Balaji's Vision of the Future: The Pseudonymous Economy

Balaji Srinivasan, one of our foremost thinkers and technologists, recently appeared on Tim Ferris’ podcast for a wide-ranging interview covering everything from the state of the media to the future of the internet, cryptocurrency, and geopolitics (full transcript and show notes here; my full notes on the podcast here). Balaji has the exceptional ability to synthesize the present state of technology, culture, and geopolitics and weave together visions of the future that lie outside of mainstream discourse yet feel far more compelling.

Their conversation is insightful, fascinating, and nuanced, and it left me excited for the future and filled with a sense of possibility. I highly recommend that you listen to it in full. This is the first in what will be a series of posts discussing some of the ideas that arose in the pod. First up, our Internet Thirty Years’ War and the Pseudonymous Economy.

Our Internet Thirty Years’ War

Balaji characterizes the status quo as akin to an online Thirty Years’ War. In the 17th century, the transnational forces of Protestantism and Catholicism wreaked havoc across Europe, and the continent was swept with violence as various competing powers took advantage of the chaos to pursue their own interests. The ideological battle had its roots in a new communications technology, the printing press, that allowed for the widespread production and dissemination of Martin Luther’s ideas, resulting in conversion away from the centralized Catholic Church and towards the more decentralized Protestantism.

Ultimately, the conflict was resolved through the Peace of Westphalia, birthing the nation-state as we know it today, with a monopoly on violence within its own borders. We’re using Balaji’s description of the war here, utilized for the sake of analogy, but if you want to add complexity and nuance to the above, feel free to drop a comment.

Today, we see individuals, political groups, organizations, and nation-states all engaged in ideological and narrative warfare against one another online, leveraging any and all platforms at their disposal. As new platforms rise to prominence, the battles quickly spread, as evidenced by the recent phenomenon of mainstream progressive journalists crying foul over their heterodox colleagues moving to Substack with great financial success. 

Balaji doesn’t see an immediate end to this phenomenon. We should expect to continue to see new social networks and currency networks arise and spread virally across the world, competing with one another for ideological and economic dominance. People will continue to try to reputationally and economically destroy their opponents (“cancelling,” in our current parlance, although it feels like we are beginning to move beyond that terminology - now that there are more critics than proponents of “cancel culture,” the left is insisting that it doesn’t actually exist). Tech companies will continue to be subject to social and political forces, and we shouldn’t be surprised to see them give in to pressure, ideologically controlling information flows and deplatforming politically disfavored individuals, entities, and weaker technology platforms. And nation-states will continue to seek to use these networks to seek advantage, from spinning up propaganda troll farms to setting up new technological payment rails free from the control of their foes.

Furthermore, we may ultimately see major hacks that truly fray the social fabric - something Balaji calls the bursting of The Cloud. Previously private messages of millions of people will become accessible and searchable to all, WikiLeaks-style. Think Facebook Messages, Instagram DMs, private Slacks. The fallout will be severe. The recent hack of the US Treasury Department, where the attackers may have had access to every single bit of valuable information, and the Ledger hack, where innocent customers had their names and addresses posted online for anyone to see, are indicators of what to expect to come.

Balaji’s Solution: The Pseudonymous Economy

As Balaji sees it, we can solve, or at least mitigate, some of these problems through the development of a pseudonymous economy. We are already familiar and comfortable with pseudonyms online and intuitively understand the value of them, just look at Twitter, Reddit, and finstas. Pseudonyms are not directly linked to a person’s real name, but they persist and accrue reputation over time, unlike total anonymity.

In the pseudonymous economy, people will separate out their real name, earning names, and speaking names. You will only need to use your real name on government documents, which is fitting, because the technology of real names, better understood as “state names” or “social security names” - global identifiers, if you will - arose in conjunction with the needs of states, including their need to conscript men into war (see Seeing Like a State). 

Pseudonyms offer freedom and protection. “Your bank account is stored wealth. Your real name is stored reputation. Only you can debit your bank account. Anyone can debit your reputation.” Pseudonyms help to prevent this. Many ancient cultures understood that disclosing one’s real name made a person vulnerable, so, in a way, this would be a return to first principles, in an age where many of us are rediscovering the value of earlier practices, from the return of sound money via cryptocurrency to more paleo-like diets.

As of today, the main barrier to booting up a new pseudonym is that you have to build its reputation from scratch. In the pseudonymous economy, there will be technologies that allow for the transfer of reputation from one pseudonym to another. If you want to voice a controversial opinion unlinked to your regular speaking name, you would be able to boot up a new pseudonym to do so, and the audience will be able to trust that the new name’s reputation was legitimately earned. Eventually we will see video chat filters that allow us to change our appearance and voice the same way we change our outfits.

Pseudonymity isn’t a perfect solution to the Internet Thirty Years’ War, but it is a very old convention with widespread use and acceptance across the political spectrum, and it solves two major problems: discrimination and cancellation. All that matters is the quality of what you have to say; your ingrained, unchangeable traits aren’t exposed to bias your audience, and you do not risk reputational harm for speaking your mind. 

Of course, in general, people may want their real name to generally still be their speaking name and their earning name. One reason people speak is to create a reputation that will further them professionally, and people want the respect they garner reputationally to attach to them in their day-to-day life.

But that doesn’t change the fact that we are living through an era of stifling political correctness, where regular people are afraid to share their views and the liberal media class has become adopters and enforcers of these speech codes en masse (many of them doing it cynically and disingenuously, if you believe Freddie deBoer’s scathing essay on the phenomenon). The pseudonymous economy offers a way out.

Thanks for reading. Please let me know your thoughts in the comments, and subscribe if you would like to see more of this type of content.

Additional links:

Balaji’s talk on on the Pseudonymous Economy at the 2019 SF Blockchain Week :

A second Balaji talk on the Pseudonymous Economy at the 2019 BlockStack Summit: