Post Web3: From Myth to a Medium of Existence and Governance

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This paper re-evaluates the political value of cryptographic and distributed technologies towards designing a more widely used distributed system after Bitcoin, and presents its significance and direction for redesign from the perspective of existence and governance. It is an attempt to understand cryptographic and distributed technologies not merely as ideals or technical properties, but as institutional mediums that mediate subjects and reconfigure relationships. Some arguments include experimental and speculative elements (for details, see "Discussion").

This paper first outlines the necessity and definition of Post Web3. It then examines three points derived from this methodology.

Firstly, it discusses the political value of crypto-institutional technologies when compared to existing institutions, through a qualification of Lawrence Lessig's "Code is Law." Secondly, it discusses the design philosophy and the transformation of the medium of resistance, based on the background of how cryptographic and distributed technologies have been politically utilized. Thirdly, it discusses how these technologies bring about changes in governance and resistance movements. Concurrently, it examines the contradictions of the governmental rationality underlying these changes, contrasting them with the contradictions of capitalism discussed by Marx in "Das Kapital."

Post Web3

Traditional discussions surrounding Web3 have centered on ideals such as freedom, decentralization, and individual sovereignty, or technical characteristics like censorship resistance and tamper-proofness, as core values. As a result, this has led to an overestimation of ideology and the self-purposification of technical improvements, making it difficult to discern the specific economic and political value of the technologies supporting these narratives. Furthermore, this value has often been overwritten by expectations of speculative profits, pushing the original political utilization into the background.

To address these issues, we introduce the methodology of Post Web3. Post Web3 is not the name of a new technological trend. It is an institutional framework for evaluating cryptographic and distributed technologies based on their economic and political value in comparison to existing institutions, rather than solely on their ideals or characteristics.

The reason for analyzing at the institutional unit rather than at the unit of the state is that states and governments include physical coercive power, whereas cryptographic and distributed technologies do not replace their entirety, but are limited to certain digital domains. Here, institutions are understood, following Douglass North, as consisting of informal constraints, formal rules, and enforcement. This paper evaluates institutions based on cryptographic and distributed technologies in comparison to other institutions, based on this definition.

Crypto-Institutional Technologies as Objects of Analysis

What is important in this framework is that the object of analysis is not merely a distributed ledger, but the totality of combined technologies designed for political utilization.

It encompasses cryptographic and distributed technologies in a broad sense, including technologies that support anonymity like PGP and Tor, and minimization of authority like Mix Net, up to distributed ledgers represented by Bitcoin. However, its central focus is on technologies intended for political utilization; distributed ledgers generally intended primarily for speculation are not the central object.

This paper collectively refers to these as crypto-institutional technologies. Simply put, crypto-institutional technologies are technologies that enable a quasi-replacement of parts of institutions that traditionally relied on human judgment, trust, and authority, by shifting them to verification and consensus by software.

As a concrete application of this framework, the next chapter will demonstrate the political value of crypto-institutional technologies as institutions.

The Spiritlessness of Code

This chapter uses Post Web3 to institutionally and jurisprudentially qualify Lawrence Lessig's "Code is Law" in this domain, arguing that code in crypto-institutional technologies is not a substitute for law, but an institutional medium with principles different from law.

Operating Principles of Law and Code

According to Charles de Montesquieu, law is understood not only as codified rules but also in relation to the "spirit of the laws," which is the totality of its relationship with the supporting political system, customs, religion, commerce, and so on. Even in modern legal orders, law does not operate in isolation but functions as an institution only through circuits of justification, interpretation, application, and attribution of responsibility.

In contrast, in distributed ledgers, transactions and contracts are processed and executed not by human interpretation or discretion, but as compliance with predefined verification conditions. Here, while the formalization and execution of rules are strongly connected, circuits such as justification, interpretation, and attribution of responsibility are not sufficiently integrated into the institution's internal workings.

Therefore, the interplay between the spirit of the law and its enforcement, which law and its institutions have presupposed, is not necessarily required. Of course, exceptions such as forks or rollbacks by community consensus exist, but these are interventions at a different level than the interplay between the spirit of the law and enforcement in traditional law.

Consequently, code in crypto-institutional technologies is not so much a substitute for law as it is an institutional medium with operating principles different from law. It is not an institution that internalizes circuits of justification and interpretation like law, but one that functions by prioritizing verifiability and executability. In this sense, institutions based on code are "spiritless" in that they do not sufficiently embody the "spirit of the law."

Political Value

The characteristic that institutional enforcement is processed as compliance with verification conditions rather than human interpretation gives rise to political values such as reduced enforcement costs, suppression of arbitrary discretion and rent-seeking, increased exit options, possibility of institutional provision in cross-border environments, and choice of privacy and subjectivation. Re-examining these values from a political economy perspective, they primarily function as institutional substitutes in the following three areas:

Firstly, in areas where state-provided institutions are insufficient, they partially provide conditions for markets to function adequately, such as property rights, arbitration/enforcement, and monetary systems. Secondly, in cross-border domains where multiple states intersect, or in areas like micro-transactions and electronic arbitration where existing institutions are not cost-effective, they enable low-cost institutional utilization. Thirdly, against rent-seeking and extractive state institutions, they create alternative possibilities and competitive pressure by offering participants exit options, explicit participation conditions, and transparency in institutional operation.

Therefore, the significance of crypto-institutional technologies is not to render politics and law entirely unnecessary, but to reconfigure institutional dependence in specific domains and open up conditions for forming a healthier institutional equilibrium.

The next chapter discusses the background of how such technologies were developed and the specific uses of their characteristics.

The Cypherpunk Ethic and the Spirit of Crypto-Anarchy

This chapter traces two backgrounds related to the political utilization of crypto-institutional technologies and discusses how the cypherpunk ethic that supported them connected to code as a medium of resistance.

The Cypherpunk Ethic

Many crypto-institutional technologies were discussed and conceived in the cypherpunk mailing list, with Eric Hughes and Timothy May as early central figures. Under Hughes's "Cypherpunks write code" ethic, political demands were to be presented not merely as assertions, but as actually working technologies.

This ethic was symbolically manifested in Phil Zimmermann's release of PGP and the crypto wars surrounding it, visualizing a form of movement that countered government regulation through implementation. Furthermore, this lineage, including institutional design theorists like Nick Szabo, later gave rise to important conceptual elements that would lead to Bitcoin.

Below, we discuss how these ethics and design philosophies intersected and connected to the political utilization of technology, along two issues: privacy protection and minimization of trust in third parties.

Privacy Protection

One important background for the establishment of crypto-institutional technologies was the opening of internet research institutions and private sectors during the détente of the US-Soviet Cold War. With the expansion of internet users, the centralized management of transaction histories and personal information became problematic from the perspective of communication surveillance and privacy.

In response to this problem, David Chaum proposed Mix Net as a foundation for anonymous communication using cryptographic technology, and further envisioned an anonymous transaction system as a means to counter the loss of control over personal information and surveillance. This suggested the potential impact of surveillance on democracy itself, laying the foundation for the idea of politically utilizing technology.

Timothy May's crypto-anarchism pushed this trend towards a more radical political vision. May envisioned a space less susceptible to government regulation through cryptographic technology, seeking to circumvent state interference through anonymous communication and transactions. This awareness became even more acute through Zimmermann's release of PGP and the ensuing conflict with governments, leading to what is known as the crypto wars.

Minimization of Trust in Third Parties

Another important background was the change in the monetary system due to the collapse of the Bretton Woods system. The transition to fiat currency brought a strong awareness of the new government power of currency issuance, and a monetary system dependent on trust in institutional managers became problematic.

Furthermore, the Austrian School's critique of the government's monopoly on currency issuance brought the question of who and how to manage the authority of currency issuance and asset transfer back to the forefront. Szabo envisioned replacing the instability associated with reliance on government or private managers with a technology-based institution, by constraining the behavior of money issuance through predefined communication rules to avoid dependence on such institutional managers.

These multiple discourses and practices—anonymous communication, anonymous transactions, and the reduction of reliance on trusted third parties—eventually connected to decentralized monetary systems represented by Bitcoin.

Code as a Medium of Resistance

As evident from the two issues above, crypto-institutional technologies have been designed and utilized as practices that problematize excessive reliance on governments or specific administrators and circumvent it. Technologies equipped with anonymity and censorship resistance have carried political values such as privacy protection through message secrecy, decentralization of authority that centrally manages personal information, and suppression of arbitrary currency management.

Furthermore, these practices, carried out under the ethic of "writing code," presented political demands not merely as assertions, but as implementations of alternative mechanisms. Resistance in modern times has often manifested as criticism, expression, and accusation in natural language. However, because natural language acts upon things only through interpretation and institutional mediation, there was a distance between the expression of resistance and the reconfiguration of reality.

In contrast, crypto-institutional technologies can, under certain conditions, directly connect expression to governance. That is, they are a medium that transforms resistance to governance from mere words of criticism into the design of actually working mechanisms. In this respect, crypto-institutional technologies not only enhance the effectiveness of movements but also serve as an opportunity to insert alternative mechanisms from outside the circuits of subjectivation formed by government governance. Therefore, code is positioned as both a medium of resistance and a medium of self-governance.

Existence Until Yesterday

This chapter, building on the discussions so far, views crypto-institutional technologies as institutional mediums arising from within the transformation of governmental rationality. Concurrently, it discusses how they bring about a reconfiguration in the understanding of the concept of revolution and existence, through a comparison with Marx.

Transformation of Governmental Rationality

In the context of government governance, the historical shift that Michel Foucault demonstrated in "The Birth of Biopolitics" was a shift in emphasis from the external limits of rights in public law to the immanent rationality shown by political economy as the principle limiting government. Government was conceived not as being externally limited by the inviolable rights of subjects, but as reading the natural mechanisms inherent in markets and populations and limiting itself accordingly.

Subsequently, this governmental rationality became sophisticated by combining disciplinary and security technologies, evolving into a society of control, as Gilles Deleuze showed in "Postscript on the Societies of Control," which performs continuous tracking and modulation under the management of communication technology. However, what is important here is that the communication technology used for this modulation simultaneously brought about changes in a different direction.

By connecting computer science, cryptography, and parts of political economy that emphasized spontaneous order rather than national order, a different style of governance emerged from the one where government reads market indicators and implements policies. In this new style, the execution environment verifies data according to pre-specified conditions, determines the permissibility of state transitions and exercise of authority, and executes them directly. What is happening here is a shift from a rationality that reads the natural mechanisms of the market to a rationality that formally constitutes and executes the conditions of institutional enforcement itself.

Therefore, crypto-institutional technologies are not alien objects that suddenly appeared outside the society of control. Rather, they are understood as a historical turning point where the same communication technology that enabled the rationalization of governance now redesigns governance itself, opening up conditions for resistance and self-governance.

Crypto-institutional technologies do not erase the problems of legitimacy and rationality of governance to date. Rather, they re-position them not as problems of the personality, judgment, or representativeness of rulers, but as problems of institutional design such as the explicitness of participation conditions, verifiability of rules, predictability of enforcement, and exit options.

Reconfiguration of Political Domination

This transformation of governmental rationality and institutional repositioning connects to a different kind of problem: the allocation of institutional means, distinct from the allocation of means of production problematized by Marx. Here, institutional means refer to the means that make decision-making, such as judgment, arbitration, and enforcement, effective.

While Marx problematized economic exploitation and alienation arising from the private ownership of the means of production and wage labor, crypto-institutional technologies problematize political domination and alienation arising from privileged subjects monopolizing institutional means. The peculiarity of crypto-institutional technologies lies in their ability to decentralize, make substitutable, and partially share these institutional means.

After Marx, the possibility of sharing knowledge and design was realized to some extent through the development of published papers and open-source software. However, what crypto-institutional technologies opened up was not limited to sharing knowledge and design, but also made it possible to share parts of decision-making in a way that could operate under publicly disclosed rules.

Crypto-institutional technologies equipped with distributed ledgers, public protocols, open verification, and exit options detach money, records, enforcement, and even parts of decision-making from the monopolistic discretion of specific entities. Here, instead of a single managing entity monopolizing the institution, numerous participants contribute resources for recording, verifying, and maintaining, thereby jointly supporting its operation.

What operates then is not subordination to a single institution, but a dynamic that compresses the monopolistic position and excess profits of privileged institutional providers through institutional substitutability and exit options. Therefore, crypto-institutional technologies are understood as reducing political domination and alienation that operate in a different way than economic exploitation, and as a new institutional medium for existence.

From the Description of Myth to the Description of Existence and Governance

With the advent of crypto-institutional technologies, resistance became not merely words of criticism, but something that could connect to reality through institutional design.

In Marx's "Das Kapital," the central problem of power was the structure of class domination and economic exploitation supported by the private ownership of the means of production. Therefore, revolution was easily conceived as liberation by subjects bearing such contradictions. On the other hand, Foucault viewed power not merely as repression but as something that generates subjects and permeates the fabric of society. This shift in the theory of power made mythological narratives that spoke of revolution as a grand story no longer sustainable.

However, at the same time, the emergence of new mediums also opened up the possibility of connecting resistance to reality not merely as discourse, but through the design and utilization of institutions. Here, freedom is re-conceived as the possibility of political choice to implement resistance to domination and alienation not merely as verbal expression, but as a functioning institution.

Therefore, is revolution no longer a distant myth, but understood as an institutional practice that creates a sustained difference between existence and governance?

Discussion

This paper presented Post Web3 as a methodology for discussing the political value of cryptographic and distributed technologies. Using this, it discussed the uniqueness of institutions based on cryptographic and distributed technologies and their general value from the perspective of their differing principles from law, the background and design philosophy conditions that supported these technologies, and how they can connect to existence as a medium of resistance to governance.

However, the arguments presented in this paper remained a theoretical organization with a high level of abstraction due to limited space to delve sufficiently into each specific point. Especially Post W