I’ve been using crypto for 10+ years, but this year I took a deep dive.

It has cost me quite some time and money to learn the ropes, make my mistakes, and internalize my lessons. But now I feel like I’m far ahead of the pack in truly understanding the revolution that I believe is about to emerge. 

When I started my career 20+ years ago, the web was as unpopular as behavioral science. Now people give me credit for being visionary in linking psychology and technology. 

But in reality, for every compliment I receive today I endured a decade of insults and dirty looks. Mainly, people thought I was an idiot for pursuing such a stupid career path.

Back then, there was no Internet bandwagon to jump on. The tech community was a lonely place for a few brave geeks who saw potential where most saw nothing worthwhile. I remember when there were no books on web design, digital marketing, or HTML. 

Regardless, I stuck with it and built my career in good times and bad. I loved the early days. Back then, there were no rules or standards–only a chaotic mess of innovation from which the standards we use today emerged. 

I remember when wireframing was adopted, information architecture caught on, web design became a job title, UX was born, and when the big programming languages were underground movements. I even remember when Google opened their lame app developers portal, years before apps changed the world. 

I witnessed how the Web changed society, destroying industry after industry, creating new winners, and killing off those who refused to adapt. Then when smartphones became platforms, the next wave of transformation hit society. Once again it destroyed those who lacked vision and created new models. 

The transition taking place in crypto today reminds me of the same transformation. The chaos and creativity that now defines crypto is something that I believe will deliver a shock to our social structure, on par with the web and mobile, but of a different nature.

Speculation about the price of Bitcoin is not the point. Processing speed is not the point either. 

The point is this; In just a few years, I believe small teams of developers will be able to replace many of the services offered by the world’s largest banks.

Why do I believe in such a speculative dream? Because it already exists. It’s small. It’s crazy risky. But it is real. And once crypto projects are fully regulated and secured, I believe we’ll see historical runs on banks. 

From a behavioral science perspective, here’s what I forsee:

Trustless contracts:
Nations will start aligning legal contracts with smart contracts, allowing trustless agreements between people. By trustless I mean that two people can exchange anything without a broker. Once executed, it cannot be reversed. So how can we build trustless technologies for transactions where people exchange all sorts of things without brokers?

Minimal brokers:
With trustless transactions, we’ll only need small teams of developers and domain specialists. Once the processes are standardized, large institutions can be replaced by smaller teams. This means the overhead transaction costs should finally be equitable and reasonable. If they’re not, competitors can enter the market with minimal overhead.

Decentralized Autonomous Organizations (DAOs):
I see the emergence of fully decentralized organizations that exist on a massive scale, facilitated by blockchain tech. I’ve already joined a few of these organizations where my staked currency earns income and gives me voting rights, similar to a co-op business model.

Decentralized finance:
I believe there will be a massive movement of capital out of banks into decentralized financial systems. These systems can pay higher interest than any banks, as they have little overhead and provide an equitable split of transaction fees and income generated from lending the capital. And you can get collateralized loans too. Today these are risky. But once they can provide secured investment options, I can see a revolutionary shift of assets.

Code is law:
When code becomes law, legal disputes may be addressed first by algorithms before humans or judges are required. The thing with blockchain is it records every transaction. This means insurance policies where you don’t file a claim because all the data was already processed by the smart contract. It means all sorts of agreements can be standardized, put into code, and transacted on blockchain technology. This concept is called,  “code is law”. The next generation of lawyers and judges will need development and UX skills, as we need policy experts who understand CSS and C++.

Deception:
The danger with trustless transactions is that people can be tricked into irreversible transactions. This is why fraud is so rampant in the crypto community. As designers, we’ll have to come up with new strategies to boost transparency and awareness about what happens next. We also need new strategies to defend people against scams because once a smart contract is executed, there’s no reversing it. 

I can see my future moving towards behavioral science and crypto, as it reminds me of the early days of the World Wide Web. 

If you dive in, go slow and be careful. The opportunities are massive, but so are the dangers.

Below are a few useful articles:

 

DECENTRALIZED FINANCE

DeFi and the Future of Finance
There’s something happening in the crypto space that’s largely under the radar screen. It’s called DeFi or Decentralized Finance. Examine its structure, opportunities and risks.https://corpgov.law.harvard.edu/2021/01/14/defi-and-the-future-of-finance/

Bitcoin and the Future of Decentralized Finance
Meltem Demirors, Chief Strategy Officer at CoinShares, joins Azeem Azhar to explore the potential and politics of cryptocurrencies: from the ideological origins of Bitcoin to the new wave of decentralized financial products that could disrupt traditional finance.
https://hbr.org/podcast/2021/03/bitcoin-and-the-future-of-decentralized-finance

State of Wyoming now recognizes DAOs
Decentralized Autonomous Organizations (DAOs) are decentralized blockchain facilitated organizations, which are a bit like a co-op business model. The State of Wyoming now recognizes DAOs as a legal business structure:
https://www.wyoleg.gov/2021/Introduced/SF0038.pdf?utm_source=Iterable&utm_medium=email&utm_campaign=campaign_2419723

 

CRYPTO EDUCATION

Online course: MIT Blockchain and Money
If you want to develop a deep understanding of blockchain, my top recommendation is an entire course put up by MIT taught by Prof. Gary Gensler. The content is incredible. What’s more amazing is Prof. Gensler is now the head of the US Security and Exchange Commission regulating crypto assets. If you think the US government is lax on crypto, these lectures will show you just how serious they are, and how brilliantly insightful, understanding, and liberal Prof. Gensler is.
https://www.youtube.com/playlist?list=PLUl4u3cNGP63UUkfL0onkxF6MYgVa04Fn

Bitcoin: A Peer-to-Peer Electronic Cash System
I didn’t get crypto till I finally read Satoshi Nakamoto’s white paper. To be honest, I don’t understand all of it. However, the introductory parts will explain the philosophy. By glancing over it, you’ll understand what it’s all about.
https://bitcoin.org/bitcoin.pdf

Psychology of market manipulators
What excites me about crypto is being a behavioral scientist with full access to market data. I spent a few months piloting algorithms to predict market behavior. One challenge I had was managing what looked like major market manipulation–shocks and boosts to the system out of nowhere. To understand how big players manipulate markets, I’ve been reading the works of Wyckoff and became hooked by the audiobook, “Reminiscences of a Stock Operator”. It tells the story of one of the US’s most famous traders. Later in his life he revealed the inner workings of popular scams and marketing manipulation techniques. It’s for deep traders, and technical, but helps you understand the games manipulators play, why they play them, and is a dictionary of timeless wisdom.
https://www.youtube.com/watch?v=yTPHPL4j-Hw&list=PLu7X6TYzMkTHP0tds-SA_3J3pUYGEZYmY