The Green Shoots of Blockchain
Ahh, blockchain, blockchain, blockchain, what is it good for? Absolutely nothing, right? And if the more sensational media are to be believed, blockchain is sneaking into your house every night and rearranging your cupboards just to get on your nerves. In the meanwhile, we miss the point by a margin so vast that you can fly a jumbo jet through it — sideways — and continue shovelling our lives, data and destiny into fewer and fewer organisations as though it is an optimised form of life for the benefit of all people.
Your digital destiny is increasingly in the control of a shrinking handful of large, centralised entities. Without their permission, functioning in modern society is challenging, if not impossible. You need permission to open a bank account. Digital services can be withdrawn from you. You can lose access to your data on the “cloud”¹. Your access to the global network, either wholesale or in part, can vanish at any time. In the meanwhile, other required aspects of societal participation such as insurance, banking, access to travel, infrastructure and other services exist only thanks to the providers making it available to you and even then, mostly as a result of the various agreements that you have accepted and signed (but obviously never had time to read²).
Having more but owning less
These centralised entities have a disproportionate control over your life, and for the time being, that control is growing. They reduce choice, flexibility, power, strip ownership from the individual and worst of all, they don’t even play nicely with each other, let alone with you. Your life and the very data that you need in order to live it exists on other people’s computers out of your control and — largely — out of your sight. Your digital fingerprint is being monetised by others and we’re lured into accepting this based on the “free” functionality and utility that we’re delivered. As time progresses, we’re being collectively groomed into no longer owning anything relating to data, locking us into centralised silos that have big, welcoming front doors but are mysteriously hard to escape from. How much of what you hear, read, view or use do you own right now? Not lease, rent, or subscribe to, but own. Your Internet? Applications? Navigation? Your TV, books, movies and music? Access to your own photos? If someone stripped your rights away (and they could — check your terms and conditions, or better still, read this, or this and weep), what would you, personally, have left? The journey away from ownership to being locked into a rolling service (whilst being utterly delighted about it) is something that’s sneaked up on us, like the proverbial frog in a slowly warming saucepan. This separation of us from ownership of our assets is lovingly called “the subscription economy” and, if nothing else, should provide cause to rub one’s chin in considered contemplation.
And this brings me back to blockchain and the general misunderstanding of what it is, the problem it solves and why it is important. Most of us hear “blockchain” and we think cryptocurrencies, crime, moons, Lamborghinis, the dark web and we think of a fad, a passing phase. We watch the news and we see bitcoin go up, up, up then down-down-down, but we don’t see the long-term trends, the benefits or the huge innovation that’s taking place in that space. We see a tiny, tiny fraction of reality because that is all that is reported and, as a result, it’s easy to utterly miss the point of what blockchain and its associated technologies are and what they, and their descendants, will provide for us and how that will fundamentally change our lives, and in a good way, too.
From the centres to the edges
Many of the centralised entities referred to, such as banking, insurance, travel agents, estate agents, dating services, lawyers and more, are middlemen: intermediaries that sit in a middle place and provide trust. They connect someone who wants something, e.g., a date, a ride to the airport, a search result or a flight with someone who has it and collect part of the value exchanged as payment for the introduction (either directly as commission or by packaging the personal data gathered during the process). Blockchain, and this bit is worth tuning in for as it’s important, enables solutions that remove the need for, or substantially reduce, the role of many middlemen by making trust between two parties possible without the need for any centralised entity at all. Let me put that another way: imagine how much money, control and power would fall back to the individuals in the economy and would be available for other uses if self-service trust allowed introductions without the need for intermediaries?
“The blockchain symbolises a shift in power from the centres to the edges of the networks.”
- William Mougayar
Blockchain is just the aperitif in a meal that you know is going to involve some really, really nice wines: a mere peek at the future, an example of how a global truth can be maintained free of a centralised entity. And it is this that is worth grasping about blockchain. It isn’t about cryptocurrencies. It isn’t about anonymising shenanigans. It is about establishing a public, permanent, un-modifiable ledger of information and a mechanism for reaching consensus on how to add new entries to that ledger: a global truth, but delivered on a decentralised network that is made up of lots of computers and not having to know which are trustworthy or not. No king. No queen. No leader. It’s like the Internet was originally conceived: a pure, inclusive, decentralised, peer-to-peer mechanism that is almost impossible to game. It provides and exposes trust to everyone and anyone and allows economic activity to take place free of large entities shaving off a cut for themselves and with nobody having the control over who is in or who is out.
Trust: it isn’t additive
If you are in the “yeah, so what?” frame of mind here, then you are in good company. Let’s approach this with a specific example. In the past, a bank would have had a single master ledger. This is its truth. It is the single document that explains who has what. New entries can be added to the end, but previous ones cannot be modified. By walking the ledger from page 1, you can establish who has what and make sure that everyone’s balance is correct. You trust the bank to maintain this, but let’s all be honest here (and that’s fine, it’s between friends), if the bank zeroed your balance tomorrow, could you prove your three grand had gone? Do you have supporting paperwork? You trust the bank. And when that trust breaks down, you trust the regulators to provide a route to complain that is fair and balanced and if that breaks down, you trust the law of the land to make sure your money comes back to you. That’s a lot of trust, and trust is multiplicative, not additive. Two half-trusts is a quarter trust. Not a full trust. And worst still, you can’t help yourself to that trust, you have to rely on others.
Blockchain, with its associated cryptographic goodies, solves the trust problem fundamentally. You no longer need to trust a third party, you can look at the ledger yourself. And furthermore, you can look at it from multiple angles: you could — if you wanted — verify beyond reasonable doubt that what the global truth was without needing anybody else’s permission to do so. This is blockchain and this is why cryptocurrency is such an obvious and appropriate early application of it: double spends are impossible, no banks required, forgery can’t be done and no computing power in the world³ will let you rewrite history in your favour. Oh, and it allows any individual — you, me, the spider in my office or an autonomous digital entity to trade. Isn’t it cool? No more social exclusion. Just like that.
Cryptocurrencies are the tip of the iceberg, and this is one hell of an iceberg. It’s iceberg all the way down. The whole decentralised ledger business (of which blockchain is just one, early example) is coming. It will gnaw at the feet of every single middleman business. It will return control and value back to the individuals and it is truly global and truly inclusive. It will give you real, not just perceived, control over how you run your life, store and deploy your wealth and find the things that you need. It will give you back control over your identity. It enables applications of machine learning and artificial intelligence that are almost magical in what they could do: your future life will have a red carpet rolled out in front of it as millions, if not billions of digital representatives explore a dynamic, adapting world that is optimised for them in order to deliver solutions for you.
You and your stuff, controlled by you
Then there are whole, new business models for monitoring content that are nibbling at our toes. Things like social networking that pays you, generates value, gives you control over your information and does so entirely advert free. Then there are content creators that could enter a world where advertising was not needed. Donate a touch of your computing power to build network consensus or solve problems for others, and silently and invisibly provide support for the resources you use. This is really scary for some centralised entities, but they’re safe in the short-term: what we have now can’t replace them as it isn’t practical, it’s not mobile friendly for a start, and there are… well… let’s just say “issues” (not least of which is effective regulatory integration which, amongst many other things⁴, is essential to protect the young and vulnerable in a decentralised world). But it is a taste of things to come. And it’s great for you and me: no more endless accounts and passwords, no more intrusive, risky advertising and we get the impression of content for free whilst actually paying for it. Neat, eh? And the examples will continue, and continue and continue. Insurance without insurance companies. You owning your own identity and claims made against it. You earning value from your things’ sensors simply by going around your daily life. Extraordinary utilisation of resources without the horrific peaks and troughs — imagine boiling your kettle from the battery of your neighbour’s car or your dishwasher negotiating with the power networks to allow it to get a cheap deal at 4AM.
This isn’t science fiction and it isn’t just pulled out of the backside of “optimistic hope”: it is a reasonable extrapolation of what is possible now into the future. Much in the same way that those on the world wide web operating on the decentralised fledgling Internet in 1994 saw a game-changer for society coming but couldn’t say specifically how (nobody foresaw the way social networking and content streaming services would unfold and yet here we are), those in the decentralised ledger business are in the same place. Decentralised ledger technology is not a technology in isolation: it is an enabling piece of the puzzle, something to be combined with other exciting technologies to produce things that are new, things that can exist independently of one controlling entity, things that are robust, scalable and inclusive — bringing entirely new applications to life.
This is happening. Now. Soon. Everywhere. Sure, it’ll be a bumpy ride and there will be ups and downs, but ultimately your day-to-day life will never be the same again — it’ll be better. And you’ll own and control substantially more of your part of it without having to farm “you” out to monolithic entities that absolutely do not have your best interests at heart.
Awesome, eh?
-
[1] — Don’t get me started about “the cloud” — everyone would be better off if they mentally replaced all mentions of cloud with “somebody else’s computer” so it was absolutely clear what it really means
[2] — It has been said that to read, properly, the terms and conditions we agree to in one year would take 76 work days (with 8 hours each day spent reading). For it even to be remotely expected that humans would read this stuff is ludicrous and an insult to everyone who is asked to do so. So we don’t, and we accidentally sell our soul. One day soon, this will end, and that day gets closer every time an individual is asked to do something impossible in order to use something trivial
[3] — This isn’t entirely true: if you get control over 51% of some decentralised network’s computing power, you do have magical powers. Preventing such things is about more, not fewer, independent computers of all shapes and sizes to help make such an attack harder to the point of being virtually impossible
[4] — Strong identity, a permanent ledger of actions taken and verifiable claims (along with permissions based on those claims) go a long way to support this essential regulatory integration. Many are out there working tirelessly to constructively influence policy to help progress this
