In this post I'm going to tell you a story that shows all the contradictions of transitional eras like ours. We live in an era in which investors are subject to controls, checks and limitations never seen in the young history of stock exchanges, and this is also due to the great crisis of 2008.
The power to distribute investment assets and the income derived from them to "subjects" is in the hands of a few intermediaries (centralized trading platforms, investment funds, financial advisory firms) who increasingly restrict the possibility of accessing "their" products and services.
The minimum capital required to invest is increasingly high, privacy violations are increasingly serious, the freedom to choose the timing and instruments of an investment is increasingly restricted, the ability to access the most profitable and less risky assets is increasingly limited to a few privileged groups. We have even reached the paradox of being forced to invest in these undemocratic instruments in order not to be refused custody of our savings.
And this is happening at a time when it is increasingly difficult for people to preserve in some way their purchasing power, that is, their ability to maintain their standard of living.
Blockchain as a tool for democracy
But it is precisely in this same bleak context that blockchain technology gives rise to prototypes oriented in the opposite direction, namely towards a "democratization" of money and investments.
The latest example of this trend comes to us from a company called Syndicate, which has just raised $20 million in its first round of funding led by the powerful venture capital firm of Andreessen Horowitz.
Syndicate's project is incredibly exciting. In fact, the company is developing a protocol that will allow investors to collaborate with each other to essentially form "self-directed" investment funds.
Syndicate's new platform will allow for the creation of decentralized autonomous organizations (DAOs) that can hold and distribute capital to participants. The founders of each DAO will determine which assets to invest in. And Syndicate's technology will allow those investments to implement themselves automatically as investors contribute funds.
Anyone who wants to participate in one of these DAOs will be free to do so. There will be no restrictions and no minimum investment quota. No intermediary will extort information from us about our wealth, family, social and employment status. Whenever profits are made, the DAO will automatically distribute them to each investor on a pro-rata basis.
It's exciting to see a company like this build the fundamental protocols that enable decentralized and democratized investing. Thanks to decentralized tools and technologies, investing is quickly becoming a social activity, at least for that segment of the population that knows about these tools and is able to use them.
A typical example is what we've seen with the Robinhood platform, where groups of investors were able to direct capital flows to stocks like Gamestop and AMC, blowing up the bearish positions Wall Street had accumulated on them.
Platforms like these (e.g., Public.com) are rapidly outpacing traditional operators, in terms of active users.
That's not enough to predict what our future will look like, though.
As in all things, technology alone cannot pave the way for the future, because the "human factor" always remains the crucial element.
The blockchain can serve both to enslave people, forcing them to use centralized digital currencies, and to sabotage any attempt of social and financial tyranny. it depends on the use that is made of it.
Tools for financial "liberation" ... or social.
Robinhood or Public.com users would already have the power to blow up all derivatives manipulations done by banks, radically changing the face of finance.
People could already be using bitcoin or any stablecoin instead of fiat currency, reshaping the social and political lives of billions of people on a completely new basis.
Facebook users could already be moving en masse to independent social networks built on the blockchain, like HIVE, sending the power groups that govern our private lives to the economic and political brink.
The fact that this is not happening, despite the fact that the right tools are already in place, teaches us that social behavior is not automatically tied to technology.
In conclusion then, it's a given that I'll be keeping an eye on Syndicate in the future, but more than anything else, what we'll have to monitor are the social trends. And from this point of view, things are much less encouraging!
Photo: Bussa's statue celebrating the Bussa's rebellion, courtesy of Barbados Pocket Guide.