The adversarial case for crypto

As recently as 2016, home printers were still common enough that when a software update blocked the use of off-brand ink cartridges in HP printers, the people rose up in revolt.

Innocent machines were subjected to strings of expletives; subreddits erupted in outrage; insurrectionary YouTube videos demonstrated how to fight back.

Among other measures, users downgraded their printers’ software to earlier versions that didn’t block third-party cartridges, then disabled automatic software updates that would restore the restriction.

When HP responded by installing security chips in their approved cartridges, people figured out how to remove the chips and install them in the much cheaper, unapproved cartridges the chips were meant to block.

Users also sued — repeatedly — with some mixed results. HP generally settled, sometimes while paying damages, but never admitted guilt. 

Today, HP continues to block third-party cartridges, and users continue to restore their freedom by reverse-engineering workarounds.

This ongoing cat-and-mouse game is an example of what Cory Doctorow calls adversarial interoperability: “[W]hen you create a new product or service that plugs into the existing ones without the permission of the companies that make them.”

It’s a years-old idea that I only just discovered, thanks to a passing reference in a blog post by Vitalik.

He really should have told me sooner. How could I spend years writing about crypto without coming across a business philosophy that’s basically “do things without permission”? 

It seems like adversarial interoperability should be a core concept of composable, permissionless crypto. 

Bitcoin is money for enemies, after all. And the entire point of smart-contract chains like Ethereum is that anyone can interoperate with them, without asking permission.

So why haven’t Doctorow’s ideas caught on in crypto circles?

It might be because he hates crypto.

His reasons are myriad: the environmental cost, the scams, the plutocratic governance…

But they seem to stem mostly from a distrust of markets.

“There are only a few circumstances in which markets produce good incentives and distributions,” he writes, “and these depend heavily on publicly accountable governance that set up their rules.”

In other words, where markets are unavoidable, governments should impose strict rules — and not, say, a community of people that opt-in to some protocol.

Doctorow does want communities to cooperate, of course. And, ideally, he’d like them to do that peer-to-peer, as they do in crypto. 

But he also wants that cooperation to happen voluntarily, to avoid the corrupting effects of monetary incentives.

Peer-to-peer cooperation, free of monetary incentives, creates “public goods through appeals to sharing and generosity,” he says.

Like Napster, for example.

Peer-to-peer cooperation incentivized by crypto speculation, however, creates “literally identical private goods.” (Emphasis added.)

Ethereum, for example.

Napster and Ethereum are both peer-to-peer, decentralized networks. They’re both ways to route around gatekeepers — record labels in one case, banks in the other.

But Napster was built on its users’ desire to share, while Ethereum was built on speculators’ desire for financial returns.

For Doctorow, crypto transforms peer-to-peer cooperation into something mercenary — speculation dressed up as community — and leads to bad outcomes: networks built for extraction rather than sharing.

But I’d like to point out that Ethereum is still with us, and Napster is not.

That probably is a result of how they were incentivized. 

The goodwill that built Napster evaporated under legal pressure; the speculation that built Ethereum has created resilience.

Validators earn rewards for running nodes, and stakers earn for securing the network. Developers receive grants from treasuries, paid in tokens. Investors are, well, invested in the future of the network.

I, too, would like the world to run on universal sharing and generosity. 

But until we have a Pluribus-type mind virus that infects us from outer space, it’s unlikely to happen. (In Pluribus, infected humans live in perfect, cooperative harmony, eliminating the need for money.)

In the meantime, we have to work with human nature, not against it — which means embracing profit motives alongside idealism.

It’s not perfect.

Among other issues, the profit motive sometimes leads to the centralization of power, especially in businesses with large networks, like Facebook and Apple’s app store. 

Doctorow believes the solution is for these private networks to be broken up by the government or required to allow interoperability.

There does not, however, seem to be any movement in that direction.

What else could we try, then?

Vitalik has a suggestion. “Basically, interact with technology platforms, social media websites, businesses and countries in ways that let you benefit from the value that they are creating, without their permission.”

As Doctorow celebrates, that’s worked on a small scale: Napster, LimeWire, BitTorrent.

But how do we get people doing that on a much larger scale? Do we appeal to their sharing and generosity, as Doctorow so eloquently does? 

Or do we incentivize them with crypto? 

I think the latter approach, however distasteful, is more promising.

Doctorow warns that crypto speculation builds the wrong kind of networks: extractive private goods instead of peaceful public ones. 

But there are no moats in crypto, and therefore no monopolies, which is precisely what he thinks our economic system has lost. 

“Adversarial interoperability was once the driver of tech’s dynamic marketplace,” Doctorow laments, “where the biggest firms could go from top of the heap to scrap metal in an eyeblink, where tiny startups could topple dominant companies before they even knew what hit them."

Crypto people are attempting to restore some of that dynamism — they’re the guys going rogue on replacement printer cartridges.

Doctorow should recognize them as fellow travellers.

— Byron Gilliam

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