The Great Rebundling: Human Communication & Crypto

All technology does is unbundle and rebundle

There’s a well-known observation in the tech industry that all business can be reduced to bundling and unbundling. To illustrate:

Apple is an example of bundling computers, taking the fragmented parts of the PC market (OS, hardware, and now chips) and bundling their assembly together in the same process.

With iTunes and the iPod they bundled your collection of CDs into one easy-access mini database in your pocket. In doing so they also unbundled the individual CD, letting you buy one song at a time instead of a whole album.

Opendoor bundles the real estate agent and home seller into one business by buying the house then selling it out of its inventory.

Google’s entire business is one big bundling of services to drive time spent on the platform so they can sell more ads.

Netflix bundles distribution (formerly Blockbuster and movie theaters) and content creation (Hollywood) for movies into one platform.

LLMs are unbundling parts of Google by taking its core business (search and info procurement) and siloing it into standalone services.

Unreal Engine unbundles video games and their distribution by allowing developers to create games individually and then find alternative paths to sell them. Whereas a gaming business like Activision is game creation and distribution bundled in one business.

Additional bundling and unbundling examples:

You could even say Twitter and Instagram unbundled the Facebook post. Facebook came first and offered pictures and text in one post. Then they came and stripped out the constituent parts and made it their core offering: Instagram focused on just pictures, Twitter initially was only text.

Why do I elaborate on the bundle/unbundle pattern and provide these examples:

• Understanding this bundling/unbundling framework is essential for the following analysis. It provides a powerful lens through which to interpret technology businesses and their evolutionary-like patterns.

• It demonstrates bundling as basically a natural law of technology development. Technology organizes behavior in a cyclical way that groups, ungroups, then regroups it again.

• I would describe the previous examples as micro bundlings. I want to zoom out and discuss a macro one in relation to human communication and technology.

Viewing these bundling cycles as a fundamental tenet of technology proliferation, what is modern-day cryptography bundling? How much do we have to zoom out to see it? In contrast with the micro bundlings previously described, crypto is rebundling core features of human interaction that we’ve lost over centuries.

---

The Natural State of Communication is Private, Technology Erodes It

Human communication used to be private as its baseline. We used to only talk in-person, which meant no one else could access your chats and they were self-deleting be default. Natural interaction is confidential, ephemeral, and between two parties by nature. Very based actually.

Then technology began to slowly erode this discreet foundation, trading off privacy for scalability and/or persistence.

Examples:

• Smoke signals could send messages farther and to more people (greater scale), but everyone could see them.

• Pen and paper allowed us to transcribe words so they’re no longer self-deleting. But the enhanced permanence meant they could be viewed by unintended parties (increased persistence at the expense of privacy)

• Carrier pigeons allowed distant messaging between two parties (more scale), but at high privacy risk (no security).

• The telegraph is the electronic carrier pigeon: better scalability and distribution, little privacy.

• The telephone facilitated widespread dialogue for billions. But with an oligopoly of providers maintaining the infrastructure, it had little privacy and high censorability.

As more scale for communication is achieved, it has invariably required more centralization at the technology baselayer to facilitate it.

The internet is the crescendo of hyper-scalable communication built on concentrated infrastructure. Web access and use is essentially controlled by a handful of corporations, and as a result privacy is mostly a relic. Tech companies can read your messages and censor you for ToS reasons at will. And all it takes is a frivolous request from the government to spy on anything you say (the NSA sends its regards). But, it’s insanely scalable.

The law of technology and communication so far has been: improved scalability and persistence results in less security and privacy.

Technology unbundles privacy from human interaction and increases censorability in exchange for boosted range and durability.

Scalability and privacy for communication are basically anti-correlated; you gain one at the expense of the other. We’ve achieved peak far-reaching human interaction, but at a complete loss of privacy.

---

The Great Rebundling of Privacy and Communication

Over hundreds of years, technology has progressively decremented privacy from our words (and increased censorability) to provide enhanced scalability and permanence.

Cryptography represents the rebundling of privacy into communication, while maintaining scalability. Nature is healing.

Cryptography does it for language, and crypto does it for finance.

Despite crypto’s native transparency via its use of blockchains (all transactions onchain are publicly viewable), there are innate features to its use that make it privacy accretive. Namely pseudonymity (you can see transactions but you don’t know who they’re from) and permissionless access (you can’t get kicked off a decentralized blockchain). It's also highly censorship resistant. None of these things can be said for traditional finance.

Cryptography enshrines privacy back into human connections and transactions. It marks the first time that technology has rebundled privacy, security, and uncensorability back into our existence, while maintaining reach and permanence. RETVRN.

Quantum computing will probably unbundle it again though. Sigh.

Likes and shares are always appreciated.

I’m receiving pledges for payment, which I very much appreciate, but I’m reluctant to paywall my writing. If you’d like, you can show your appreciation here: 0x9C828E8EeCe7a339bBe90A44bB096b20a4F1BE2B

I’m building something interesting, visit Salutary.io

Related essay:

Follow at @BackTheBunny