How Identity Emerges in Crypto Networks

June 15th, 2021

We construct self-identity as a necessary part of existing in a social world. We share life stories with each other, and cultivate associations on the basis of the shared beliefs and values that these stories convey. These, in turn, help us to negotiate norms and moral standards that create functional societies.

Today, with 75% of young people spending almost all of their time online, a portion of our identity construction process has moved to the social web, resulting in modern-era digital identities that are independent of nation states.

Similarly to how state-issued identities allowed citizens to work and live in urban environments, these corporation-issued web identities have allowed users to log in and use online services - such as media streaming via YouTube, or mobile payments via Venmo.

But the centralization inherent in the storage and control of these identities presents numerous challenges, including exponential security risks, and an artificial and reductive social identity siloed in corporate platforms.

In a separate vein of the internet, the decentralization of value in the form of blockchain-based digital assets - including stablecoins, community tokens, and NFT artworks - have exploded in popularity.

The blockchain technology underlying this movement has mainly been used for public financial accounting of these assets; as peer-to-peer "ledgers" that enable financial transactions without an intermediary. Its primary strengths are censorship resistance and guaranteed execution.

But a public ledger also implies an accessible, auditable, temporally ordered record of interactions among users - including interactions such as purchasing art, or lending currency. Analysis of the contents of these ledgers invites narrative generation and births a new crypto-economic sociology. Identity, understood as what is known about us by others, can be represented and explored through information stored on blockchains.

I hold that relevant scholarly disciplines guide us towards a conception of individuality that is represented well on blockchains, and that blockchains are already expanding, formalizing, and protecting our identities in a socially progressive way.

I explain how on-chain "intersectional identity" can be constructed from token ownership networks that reveal group affiliation, and how to view NFTs as cultural objects with shared significance.

I leave out the fact that many systemic problems observed in social media, including political polarization, security threats, and other malicious personal attacks, may be mitigated by the increased use of pseudonymous digital identities provided by default on these networks. I also avoid specific implementations for on-chain identity.

Finally, I am not a proponent of "identity protocols", but as this post suggests, I view identity as an emergent property of interconnected crypto networks and the activity on them.

Intersectional Identity

The concept of individuality as the intersection of a person's group affiliations and interests dates to the beginnings of social science, when it was formulated by German-Jewish philosopher and psychologist, Moritz Lazarus, and carried on by intellectual heirs such as Georg Simmel and Charles Cooley.

These early writers argued that modernity was characterized by a more diversified life; that the mind of a person has greater variety of interests, affiliation, and personal projects than ever before. They imagined these affiliations and interests as a system of coordinates, with each additional group determining one's individuality more exactly.

"A man may be regarded as the point of intersection of an indefinite number of circles representing social groups"

  • Cooley, Human Nature and the Social Order (1922)

Cooley specifically anticipated that expanding individuality is connected with the "growth of communication". The blossoming of global communication networks on the internet has borne this out and given interested researchers in every field of study new tools for understanding what it is to be a social animal in a modern world:

...beyond the fact that it is so immediately important in all of our lives, [the science of networks] cuts across fields: making sense of human networks draws on core concepts and studies from sociology, economics, math, physics, computer science, and anthropology.

  • Matthew Jackson, The Human Network (p. 10)

Intersectional identity is a robust way to operationalize and understand identity, and the proliferation of digital networks has accelerated multidisciplinary research on this topic. As we will see, crypto network analysis deepens this field immensely, and opens it to more accessible and accurate study.

Problems with this View

For most of us, the freedom to create intersectional individuality has been achieved through progressive social movements. For example, first and second wave feminism in the United States expanded women's interests and affiliations through ownership of property, and integration with political and workplace groups. Other examples would include the Black Consciousness Movement in South Africa, and the Gay Rights Movement globally.

Looking through an optimistic lens, modernity is a progressive march towards inclusivity, which implies more group affiliation - a broader social life - and hence more individuality. Glen Weyl and Zoë Hitzig (2018) give a colorful example of this, in what they consider to be a fully self-actualized individual in a liberal society:

One [example] is the gay nephew of the former ultra-orthodox chief rabbi of State of Israel. He is deeply steeped in nearly ever Jewish theological tradition and is ordained as a conservative rabbi, but runs a “God-optional” shul and was thrown out of the conservative rabbinate for marrying a Jew to a non-Jew. He knows and incorporates into his sermons more social theory and sociology than most rabbis, yet his shul is driven primarily by the contributions of a wide range of artists who draw on ancient Jewish traditions from all over the world.

But when considered holistically, the increasing multiplicity of our identities has benefited those belonging to some affiliations while, on a relative basis, been exponentially detrimental to others.

The dominant use of the term "intersectionality" in social science today (starting with Crenshaw, 1992), builds a framework for understanding of how oppression, derived from the combination of our social identities, is not merely additive:

How one form of oppression is experienced is influenced by and influences how another form is experienced. An additive analysis treats the oppression of a Black woman in a society that is racist as well as sexist as if it were a further burden when, in fact, it is a different burden ... sexism and racism must be seen as interlocking, and not as piled upon each other

The term intersectionality references the critical insight that race, class, gender, sexuality, ethnicity, nation, ability, and age operate not as unitary, mutually exclusive entities, but as reciprocally constructing phenomena that in turn shape complex social inequalities.

These "reciprocally constructing phenomena" that may empower one person with increasing self-actualization, burden others with exponentially debilitating oppression. The fact that this extends to digital life can be deduced a priori, but examples are easy to generate: women are more targeted online than in real life, because of reduced friction to do so. Hate-speech is easier to propagate due to the algorithmically-amplified virality of content from polarized online groups.

While we don't have long-term evidence for the efficacy of crypto networks as a tool for social liberation yet, crypto networks are unique in that they promise participants a highly functional "persistent pseudonymity" that has protective functions. An account on these networks does not necessarily reveal a person's nominal offline identity, but also allows its holder to participate in economic activity and exhibit individuality (e.g. group affiliation and taste), while hiding any unbidden or personal attributes likely to lead to oppression (e.g. nationality, race, gender, sex, etc).

Renée Cox, Chillin' with Liberty displays a vibrant visual mix of identities, from that of the painful distant-historical, to the brave and forward-looking, and from the sexual to the militant.
Renée Cox, Chillin' with Liberty displays a vibrant visual mix of identities, from that of the painful distant-historical, to the brave and forward-looking, and from the sexual to the militant.

NFTs as Cultural Objects with Socio-Economic Networks

Minting a token is an enactment of authenticity, an ontological shift in the history of representation.

Technological innovation allows artists to create objects that produce new meanings, social relations, and reputations. Minting an NFT simultaneously creates art and its historical record, which allows us to explore these relations in a new way.

Technology and Economic Networks in the Construction of Identity

In Beethoven and the Construction of Genius, Tia Nora explains how the invention of the pianoforte was a determinant of Beethoven's success in his early days as a composer; the new sounds evoking a greater range of emotional responses in listeners. But DeNora also examined the social and economic networks that supported Beethoven in Vienna, providing insight into the origins of his identity as the genius we regard him to be today:

[DeNora] examines more closely than anyone else just which aristocrats supported Beethoven, where they were in the complex Austrian hierarchy, why they backed him, and how this affected aesthetic perceptions. Her study provides substantial insight into the interworking between musical creation and production and the social forces that shape them...

NFTs are a technology that allow artists, patrons, and collectors to express and secure ownership of digital goods on a public ledger, and in doing so reveals preferences among and within socio-economic networks. This grants us an unprecedented view into the cultural norms of digital communities. For example, Charlotte Kent (2021) implicitly alludes to generalized social exchange occurring within communities of NFT artists:

“One notable feature of artists using blockchain is their interest in buying art with the funds they receive...This community-oriented attitude is reminiscent of early feminist practices”

NFTs also allow us to express value for community-oriented attitudes and collective narratives in a new way. An excellent example of is the sale of the NFT “Dreaming at Dusk” (2021), created by Itzel Yard (ixshells), for 500 ETH (~two million dollars at the time of auction, May 14). The NFT supports the Tor Project, which describes its mission as:

To advance human rights and freedoms by creating and deploying free and open source anonymity and privacy technologies, supporting their unrestricted availability and use, and furthering their scientific and popular understanding.

Dreaming at Dusk was collected by a on-chain organization called PleasrDAO. We therefore have a metric that hypothetically assigns a cultural attitude to the PleasrDAO community - according to those values inherent in the Tor Project: human rights through open-source privacy technology. This would extend for any account that bid on the audition for this work, all publicly viewable on-chain.

The preference for art, expressed through bidding and collecting NFTs, can be a map for digital identity - for a community as well as an individual.

DAOs as Token-Driven Culture

Culture can measured by embedded "collective narratives", expressed in a shared language (schemas) and knitted together in a consistent manner. These can produce moral norms (beliefs, attitudes, and values) that inform behavior.

People construct social reality via the development, transmission, and institutionalization of shared patterns of thinking across generations.

  • Measuring Culture (2020), p. 23

Shorn, Lotti & Hart (2019) articulate how blockchains enable the organic development of organizations that form shared consensus - conceived as a "headless brand*"*, in their iconic article, Headless Brands:

While brands have traditionally been planned and designed directly by corporations, the rise of networked media has challenged the coherence of centrally-managed brand identities. New blockchain-based decentralized organizations take this a step further by giving users financial incentive to spread brand narratives of their own...In this way, a brand operates as a consensus system, facilitating a consistent set of beliefs across people.

Beyond brands, social communities in general are beginning to proliferate around tokens. Friends with Benefits is one such example, whereby the access to the community and its productive capacity is gated by ownership of the token, and holders of the token are financially incentivized to increase its value. Members are interdependent within the community, and work to make it better without any formal organizational hierarchy - bound only by their values:

Friends with Benefits started as a private Discord server populated by our favorite thinkers and has since evolved into a global community bound together by shared values, shared incentives ($FWB) and shared IRL + URL experiences

Blockchains allow for people to play new kinds of coordination games, empowered by shared narratives and enacted by a decentralized organization of users. The classic example of a DAO is Bitcoin, which incentivizes millions of people to add labor to the project (in the form of marketing, research, or software development), without formally employing a single person. Although DAOs might have a core development team, or individuals who can influence the DAO's participants, there is no executive board with special powers.

As the number of people "working for" these DAOs expands, it takes on grander proportions, as articulated in DAOs, Democracy and Governance, 2016, by Ralph C. Merkle:

Modern research into “the wisdom of crowds” provides new insights into how to combine the expertise of all participants without handing over control to “experts”. Combined with research on Decentralized Autonomous Organizations (DAOs), this allows us to design a new form of democracy which is more stable, less prone to erratic behavior, better able to meet the needs of its citizens, and which better uses the expertise of all its citizens to make high-quality decisions. We call this new form of democracy a DAO Democracy.

Taken to its most grand proportion, is Balaji's idea of starting a "Crypto Civilization":


This post begins to explain how individual identity, viewed as the intersection of our social affiliations and tastes, is an emergent property of blockchain interactions. The richness of our on-chain identities increases as more people and content move onto these networks.

While state-issued formal identities (e.g. SSN number) and corporation-issued informal identities (e.g. a Facebook login) entail severe security risks through centralization and a high decree of artificiality, decentralized identities promise persistent pseudonymity, while enabling economic cooperation and a greater expression of individuality through the collection of digital cultural objects and participation in DAOs.

This is a field in its infancy, but it clear that there is potential for crossover among the fields of computer science, network analysis, economic sociology, and many others, in the understanding of our on-chain identities.

If the use of blockchains continue to proliferate as they have so far, this may become one of the most meaningful fields of study in human history.

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