When I wrote this piece last month about how blockchain was making a case for itself, I wanted for us crypto enthusiasts to take a step back from the markets and headlines and look around at the industry. To take a moment to smell the blockchain, so to speak.
There was a definite positivism in the way people responded: sharing even more industry developments across the globe and opening up more discussion into what lies ahead. But the point goes beyond reassurance, even if it’s needed in this particular mood for the industry.
It isn’t just about preaching to the choir
Our audience is staunchly pro-crypto and pro-blockchain, we’re well aware of that. They are the hodlers and the long-term supporters for whom this isn’t the first period of uncertainty, and they know it won’t be the last.
But there remain many professionals in and around the industry, who — rightly so — still maintain a great deal of skepticism and caution about the transformative potential of this technology and its implications for the future.
It doesn’t necessarily help that the opinions out there tend to be on extreme ends of the spectrum. On one side are what the other sees as snake-oil merchants spouting blockchain tropes that will “disrupt, revolutionize and decentralize”. On the other, are those viewed by blockchain supporters as preservers of an obsolete technological and financial order bent on snuffing out innovation and control by the few. Both sides are at equal times justified.
But for the industry to take the next step with its detractors(whether that next step is awareness, interest, evaluation, trial or adoption is up for another discussion!), it needs more objective literature, more balanced discussion, more nuanced argument.
Because if we are to convince others that blockchain is, indeed, a big deal, then we must be able to demonstrate its significance in logical and rational language that makes sense to our current realities — be they social, financial, economic or political.
And for me, blockchain makes sense in all those terms, which is why it’s a big deal to me. A really, really big deal.
This is what growing up looks like
Nascent technology. One of the many defining terms of blockchain, whose popularity probably makes us forget the context of blockchain’s teething problems.
Every technology that we’ve come to accept and consider indispensable started out as nascent and pretty much had to fight its way along the stages of adoption.
If today, blockchain still struggles to shrug off myths like being the favored tool of criminals, drug lords and hackers, the internet and open source software started off being denounced as the playground of the exact same undesirables, with ex-Microsoft boss Steve Balmer once calling open source a cancer (don’t worry, he loves it now). Even the telephone drew incredibly hostile receptions when it was first introduced, with the New Yorker calling it “dangerous”. Yet here we are today wearing phones on our ears.
Detractors will be quick to point out that even if we remove external downsides like facilitation of crime or how it will pollute the planet, even blockchain advocates must accept that the technology still has many flaws.
It is not energy-efficient as a ledger. It is so volatile it makes commerce difficult. It does have scaling issues. It is confusing in a regulatory sense.
But these are good problems to have. It means it isn’t a passing fad. It means the technology is being used at a capacity beyond what was imagined. These problems have actually spurred developments within the space.
Every week, projects are experimenting with new technology, developers are trialing upgrades and taking ideas from the board and putting them into implementation. A year ago, people were debating about block sizes, liquidity, stability. Between then and now, the same people are experimenting about off-chain layer-2 scaling to outperform Visa like Lightning Network. We’re coming close to atomic swaps, where different blockchains won’t matter. Stablecoins developed by guys like ARYZE and liquidity projects like Helios seek to address market concerns. Security tokens are the current new answer to regulation.
Necessity is the mother of invention. And blockchain has had many offspring, each we’ll get to see growing up on their own over the coming years.
Speaking of necessity…
In the introduction, I said that blockchain technology — including its most prominent product of cryptocurrency — is still in its early phase of development.
Blockchain will come into its own, in time. Some believe “it’s too big to fail”, others think it will happen in a different shape we cannot foresee, but the world will embrace progress. That is the natural order. And that’s true for the objective viewer, regardless of which side of the fence you or I might be on.
But I believe this acceptance will happen sooner than we expect, but not so much because it seems logical for a new digital technology to displace the old, but because blockchain is what we need.
1. Centralization cannot sustain society
The internet, which we all take for granted, started out its roots in enthusiasm for social and academic wealth to be shared with all. But as commercial interests embraced it (after first denouncing it), we see today a world wide web of fragmented monopolization, where we are shown information paid for by the highest bidders, where we can only access what the wealthy and powerful allow us to.
Everything we do is only by the permission of some central entity. Want to buy something online? You can, but only if your bank or payment processor accepts to pay the merchant on your behalf. Want to say hello to a friend halfway across the world? Sure, but only if Facebook relays the message for you.
For the first time in a long time, we are now able to do the most basic of social interactions directly. Through blockchain innovations, we can decide exactly how much to pay, and precisely to whom, without ever relying on some other mysterious third-party to process and settle our money for us.
Decentralization is not merely the unfortunate marketing trope of ICOs, but as Ethereum co-founder Vitalik Buterin reasonably explains, blockchain’s political and architectural decentralization — if not logical decentralization — are increasingly being recognized as desirable for sustainable social and economic constructs.
2. Resistance to censorship is universally appealing
The old social constructs of the state deciding what is good for us was never meant to last. The idea of governments and corporations dictating what information is safe for us to consume, which services are legal for us to use — that may have been necessary for the old arguments of safety and security in societies living in herd mentalities.
But people are as intelligent as we allow them to be. The resistance to censorship may have had it roots in libertarian ideology and enshrined in little-known declarations like the Cypherpunk Manifesto, but are today entering the consciousness of global citizens.
We’ve had partners like Bitnational that have been carrying these ideas on an ideological scale, with their own model of Governance 2.0, with blockchain, not borders.
Blockchain is now bringing about decentralized applications and open source protocols that will soon bring about “Web 3.0” based on the tenets of personal freedoms, where we can freely access and transmit information as we please, without restrictions.
We no longer want to be at the mercy of ISPs who limit and restrict, or governments who block with prejudice.
Universally, people believe themselves as sovereign individuals, with self-determination and liberty to choose how to express, associate and interact with. What used to be privileges determined by censorship are now universal rights demanded by all.
3. Doing better is no longer our desire but our pursuit
I work pro-bono with the Nordic Blockchain Association as co-founder and advisor. The blockchain ecosystem in the Nordics may be relatively small but has a rich diversity of private enterprise, public organizations, and individuals, including academia. Together, we explore ways of bringing the technology from its current phase of interest, into applications, fostering cooperation and understanding, disseminating awareness and education, and ultimately, hoping to roll out useful implementation.
Over the months and years, I’ve noticed a stark difference in the early thinking behind the question “Why blockchain?” years ago, and the question being asked today of “When blockchain?”.
It’s reflective of our own thinking as global citizens and can be seen even among the most elite of thinkers.
Let’s take the past winners of the Nobel Memorial Prize in Economic Science, for example. Initially, all of them were extremely critical of blockchain. Thaler, Krugman, Fama, Shiller, Stiglitz,Holmström… all said blockchain was a “bubble”, a “bad idea”, had no legal function, has no value, no adoption and will collapse.
No surprise, perhaps, since they were all part of the old world order and blockchain is an attack on the status quo. But they were each blameless in their criticisms, each won Nobels because of their work and desire in seeking fixes to a broken global economic model.
But with every global financial crisis that seems to come in increasingly frequent cycles, and with every Nobel winner providing proof that we are headed for disaster on our current paths, it is becoming clearer that a solution is no longer desirable. It is needed. And needed now.
We’ve now seen a change of heart from such traditionalists. This year alone, Nobel Laureates have switched sides, choosing blockchain, as they begin to see and understand that this technology is moving from theoretical promise to actual application.
This is an experiment well on its way to succeed
The blockchain experiment promises so many transformations, across so many sectors. That will take years, many years.
For blockchain to succeed, as with any technological innovation, many barriers must first fall. And we are learning each day, understand more about how blockchain will take hold, and how these barriers will crumble.
Already, we have clues about the where and the how: the trialling of blockchain projects at the UN for humanitarian aid to address efficiency and identity issues, the testing of blockchain systems for electoral rolls in Southeast Asia, Africa, North America for election transparency, the use of the tech by the Australian Security Exchange to replace its current settlement system.
All these trials have been decidedly positive in initial findings.
Maybe it will be the disruptive tech that attacks old models and brings about quick adoption. Maybe it will also be foundational tech that lays the new basis for tomorrow’s economy and society.
But any or all of these will happen. No longer simply because blockchain is better but because blockchain is what we need.