In The Know

What is the pseudonymous economy?: Balaji Srinivasan

Balaji Srinivasan, angel investor and entrepreneur, believes pseudonymity is key to creating a better society in our modern age. He outlines why in this presentation for the Cryptocurrency and Hayek Conference entitled The Pseudonymous Economy: Why should we want it, and how do we build it?

“The pseudonymous economy is the foundation for muscular classical liberalism that is capable of standing up in today’s information environment. Rather than make naive appeals to people to look past gender or race, or to not cancel or to not discriminate online, instead we make it impossible to do that by taking away that information entirely with realistic avatars and fully functional pseudonyms.” 

He lays out some important features of pseudonymity: 

  • It’s not anonymity: A pseudonym can have a reputation and metadata that follows throughout different interactions, whereas anonyms are not persistent at all.
  • It’s essential to decentralization: It is an identity that is chosen rather than given and cannot be leveraged against any one individual.
  • It’s a continuum: Degrees of pseudonymity are important; narrowing a pseudonym down to a thousand people would still permit one to operate without interference.
  • It’s already mainstream: The basic idea is already pervasive both online (usernames) and offline (nicknames and changed names).
  • It’s where society is already going: In many realms, from the increasingly remote nature of our economy to crypto to even hiring practices, society has already implemented many of these concepts as common practice.

One reason a pseudonymous economy is necessary, he explains, is that it allows for freedom after speech, defending you against disruptions to your social networks in the age of online mobs, he argues. Just as your bank account is your stored wealth, your real name is your stored reputation. Pseudonymity insures against unjustified debit to that reputation. 

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