Three non-technological ways in which blockchains may still “fail”

“Fail”, because failing is obviously relative. By now, there is no real doubt that blockchains deliver on their technological promise: tamper-proof distributed permissionless ledgers. But they may very well fail to deliver on their promise as a new shiny class of peer-to-peer technology disintermediating all those pesky central authorities into oblivion.

1. Poor usability for non-experts

Several generations of peer-to-peer technologies have promised a lot, delivered quite much, but still left a lingering taste of underachievement. While GNU/Linux — an operating system crucially dependent on a p2p development model — is clearly one of the resounding successes of open source, it still did not fulfill its promise in one crucial area (which in its early days was seen as one of the most important): desktop computers. Linux powers anything from toasters to supercomputers, but it hasn’t liberated the masses from Windows or Mac OS. In most of smartphones, Linux is in the shackles of Android.

There are many reasons for why GNU/Linux hasn’t taken over, vendor lock-in being one of the major ones. But there is another issue that may be relevant to blockchains. When hackers write software for themselves — scratching their own itch — it is ready when it delivers what is needed. And this point of being ready for use is very different for a hacker and for a regular user. For too long, the installation and use of a Linux distribution was too hard for ordinary users. Even if Ubuntu and similar systems have largely solved that bottleneck now, the lesson stands: superior technology, if polished only to the point where it is good enough for hackers and early adopters, will not escape that ghetto. Let’s be honest: just the visual look of a Bitcoin address “13ktXxaJTPvBPfSyS7XALTP1i7nAeR2oZ9” is going to keep a big chunk of potential users away. At the moment, the user experience of even the most advanced blockchain apps is abysmal.

2. Domestication

The second danger is domestication, or, maybe better yet “commoditization”. As Robert Herian writes

“Disruption, so-called and preached by many of the major global banks, to the extent that IBM are now claiming that more than half of those banks will be using the technology in the next three years, is anything but disruption because it leaves unchanged the conditions (norms and expectations) in which it occurs, namely those in which global financial capital has exclusive dominion over the social.”

It is clear that the way the banks use blockchains in effectivising their databases and other back-office oprations, does very little for a peer-to-peer future. Furthermore, as Herian continues to argue, there is the

Beyond the public and transparent blockchain, and thus any hope of preserving a common space if not exactly or politically-speaking a “commons”, we see a potent indication of the victories of normative liberal and, to a greater extent, global financial capitalism over the blockchain narrative. An ideological victory which is in no small part manifesting itself through the proliferation of permissioned enclosed ledgers which are altering the dynamic of blockchain development […]

Most of the resources in terms of money are certainly going to permissioned and private blockchain development and that will, for sure, lend its flavor to what blockchains are all about in the public mind. Moreover, as Herian indicates, this trend is in a worrying way reminiscent of the way in which other technological developments have encroached digital commons. However, is it so bad that banks and other institutions want to use permissioned blockchains? We are still allowed to use permissionless blockchains and build on them, right?

3. Marginalisation

Domestiction becomes a real problem when combined with another non-technological threat: marginalisation. Again, let’s look at recent history. Torrent technology is a superior way for distributing digital content. However, since its first and most prominent uses were related to illegal file-sharing, legislation and public PR campaigns have pushed the technology to the fringe (can you believe that PirateBay is still the most popular torrent tracking site?). Torrents are, of course, used for legal purposes, too, in many forms of content distribution, but again the full promise of the technology has been curtailed by pushing it into a socio-cultural margin.

All of the three threats ­– marginalisation, domestication and ghettoised user experience — loom large over blockchains. Moreover, the three collude in forming an evil circle, reinforcing each other. There is no silver bullet agaist any of them. A lot of education, both for regulators and the general public, is needed in order to counteract marginalisation. Against ghettoisation, the most urgent need are real-world uses cases that are not limited to currency speculation or to transactions with high counterparty risk. The more diverse the community involved, the greater the possibility of avoiding marginalisation and pushing for overall usability. The free software and open source movements, for instance, have a history of initiatives and procedures for increasing the diversity of the communities and lowering barriers of entry. They can be reused, while at the same time looking for new ways, such as , of broadening the horizons of p2p technology development.

Economic Spacing

Invent the economy

Tere Vadén

Written by

Co-founder, Economic Space Agency, Inc.

Economic Spacing

Invent the economy