Just two hundred years ago, the average life expectancy was 35 years. As better systems of food production, health services, protection, and diplomacy were designed, we exponentially improved our human experience.
However, in spite of the greatest agricultural, technological and humanitarian advancements we’ve ever seen, there are still obstacles holding us back in unlocking a true quantum leap of progress — equal opportunity to abundance of resources leading to the fulfillment of goals for everyone on the planet.
In my opinion, of all the addressable obstacles, those not tied to technological or scientific discoveries, it’s the biases, inefficiencies and vulnerabilities of our Trusted Third Parties — public institutions, political and legal systems, banking, NGOs, etc. — that prevent us from achieving our highest objectives.
The trust/power conundrum
Our most important systems — those pertaining to governance, predominantly organized around the power and reputation of our leaders — have a lot of room for improvement. They have arguably delivered to the majority of people, political and economic failure, social inequality, conflicts and instability around the world. History is full of social reboots, downfalls and economic catastrophes.
It’s not that Trusted Third Parties (TTPs) fail us because they’re all ill willed (although some are) or stupid (although some are). It’s rather that, very much like people, they are inadequate or fundamentally flawed in the sense that they generally operate under the ‘survival of the fittest’ paradigm in a world that is not to be trusted. TTPs predictably seek power and control. To propel their mission, they must dominate their space, control the narrative, influence their territory, protect their legacy. They are by definition, therefore, not neutral. Their objectives are not neutral. Their knowledge-base is not neutral. Their data is not neutral.
Self interest, self preservation, together with a general fear of counterparty risk typically leads to contentious outcomes. The shortcomings of TTPs appear to be reflections of human behavioural limitations and our own primitive impulses. The world is not safe because by and large the system isn’t fair. The system isn’t fair because the world is not safe.
Does neutrality exist?
Altruism and selflessness exist. Trustworthy actors exist. But we’ve created TTPs in an attempt — our best attempt — at coordinated fairness, to protect everyone, especially the weakest among us.
TTPs do what they can. They are the best we’ve got to facilitate our interactions. To the point that we’ve built our civilization on a foundation of TTPs. We depend on them to make our dealings and relationships possible. They brought us this far and it’s quite possible that they’re responsible for the prosperity of the modern world.
TTPs manage and preserve who’s who, who said what to whom, who did what, when. Who owns what and according to whom. Basically, what happened… Nevertheless, in addition to their biases, we have to also endure their inefficiencies. It’s expensive to rely on the oversight of TTPs for every interaction. Every. Single. Interaction.
Centralizing trust in the hands of another bestows great power, and like Spiderman’s uncle Ben says, also great responsibility. In an effort to keep them in check, we’ve also created TTPs in charge of verification. But who polices the police, and the police of the police? A downward spiral of mistrust, subjectivities and unproductiveness.
In other words, it seems that we’ve placed too much trust on TTPs (or they simply take as much as they believe they can get away with). They end up underperforming, sometimes abusing their position of privilege due to selfish, self-serving mechanisms that are ingrained in human dealings. Given enough time, TTPs break down confirming that the world is indeed, by and large, not neutral.
But what can we do? Centralized TTPs are the state-of-the-art…
Hello Bitcoin. Hello neutrality. Goodbye TTPs?
We got lucky.
Thanks to Satoshi Nakamoto — an anonymous individual who created Bitcoin in 2008 — we now have, for the first time in history, a verifiable and neutral system that can handle data in a way where reliability is guaranteed. Again, it is guaranteed.
This system, Bitcoin, is not only neutral, but also secure, permissionless and incorruptible. It’s automatic, global, unhackable and open to all participants — individuals (dead or alive), groups, machines or groups of machines.
Bitcoin is not owned by anybody, it is not a business, it has no marketing department, no attorneys on retainer, no patents pending, no royalties, no CEO, nor is it registered in any country. It’s an open-source idea to be used freely by whoever wants to join. It is maintained and updated by volunteers.
Bitcoin is a network where we can coordinate data — without TTPs or centralized controlling agencies — to a degree unimaginable until January 3, 2009 (the day it became active). Bitcoin is a tamper-proof, immutable and censorship-resistant registry — a database — where anyone with Internet access can verify whether data, and transfers of data, existed at a specific time and whether that data has been modified. It’s therefore an incontrovertible time stamping validation machine, sequencing information of events on the network on an indestructible timeline. Again, without governments, banks, a board of directors or the supreme court.
It is arguably the most promising experiment the world has ever seen.
Everyone who wishes to participate can have an up-to-date, synchronized exact copy of the registry. And for everyone else who does not want to participate, they can still consult the shared ledger online for free. In real time. One does not need to ask for permission or get authorization from anyone to read the registry. The information is live and transparent. The system does not care what information is written or transferred. It is agnostic.
On the bitcoin network, participants check the validity of interactions (information, data, transactions) against their up-to-date copy of the distributed ledger. All actors are treated equally by the system. No one is judged on where they are, what information they have processed, or who they are. The system simply executes automatically what it has been designed to do — validate blindly, impartially, the state of what is.
There is no room for favoritism, nepotism, or partiality. The system does not and cannot chose outcomes or influence the core process. It is in fact, truly impartial and neutral. There is no counter-party risk. There is no settlement, no need for appeals. Transactions are final.
Bitcoin is as far as I can tell, the most important neutral thing we have ever created. Think of the impact this can have on our interactions, our behavior…knowing that we all have access to our truths.
Bitcoin as a state-of-the-art TTP
What would the world look like if true objectivity were possible among humans? In my mind, it would give us an extraordinary opportunity for development in every aspect of life. If indeed neutrality is an essential, fundamental ingredient for trust, we would be able to prosper like never before.
It is unclear if Satoshi foresaw the extent of the impact his creation is having on our world. Bitcoin is so fair, neutral and secure that sound money (the best money we’ve ever seen) runs innately on this system. And although I, among many, believe that Bitcoin stands to become one of the world’s reserve currencies, it also functions as a the most secure and powerful neutrality platform on the planet. TTPs 2.0.
People are naturally suspicious when talking about money. After all, more people have died due to power (money) struggles than from all other causes in combination.
Although conversations on this subject quickly turn philosophical, it’s important to remember that Bitcoin is a technological innovation; it’s software. To appreciate the level of disruption it makes possible, it has to be understood in technical terms. There’s an elegant balance of market forces, game theory, blockchain, cryptography and proof-of-work technologies beautifully and harmoniously blended. If one does not have the skillset to fully appreciate the subtleties of the bitcoin protocol, one should consult an expert. If one is not so inclined, at least one must grant Bitcoin the same privilege that we give, for example, a TV. Who among us can honestly say that he understands how a cathode ray tube works?
Bitcoin is neutrality made real
Bitcoin is so neutral that there are projects already in motion to improve how we handle property rights, voting, identification, notarization, reputation, copyright and patents, finance, credentialing, citizenship, loyalty programs, trading…
If a bad actor, willingly or unwillingly, were to alter their version the distributed ledger, that discrepancy would be self-evident to every participant and auditor, and the system will cast that information aside.
You either join, by running the bitcoin software, and live by the same rules as everybody else or you are not part of the network. Changes, to the information or the protocol itself, must be accepted and integrated by consensus. And in that sense, Bitcoin is a neutral voting mechanism. A coordination and validation machine.
Konrad Graf points out that “Bitcoin revises the Russian proverb, “doveryai, no proveryai,” “Trust, but verify,” to just “verify.”
The consequences and magnitude of this innovation are not yet understood. It will take time for us to assimilate it into everyday life. But from what I can tell, we have a new revolutionary tool to ensure that our records, our history, our decisions, our interactions, are — permanently — available to all without so much dependance on TTPs. And thus, deliver equal opportunity to transcend, evolve and finally prosper on a level playing field.
I can’t wait to see what the world will be able to achieve by fully unlocking what Bitcoin has made possible — true neutrality.
I believe, we have found a better way. And it is unstoppable.
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