Blockchain is the greatest invention ever!
But, only if, there were just 4 people on the planet.
It isn’t all bells and whistles, after all, blockchain is yet to prove if it’s really worth all the hype it’s getting.
Before the dawn of currency, people traded in barter. Whenever someone wanted something, they would exchange it with the commodity they produced or poached. For example, suppose there are 3 people in a community, each one of them produces or poach different commodities. X poaches rabbits, Y grows rice, and Z brings fishes to the table. Each one of them needs to trade their commodities for a scrumptious meal, and here comes in a need for the barter system, for every two fishes Z trades, he asks for a 1kg of rice or 1 rabbit, and same trade rules apply for X and Y. This is surely an ideal system where no resources are wasted in currency printing and keeping records, and surely it worked really well, but our ancestors had to move on from it.
The barter systems work for a community with limited members, say 20 at max. As the competition increases, the economy starts to fall prey to demand and supply. Suppose in our example if another person came in and started fishing, both him and Z will have an argument, even if they come to a conclusion there won’t be an increased demand for the fish and so its value fall to half and the new guy and Z would have to share profits (rabbits and rice) which would be devastating. Even with such a small addition to the number of people, the barter system fall prey to imbalance.
This whole story is same as what’s up with blockchain lately. The problem with blockchain is that it doesn’t really have a place to fill in, we already are using paper currencies printed by our governments. The only reason to believe that blockchain could take its place is for the reason we feel we all are globally connected and are on the expedition for a better world economy. This would have been possible if the blockchain was issued when there were only 4 people in the world, with over 8 billion people around the world, things start to get tricky even for the all impenetrable distributed ledger blockchain technology.
So the widest implementation of blockchain is much like barter, here and now, through cryptocurrencies. We are trading an electronic commodity which is either mined by burning a lot of electricity or bought at an inflated or deflated rate depending on how many people fall prey to this deception. Check out ‘ The largest economic bubble the world has ever witnessed: blockchain’ for a fair bit of clarity on how big of a deception bitcoin actually is.
Back to the blockchain, excluding cryptocurrencies, it works well as a publicly connected distributed ledger and, for now, we can only speculate if it’s capable of being as wide as the internet. But while being an optimist, we forget to consider the amount of resources we would need not only for the shift to the new internet but also the resources that would be required for it to sustain. We can only wish there would be a blockchain version limiting the resource wastage to a sustainable level and then blockchain could truly achieve what it was initially built for.