INITIALIZE // GENESIS

A modern alchemist's musings.

The dawn of the Information Age in the 1940s has catalyzed parabolic growth for human civilization. Computation has taken center stage as one of the most valuable resources available to humanity; supercomputers lie in secretive bunkers executing floating-point operations at unfathomable speeds to power everything from high-frequency financial markets to high-powered artificial intelligence simulations of protein folding.

As humanity meanders through the timeline exploring the infinite forest of possibilities wrought by advances in computation, the macro-level behavior governing such expeditions reduces to a simple pattern:

1. A new layer of computation is made possible by previous advancements.

2. A few live players throne themselves as the masters of this new plane.

3. These players focus on capitalizing on the newfound value and optimizing to the zenith; they maximize the efficiency of the processes and infrastructure involved, lowering costs to entry.

4. The playbook is disseminated, and the market is made available to new entrants due to low costs.

We can reliably map this; transistors came about, enabling IBM to become THE computer company in the mid-20th century before microprocessors enabled widespread computing leading to incumbents; Microsoft positioned themselves here by moving one layer up from computing to the OS-level and was the dominant player licensing proprietary software before they too were challenged by open incumbents in the form of Linux and HTTP protocol. Computing once again moved one layer up, and we got the massive behemoths of the Internet age born in the early 2000s that have come to consolidate power now. Google, Facebook, Twitter, Amazon; the firms that occupy so much mindshare of the average human moved beyond the base OS and networking layer into the application layer and focused their consolidation on one of the few resources more valuable than computing: information.

As far as the evolution of the information age goes, we thus trace the cycle as such:

Hardware —> Computers —> Operating Systems and Networking —> Internet Applications —> ???

The paradigm lies in launching an Internet-layer application and deriving value from siloed data stores painting valuable snapshots of reality.

This too is now being challenged.

January 3rd, 2009 was an inflection point. The genesis of the Bitcoin network was the first meaningful step to advancing to the next layer of compute. If the current system revolves around siloed data stores, Bitcoin, Ethereum, and all the cryptonetworks that have come since are shifting value by creating a universal data availability layer that does not rely on any single entity. By granting information access to everyone and preserving privacy through the veil of pseudonymity, an open playground is created driving value to meaningful applications anchored to a distributed network of stakeholders.

Behavior is enforced through a mix of algorithmic game theory and social consensus; with everything out in the open, the playing field is reset. Users are free to act with freedom through proxy avatars and addresses; they traverse the Metaverse, building open alternatives to financial institutions, auction houses, and storage centers. Through the advent of cryptonetworks, the dichotomy between individual agency and institutional coordination has begun to narrow. It’s why young, ambitious individuals can launch incredibly innovative financial products without needing to work at Google or its contemporaries for access and resources. It’s why artists can showcase their talents and cultivate star reputations without the need for Sotheby’s endorsement.

Crypto enables decoupling from traditional institutions by ascending to the next layer on the compute stack:

Hardware —> Computers —> Operating Systems and Networking —> Internet Applications —> Open Cryptonetworks

And like the alchemists of old, those researchers and builders advancing both protocol-layer blockchains and the applications built on those are in the constant pursuit of generating outsized value from fixed inputs (computation, human capital, mimesis).

These networks are the cauldron by which these crypto alchemists will build the applications of tomorrow: decentralized money markets and exchanges, games that give ownership to their players, information markets that provide truth via wisdom of the crowd. Despite all the immense advancements in the past decade, and especially the past year with respect to DeFi, NFTs, and DAOs, we’re still early.

This is the age of Open Alchemy, and this is genesis.

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About this Substack

Open Alchemy is the place where my research and writing into cutting-edge topics relevant to crypto and the industry and large. Expect this blog to cover some of the more fascinating and esoteric phenomena, frameworks, and advancements in areas like DeFi, the Metaverse, and markets.

I’ve spent time as a researcher and investor in the space; I’ve previously worked at Dragonfly Capital and Polychain Capital on the investment team, as well as contributed to protocols like Cozy Finance and others. I’m now spending time doing R&D at Alkimiya building products that will become core financial infrastructure to all cryptonetworks. Future issues of Open Alchemy are just on the horizon; in the meantime, you can find past public content here, here, here, and here, and follow me on Twitter @sanlsrni for updates.

Special thanks to Leo Zhang and Ashwin Ramachandran for inspiring me to write more, and Zach Davidson for helping me acquire the NFT last-minute that will represent Open Alchemy.