Turing Test Series: CryptoCurrency
The Turing test for investing in Crypto Currency
When you are looking to invest in any asset class, you need to pass what I call the Turing test for that asset class. Turing test answers one fundamental question that, if answered correctly, makes you ready to explore that asset class further.
Before we jump ahead, a small note on the Turing test
A Turing Test is a method of inquiry in artificial intelligence (AI) for determining whether or not a computer is capable of thinking like a human being. The test is named after Alan Turing, the Turing Test founder and an English computer scientist, cryptanalyst, mathematician, and theoretical biologist.
When applied to asset classes, the Turing test helps you think and answer the fundamental question that determines that asset class's sheer existence.
Turing test for CryptoCurrency
Do you think the Nation States are the best way to organise us?
Definition of Nation-State:
A nation-state is a state in which a great majority shares the same culture and is conscious of it. The nation-state is an ideal in which cultural boundaries match up with political boundaries.[1] According to one definition, "a nation-state is a sovereign state where most of its subjects are also united by factors that defined a nation such as a language or common descent." [2] It is a more precise concept than "country" since a country does not need to have a predominant ethnic group
Our view: We argue that it's not, and that is the underlying concept upon which cryptocurrencies emerge.
Nation-State as a concept served its purpose when communication was hard, access to information was harder and physical movement was painful.
It meant that the simplest way to organise humans was to cluster those who lived nearby and then bind them using certain rules and regulations. Once bound, this cluster took the shape of one single entity. To distinguish that entity from other such entities, currencies were set up, which were valid within that cluster's geographical boundary.
However, the prominence of the internet has destroyed the problems of communication and access to information. The effects of technology have also meant that physical movement is increasingly getting faster and better.
This has led to two big changes.
Removal of Physical Boundaries: You can cluster people without a restriction of geographical boundaries. As COVID has accentuated, people from anywhere around the world can cluster basis their hobbies, interest and affinities etc. Any centralised rule or government regulation does not bind them.
The emergence of the Metaverse: We are seeing that most of us now have two identities. One in the digital world and one in the physical world. As we start getting better with user experiences in the digital world, the lines between these two would blur. Any person while living in the physical world could have a life also in the digital world. The beauty of the digital world is that it can be free from any clustering or geographical restrictions.
Therefore as the fundamental method of clustering people changes the foundational concept of nation-state stands questioned.
This implies that any form of regulation (Currency is a form of regulation) by a nation-state is in itself a question.
For example,
You don't need to be a US citizen to participate in a US artist's concert digital concert or buy a US creators asset.
You don't need to be a US citizen to hold US dollar-backed assets and earn interest in them.
You don’t need to be an Indian to invest in a Crytpo Exchange in India or a Crytpo lending platform out of India
Of course, we are, I would say, at the very start of this new societal change. And at the start, your best bet is that you agree and accept that this change is happening. It's almost impossible to know how any of these will get executed and in what exact form will land up.
That is our answer to the Turing Test, and we are long crypto at RefreshMint.
We are focusing on building distribution first cause once we build that, we know that crypto will free us to stitch any product that a consumer wants sans regulation.