The Social Exchange Machine: Crypto as Society Made Scalable
Why HCI folks should pay more attention to crypto.
Trust and The Social Exchange Machine
Well, the talk of the town today is ConstitutionDAO raising 13 million and counting in crypto to buy the constitution . If nothing else, this is one of the most interesting performance art pieces I have seen recently, and there is so much to unpack here, even from a social computing angle.
Before you roll your eyes. Hear me out.
It’s safe to say that the world as we know it builds on social exchange. Social exchange can be psychological or economic . Employment relationships, purchasing decisions, interactions on social media, etc., can all be considered a form of exchange.
I spent the majority of my PhD studying social exchange and understanding interpersonal trust in these social exchanges. For example, what makes an Airbnb host profile seem trustworthy? What makes someone trust a social group on Facebook? As early as the 1970s, scholars have been writing about trust as the crucial infrastructure to facilitate social exchanges (Niklas Luhmann, Richard M. Emerson. The contribution of my work is to understand how technology further mediates trust, and hence, exchanges.
In the case of the ConstitutionDAO -- it’s a Social Exchange Machine, backed by crypto (smart contracts) and is infinitely scalable. But what’s interesting here is that all of this still requires a lot of trust in the humans -- and crypto doesn’t solve it.
As Ben Thompson pointed out, because of regulatory reasons, the actual bidder for the Constitution will be a LLC with two members who promise to abide by DAO decisions. That’s a pretty big promise. “It sure is striking that a memetic moment meant to demonstrate the power of trustless technologies is utterly and completely dependent on trust: trust that the LLC owners won’t take the funds and run — or the Constitution copy, for that matter; trust that the money will be refunded if the bid fails; and trust that the actual DAO, when it is finally formed, doesn’t enrich the core team along the way.” 
Crypto as Society Made Scalable
So what is a Social Exchange Machine? And what does it even mean that it’s society made scalable?
To answer that, we need to take a brief detour and review Bruno Latour’s 1991 article -- Technology is Society Made Durable. This is one of my favorite stories about technology and human factors of all times. A hotel manager wants the customers to leave their keys at the front desk every time they leave the hotel instead of taking it with them (perhaps they would lose the key). The manager tried telling the customers. It didn’t work. Then they tried written notices. It didn’t work that well either.
Finally, the hotel manager came up with a tiny “technological” innovation -- attaching a large cumbersome weight to the room keys. It worked like magic, customers suddenly cannot wait to get rid of the keys when they go out.
The heavy metal weight is technology in its most basic sense, in that it binds the customer and hotel manager in a relationship/contract that is naturally enforced. That’s the central thesis of Latour -- technology is society made durable.
What I am arguing here, is that crypto, in particular, smart contracts, doesn’t act that differently than the heavy metal weight attached to the key. It enforces an agreement, but unlike heavy metal weights, crypto is scalable and that can have profound implications of social exchange relationships, and for that matter, society, as we know it. Crypto is society made scalable.
The skeptics among us may still wonder, we have legal contracts and social norms that bind social exchanges already. Isn’t it enough? What’s the big deal?
I would argue that scalability makes a huge difference. Did we have commerce before? Sure we did. Did we have Bed and Breakfasts before? Yes we did. Did we have libraries before? Did we have social interactions the old-fashioned way? But did something fundamentally change about these social exchanges when they are mediated by the internet, the payment technology, and sharing economy platforms with review systems? Amazon, Stripe, Airbnb, Google, Facebook.
Does scalability make a difference?
Only history will tell.
That brings us to the big question, can technology fix it all?
@maiab’s tweet said it well:
I think I can hear audible sighs all around from the HCI (Human-Computer Interaction) and Science, Technology & Society (STS) folks.
Don’t we learn anything from history? Even the environmental impact aside, how many times have we collectively got so excited about a technology, thinking that it will fix all the problems we have, only to realize later that technology alone cannot fix human problems. Think about AI and society. The internet and democracy. Phones and communication. Financial inventions and inequality.
Should HCI people have done more in the course of the rise of deep learning and AI? I think we should have. Should we have been more vocal and earlier to sound the alarming bells of all the perils of technology and how we have been studying the impact of human factors in designing technology for decades?
Am I surprised that there sure will be a racist DAO drawing headlines one day if not already? Am I surprised that female NFT artists only account for a fraction of the sales ? Is it more comfortable for me to roll my eyes and be like all these crypto people are crazy and it’s all a scam?
But what if the crypto does become society made scalable? Would we regret not having to participate earlier in the making?
P.S.: kudos to Metagov.org for spearheading some of the discussions around meta governance .
What about the Metaverse?
I think it’s a separate debate. I am not at all interested in the debate between AR (Augmented Reality) v.s. VR (Virtual Reality). Some people have the view that traditional web2 is 2D and web3 is 3D. As Ben Thompson discussed with John Riccitiello today, that’s not necessarily true either .
I believe in reality (or verses) as humans' imagination and perception. If it’s up to me, Shakespeare is the OG metaverse. You can have a whole world without a single picture. Are pictures, videos, 3D universes more immersive and visceral? Interactive? Sure. But at the end of the day, it’s the perception of reality that makes up a universe. And whether that’s achieved through text, image, web2, voice, AR, XR, VR, or whatever crazy new technology that we develop, it doesn’t really matter to me.