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Crypto's four key roles in technological innovation

From the deployment stage to the deployment stage, from capital influx to market saturation. Every innovation has a different big cycle, and the transfer of different technological and economic paradigms is more or less similar.

The digital information and communication technology revolution (ICT revolution) is the closest major It has only been more than 20 years since the Internet was adopted on a large scale. For this innovation, we may have just finished the deployment phase and slowly entered the deployment phase of explosive innovation.

The emergence of Crypto is so accidental, and it seems to be the inevitable product of this ICT innovation. In this era of highly overlapping finance, technology and social governance, what role does Crypto play?

This article is written by Mario Laul, a research analyst at Placeholder, a top Crypto investment institution. role is analyzed in depth. Rhythm BlockBeats translated the full text:

Before, I had Define Crypto as a general overview of blockchain technology and Web3.0 innovation. The "digital revolution" began in the late 1960s and early 1970s and included packet-switching networks, microprocessors, and other electronic innovations that led to the proliferation of personal computers and the Internet. I would like to further elaborate it in the following ways:

1. Briefly explain the two main stages of technological innovation A theoretical overview;

2. On the last organizational and institutional changes (around oil, automobiles and mass production) and This time the Internet revolution (around digital information and communication technologies) from the late 1990s to the early 2000s is compared.

3. As the "digital revolution" matures, we will discuss the innovation model and How innovation clusters shape global institutions and governance.

Throughout this article, I will use "ICT" as an abbreviation for digital information and communication technology, and "ICT innovation" as an abbreviation for digital innovation. From now on, the word Crypto will be without quotation marks, and it will not only refer to Crypto technology, but all innovations related to blockchain and Web3.0. Readers familiar with Carlota Perez's techno-economic paradigm shift theory may skip the first part of this article.

From deployment to deployment

Wave cycle model is a very popular Models that theorize economic development. There are many variants of this model, each focusing on a different driver of change, including demographics, credit/debt, trade, and authority cycles. According to Joseph Schumpeter's research roots, the main emphasis in innovation economics is entrepreneurship and innovation.

In the neo-Schumpeterian tradition, Carlota Perez is known for her contributions to the theory of technological innovation and techno-economic paradigm shifts. The techno-economic paradigm shift divides modern economic history into five waves of development. Each wave is driven by a different set of transformative technologies that were first adopted by a few major countries and then gradually spread to other parts of the world. For example, the fourth paradigm shift that took place in the United States in the early 20th century around oil, the automobile, and modern mass production led to suburban urbanization and consumerist lifestyles. Later in the century, the fifth paradigm shift was driven by ICT revolutions including digital electronic computers and the Internet.

In Perez's model, each wave is triggered by a "big bang" event (usually a Key technological advances, such as Stephenson's rocket steam locomotive, Ford's Model T car, or Intel's 4004 microprocessor) span approximately 50-60 years and are divided into 4 distinct phases. The first two phases are called "Surge" and "Rage", and they constitute an innovative deployment phase. During this period (i.e., the 1970s to early 2000s in ICT innovation), new paradigms and their key industries were still emerging (which increased the role of speculative finance capital), while individualism combined with regulatory lags resulted in The extreme imbalance in the distribution of innovation growth. The deployment phase reaches its peak in a certain crisis, which is also the mid-term inflection point of innovation. The latter two phases are called "synergy" and "mature", which constitute the deployment phase of the innovation. According to the model, when productive capital (i.e., non-financial firms engaged in the production of goods and services) tends to dominate, major industries merge, ideally through incremental institutional innovation and a revised social contract to achieve fairer distribution of economic benefits.

Figure 1. The life cycle of technological innovation

A key claim of techno-economic paradigm shift theory is that while the prerequisites for a techno-economic paradigm shift are already in place during the deployment process, the broader social and institutional shifts brought about by the new paradigm can only occur during the deployment process accomplish. This is because over time the full potential of innovation is constantly revealed through learning, iteration, and especially the maturation of synergies between different innovation clusters. Furthermore, the social institutional domain is often more difficult to change, requiring extreme authority and cultural pressure (a crisis) to break free from existing structures than the techno-economic domain, which is susceptible to entrepreneurial behavior and competitive pressures and customs. But eventually, the technological and organizational principles of the new paradigm will become pervasive and deeply ingrained throughout society, and even the most conservative organizational structures will have to adapt. As innovations multiply, the economic and social logic applied in previous innovations (even in the deployment phase of this innovation) becomes increasingly outdated. The techno-economic paradigm established by this innovation will become a "new normal" and will become the starting point for the next wave of innovative innovation, as well as the source of its inertia and resistance. So this cycle will keep repeating.

Figure 2: Three areas of interaction in technological innovation

The above overview may seem a bit dull. In reality, each innovation has many unique characteristics, which also makes this general overview problematic. But as a starting point for connecting Crypto technology and ICT innovation, it is enough to understand the core difference between provisioning and deployment. Simply put, Crypto can be seen as a reaction to the typical early deployment phases of ICT innovations, which also enabled more digitally native institutions, lifestyles, and forms of governance. But before exploring this idea in more detail, we need to recognize how Crypto was built on earlier digital transformations, and need to focus on some of the context in which it emerged.

Mass production deployment vs ICT innovation

The deployment stage is mainly composed of two main determined by strength. The first is the continuous iteration and mass adoption of transformative core innovations, establishing new paradigms from production methods and business organizations to consumer lifestyles and social institutions. The second is the public policies needed to address the challenges and opportunities presented by innovation. Although these two forces are separate, they are constantly interacting: the invention and adoption of new technologies influences decisions, which in turn affect the evolution of technologies, especially the social distribution of innovation costs and benefits.

During the first half of the 20th century, under the leadership of the United States, advanced economies around the world adopted the mass production paradigm technical and organizational principles. Most importantly, this includes cars and other internal combustion engines powered by low-cost fuel. Taylorist assembly lines, otherwise known as "scientific management," were applied across industry to coordinate the mass production of household appliances and a host of other standardized consumer goods, many of which were increasingly made of synthetic (petrochemical) materials And made. Private cars have allowed people to stay out of urban centers, which has spurred the expansion of highways and road networks. Suburban consumerism is not only a trend, it's accessible to a wide range of people, thanks to officially backed home loans and various installment plans.

In the latter half of the mass-production revolution, the organizational behaviors advocated by private companies are increasingly adopted by the public sector Replicated across time, the public sector developed into a complex "multi-sector" structure, resembling the large, hierarchically organized corporations that dominate the economy. The same goes for international organizations such as the United Nations, the International Monetary Fund, and the World Bank. In addition to supporting the housing market, officials have been the main demand side of the economy through public procurement of physical infrastructure (in part for post-war reconstruction) and military spending due to the Cold War. The relative strength of labor unions has allowed productivity gains to be matched to wages, while welfare and unemployment insurance programs have helped cushion the blow of the recession. All in all, while it’s all far from perfect, a positive synergy between technological advancement and public policy has allowed most Western countries to achieve decades of inclusive, steady growth — what Perez calls a “golden age” of deployment " Typical example.

By the end of the 20th century, especially with the boom in the Internet economy in the 1990s, it was generally acknowledged that the development of advanced economies was entering a period of new stage. The popularity of terms such as post-Fordism, post-industrial society, knowledge economy, and information society signifies a shift toward a more IT-intensive and global economically integrated order. The table below enumerates some of the key differences between the declining (left column) and emerging (right column) paradigms, all as envisioned in the early 2000s.

Table 1: Differences Between Mass Production and ICT Paradigms

Remember , according to Perez's model, the bursting of the Internet bubble only represents the middle point of ICT innovation, and the entire deployment stage has not yet come. In the early 2000s, Perez wrote:

"Finance Capital has completed the widespread dissemination, deployment and testing of new paradigms The work of new infrastructure. Enough business communities and consumers have absorbed the new common sense and are able to continue this transformation process. Now it is the turn of production capital to take the lead. Expand production, expand demand, and financial capital should only play a role Auxiliary role.[…] By developing real knowledge-intensive production and lifestyles, we still have a lot of room for commercial imagination and technological innovation to guide deeper social changes in the world.”

The impact of ICT innovation on the world society in the past two decades has been transformative. While there are still huge social and geographical disparities in the adoption of ICT technologies (the so-called digital divide), personal access and the cost-effective exchange of information on a global scale has undoubtedly improved the lives of billions of people. The resulting impact can be compared to the improvement in material living standards brought about by the mass production and international transportation of consumer goods. This time, the key infrastructure is the digital network connecting data centers and personal computing devices, further accelerating the movement of goods, people and information, thereby improving the efficiency of everything in the world.

We must recognize that the diffusion of new techno-economic paradigms is not an orderly process. Within the large multi-decade S-curve of each technological innovation, there are many small S-curves of individual disruptive technologies, many of which occur only after earlier technologies have matured and can be easily disrupted again An industry still in the process of integrating innovation. Recent examples include social media, e-commerce automation, smartphones, cloud computing, Internet of Things (IoT), deep learning, advanced robotics, and blockchain technology. While radical innovations in the provisioning phase (such as the personal computer and the Internet) may seem more disruptive, the deployment phase is just as transformative. In short, throughout the innovation process, a new technological and economic paradigm will never be the pinnacle of its debut, but will continue to iterate and unlock new synergies throughout the innovation process.

Perez's "New Common Sense" concept drives and enables the deployment phase, which perfectly embodies Marc Andreessen's famous quote "Software is eating the world." But being eaten is not a good thing. Each successive innovation poses an existential threat to established ways of doing things, creating a mismatch between new economics and technologies on the one hand and established institutional, social and regulatory frameworks on the other. This mismatch has been a key source of tension between society and authority over the past few decades—a turning point typical of all technological innovations observed. Even today, when ICT technology is no longer a novelty, it is still closely related to the grand challenges of national and global governance, as different communities and societies around the world grapple with the economic structure, division of labor, and power of wealth arising from innovation Assignment reorganization.

However, while we can learn from history, society remains fundamentally uncertain when we chart the dynamics of technological change , should not be too sure. For example, while the second half of each technological revolution is usually a period of more inclusive economic development, this is by no means guaranteed. As Perez puts it, each phase of deployment has the potential to be a "golden age" for the majority of the population (at least in core countries), but only if, by rebalancing interests between financial and productive capital, workers and the state, to point it in a suitable direction. This is where the post-crisis environment presents a unique opportunity to forge a path forward by mobilizing diverse stakeholders and the necessary resources to leverage new technological capabilities while addressing the institutional and distributional shortcomings of the more volatile deployment phase. Visions of the right path, however, have never been universally agreed upon and are therefore subject to some degree of authoritative debate and struggle.

The last two developments in particular prove that, as Perez envisions, the way deployment is not preordained. First, despite much public discussion of fundamental policy innovations around issues such as income and wealth inequality, job insecurity, and environmental degradation, some real action has taken place. Second, the financial industry is not declining in size and importance; instead, the global economy appears to be increasingly financialized. Regulatory responses to events such as the global financial crisis of 2007-2009 have tended to be more aggressive in the past, in stark contrast to policy in the pre-crisis period. In contrast, the global response to the financial crisis was roughly the same. While it is too early to assess the full social and economic impact of the second half of the ICT revolution, it is certain that this must be more complex than an idealized version of Perez's model suggests.

The concept of deployment can prescriptively be considered a policy-driven "golden age" (contrasted with history), or in terms of Descriptively considered to be any phenomenon observed in contemporary society (without reference to history). The analysis below is more inclined to the latter, so as to avoid discussing the negative role of normative policies in dealing with disruptive technologies. The mass adoption of ICTs over the past 20 years is a historical fact, regardless of whether its associated socioeconomic outcomes meet individual expectations or achieve authoritative goals in a given society. It is now evident that ICT technologies have transformed organizational behavior in most sectors of the economy. But all this is going on, and until recently we found no signs of truly ICT-native organizational forms. In the next and final installment we explore how Crypto is revolutionizing digitally native institutions and their governance as the ICT revolution matures.

Crypto and ICT technological innovation

Try to define the core innovation and social significance of Crypto, It will always be seen as "blind man feeling the elephant", like describing a complex phenomenon from multiple but limited perspectives. The most common explanations can be divided into two categories, "Currency Crypto" and "Technology Crypto". The former focuses on Crypto's impact on money and finance, particularly its potential to upend the role of state institutions; the latter explains more ambitiously, focusing on Crypto's impact on all digital systems or services that could benefit from greater High transaction execution assurance, or a more decentralized, secure and user-centric information management model.

The views presented here combine "currency Crypto" and "technical Crypto", and refer to Perez's two-stage model of technological and economic paradigm shifts to explain that Crypto is How to integrate into ICT innovation. More specifically, it allows blockchain-related innovations to be seen as typical of the deployment phase, by viewing Crypto as technological innovation, financial innovation, process and institutional innovation, and ultimately as part of the general trend toward network automation. Given that the ICT revolution is still a work in progress, this interpretation is by definition a conjecture whose accuracy can only be assessed retrospectively after ICT has given way to the next technological revolution.

Crypto as a popular concept of technology

Historically, every technological innovation Mid-term inflection points are all about periods of controversy between different visions of the way forward. Financial and economic crises often lead to questioning of existing institutions, opening the Overton window for fundamental innovation. So the turning point provides an advantage for that.

Crypto is related to the sequential structure of the Perez model, and the first way to understand this is to recognize the importance of the reactive and ideological drivers behind Crypto . These driving factors are not uniform, and there is generally no incentive, the most important thing is the greed for wealth. But discussions about Crypto’s core values have been rife with criticism of the dominant players in finance and digital technology, who profited both before and after the global financial crisis. Therefore, it is reasonable to describe Crypto as a technological innovation, partly due to dissatisfaction with the existing financial system.

In addition to being critical of existing institutions, many of which are struggling to secure their potential new share of the blockchain space, Crypto expressed this A belief that, if channeled properly, innovation and incentives can provide the foundation for a technologically more advanced, prosperous and inclusive economy. But it would be wrong to conclude that Crypto is a radically disruptive technology. In fact, all this is more like several small groups with a common enemy, but because they are too young and have different views, they cannot unify the consensus on the best solution, and Crypto adapts to the full range of authoritative ideology. Over time, certain ideological factions are likely to become dominant while others are marginalized, which will affect the way the existing authority system interacts with the Crypto system as a whole, and more importantly, individual blockchain networks There will be huge differences in the authority positioning and governance of the community and its community.

The emergence of Crypto as a social and authoritative model requires mature technology that can support it, the rise of big technology, and the benefits brought by the inflection point caused by the financial crisis condition. Ultimately, as with other post-crisis innovation models, its main challenge is to build a sustainable alternative to the current structure without being co-opted by those in power and without repeating the same failures, or at least Make some meaningful changes. While some offshoots of Crypto have a broader and long-term vision for the digital and creative economy, it is only the transformative potential of Crypto in the monetary and financial sectors that has attracted most interest and attention so far.

Crypto as a financial innovation

From a financial point of view, Crypto appears to be Contradicting Perez's idealized deployment, in this case highly speculative and self-referential forms of finance are reduced compared to those closely integrated with the production of real goods and non-financial services. However, there are at least two reasons why using this framework is rather limited in analyzing Crypto and the context in which it was born. The first reason focuses on the relationship between financial capital and productive capital, broadly referring to the adoption of ICT technology since the 2000s and its actual impact on the economy; while the second reason is that Crypto financial innovation clearly foresees Arrived at Perez's theory and it fits perfectly.

First, it is an indisputable fact that the Internet stock market crash and the aftermath of the global financial crisis did little to reduce financialization. In many large countries, the size of the financial sector and the importance of financial instruments in promoting economic development, including the business activities of nonfinancial firms, have not diminished. Relatively speaking, financial capital has not given way to productive capital (which has continued to decline in many non-industrialized Western countries), and the line between the two has become more blurred. This is partly due to the impact of loose monetary policy on the financial sector, and partly due to the fact that digital technology (including Crypto) has greatly optimized ordinary retail investors and institutions' access to financial knowledge, tools and opportunities to participate in the market. Furthermore, the ICT technological revolution coincides with the global rise of technology-focused venture capital and Internet crowdfunding, which has provided critical support for the continued experimentation and growth of traditional financial technology and Crypto in the aftermath of the global financial crisis.

However, the size of the financial industry should be seen in the larger context of the impact of ICT technologies on society. In absolute terms, the role of productive capital over the past 20 years in the core applications of the deployment phase, such as digital infrastructure, mass rollout of products and non-financial services, is impressive. In addition to the giant technology companies (which currently include some of the world's largest companies), there is a long list of other established companies that provide digital information and services to tens of millions of organizations and billions of people - certainly in those major economies , but is gradually moving towards the backward areas of the world. In short, the digital and intangible elements of everyday life, work and consumption have become an important part of the real economy, although traditional economic measures have not always been responsible for this.

Second, although the use cases for Crypto extend more broadly into information management, blockchain and related The financial services (decentralized finance) field has the most widespread application impact, which illustrates the changing nature of financial innovation at different stages of technological innovation. According to Perez's theory, the deployment phase tends to coincide with more favorable conditions for genuine financial innovations (i.e., fundamentally new products), and it is widely believed that from the early 1970s to the period stage) development is a real financial innovation. However, it would be incorrect to conclude that Crypto as a post-crisis financial innovation is incompatible with Perez’s model. The following is Perez's description of the typical nature of financial innovations and innovations after the medium-term turning point:

"Although they are more likely to originate from official or world institutions, the financial sector Some of the new rules are self-imposed, precisely to avoid official oversight. They usually involve a new framework for banking and monetary practices. Next, the rules of the game are established to govern business [and labor relations], as well as international Regulatory innovation at the level. But each set of rules is unique in that it needs to match the specific features of the paradigm to which it fits. …Accounting and disclosure legislation is often designed to avoid unmasking in previous “manias” developed for its disadvantages.

"In order to help this new "prosperity" enter the [deployment phase], we need innovative products to smooth the transition in monetary, banking and financial practices. New paradigm operation. As with all innovations, when it is introduced is less important than when it is widely distributed. The deployment period of each tide will bring various innovations in the financial field. Some are temporary or borderline legal, destined to disappear or become marginalized (over time). Others, especially those related to investment, production, trade and consumption processes adapted to new technologies, are likely to be popularized and widely applied. During deployment, diffusion of the model to more sectors of the economy may require these tools, along with others appropriate to emerging business practices [for example, technology-focused venture capital and Internet crowdfunding, both of which are critical to the growth of the digital economy. Important, including Crypto - M.L.]. These may include innovations in types of currencies, banking services, and forms of credit or finance that facilitate the full adoption of new models in the economies of each country and the world as a whole. They will be closely integrated with public policy measures (national and international) that set the rules of the game and the institutional framework for banking and finance. […] It is clear that the thriving knowledge economy [created by the ICT revolution] will require a host of new tools and even the overturning of some "timeless truths" about the tangible nature of assets [this is the challenge posed by Crypto currencies -M.L.]”

The above paragraph can be interpreted in two different ways when it comes to the practical record of applying ICT to finance over the past 20 years , which enables both traditional financial technology and Crypto. On the one hand, Crypto is the complete opposite of official or policy-led financial innovation, nor is it considered a self-regulatory attempt by current financial institutions. Despite growing popularity among certain segments of society in both developed and developing economies, crypto financial services are far from mainstream and their impact on business and jobs outside of a few niche markets remains to be determined . Thus, the ultimate conclusion may be that even though digital technologies as a whole have contributed to the modernization and globalization of finance over the past few decades (at least in part in line with the specific features of the ICT paradigm), it has not yet led to a deeper change in the financial system. Levels of innovation, neither through official or self-regulation, and certainly not through Crypto.

Crypto, on the other hand, is often accurately described as "a new framework for banking and monetary practice" that takes advantage of the unique Its technical and organizational capabilities arguably have an advantage over traditional financial technology, which, while digital, is still rooted in traditional business methods. Financial innovations are typically triggered by two types of advances: legal-transactional (financial contracts, or more broadly agreed terms) and technological-informational (communication infrastructure). Crypto involves both: the first case is the Crypto protocol (including smart contracts), and the second case is the blockchain network combined with advanced ICT infrastructure. Crypto's core values and organizing principles are Freedom and Open Source Software (FOSS), decentralization, censorship resistance, permissionless access (via off-the-shelf devices), and transparency sufficient to allow anyone with some basic technical skills to audit and verify information degree. So another way of saying the above conclusion is that Crypto enables the most ICT-native form of financial services that exist today, thus creating the potential for the global financial system to be substantially aligned with the ICT paradigm.

Crypto financial services are, of course, still marginal by traditional finance standards. However, Crypto is born digital and global, so it is more difficult to regulate and restrict through traditional, state-embedded frameworks. This offers the crypto currency considerable potential for organic growth, but only if some key barriers to its mainstream adoption are addressed. Most importantly, these include scaling at minimal expense in terms of security, decentralization, and privacy, improving the unfamiliar user experience, and reducing the still relatively high risk of financial loss due to fraud, hacks, or software bugs (relatively For purely financial or market risks, it follows a logic similar to that of other economic sectors) and ensures the necessary degree of systemic stability. The above four scenarios, along with Crypto’s other shortcomings relative to traditional finance, and the role of this vision of the future in the continued attraction of entrepreneurial and technical talent, financial investment, and a steady inflow of new users remain critical to Crypto’s long-term success.

Regulation through traditional measures is a challenge for crypto currencies, but that doesn't mean regulation won't be central to determining its future. The following moves between regulation and Crypto are of particular importance:

- Traditional regulatory actions, which may both encourage and hinder the development of Crypto, and may continue to target centralization Service providers such as fiat deposits, custodians and trading platforms, but also targeting companies closely involved in core software development or marketing of specific Crypto financial protocols and services.

-Crypto as a coercive function has prompted traditional financial and regulatory institutions to explore new technologies and organizational models, the best example of which is the central bank digital currency (CBDC) interest is growing and attempts to integrate Crypto currencies with traditional financial and real economic processes.

-Crypto is an expression of "code is law", that is, software can replace traditional legal codes, not only providing the basis for legal texts, but also It is also increasingly replacing traditional legal codes in administration and law enforcement to determine the types of actions that are possible in a world awash with digital technologies. Behind Crypto’s ostensibly anti-regulatory stance is also a vision of a world of hyper-regulation by software protocols — the digitization of bureaucratic procedural rules.

A common criticism of Crypto is that it offers few truly innovative financial products, just recreating everything that already exists on the blockchain. In a way, this criticism is right. However, aside from all the new software involved, Crypto's core innovations are not products, but processes and institutions related to free software development, decentralization, open access, composability, programmability, automation, and distributed governance innovation. All of these concepts can be seen as paradigms of ICT innovation, contributing to the "truly knowledge-intensive production and way of life" that Perez envisioned two decades ago. Therefore, in order to fully understand the social significance of Crypto, it must be recognized that its potential impact is not just monetary and financial, but has a wider impact on digital organizations and Internet-native societies and economic coordination.

Crypto as process and institutional innovation

The process of spreading technological innovation takes centuries , which involves many innovative technologies and the expansion around these technologies, and various innovative activities are also developing and maturing at different stages. Some need to iteratively upgrade core general-purpose technologies throughout the innovation process (such as digital computer technology in ICT innovation). There are also some technologies (such as the Internet, cloud computing, smartphones, etc.) that will only see disruptive changes after the early technologies are mature enough. At the same time, with the development of innovation, many technologies are gradually commercialized, and the single cost is reduced. As the population increases, people learn and rely on the new changes brought about by these technological innovations, and regard the changes of technological innovations as the only way for "normal" people to live, work, and organize activities in contemporary society.

In the ICT revolution mentioned here, the "normal" is digital. However, over time, changes in technology, consumer behavior, investors, private companies, and public institutions have perpetuated this "normal" number in a complex, co-evolutionary dynamic. The fundamental nature of numbers There have also been huge changes. In recent key developments, this multifaceted co-evolution has also seen fluctuations in the Crypto field. Crypto has spawned many new experiments around digital information on distributed ledgers. And unfold. Although the original intention of this experiment was to focus on decentralized forms of currency, it quickly expanded to how to build and refactor other types of digital infrastructure and services.

Crypto as a process innovation mainly focuses on information management (including format, storage, transaction) and governance (including software and organizational development). One of the greatest visions of its future is to make Information and governance methods are more transparent, decentralized and autonomous, and Crypto hopes to complement or even subvert existing currencies, laws and digital platforms in some ways. In Perez's terms, Crypto can be seen as the deployment of ICT innovations Phase exemplars, which include the emergence of ICT-native organizational structures and the widespread integration of existing and emerging institutions with ICT paradigms. Further:

Public The openness and permissionless nature of the blockchain makes it comparable to real public infrastructure or utilities. Although most public facilities are fixed in a specific location and are directly or indirectly controlled by a democratic accountability institution, the official, But as a digital infrastructure, the nature of Crypto is global (similar to the Internet) and is controlled by various private sectors in a decentralized manner. This means that individual network individuals can also stay in specific areas This does not mean that it is contrary to democratic checks and balances or accountability. In principle, Crypto's global influence has only depended on Internet access traffic from the beginning, and it is clearly stated that its design is to resist centralized centralization such as the official or any other centralized group.

Similar to the impact of Crypto on the financial field, the entry of Crypto technology into other fields will pose direct competition and challenges to existing institutions, and can trigger their internal paradigms change. From the perspective of existing institutions, all their questions boil down to one sentence: what is our own crypto strategy?

Crypto opens up a very permissive and flexible environment for running experiments in digital governance, not just in managing blockchain-based networks and protocols (which can be As a digital institution), it can also be used as a governance tool in other fields through the blockchain network and protocols (that is, to contribute to the digital transformation of traditional institutions).

Crypto builds new forms of online collaboration and community building, including Decentralized Autonomous Organizations (DAOs), which were the Impossible. The role of DAOs is critical to an economic system formed by assets, contracts, and relationships tracked through the blockchain. Over time, this emerging Crypto economy may pose a huge challenge to the traditional digital economy, or combine with each other.

In addition to blockchain and FOSS protocols, DAO is crucial to Crypto as an institutional innovation. DAO can be defined as a combination of automation (i.e. distributed computer networks and smart contracts), incentive mechanisms in the Crypto economy (i.e. Tokens stored in distributed ledgers) and human collaboration (mainly online, relying on Crypto native and traditional network) an organization based on a coordination tool combining these three. As a digital organization, DAO is not limited to a specific geographical location, and is open to organizational membership: anyone can join it, and can get rewards for DAO governance rights and resources by contributing to the DAO. Ideally, no one person can fully control the assets and governance rights of the DAO, and participants can still guide its future development through collective behavior. In other words, DAOs want to have a high degree of assurance that their information can be traced and transactions can be executed (automated censorship and tamper resistance) and a high degree of organizational autonomy (such as autonomy, usually some form of online voting).

The topic of finding the right legal status, structure and governance for DAOs is also developing rapidly, now using specific It is still too early to draw conclusions about which DAO design is better than other designs. Although the purpose and activities of each DAO are different, this naturally leads to different challenges faced by each DAO. For now, the biggest and most common challenges faced by DAOs can be summarized as the following questions: How to plan and make decisions in the organization? Key functions (e.g., mobilizing and allocating resources, hiring contributors, assigning tasks, allocation of decision-making authority, resolving conflicts of interest, securing taxation, ensuring legal compliance, etc.), while not violating Crypto's core principles. To address these issues, technical foundations and standards tailored to the needs of DAOs are currently being developed. At the same time, DAO also showed a professional trend, successful experimental ideas began to land, and influential DAOs also began to attract the attention of regulatory agencies.

It is sociologically naive to say that blockchain networks and DAOs will be immune to the typical failures of traditional institutions. Of course, ignoring the combined innovation of blockchain and advanced infrastructure in ICT is also short-sighted: relying on distributed digital networks instead of centralized traditional institutions, the ability of blockchain networks to coordinate and trade on a global scale, not only It represents a major turning point in the context of ICT innovation, and also represents the gradual shift of technology to the interstellar system of network automation.

Automation of Crypto

Technological advances have been moving towards a high degree of automation. This trend has been particularly evident since the industrial revolution and has been amplified by the ICT revolution. The combination of computers, sensors, network communications, and advanced robotics is enabling increasingly complex cyber-physical systems that can perform large-scale concurrent tasks with little or no human intervention or assistance. Although these technologies are often mentioned in public utilities such as agriculture, manufacturing and transportation, the impact of ICT on automation is actually much more far-reaching.

The core component of digital automation is information circulation and inventory management, from a small amount of files on personal devices to global digital platforms that process PB every day (1PB=1024TB )The data. The management of these information is carried out according to preset rules, namely "agreement", which is a defining feature of "bureaucracy" (a definition of modern organization), which is fundamentally consistent with ICT and empowered by ICT . The essence of so-called empowerment is to weaken the importance of human roles in the bureaucratic system. For example, filing cabinets can be replaced by digital data storage; manual counter transactions can be replaced by computer automation; The so-called middlemen can be replaced by an increasingly global distributed network.

The field of Crypto can be said to be an extension of automation and digital management caused by ICT innovation. Through the combination of automation, centralization and anti-censorship capabilities, the Crypto field is one step closer to a "perfect" "bureaucracy". At least on the surface, Crypto technology can prevent corruption, prevent artificial laziness, and it will not slow down and be easy to control. Although the Crypto protocol and network are still under human control, they are still more automated. Crypto technology is more like a vending machine, a vending machine that can be used by people all over the world, can add products at will, and provide any service. With the integration of some parts of this automaton (referring to Crypto technology) and some parts of ICT, this system can become the basis of governance and management of globalization. Therefore, the field of Crypto has inevitably become the object of authoritative debate.

Conclusion

The above description of Crypto is influenced by the neo-Schumpeterian theory Inspiration for Paradigm Shift Theory on Technological Economy. We can summarize it as the following 5 points:

1. Crypto is not a technological innovation. It is supported by ICT (cryptography, computer, software distributed network, etc.), an innovation cluster integrating various disciplines, and can only be classified as a part of ICT innovation.

2. To a certain extent, Crypto is an innovative model of responsiveness and technology public concept. Crypto is typical of the early stages of deployment, both in terms of its critical stance on existing institutions and the legacy of economic power relations from the early stages of ICT innovation.

3. By supporting more ICT-native financial forms (digital, global, programmable), Crypto brings competition and challenges to existing financial institutions , accelerating their digital transformation and driving innovation in financial and regulatory regimes tailored specifically for the information age.

4.Crypto represents the expansion of digital and automated management triggered by ICT innovation. By enabling more decentralized and censorship-resistant forms of automation, Crypto opens up new vistas for global governance, and as such, it can be seen as the central system of an emerging (geographical) automated authority economy.

As ICT innovations mature, their most lasting effects are revealed. Whether Crypto is just a short-lived trick to grab people's attention, or it is a supplement to the centralized digital platform, or it breaks the shackles of traditional institutions, and has further breakthroughs from the ground up, all of which remain to be seen in the future. But no matter what the final outcome of Crypto is, the future society will tend to be digitally mediated, globally integrated, and automatically regenerated. Therefore, the challenges of social governance and digital technology system governance will gradually overlap, all of which will last forever and enrich future generations.