Field Note #20. On "Chain Optionality"

Source: Stephan Tual, fmr. CCO Ethereum, "Web 3.0 Revisited: Parts 1-3,” avail. online (2017)

  • The web 3 stack can be abstracted into useful categories that still belie the underlying complexity
  • Be chain agnostic; no “one chain to rule them all” reality in sight
  • Be pragmatic when it comes to permissioned blockchains
  • "Expertism" in crypto is misguided

RE: the last bullet.  The rapid pace of innovation, the technical depth, the regulatory opacity, and the broad probability space for business outcomes over an indeterminate time series, interlaced by cultural, ideological, and philosophical motivations make expertise in crypto or blockchains impossible. This is a Gordian Knot. The Gordian Knot is impossible to untangle. The only appropriate solution is to cut it. When there is a problem that is intricate and intractable, the solution is not to work within its logic, but transcend it. From an investor standpoint, the ways to (start to) cut this knot, inter alia, I'm exploring are (a) disciplined, non-concentrated, non-over-levered position sizing, (b) portfolio diversification (but how to avoid "cosmetic" diversification?), (c) hedging & shorting, and most critically, (d) multidisciplinary and humble teams. How else?

On optionality preservation as a critical philosophical approach: quoting Gavin Wood, “The critical thing is that optionality be retained– similarly by Linux being open source, you keep the optionality to audit and understand the codebase; this was instrumental in gaining its adoption in Android and by large enterprises such as IBM.”
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