I was interviewed by a South Korean newspaper MoneyToday in January to talk about blockchain’s impact on today and tomorrow’s economy. Although I am an engineer and not an economist at all, I have had a lot of thoughts on this. So I shared my thoughts from the perspective of an AI engineer / researcher who have been digging into blockchain since 2012, which many blockchain advocates may not agree with (based on summaries we observed from Opinion Engine we built). They published the article in April: http://news.mt.co.kr/mtview.php?no=2019040110063375883&type=1 .
The article is in Korean (which I can only read by Google translate). Here is my best recollection for part of the conversations in English.
Q: Some of the advocates of blockchain say that there are fields that require centralized systems even after far-reaching developments and expansions of the blockchain technology. What do you think about this? If you agree on this idea, what do you think are the areas in which centralized systems and decentralized systems can be most efficiently utilized, respectively?
A: It’s exciting to think about how cryptocurrencies could replace money, how all payments could be done over blockchain, or how decentralized autonomous organizations could replace governments.
While these are all fun to think about, there is an old saying that the best technologies transform how we do things, but don’t really change what we do. For example, when cars replaced horses, what we do is still moving from point A to B. When Internet replaced radio which replaced pigeons. it is still all about sending a message from Alice to Bob.
It’s very likely we will still have governments, money, and banks, which were spontaneously formed over centuries based on what our society need, rather than artificial processes designed by small groups of people. These entities are fictional things that exist because people believe in them. Unless we change what everyone believes, these things would remain to appear as centralized entities, regardless how decentralized their infrastructure may be. If blockchain is really one of the best technologies that transform the world, it is very likely that it would remain invisible as it gets pervasive, and most people might just live their lives just as usual, unaware of what blockchain is.
It goes without saying that not everything should be decentralized. Centralized systems can make faster decisions and are more efficient when middlemen don’t exist at all, for example, in use cases such as surgical robots, self-driving cars, machine translation. There is little benefit of adopting decentralized systems when consensus and trustless permanent ledgers are not required.
Q: There still exists high anticipation for the era of decentralization which may be achieved by blockchain. What kinds of changes do you expect the society, economy, as well as human lives and behaviors will undergo in the era of decentralization?
Rather than seeing blockchain repeatedly hitting news headlines as it had been in 2017 and 2018, I hope real adoptions quietly happen in 2019. So let’s look at some changes I noticed based on my personal experience in real life.
I see an increasing amount of payments made through Ethers or similar cryptocurrencies, primarily for paying goods or services overseas. I do that myself when I want to pay oversea contractors. It is just much easier than wire transfer, if the other party knows what he is dong. Friends of mine built EOS wallets and games, which started to form their own communities. The games are quite fun. The limitation with blockchain infrastructure seems not to be a major problem. Some of these games also incentivize people with cryptocurrencies. It’s just much more rewarding than meaningless gold coins created by random gaming companies that’s only useful in the gaming world.
I also saw people making bets on sports and games on blockchain. Obviously, transparent and trackable gambling is safer and good for the society. If it can be adopted at scale, gambling would become a lot easier to regulate.
People have started creating marketplace for dApps. Because of the limitation in infrastructure, the usage is nowhere close to App Store or Google Play. But I hope one day they get big enough so that we won’t have to rely on centralized platforms such as iOS, Mac, and Windows anymore.