The concept of affordance in design theory illuminates how objects’ properties suggest their usability, a principle that extends beyond the physical world into digital interfaces and interactions. Affordances signal to us how something can be used without explicit instruction; for instance, a handle on a cup affords holding, indicating its use. The affordance of a cup is that it is holdable in a way that it can be held and tipped at the same time.
This intuitive understanding of objects’ functionalities is mirrored in the digital realm, where the design and layout of a smartphone, for example, suggest its primary functions – its shape and size afford holding it up to our ear for a call, while its touchscreen interface affords swiping and tapping to navigate.
But not all affordances are known to all users.
Signifiers, or cues within the design, further guide interaction by making affordances visible. On-screen buttons, with their shaded edges and gradient textures, once mimicked physical buttons to signal pressability to users. This skeuomorphism — designing something to resemble something similar that is known to the user — serves as a bridge, making the unfamiliar digital environment more intuitive. As users became more digitally literate, the need for such direct mimicry diminished, allowing for more abstract representations and a broader exploration of digital interfaces’ potential. For example, the ☰ symbol is a signifier that a menu is available. And not all signifiers need to be so obvious as we get to know a new technology; swiping becomes expected given certain mobile app layouts. We sense something is swipable because we see a list or see a full-screen image.
Skeuomorphism, the design concept where new items mimic old ones in form or function, provides a bridge between the familiar and the new. Skeumorphism is easier to see in the past. Early automobiles were termed “horseless carriages”, and some of the first steam locomotives were adorned with decorative horse heads to make the new and intimidating technology feel more familiar. As gas lighting began to replace candles and oil lamps in the 19th century, many gas lamps were designed to resemble the candle holders and oil lamps they were replacing. In the early 20th century, as radio technology became a common fixture in homes, manufacturers often housed radio components in large, ornate cabinets that resembled pieces of furniture.
In the blockchain space, skeuomorphism manifests in how we conceptualize and interact with novel technologies. It’s the same idea of designing the new to resemble the old, so people know what to do with the thing, but applied to economic capabilities, not just ergonomic interfaces.
Tokens, for instance, are often initially understood as digital equivalents of familiar assets like shares or currencies. Yet, their true potential lies in their programmability and the novel forms of coordination they enable, such as DAOs (Decentralized Autonomous Organizations). While DAOs may initially adopt familiar organizational structures, their blockchain-based nature affords new possibilities for collective action and governance beyond traditional models. Similarly, NFTs (Non-Fungible Tokens) extend beyond mere digital certificates of ownership to redefine value creation and distribution in the digital realm. These blockchain applications exemplify the transition from skeuomorphic designs to innovative uses that leverage the unique affordances of digital and decentralized environments.
Say’s Law, classically summarized as “supply creates its own demand,” posits that the production of goods inherently generates the demand for them. This applies to how demand is created for new things becoming available on the market, through to how overproduced goods lead to the market finding new uses for them.
This principle emerged from his observations of post-revolutionary France’s economy and was a cornerstone of classical economics. Say argued that the act of producing goods or services inherently generates the means and the desire to consume other goods or services, as producers are also consumers. His observations led him to believe that economic recessions are caused not by overproduction but by problems in the distribution of goods and mismatches in market desires.
Agricultural Surplus: Say observed that an agricultural surplus, rather than being a sign of overproduction, actually led to increased prosperity in rural communities. Wheat, being a staple crop in France and much of Europe, saw surpluses that could be sold in national and international markets, stimulating economic activity beyond the agricultural sector. Surplus cotton produced in the US was exported to meet the demands of the burgeoning textile industry in Europe, driven by the Industrial Revolution. It was a surplus of cotton that spurred innovations in weaving and spinning technologies, ultimately transforming cotton into a staple of global trade. Agricultural surplus in one region can stimulate industrial and economic activity in another, aligning with Say’s observations about production creating its own demand.
Industrial Revolution: The availability of coal as a cheap and abundant source of fuel during the Industrial Revolution led to the development and widespread adoption of the steam engine. In the British Isles, introduction of the potato, and the increased cultivation of corn (maize), contributed to agricultural surpluses fed a growing urban population, supporting the workforce needed for industrialization. Although Say was writing before the full impact of the Industrial Revolution, his law predicted the explosion of manufacturing capacity it brought. The vast increase in goods produced led to a significant expansion in the workforce, which in turn created a market for these goods. Workers spending their wages on goods and services stimulated demand across various sectors of the economy.
Innovation and New Markets: Say was keenly aware of how innovation could open up new markets. He noted that the creation of a new product or service would generate demand for it, as well as for all the materials and labor required to produce it. This observation aligns with the modern understanding of how technological advancements can create entirely new industries.
While Say’s Law directly addresses the relationship between supply and demand in economic terms, suggesting that “supply creates its own demand,” there are several concepts and phenomena, both classical and modern, that echo the idea of overproduction or overavailability leading to new uses or innovations. These examples span various fields, from economics to environmental science, illustrating how surplus or abundance can drive creativity, efficiency, and technological advancement.
The Cotton Gin and Textile Industry: The invention of the cotton gin by Eli Whitney in 1793 significantly increased the efficiency of cotton processing, leading to a surplus of cotton fiber. This surplus was a key factor in the Industrial Revolution, particularly in the textile industry, where it spurred innovations in weaving and spinning technologies, ultimately transforming cotton into a staple of global trade.
Coal and the Steam Engine: The availability of coal as a cheap and abundant source of fuel during the Industrial Revolution led to the development and widespread adoption of the steam engine. This innovation not only revolutionized transportation and manufacturing but also opened up new industries and uses for coal, further driving economic growth.
Renewable Energy and Battery Storage: The increasing availability of renewable energy sources like solar and wind power has led to periods of energy surplus, particularly in regions with high renewable penetration. This overavailability has accelerated the development of energy storage technologies, such as batteries, and grid management solutions that can harness this surplus energy, making renewable energy more viable and reliable.
Plastic Recycling Innovations: The overproduction of plastic and the resulting environmental challenges have spurred innovations in recycling and alternative uses for plastic waste. From converting plastic back into fuel to using it in construction materials, creative solutions are being developed to address the surplus of plastic and mitigate its environmental impact.
Silicon and the Semiconductor Industry: The abundance and properties of silicon, a common element in the Earth’s crust, led to its use as a foundational material in the semiconductor industry. The development of silicon-based transistors and integrated circuits has been central to the digital revolution, enabling the proliferation of computers, smartphones, and countless other technologies.
GPUs and Graphics Cards: Graphics processing units (GPUs) are coveted by gamers for their ability to render complex graphics in the latest video games, but quickly rendered obsolete by newer models, as more demanding video games come out every year. These second-hand GPUs found an unexpected resurgence, repurposed for Bitcoin mining, a process that demands substantial computational power to secure blockchain networks and process transactions. Though never designed for this, they provided a cost-effective solution for cryptocurrency miners. TThis shows us the adaptability of existing technologies to serve new purposes, at odds with narrow views of supply and demand.
These examples illustrate how the overproduction or overavailability of a material can catalyze innovation, leading to new uses, technologies, and industries. Whether through economic necessity, environmental challenges, or the pursuit of efficiency, these scenarios reflect the dynamic interplay between supply and demand. We see how Say’s Law applies in a range of situations.
Steve Jobs’ famous adage, “People don’t know what they want until you show it to them,” echoes the essence of Say’s Law in the context of innovation and market creation. Jobs’ statement highlights the idea that supply can indeed create its own demand, particularly in the realm of technological innovation where consumers may not be able to articulate a need for something that does not yet exist. Once these innovative products are introduced, they can create new markets and demand, as evidenced by the success of Apple products like the iPhone and iPad, which opened up new dimensions in consumer electronics and digital communication. While users and markets might be able to express needs, and share behaviours that expose gaps in their needs, the market consumer rarely has the insight or experience to design for them. However, seeing a new product that serves those needs well leads to “supply creating its own demand.”
Both Say’s Law and Jobs’ philosophy suggest that production and innovation are not merely responses to existing demand but can be drivers of economic activity and market evolution. They underscore the role of producers and creators in shaping consumer preferences and opening up new avenues for economic growth and development. This perspective encourages looking beyond current market demands to the potential of new products and services to create their own demand, reshaping industries and consumer behavior in the process.
In the context of blockchain and the burgeoning token economy, this principle takes on new dimensions. The influx of capital into blockchain projects has led to a surplus of digital assets and platforms seeking utility and purpose. (It’s worth noting here that surplus capital is not isolated to Crypto, but a function of global economic policy. For the past decades, central banks create surplus capital - “printing money” - in order to spur more speculative economic activity.) Just as the early internet’s expansion created a vast digital landscape to be populated with content and services, the proliferation of blockchain projects has generated a digital material awaiting undiscovered applications and economic models.
The economic affordances of blockchain technology—such as the ability to mobilize resources or coordinate capital and effort across decentralized networks—mirror the transformative potential seen in other technological leaps. Just as ride-sharing apps leveraged the ubiquity of smartphones to reimagine transportation services, blockchain applications promise to reshape economic interactions, governance models, and social coordination.
For example, a token has some expected affordances: it can be bought and sold. These functions are written in the token code, but that code can do much more. A new affordance of tokens, that wasn’t available to the stocks that this emulates, is “staking” where the ownership tranfer capability is frozen in exchange for other rights, like increaed voting power or increased profit-sharing.
The design principle of skeuomorphism, which makes new technologies mimic better-understood counterparts, often marks the initial stages of technological advancements, easing the transition from the familiar to the novel.
The challenge and opportunity lie in moving beyond skeuomorphic constraints to fully explore and realize the novel affordances offered by blockchain technology, crafting systems and models that harness its potential for innovation, inclusivity, and empowerment.
Questions to consider
These questions challenge us to think beyond the current applications of blockchain and programmable money. They push us to reimagine not just our financial systems but our societal structures, power dynamics, and individual identities. As with all technological advancements, the true potential of blockchain will be realized not just in its technical capabilities but in its application in reshaping our world.