What Are Blockchains Actually Good At?

Let me break it down into four key ideas.

1. Programmable money

The importance of being able to specify dynamically and securely what occurs as the result of moving value around the world is difficult to overstate. To understand why, let’s start with plain old money as described by Yuval Harari, author of Sapiens:

2. Decentralised Assets

3. Trust minimisation

This phrase is useful because blockchains do not, contrary to some popular rhetoric, remove the need for trust entirely. You’re trusting client developers, network availability, that the internet will be accessible, that your local machine is not corrupted etc. whenever you run a node. Likely the best article about this is Ray Dillinger’s, who reviewed the original Bitcoin code.

Are the two mutually exclusive?

4. Self organisation

Simply put, organisation is a function of communication. The more trustworthy the medium, the more reliable the message and the more stable the social structures that appear around that message. Status leads the pack on this front.

A shoutout to all the shibes out there.

“Most likely both the gossip theory and the there-is-a-lion-near-the-river theory are valid. Yet the truly unique feature of our language is not its ability to transmit information about humans and lions. Rather, it’s the ability to transmit information about things that do not exist at all. As far as we know, only Sapiens can talk about entire kinds of entities that have never been seen, touched or smelled.”

Which is really just a fancy way of saying that fiction is the unique feature of human language. It is on fictional foundations that we have built ever increasing scales of organisation; from kingdoms and empires, to religions, to money and the global markets. At each new scale — brought about by what Harari describes as the Cognitive, Agricultural, and Scientific Revolutions — we have required a new mythology by which to navigate the world in ways that allow greater collaboration, less hampered by censorship or tradition.

“Telling effective stories is not easy. The difficulty lies not in telling the story, but in convincing everyone else to believe it. Much of history revolves around this question: how does one convince millions of people to believe particular stories about gods, or nations, or limited liability companies? Yet when it succeeds, it gives Sapiens immense power, because it enables millions of strangers to cooperate and work towards common goals.”

There are two particularly interesting words in Harari’s account: history and cooperate. If we can agree about the story we are reading and writing together, and make it possible for as many people as we can to participate in forming a shared and coherent version of our past (and our current state), then we can cooperate in numbers and in ways not before possible. This is the promise of blockchains from a historian’s perspective.


“We believe in a particular order not because it is objectively true, but because believing in it enables us to cooperate effectively and forge a better society […] It follows that in order to change an existing imagined order, we must first believe in an alternative imagined order.”

Book-mad alum of @UniofOxford. Always looking for a towel. Never to be taken too seriously. Enthusiast, communitarian. @ethstatus Interplanetary Cat-herder.

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