Social Collateral and the Economy
MetaMask co-founder Dan Finlay’s thoughts on the future of money
Human needs are tangible goods, and cash is merely the means for exchanging tangible goods. A perfectly efficient economy, then, wouldn’t need cash as we currently understand it.
Dan Finlay, MetaMask co-founder, believes that healthy economies hinge upon establishing networks of trust — ones in which people rely on each other to meet those tangible needs. He believes that the power of blockchain rests in its “unprecendented degrees of automation,” in which a person can add others to their secure, shared pools of resources with ease. Rather than dealing with lengthy loan applications and financial contracts, individuals can grant “transitive trust” via blockchains which allow trusted others to safely access one’s own tangible resources.
People are compelled to keep their promises (to deliver on “loans” etc.) because of the social collateral they stand to lose if they free-ride or fail. In exchange for donating tangible resources to others, investors stand to profit from resource discounts the borrower offers for that initial transitive trust.
Dan Finlay gives the following example: a medical student might approach friends and family for aid going through school in the form of books, housing or food during their residency. In exchange, the student might issue promises (i.e. medical utility tokens) for future medical care. A breach in the contract would limit the student’s ability to secure resource help in the future. Trust and economic ability is born and dies alongside the keeping and breaking of promises in this decentralized marketplace.
If this vision interests you, watch the long-form interview for more of Dan Finlay’s thoughts!
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