The Ministry for the Blockchain

by Michael Szul on

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I had heard bits and pieces about Kim Stanley Robinson's The Ministry for the Future, but it was mostly sitting on my wish list as something I'd get to in the future until the Exponential View reading group picked it for their book club. I decided to put some of my other reading on hold and dove in since I felt it would provide some good debate and discussion with other thinkers from across various industries.

I'll spare you a real book review and kindly suggest you read up on the criticisms riddled throughout Amazon, Goodreads, or virtually any book review site. The story in the book is keen to bring the climate issue to the forefront, but does so at the expense of any real narrative, providing you with maybe 2 1/2 developed characters. The chapters alternate between story, preaching, non-fiction analysis, and weird chapters where inanimate objects break the fourth wall and read you poetry and riddles. It is not Robinson's best work and I'm fairly confident that in the hands of any other writer it likely wouldn't be published.

This isn't to say that the book is devoid of value. It's worth reading if you're at all concerned about climate change and want a glimpse at any possible course correction. Just don't read it thinking you're going to mentally engage with a high quality storyline. It isn't there.

This isn't me being a bitter curmudgeon either. Out of all the participants in the reading group, only Azeem Azhar led with positive thoughts, but he shortly dipped off the phone for some other engagement. It also would be fair to assume his positive words were colored by his personal acquaintanceship with Robinson.

The rest of us continued with the call, picking apart the story structure, characterization, and broad stroke solutions.

I read Ministry on my Kindle, and when I read a book as an eBook, I usually highlight text like crazy, but looking back, I have only 12 highlights in this book. At some point, it just became a chore to get through and the only reason to stick around was to see how Robinson wanted to end the tome.

One thing was clear after finishing the book: Kim Stanley Robinson certainly believes in the power of the blockchain to democratize the world for the better. Robinson doesn't shy away from socialist ideology, but by embracing the highly speculative and capitalized blockchain, he merges his ideas of a socialist collective with DAO-like ownership of personal data and economic prosperity to solve most the worlds problems. Robinson even dedicates one of his riddle-based chapters (chapter 43) to speaking in the first person as the blockchain (or "a" blockchain).

Is Facebook (or now Meta… whatever), Big Tech, and/or corporate America (or China or Europe) stealing too much of your personal information and selling it without your permission? No problem, here's "YourLock" where you can keep all your information and sell it to those companies on your own terms. Problem solved. But how did Robinson's world get there? In the book, he gets there in the first two pages of chapter 60.

[P]eople began to share the news that you could transfer everything going on in the rest of your internet life into a single account on YourLock, which was organized as a co-op owned by its users, after which you had secured your data in a quantum-encrypted cage and could use it as a negotiable asset in the global data economy, agreeing to sell your data or not to data-mining operations out there who quickly saw the new lay of the land and began to offer people micro-payments for their data, mainly health information, consumption patterns, and finance. The royalties for being oneself in the world machine were not insignificant, a kind of lifetime annuity, small but useful. And so people began to make the shift, and one day that tipping point arrived where a non-linear shear occurred, like an earthquake, and suddenly everyone had a YourLock account and would henceforth be conducting their internet life by way of it.

But is that route (and pace) pragmatic? If so, why isn't Mastodon more popular than Twitter? Why isn't XMPP the protocol of choice for messaging? The "common good" often isn't cost effective or profitable for venture capital or start-ups. Robinson seems to believe that climate catastrophe is likely to shift the collective consciousness of the world towards more communal and collectivist thought.

Ethereum Coin from quoteinspector.com

The most significant use of blockchain technology in Ministry is the carbon coin, and this is at least an area where Robinson allowed for some drama and turmoil in his story as one of the two main protagonists struggles with the central banks of most countries to get them to collectively mint and back the token as a way to convince fossil fuel companies and everyday citizens to leave oil in the ground, reduce emissions, and benefit from a transitional phase in the world economy. Robinson leaves out the implementation details, which is fine. He gives just enough drama to unfold before mass adoption and even holds onto that drama as the late adopters fall in line.

Robinson doesn't stop at the carbon coin—even suggesting that all fiat money be managed by the blockchain. The repercussions in his world is that once money is permanently on the blockchain, shell companies, offshore bank accounts, money laundering, etc. all come to an end, which—given the short time period in the book—is exactly why something like putting fiat money on the blockchain would likely not happen: Too many people at the top controlling decisions and hiding funds. I get that climate catastrophe can create swells of revolutionary movements, but Robinson gets to these revolutions while mostly maintaining status quo government entities intact. There were some shifts in politics and leadership, but not that many countries fell.

Robinson himself quotes the Gotterdammerung Syndrome in defining the pathology of current politicians and corporate pioneers:

The Gotterdammerung Syndrome, as with most violent pathologies, is more often seen in men than women. It is often interpreted as an example of narcissistic rage. Those who feel it are usually privileged and entitled, and they become extremely angry when their privileges and sense of entitlement are being taken away. If then their choice gets reduced to admitting they are in error or destroying the world, a reduction they often feel to be the case, the obvious choice for them is to destroy the world; for they cannot admit they have ever erred.

With such a damning statement, I'm not sure how one can assume in a single lifetime that such people would agree to the blockchain monitoring of money. Robinson's end game is thus:

Capping individual income and wealth had flattened the top of the scale. Of course many rich people had attempted to abscond to a safe haven with their riches, but currency controls, and the fact that all money was now blockchained and tracked, meant that all the old havens and shelters were being rooted out and eliminated.

But it doesn't stop there. Robinson uses the ideological potential of blockchain technology to solve worldly problems, but does so with the advent of newer semi-centralized blockchain technologies, while tossing existing blockchain technologies to the side:

Digital distribution of the total blockchain record through YourLock and other sources meant there was a kind of emerging people’s bank, a direct democracy of money. So now the various old private cryptocurrencies were only being used for criminal activities, and traded at fractions of a penny. Lots of investors who still held these worthless coins were looking for a moment to get out with a minimal haircut.

The promise of blockchain technology revolves not just around immutability, but also decentralization and democratization. Why then would Bitcoin or Ethereum be chucked to the side in favor of a government or pan-government created blockchain, regardless of the intent?

My gripes with Robinson aside—including the unlikelihood of fiat money disappearing into a blockchain so quickly—this idea of a carbon coin has captured the attention of multiple blockchain companies looking to reduce carbon emissions, establish ledger based carbon swaps, and invest in environmental projects.

Moss

Moss, for example, is a carbon offset and sustainability company that uses blockchain technology for carbon credits and forestry protection. You can purchase Amazon NFTs, which supposedly enables digital rights to real land, putting your money towards protecting that specific piece of land.

We have tokenized governance and economic rights to small forest areas into NFTs. You can now buy an Amazon NFT through Moss and protect your own piece of the forest.

Think Decentraland only instead of owning a virtual representation with no physical counterpart, you own the digital counterpart of a real place, and your purchase of that NFT allows for the monitoring and preservation of that land.

Moss also enables carbon credits through the MCO2 token:

MOSS sources carbon credits from top notch Certified Environmental Projects and Tokenizes them via Blockchain.

Users can buy MCO2 Tokens at the main Crypto Exchanges.

Each MCO2 token represents one carbon credit (one ton of carbon) and the money used to purchase the carbon credit is then invested in preservation projects.

Celo

Moss has joined with the Celo Foundation (founders of the Celo blockchain) in the formation of the Climate Collective—attempting to tackle the carbon removal XPRIZE competition. The Celo blockchain maintains a reserve of blockchain-based assets in order to expand and contract supply with demand. As a part of the Climate Collective, Celo is moving towards a target of 40% of their reserve being tokenized physical assets (e.g., Moss' digital rainforests) and other tokenized carbon initiatives, creating a "natural-backed" currency:

Inspired by Charles Eisenstein's Sacred Economics, the collective is proposing that over the next 4 years, up to 40% of the Celo Reserve (which backs the Celo Dollar and Celo Euro stablecoins) transition to tokenized rainforest and other carbon sequestering assets, enabling natural capital backed currencies on the Celo platform.

Celo is an environmentally friendly proof-of-stake blockchain platform with native stablecoins that are backed by a basket of crypto assets. By allocating a fraction of these assets to natural capital, the reserve can create an incentive mechanism that aligns demand for stablecoins with the protection of natural capital.

This mechanism acts as a large-scale carbon sink. As currency demand increases, the reserve programmatically preserves rainforests and other carbon sequestering assets. This provides for a monetary system in which any economic growth—any increase in money in circulation—would lead to a preservation and regeneration of natural resources.

KlimaDAO

Meanwhile, there's also KlimaDAO. A DAO is a decentralized autonomous organization. Many in the crypto world believe that DAOs combined with algorithmic voting can replace corporations and governments, while making decision-making more fair and inclusive. DAOs are created via smart contracts and are often funded through an initial coin offering (ICO) or token-based economic distribution, or they can be funded via non-fungible token (NFT) sale. DAOs then use a codified voting system that involves staking your tokens in order to come to decisions.

KlimaDAO and the Klima token (not to be confused with the Klima carbon offset company) is a DAO initiative to put a price on carbon and introduce it into markets. The premise being that financial markets produce the liquidity necessary to back, burn, and trade carbon initiatives. Much like the MCO2 token, one Klima token is roughly equivalent to one verified ton of CO2 emissions. With KlimaDAO, since the organization is a DAO, Klima token holders have the added benefit of voting rights on organizational efforts.

KlimaDAO wants Klima to become the carbon-based reserved currency and is the closest thing to Kim Stanley Robinson's carbon coin. KlimaDAO relies on Base Carbon Tonnes (BCT) in their ecosystem. Legacy carbon offsets can be converted to BCTs via the Toucan protocol—yet another blockchain protocol meant to manage carbon markets. In the case of Toucan, the selling point is to attach carbon offsets to on-chain, verifiable transactions and real-world carbon drawdown.

KlimaDAO relies on staking and bonding to impact carbon markets. Holders of BCT can bond their BCT for a period of time to Klima—locking those assets in—in order to receive discounted Klima tokens later. For staking, holders stake their Klima tokens in much the same way you would bank your assets, collecting interest.

There is a lot of jargon, but ultimately KlimaDAO is using Toucon as a way to piggyback off of verified carbon offsets, while using bonding to lock in those carbon offsets to incentivize holders, and staking to lock in investment, expanding the reach of the Klima token. Klima also manages token creation and burning much like a central bank does quantitative easing, focusing on the minimal intrinsic value of one BCT per Klima.

Can you tokenize everything?

These are just three initiatives involved in environmental blockchain exploration, and whether any of them catch on is unknown at this point as blockchain technology and the so-called Web3 is still being pondered. Will carbon coins succeed where carbon taxes and credits have sputtered?

One thing is certain: As blockchain continues to see a swell of investment and a migration of very smart people, we are seeing the tokenization of everything. But how much of human life has a legitimate market price on it? And is our assumption that we need a market price to show value just an imprint in our brains from runaway capitalism?