This post was originally published in May 2014, and is being republished as I move past content to Medium. I think this remains a relevant in so far as it discusses how major technological paradigm shifts are adopted by users, even though two and half years later, bitcoin (the currency) remains in the same spot: unknown to most. It also foretells of what is common knowledge today, that it is not the currency that will ultimately be the most influential, but the underlying technology of the blockchain.
The blockchain is a hard concept to wrap one’s head around because it describes a system for which no analog exists today, and it runs counter to everything we know about how trust works. In today’s world, trust can only be assigned or transmitted by an individual or organization. The idea that one could safely send money from point A to point B, and have that transaction facilitated by potentially millions of agents without you knowing who those agents are, what motives they might have vis-a-vis your money, whether they are nefarious or not, is an anathema. But that is exactly what the blockchain helps enable.
With the blockchain, trust stems not from the reputation of an actor or collection of actors, or from a process or set of controls that abstracts power and authority away from individuals. Nor does trust get transmitted through a graph of friends, or from an external auditor who can vouch for a claim. Instead, we place trust in a design pattern.
But what does that mean, to trust in a design pattern? To answer that, let’s look at another decentralized system we have all grown to trust so much that it has transcended the need for trust entirely, and just is: the Internet. The Internet has no governing body or centralized authority. There is no mastermind responsible for making sure some secret collection of computers are plugged in and working. There is no facility that if compromised could “take down the Internet.” No, the Internet works because of a design pattern that dictates that data should move the same way between networks, as it does within networks. So if a network wants to take advantage of the access and opportunity afforded by the Internet, all it has to do is connect, and in so doing it begins contributing it’s own resources to the benefit of the whole, further decentralizing it, making it faster, and making it more resilient.
We take all of this for granted without knowing how this system works. But if you look back to your own history, assuming you were around when the Internet had it’s tipping point, I bet you will find a moment where you had to take a leap of faith. A moment when you had to drop AOL for a generic Internet Service Provider who provided no information services of their own. Of course, the later you made this leap of faith the easier the choice was to make because you were entering an increasingly useful and utilitarian landscape of services — companies like CNet, Excite, Yahoo!, Excite, and others. And the more companies that began building their businesses on top of this infrastructure, the less and less people cared about the fundamentals of how it worked. The proof was in the pudding.
The blockchain today is operating in a time not that dissimilar to the Internet in the 1990’s. Consumers are baffled and confused by how a decentralized finance system could even function, while a growing number of people led by technologists, futurists and entrepreneurs see the potential for ideas and companies that heretofore had been impossible due to the economics of a centralized system. But slowly, as more and more people take their own personal leap of faith, more and more people will stop caring about how it works, and just accept that it does. By then we will no longer be talking about “a blockchain,” but rather an Internet of Blockchains. And no longer will our computers simply connect to the Internet, they will contribute their computing cycles to an untold number of micro-economies that will power far more than even they are aware of.