Walkable Blockchains: Metaphors Between Blockchains And Urbanism

Also: More Novellas, Axel Springer - OpenAI Deal, and Compulsory Licensing

Networks are built from relationships. Cities can be destroyed and they will return as long as the relationships in it are stronger than the built environment it was made in. The city is thus more of an emergent ant-hill of the humans in it, than the other way around. We design cities, yes, but once they are lived in, the relationships define it. Blockchains are the same. They capture relationships and bring together people as if they were a virtual city. Over time, it stores history and relationships. It’s why, in the event of existential attacks against it, blockchains rebuild themselves to save the relationships in it. Cities and blockchains die from years of atrophy that’s not repaired, not from singular events.

They sometimes act quite similar and there’s potential for cross-pollination of ideas and metaphors to each other. The cross-reference isn’t new. I’ve at least mentioned it since 2016 and people like Huseeb have ran with the metaphors as well.

So, I want to have fun again after diving deeper and deeper into both disciplines over the past years and see if there’s some metaphors worth comparing again.

The established metaphors compares blockchains to cities in general. Each blockchain has its own relationships, activities, congestion, development, and so on. A common reference is to describe how layer 2 scaling solutions fit into this.

Scaling to New Cities and Districts

If the uses of a blockchain isn’t working in it, new blockchains are created either as stand-alone centers or as L2 scaling solutions. I would say that a scaling solution is closer to increasing density and activity OR adding a new district. For example, a chain like Zora attempts to foster a specific kind of activity, even any activity is allowed. That’s more akin to a business development forum that incentivises certain business in order to get network effects. A district is still within the same city and often still re-uses some of the main city’s infrastructure (like re-using ETH as currency or security through rollups).

NIMBY vs YIMBY

Not In My Blockchain vs Yes In My Blockchain? Ethereum notoriously started because Bitcoin always fought against allowing or disallowing certain activity. Just as in urbanism there’s always a debate allowing or not allowing certain developments. The recent Ordinals debate on Bitcoin is a classic example.

Zoning Regulations

This is an interesting one. Who gets to do what in their city or blockchain? What’s encouraged or incentivized? A lot of the Western world uses Euclidean Zoning, which errs on the side of having rules focused on what’s permitted. Anything else is *not* permitted. It also attempts to split zoning to various locations, away from mixed-use. In Euclidean Zoning, it’s also often left to local government to decide, not national: eg, residential is over here and commercial is over there. Japanese zoning, as a counter-example, sets zoning policy nationally and allows developer to build according to nuisance level. Anything is mostly allowed up to a nuisance level. Which means that you can see much more mixed-used neighbourhoods. It’s allowed to build residential in most places if you are willing to live there.

Here’s a classic example of a small neighbourhood restaurant with residential on top in Japan. via Rahul Shankar

By designing the blockchain in a certain way, it strictly allows or denies certain activity. Since most blockchains these days focus on having programmable base layers, it’s moreso that the zoning policy of most blockchains are generally permissive and allows mixed use. Ethereum first encouraged mixed-use activity particularly for the benefit of cross-pollination. But, as with any mixed-use neighbourhood, if one activity becomes very popular, it can crowd out other uses accidentally. eg, a sudden popular restaurant can make night-time activity undesirable for neighbours who live there. In this case, some tenants want to move elsewhere. Managing this isn’t always straight-forward. Sometimes some activity in Ethereum raises the gas prices of the entire network, resulting in other applications being more expensive with no benefit.

City Taxes

Taxes are both a tool to raise raise revenue and to manage allocation of property (ongoing tax liability puts price pressure on an asset). For example, China has no property tax, resulting in local municipalities to raise revenue through property leases. Many Western countries taxes the property (which is also a function of the land its built on).

A discussion often found in blockchain land is: how does it raise revenue to support the infrastructure (in cities: policing, water, etc and in blockchains: consensus networks, indexers, block explorers, etc) and how is it distributed?

The infrastructure layer is often a pay-by-use agreement that also attempts to estimate its long-term cost of maintenance. eg, upload a smart contract once and it remains on there. Some blockchains (like Solana) has storage rent, where applications need to keep paying over time to host their smart contracts. It’s in essence an on-going tax. Bitcoin charges more simply for its use: only looking at bytes (size of the transaction). Ethereum looks at computation that was done per transaction. In essence, it sounds similar to the debate around land vs property taxes. Georgist land taxes only taxes the land value, NOT the developments and improvements on top of it, arguing that it’s the most pro-development through reducing the loss that comes from hoarding property and not taxing positive development on top of it. A Georgist blockchain would opt to never capture taxing anything beyond what’s necessary. It sounds similar to Jacob Horne’s encapsulation of a hyperstructure.

Tax Credits and Rebates

In order to incentivize particular developments, cities might offer tax credits (reduction in cost) or rebates (refunds or payments for desired behavior). A blockchain tax credit is pretty rare. A potential example is offering lower rates for different kinds of storage (eg calldata vs contract storage in Ethereum)? Rebates can be found in airdrops or retroactive funding. It's after the activity had happened and the network rewards behaviour it needed.

Walkable Blockchains

Walkable cities incentivises mixed use and ease of transport. How easy is it to get around to what you need? If we would generally classify walkability on the web as the ease of the ability to get around, then blockchains are in generally, very walkable. You don't have to sign up for every app because you bring your identity with you. You also aren't stuck with certain platforms (like maybe only having one large mall in your neighbourhood as your only retail). Everything is always within range. Interoperability and portability is the nature of the day.

Dalle-E’s vision of a walkable blockchain after I had to coax it from being too stock image-y. 😅

That being said, a more walkable blockchain is one where there's even more to do with more ease of getting around. If we consider scaling solutions as more neighbourhoods and districts, then more and easier ways to transport between those neighbourhoods extends the walkability. For example, Decent’s “The Box” allows you to mint on an L2 from the main ETH chain. You don’t have to manually bridge and swap to move into the new neighbourhood. Feels like ordering take-out from across the city. 😅

There’s definitely a lot more metaphors here. Have at it, if you find some more! I like my blockchains like I like my cities: walkable. How about you?

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Bonus Content!

Hey friends! Nursed a cold the entire week. One of those where it was literally just an incessant runny nose and nothing else. Probably made worse by the fact that I ran a 15km race on Sunday (which I got a 1:21:42 PB for)! So, a lot of the week was me being a bit grumpy of just having to force myself to rest. I needed it though. I ended up finishing reading Ship of Magic by Robin Hobb. Onto Mad Ship for the holidays. Yes, still in my pirate phase.

More Novellas

I think novellas are great. There should be more novellas. Daisy Alioto agrees in that it’s also a format of our times.

I still think that we’re in the start of a growing throwback to more physical media, not just a backlash to the temporary renting era of content, but also that physical media is more able to serve as an accessory. Novellas are slim, easy to carry, and says something to yourself and the people around you.

Axel Springer - OpenAI Data Deal

Axel Springer signed a deal where OpenAI can ingest data from their publications.

With this partnership, ChatGPT users around the world will receive summaries of selected global news content from Axel Springer’s media brands including POLITICO, BUSINESS INSIDER, and European properties BILD and WELT, including otherwise paid content. ChatGPT’s answers to user queries will include attribution and links to the full articles for transparency and further information.

In addition, the partnership supports Axel Springer’s existing AI-driven ventures that build upon OpenAI’s technology. The collaboration also involves the use of quality content from Axel Springer media brands for advancing the training of OpenAI’s sophisticated large language models.

It’s not clear, but it doesn’t look like writers will get a cut? Even if data mining laws (in US, EU, and UK) still favour AI companies in terms of being able to scrape without permission, these deals are a step in the right direction: getting explicit access to data. BUT, it should not be at the cost of the actual people producing the works. Would love for this to actually result in the writers seeing a cut from this deal, in the opposite way of musicians don’t really see a cut from record labels investing in Spotify. Their IP was used as a bargaining chip and the musicians didn’t get anything. It took Taylor Swift to bargain with UMG to get all the *other* musicians windfall from future sales.

The Conundrums of Compulsory Licensing

Having worked in the music industry, I have a love/hate relationship with its unique copyright laws. Compositions have compulsory licensing. In other words, you don’t have to ask permission to make a cover of a song. You still have to pay the songwriter, but you don’t need their permission. This is good and bad.

This amazing piece by

Chris Dalla Riva

details his thoughts on compulsory licensing as it also relates to potentially having compulsory licensing for recordings. eg, having the ability to sample without permission and paying the recording artist for that snippet.

The history of popular music is a history of quotation and reimagination. It is “The House of the Rising Sun” evolving over decades before The Animals had a massive hit with it in 1964. It is The Beatles getting their chops by covering scores of compositions before composing their own. We need our laws to reflect that the ways we quote and transform music have changed.

I think it’s a super relevant discussion, especially in the face of how we treat data in the era of AI. Compulsory licensing has its benefits and disadvantages and I think it’s a discussion worth opening up again. The ability to enshrine such rights can enable a lot of good stuff automatically (eg, creating your streaming service without having to ask for permission from record labels), but the fact that it’s enshrined in law removes certain rights (like being able to negotiate or exclude uses of the copyright).

Looking forward to reading more on this. I bet I’ll definitely keep these ideas in the back of my head as the AI era continues.

Steely & Clevie - Fish Market

Speaking of sampling. I mentioned last week that one of the songs that kickstarted reggaeton is trying sue reggaeton artists for use of the beat.

I went and listened to the song and it got me hooked on it. 😅

Such an actual banger.

That’s it for this week! For those heading out on holidays soon. Hope there’s a sunset waiting for you, wherever you end up going. Stay safe!

Simon