Foreword by Amir Taaki

Crypto-anarchy is neither a strategy to impose a political hegemony nor discredit other possible attitudes or agendas. It is merely a set of concepts or ideas that can be used tactically to realize alternative modes of being. History is the result of human will and action, but this always occurs within a framework of convictions, belief and representation which provide meaning and direction to any given pursuit. In this way, crypto-anarchy seeks to arm the individual with powerful conceptual tools to construct their own creative visions.

Economics is important since it is the study of the fundamental mechanisms of human action and their consequences. Rational economics analyzes human activity while accepting knowledge limitations. From a simple set of assumptions, including that humans act and prefer things sooner than later, theorems are derived using rules of inference. The result is powerful, as it is necessarily true under the assumptions. The development of these theorems provides us with simple constructs we can use to compartmentalize and analyze more complex phenomena.

Cryptocurrency emerged from crypto-anarchy and free market economics, but since then has outgrown its own roots and become a contemporary entity with peculiar characteristics. This has forced us to revisit our own ideas and assumptions about how these disciplines interrelate. This new field of study is termed cryptoeconomics.

Cryptocurrencies such as Bitcoin represent money which is simultaneously global, uncensored and open access for everybody, for the first time in human history. There are also great advances being made in anonymization technology, not only for cryptocurrency but for other financial instruments and human activity. Cryptocurrency is therefore a unique phenomenon with its own characteristics worthy of study.

The importance of economics lies in giving us a window to understand the activities of human beings. This means we can make plans about where to apply our resources and our technical knowledge. The current generation of crypto companies lack this strategic dimension and will not be prepared to take advantage of new geopolitical trends. Presently there is too much divergence in focus – the crypto industry is not selective enough.

Concepts from evolutionary theory can help us to predict which kind of organizational strategies will win-out in the longer term. For example, r/K-Selection Theory explains that after major extinction events, the first organisms to occupy niches are the species with high numbers of young that mature quickly and have little investment of resources from the parents (r-selected). However, they are edged out by organisms over the longer term, which have fewer young that are better specialized for niches and take longer to mature (K-selected). These K-selected crypto-organisms are the ones that will be better adapted to take advantage of new economic niches that are opening up.

Another hypothesis from evolutionary theory is the Red Queen hypothesis, which is that organisms are in a constant battle to evolve. That is, we must constantly adapt and evolve in a continually changing environment with ever-evolving actors.

We do this through the process of applying our knowledge to find patterns and build conceptual models, modifying those models in feedback to improve their accuracy or augment their underlying paradigms.

The current crop of crypto-companies will die out soon enough. In their place, a new generation of organizations will emerge. These will be highly adaptive, attuned to geopolitical trends, and optimized for survival in a state of perpetual disequilibrium. To withstand such conditions, this new generation should be founded on a synthesis that combines the astuteness of crypto-economics and crypto-anarchy itself – which is at its core a simple doctrine: the motor of historical change is not simply technological innovation, but concepts, models and ideas that give us power over material reality.

My experience with Eric goes back to 2013 when we began working on Bitcoin system software that was both fast and scalable. Eric is a top tier developer who single-handedly can do the work of an entire team to create production level software – a very rare skill. He also has a wide-ranging life experiencing, having flown jets for the U.S. Navy and started multiple successful companies. He combines intense practical knowledge with a strong theoretical underpinning and a deep interest and knowledge in politics and economics.

Eric's unique insights into fundamental concepts provide us with a vital framework to guide the future direction of the cryptoeconomics field. He rigorously applies rational economic theory to cryptocurrency, and ventures beyond the financial to explain how human activity shapes this future.