Why the Cooperative Movement Should Care About Crypto Still

In August 2023, my book Blockchain Radicals: How Capitalism Ruined Crypto and How to Fix It came out through Repeater Books. The past couple of years have not made the already difficult task of getting the attention of others in the cooperative movement any easier. However, for the worker cooperative non-profit I co-founded, Bread Cooperative, the affordances given to use and build applications on blockchains has a very clear reason.

For most of the cooperative movement, crypto has either looked like a distraction or a threat. At best, it is seen as irrelevant speculation. At worst, as a financialized scam that runs counter to cooperative values.

I think that dismissal is still a mistake.

Not because crypto, as it exists today, aligns with cooperative principles out of the box. In many ways, it does not. But because beneath the speculation and ideology, there are tools that directly address some of the hardest problems cooperatives face. Additionally it a potential piece of the puzzle for building the technical stack that would allow collective governance over powerful AIs.

The real question is not whether co-ops should adopt crypto as it is. The question is whether they can use parts of this technology to solve problems they have never fully solved.

The Core Problem: Coordination at Scale

Cooperatives work. That is not really in dispute. Worker cooperatives reduce inequality, distribute ownership more fairly, and tend to be more resilient in crises. Mutual aid networks sustain communities where markets and states fail. Commons based systems manage shared resources without private ownership.

The problem has always been scale and coordination.

As co-ops grow, governance becomes harder. Participation drops. Decision making slows down. Informal trust structures break under pressure. Cross border coordination also introduces legal and administrative friction. And the co-ops that do succeed can end up reproducing the worst of capitalism’s tendencies.

These are major coordination problems for the cooperative movement to solve and potentially has the tools in its hands in the age of agentic AI.

What Blockchain Actually Brings to Co-ops

Stripped of hype, blockchains are coordination infrastructure with very strong guarantees of uptime and no centralized administrator, unlike traditional platforms. They allow groups of people who do not know each other, or who are geographically distributed, to coordinate around shared rules and shared resources.

For cooperatives, there are a few specific capabilities that matter.

Shared treasuries with transparent rules
Blockchain based systems allow a cooperative to hold and manage funds in a way that is auditable and governed by predefined rules. This can reduce internal disputes and increase trust, especially in larger or more distributed co-ops. These are often called multi-signature wallets, which you can think of as essentially joint bank accounts that don’t require regulatory approval to create. We showed how we manage our treasury at Bread Cooperative in a webinar as well as published a report on it.

Programmable governance
Voting mechanisms, proposal systems, and resource allocation can be partially automated in a way that money moves deterministically if a majority wants it to happen for example. This does not replace deliberation, but it can reduce administrative overhead and make participation easier across time zones and contexts. 

New ways to represent ownership
Tokens can represent membership, shares, or usage rights. If designed carefully, they can encode cooperative principles such as one member one vote, capped returns, etc. directly into the system. Blockchains provide a design space for cooperativists to embed their values into technical systems.

Access to capital without traditional intermediaries
This is one of the most underexplored areas. Co-ops struggle to raise capital without compromising ownership. Blockchain based funding mechanisms make it possible to experiment with community financing, shared ownership structures, and non extractive investment models. Our Solidarity Fund is a great example of this in action where funding is generated through decentralized finance and automatically distributed based on democratic principles.

Interoperability between organisations across jurisdictions
Different individuals and co-ops across the world can coordinate across shared infrastructure. This opens the possibility of federated cooperative networks that operate across jurisdictions without needing a central authority or intermediary. Blockchains allow organizations like cooperatives to compete at the global scale like normal LLCs do without needing governments across the world to agree on the same standards as they have with LLCs.

None of this is automatic. These are affordances, not outcomes. But they map directly onto long standing constraints within the cooperative movement.

Why Previous Attempts Failed

If these tools are so relevant, why have previous attempts to merge crypto and more decentralized organizational structures through Decentralized Autonomous Organizations (DAOs) largely failed? The overarching reason I would argue is because those that were controlling many of these DAOs were not looking to the already existing cooperatives movement for inspiration.

But there are some more reasons as well.

1. Importing venture logic into cooperative structures
Many DAO projects adopted token models designed for speculation and rapid growth. This created pressure for profit extraction, early investor advantage, and governance capture. In other words, they reproduced the very dynamics co-ops are meant to resist.

2. Treating tokens as equity substitutes
Tokens were often used as a direct replacement for shares without rethinking what ownership should mean in a cooperative context. This led to concentration of power, secondary market speculation, and misalignment between users and owners.

3. Overengineering governance
Some projects tried to solve governance entirely through code. Complex voting systems, incentive schemes, and automated rules often made participation harder, not easier. Cooperative governance requires human judgment, not just formal mechanisms.

4. Ignoring existing cooperative practices
Many crypto projects approached co-ops as if they were a new invention. In doing so, they ignored decades of experience in cooperative governance, federations, and mutual aid. The result was systems that were technically novel but institutionally naive.

5. Lack of real world grounding
A large number of experiments never connected to actual economic activity. Without real services, products, or communities, governance systems became empty shells driven by speculation rather than use.

6. Regulatory and legal friction
Cooperatives are embedded in legal frameworks that do not map cleanly onto token based systems. Many projects either ignored this or tried to bypass it, which limited their ability to operate sustainably.

What Would It Take to Get It Right

Just because earlier attempts failed, it does not mean the project itself is impossible. It does mean the direction needs to change though.

In my book Blockchain Radicals, I coined the term techno-probabilism as opposed to techno-determinism, or the idea that the progress of technology is deterministically laid out to create utopian or dystopian futures based on who you ask. Techno-probabilism opens space for us to ask: given the current distribution of forces and the specific affordances of this technology, what futures does it make more or less likely — and what would it take to tip the scales towards a more cooperative one in our case?

Technologies do not determine outcomes, but they do shape the probability of different outcomes. They make certain arrangements easier to build and others harder to sustain. The current trajectory of crypto reflects the actors and incentives that have dominated its development so far. That trajectory is not fixed.

For the cooperative movement, this opens up a different role. Instead of rejecting the technology or adopting it wholesale, co-ops can intervene in how it is designed and used. That starts by grounding development in real needs rather than abstract possibilities. The focus should be on concrete coordination problems such as treasury management, cross border governance, and access to capital.

It also requires a deliberate move away from speculation as a core driver. Systems that prioritise tradability and price appreciation will tend to concentrate power and distort governance. Designing against this means limiting extractive dynamics and aligning incentives with participation, contribution, and long term use.

A key principle is the separation of governance from capital. Cooperative systems depend on the idea that decision making should not be determined by financial stake alone. Blockchain systems can encode this, but only if it is treated as a core design constraint rather than an afterthought.

At the same time, governance needs to remain legible and human centred. Automation can reduce friction, but it cannot replace deliberation, negotiation, and collective judgment. Systems that become too complex or opaque will undermine participation rather than enable it. With the continued progression of the development of LLMs and AIs, it is likely that we will see this technology combined with decentralized organizations like cooperatives in order to condense context for more freely flowing information and context between members and executives.

Another shift is toward federation rather than isolation. Individual co-ops often lack the scale to compete in global markets. Shared infrastructure can allow them to coordinate across organisational boundaries, pooling resources and aligning strategies without centralisation. This is where blockchain offers something genuinely new, the ability to create interoperable systems of cooperation at scale.

All of this also has to connect to legal and institutional realities. Durable systems will likely be hybrid, combining on chain coordination with off chain governance and compliance. Ignoring this layer limits the ability to operate in the real economy. Luckily more and more solutions have been built to bridge the gap.

Underlying all of this is the need for technical capacity within the cooperative movement itself. Without direct involvement in design and development, the tools will continue to reflect external priorities. Engagement is not just about adoption, it is about shaping the infrastructure at a fundamental level. The development of standards for decentralized organization should be within the remit of international cooperative bodies.

What emerges from this is not a utopian vision, but a different trajectory. One where blockchain is used to extend cooperative principles into domains where they have historically struggled to operate.

Beyond Crypto: AI and the Question of Collective Governance

There is another reason this conversation matters, and it extends beyond crypto itself.

We are approaching a period where advanced AI systems, potentially even artificial superintelligence some think, will play a significant role in shaping economic and social life. The dominant narratives around this future are strikingly narrow. They tend to assume that powerful AI will be controlled by large corporations or states, and that its deployment will follow existing patterns of capital accumulation and lack of agency for those on the wrong end of the economy.

In that imaginary, the outcome is predictable. Increased productivity concentrated in fewer hands, widespread displacement of labour, and the expansion of a “permanent underclass” with diminishing bargaining power.

The cooperative movement offers a different starting point. It has long grappled with questions of ownership, governance, and collective control. These are exactly the questions that become urgent in a world of powerful AI.

The challenge is that existing institutional structures are not well equipped to enforce democratic control over systems that operate at global scale and high speed. Even if we agree that AI should be governed collectively, it is not clear how to implement that in practice. While government policy could be a good place to start, it is not likely a panacea to international coordination around the problem that will potentially define this century.

Blockchains provide a way to encode and enforce collective decisions in systems that do not rely on a single trusted authority. They can act as coordination layers through which communities define rules, allocate resources, and constrain behaviour. Combined with a robust and privacy preserving identity system, citizens would be able to share their desires for the world they live in. 

In the context of advanced AI, this suggests a different architecture.

Instead of AI systems being owned and operated entirely by private entities, their deployment and behaviour could be mediated through collectively governed infrastructure. Access to resources, training data, or deployment contexts could be conditioned on compliance with rules set through democratic processes. It’s likely that one of the reasons that many people in the United States don’t want data centers built in their communities is because of the evidence of the past decades where very little of the gains of technological progress was shared with them. However data centers are physical infrastructure built on land that can  be co-owned by the community if there was political will to do so.

Organizations like Atlas Computing have proposed mathematical techniques like formal verification to define the guard rails that AIs are allowed to act within. In practice this would look like people coming together to define the formal specifications for AIs to follow that would limit their ability to be used by bad actors.

This is not a complete solution. It does not eliminate power imbalances or political conflict. But it introduces a technical mechanism through which collective will can be expressed and enforced in relation to systems that would otherwise be difficult to control.

Importantly, this is not something that can be improvised at the last moment. It requires building institutions and infrastructure in advance. It requires experimenting with governance systems, coordination mechanisms, and hybrid organisational forms which the cooperative movement already has the experience of.

In this sense, the intersection of cooperatives and blockchain is not just about improving existing organisations. It is about developing the capacity for collective governance in a future where it will be urgently needed.

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