockchain and how this fundamentally changes how communities can self-organize to build local, just, carbon-negative economies.

Peer-to-Peer Finance

What cryptocurrencies are, why they are, and how you can program them to run more complex and equitable value systems

With today’s money system, you either have it or you don’t, and it controls your ability to access a nice place to live, get your kid to a doctor, or have food to eat. With cryptocurrency, *you* control what it means, together with a community of people who care about similar things as you. 

Let's talk about Bitcoin first, since it is the most widely adopted one, and fundamentally different from most other cryptocurrencies. Bitcoin is simply peer-to-peer electronic cash. The difference between it and say, US dollars, is that the federal reserve can print money whenever it wants to, creating debt, and changing the value of the dollar. Additionally, the US dollar tends to be tied up with the oil economy - some people call it the “petro dollar.” There are many reasons this setup is not ideal - including how it props up empires and is tied up with the war economy. People vying for control of money and power is a brittle system, it incentives sociopathy and divisive / combative political systems. It is built on a long history of feudalism, colonialism, slavery, policing, redlining, and genocide. Many people who built Bitcoin and later blockchains did so because they believe that the root of systems change is changing money itself.

“The” economy and today’s monetary system is not the only way to approach money. Many Indigenous communities have more sophisticated structures of value exchange that support healthy social and ecological relationships. Cryptocurrency has the potential to diversify who has access to money, and how they get it.

With Bitcoin, there will only ever be 21 million Bitcoins. (P.S., Bitcoins are divisible into tiny pieces called Satoshis or “SATS”. You can own .0000001 bitcoin; you don’t have to pay $30,000 to get a whole one to have any.) One reason this fixed amount is important, is because no tiny set of old white men can dictate the fate of Bitcoin. Its governance is completely, technologically decentralized and subject to global consensus rules. 
Bitcoin is the easiest to use as ‘normal’ish money today. You can get gift cards with Bitcoin to buy groceries. You can send someone money for a coffee instantly with nearly no fees (Whereas most normal money payment processors charge a 3% fee - credit cards, all online payment processors like Stripe, etc - those fees are passed on to the customer as higher prices). You can instantly send money back home to your family in another country without bureaucracy. It’s the most widely adopted cryptocurrency, and the oldest. The last thing we’ll mention is that Bitcoin is an asset, most comparable to gold - whereas other forms of cryptocurrency allow for complex programming about what types of value they store and unlock. 

(I will skip over the environmental debate for now, but once we find a good breakdown of that for you we will post it here. To summarize my understanding on it: Is it worth some amount of carbon spend to stop the global war machine? The entire global energy usage of Bitcoin mining and exchanging is less than the energy usage in the United States on clothes dryers, which are largely not necessary and most countries do not use them. Most of the statistics that get circulated in these debates are false comparisons.)

In summary, Bitcoin is decentralized digital money.

Programmable Currencies

Cryptocurrencies on Ethereum and other blockchains tend to be more akin to computer programs. The best phrase I’ve heard for it is “money as programmable language” (h/t Andy Tudhope).

While Bloom will encourage adoption of Bitcoin later on in our development, at first we are using Ethereum-based tools to address the lack of access to capital that is common among community-led projects. To catalyze large-scale climate mobilization, fast.

Customizing power relationships: With cryptocurrency, you can use math formulas to flatten the power curve as much as you need to, so someone with 2 million of that token doesn't have extremely more power or voice than someone who has 20. You can also program it to reward people for doing business with historically disadvantaged entrepreneurs, to incentivize an equalization of power. At Bloom we believe those kinds of adjustments could lead to more creativity, better social health, and innovation capacity. 

Non-Bitcoin cryptocurrencies are usually called tokens. Like, token of appreciation, or a token you can use to vacuum your car at a car wash. There is a whole engineering field for designing and programming tokens, called token engineering. Their ability to hold complexity makes it possible to design local economies that are just and ecologically in balance.

Cryptocurrencies also able to fix problems where, for example, the government subsidizes the cost of oil to ship you clothes made in sweatshops from Bangladesh where the chemical dyes used have permanently destroyed their rivers. Where instead, your local seamstress would be thrilled to make your clothes but the economics don’t work out unless she has rich clients. Insert your country’s most insane subsidy story here.

There are thousands of programming tools to customize the "utility" and "properties" of a token. They all have stupidly technical/arcane names, but so you know the scale of creativity you have here in programming economies, here is a library of them from my coworkers at dOrg, Ori Shimony and Juan Blanco. https://mechanism.institute/ ) 

On the value of cryptocurrency relative to your country’s currency: Cryptocurrencies can either have their own inherent value, and/or there is a type of cryptocurrency called a “stablecoin” that is pegged to the value of, usually, US dollars. Many people who do their daily contract work on Web3 are paid in stablecoin, so they are not subject to the rapidly changing value of cryptocurrency relative to USD. Some people choose to be paid directly in Bitcoin or Ethererum or other tokens, because they are choosing to exit the petro dollar system as much as possible. Many cryptocurrencies are tradable on an “exchange”, so you can swap them into your country’s currency to pay rent, etc, similarly as you would trade US dollars for Indian rupees and vice versa. You can also buy cryptocurrency on an exchange with your state's currency, although some countries do not allow this.

If you’ve ever tried to throw your head at cryptocurrency and are still totally confused, know you are not stupid, this technology has the capacity to hold incredibly complex programming of what has value, why, and who has the power to set the rules of what has value.

I spent several years engineering Bloom's token FLO (Flowers), after listening deeply to local community organizers from around the world, studying and mapping what Bloom members have in surplus and what they need but can't access due to being cash poor, and then doing a boatload of trainings and fellowships to design it to reduce risk to our already at-risk communities. We will slowly train you up on what it is and how to use it, and we will govern how it’s distributed together as a collective, iteratively over time.

Cryptocurrencies compared to community currencies:

Unlike other forms of community currency that people have been experimenting with to support local economies, cryptocurrency has more "knobs you can twiddle". This provides pathways for community-designed subsidies, and complex business models that include ecology and social wellbeing instead of "externalizing" them the way most corporations today do. 

They also fix common problems that community currencies and timebanks have. For example, over 95% of the time, a community currency becomes essentially worthless because a few people or businesses end up with a hugely disproportionate amount of it compared to anyone else. Timebanks, where people put their time on a digital exchange board, end up usually having the same racial bias problems that many societies have. You can pin down those biases and dynamics, and collectively create policies and incentivize social processes that remedy them, much faster than is possible through nation-level governments.

Conclusion

Whereas money is one-dimensional, you have it or you don’t, and the power games around it across the planet have grown through feudalism and genocide, cryptocurrency allows communities to program their own value systems. 

Cryptocurrencies can be and are widely abused or used to scam people. There is a smaller sliver of people creating wondrous protocols and value systems of care with these tools. The Bitcoin whitepaper was written to invent peer-to-peer electronic cash that isn’t controlled by small non-representative sets of people in power in a government.

We will go more into governance later, but for now, let’s go to the next most common thing you’ll come across - NFTs.

NFTs

Nope they’re not just a jpg. NFTs are art objects that can be used as legal contracts, member cards, and public grant reports.

An NFT (nevermind what it stands for just yet) is like a baseball card or other collectible item. If there are a small number of them that exist, and enough people who think they’re valuable, that card can be worth millions of dollars. It might be a Pokemon card with amazing art on it, or it might be a humdrum boring stamp that just happens to be very rare. 

“Wait but how is a digital art piece unique? You can just take a screenshot or download it and put copies of it anywhere.” Yes, the visual appearance of an NFT is literally just a JPG or a gif or whatever. However, the visual is only one part of what an NFT actually is.

Now it’s time to explain what N F T stands for. And I’m sorry, because it’s annoying. It stands for Non Fungible Token. You know what non means, and you have a bit of a sense of what a token is and that with blockchain it can hold a lot of programmed information. So what does fungible mean? Paper money is fungible - this dollar bill is worth the same as any other dollar bill, for the most part. Non fungible is a 26th century-sounding word that just means unique, and uniquely valuable. With an NFT, this has to do with all the other information that is part of an NFT, in addition to its visual, that makes it unique. 

Most NFTs, in addition to the image you see on your screen of the NFT, also has data attached to it, called “metadata,” that is stored in a specific format. That metadata has information on the rarity of the object (one common type of NFT uses “generative” art to combine different elements, like what kind of jacket it’s wearing, if the figure has glasses, or how many branches a tree has, into a unique visual.) The more rare the combination of elements is, the higher its value. I personally don’t like the art on most generative NFTs, but most NFT projects are that. An NFT is technically a specific type of token standard that has additional parameters that allow this kind of information to be stored in it.

There are a million things you can do with an NFT because of that metadata, in addition to art. They can hold complex contracts like fractional ownership of a real estate property, or even fancy finance instruments like a donor-advised fund. (God no wonder finance has so many gatekeepers, these terms suck, I’m sorry, I’m trying.). One of Bloom’s partners is Kolektivo. They are using an NFT to upload environmental improvement measurement data over time that a local community has done. That metadata is used as a record to mint money (specifically, a local currency that is a “stablecoin”) for the people who contributed to those improvements. They can use that local stablecoin to pay their phone bill and buy local food. That anecdote is probably still not plain-speak enough, but I hope it sparks your interest as to why so many people are spending time developing these technologies. We should do a whole article on NFTs because there are soooooo many things you can do with them.

There are three main uses of NFTs that we are interested in at Bloom Network right now:

One is art - nearly everyone in our community is a creative, and we think there is a decent chance we can sell NFTs made by various artists in our community, to raise significant capital for on-the-ground community care projects like community-owned farms or better forms of justice that don’t involve putting people in prison and ruining their family’s life even more.

The second is what is called a membership NFT. NFTs are owned or “held by” by your cryptocurrency address. (Think of your cryptocurrency address a little bit like a purse - it’s more like that than it is like a bank account, including that it is somewhat vulnerable to theft. We’ll teach you more about security over time.) A computer program can read the blockchain to see if you hold a particular NFT, and if you do, it will give you access to log in to a members-only website, or permission to vote in a community over its governance or spending of its resources. This concept of using a token to access a community is called “token-gating”. 

It’s basically just an access pass, or like Patreon where you need to subscribe to access members-only content. Additionally, token gating allows for sophisticated practices, such as giving certain people in an organization an NFT once they have demonstrated certain levels of knowledge and responsibility, which gives them access to governing resources and making decisions for things that need an informed, trustable person to do them. 

“Why can’t you just keep track of if I paid my membership dues in a database?” Here’s one of the other major underlying principles of Web3. It’s open by default. Some other collective can see if you have a membership to Bloom, and they can give you governance rights in their project because they trust you to be an informed decision maker. 

(There is also a whole concept of “badges” and “credentials” in blockchain communities that people are working on. For example, instead of academic credentials being kept as certificates with specific colleges, or certain skill credentials being impossible to verify unless you know the person or get a really good direct referral, open credential standards can make these skills more verifiable across different platforms and communities, and standards better enforced. Remember what I said a while back about diversity of people having access to governing resources? This applies to credentials, too. Universities no longer have a monopoly on stamping approval that you have learned skills or knowledge to do your job well. Indigenous communities can create their own credentials for Native-made handicrafts, so they have an economic leg-up over fashion houses that pirate their designs and use sweatshop labor and toxic dyes to make them on clothes. I digress.)

The third interest Bloom Network has in NFTs (art objects that can hold contractual data) is impact certifications. These help people record their contributions to local climate and social repair work, in a way that is widely visible to sources of funding. This helps them start to receive compensation for work that by and large across the globe is not included in “the” economy. 

Today, most grassroots, community-led climate projects are impossible to fund because they’re too small and decentralized for a funding institution to be able to make time to vet them. Meanwhile, they’re the most cost-effective and fastest approaches. But, if we bundle our impact data up into the level of a local DAO (a DAO is basically a cooperative that uses blockchain for operational transparency) - we can collectively make ourselves visible to granting institutions, to get the initial influx of capital we need to prop up local regenerative economies that are carbon negative and more equitable. Bloom Network is already known for our depth of impact on ecological and cultural levels, and we are respected by communities who have financial resources. As long as we maintain trustful local verification and documentation of what’s happening among the Local Bloom coalitions on the ground, we will be able to help bridge this gap for funders vetting many small projects which together make a mighty force for transformation. If I went full on Web3 bro speak right now I would say we are a mimetic aggregator. (I hate tech bro speak as much as you do. It’s why I haven’t been able to fully finance Bloom Network yet - that way of talking drives me up the wall, and over it, and away from whoever is talking like that. We are slowly attracting people who can translate our matriarchal way of working into the formats and language that granting bodies want to read.)

Public Goods Funding

This needs no translating.

This one doesn’t need translating. It is what is says, funding for public goods. Actually they do use a more technical sounding phrase - “retroactive public goods funding” - which means the money is given after the impact is demonstrated. While that term is a little heavy handed, the problem it addresses is that grant funding often requires laborious reporting - reporting that small, grassroots groups usually do not have the capacity or training or time to do, which means they never get funded. It’s very common for larger NGO’s to misuse funds and divert a significant percentage of it to top-heavy administrative structures, or to have the admin sophisistication to get a grant but not actually be effective at solving a problem. Retroactive funding - after the impact is done and demonstrated, allows projects to start to move into a gift-first approach, and establish more trust that they will be rewarded for contributing to public well being. One example of contributing to public well being would be a group of people planting a free forest for people who live in the area to freely access and eat from.  

Public goods funding also is going to allow us to subsidize work that is otherwise economically inefficient to do or to at least get started. For example, there is a process called restorative justice where instead of putting someone in jail for a crime, the affected parties sit in a circle and a facilitator walks them through dialoguing about what happened and what everyone affected needs in order to feel safe again, and doing that together. It’s light years cheaper than prisons, and 95% more effective. Not enough people know about it and not enough people are trained in it. Many people who are interested in being trained in it don’t have money to be trained in it, and it’s not widely adopted enough yet for them to make a living doing it fast enough to cover the training expense or in a way that they can juggle between their full time job. There are *so many* skills like this across Bloom Network, that millions of people would do and it would save society billions of dollars and repair longstanding trauma in communities, but there is a financial gap to anyone being able to make and sustain that kind of livelihood leap. When retroactive public goods funding, we could set up funds to supplement the income of a restorative justice facilitator. Until the practice is more well-established and has its own self-sustaining finance models and is at a scale that can hold that.

There are so many more examples I could give here. Public goods funding will empower more people to take the leap to doing types of activities and entrepreneurial endeavors that care for their communities and create widespread public benefit. The incentives to capture and control value are less in this kind of funding structure. Openness, collaboration, and making widely accessible public value is what gets you compensated well.

Decentralized Organizations With a Transparent Bank Account

Otherwise known as, DAOs

Ok, so now I feel ok telling you about DAOs, which is one of the most abstract concepts that people find frustrating. A DAO is just a collective managing funds. With rules that they can program, without having to trust a privileged set of people to follow and not abuse. 

DAO stands for decentralized, autonomous, organization. Decentralized because no one person has all the control knobs, no three people in an office can collude to get resources to do what they want and get paid way more than the people doing the day-to-day labor. (Unless everyone agrees to that or has set up rules that explicitly allow that. You can literally set up a DAO on “dictator mode”, like, it’s a setting.) Autonomous means each person or set of parties that have voting rights in the DAO, have autonomy to participate or not as they like. No central body has authority over everyone. And it means that decisions can autonomously be executed by code, i.e., the vote happened, it is binding, and the funds get sent immediately. 

With a DAO, members vote on how the collective treasury is spent. You can set up any rules you could possibly imagine for that - who can vote, how much power or “weight” each person has and why, how often votes happen, how many people need to participate for a vote result to be valid. There are technical terms for all this, and it’s normal organizational governance stuff for the most part. Except it’s 100% open and transparent, and it’s cheaper to program more complex governance rules than if you make long formal legal agreements about them. That’s important because humanity needs collaboration structures to manage resources together quickly and efficiently, in order to address the climate crisis and more quickly transform our economic and governance infrastructure. We need to be able to form groups fast, make decisions fast, and allocate resources quickly and effectively. DAOs help with that, if they are done right, and if they exchange knowledge with on-the-ground direct action communities who have deep experience with power dynamics and conflict resolution.

Setting up a DAO can be incredibly simple - 7 people make a wallet address that requires 3 out of 7 members to sign any transaction before it can go through. They use email or an in-person meeting to make suggestions of what to fund and dialogue about. Or they can use different platforms and irrevocable contract rules to automate very large-scale, sophisticated governance structures. Either way, you get transparency, consent, and you can’t have something happen like what really happened with Occupy NYC, where one person who controlled the paypal donations account ran off with the money.

Here is an example of a good business use case for a DAO. You surely must have met a marketing person who hates their job. They’re a graphic designer who does the same thing day in and day out for random clients and is bored out of their mind. They’re a talented strategist who gets paid a tiny fraction of what the principles of the agency make. If talented marketing people circled up and made their own DAO that was a cooperative marketing agency, they would have more agency to choose which clients they each work on, and choose humane values over the high profit margins of doing marketing research for a sharky pharmaceutical company, but still get paid more than they would at their own hierarchical agency where they had no leadership authority. Freelancer collectives are a good, solid business model for a DAO. 

There are a lot of decentralized organizations (DAOs) that do not work at all - people are like “yeah let’s make a DAO about x”, but they have no culture strategy, no business plan, it’s just people doing free labor and it’s chaos. That’s the most common thing that happens. Don’t do that and try to not join a chaotic DAO like that. Educational DAOs are also pretty good - I hear good things about Boys Club, an educational community for women and nonbinary people to learn about Web3.

I’ll stop here in this initial translation document. I hope this helped demystify some of the tech and help you grab onto the “why’s” and the “real world” reasons its important. Stay connected with Bloom to begin to learn and participate as we get rolling.