Blockchain’s Broken Promise
…and the limestone analogy
The promise of blockchains, that would solve all the world problems came in the form of TWO key attributes:
- Security
- Immutability
That was it.
Game. Set. Match.
Let’s now use it everywhere!
The problem with this conjecture (as we established in the prior article; Breaking the Blockchain), is that ‘blockchains’ are not mysteriously endowed
with these attributes because of their unique technical architecture.
In fact, there is NOTHING unique about blockchain architecture. It’s just chunks of data, segmented, and chronologically connected — and these days supposedly across multiple servers (in the case of the new buzzword: DLT).
Let me be clear. This does NOT give you anything that’s secure.
Security and Immutability are a derivative of COST.
And cost only comes from combining ALL the ingredients in the recipe (as defined in Breaking the Blockchain).
Bitcoin is different.
Why?
Bitcoin is the most secure, public, digital network we have — not because it’s “built on a blockchain”, but because it combines that form of database architecture (I call it that, because that’s what it is), with a robust, game-theoretically sound economic model, with a well thought out incentive and disincentive mechanism, and Proof of Work, which solves the Byzantine generals problem in a distributed (or decentralized) system and introduces the necessary game theory.
In other words; Bitcoin is secure and immutable BECAUSE it has a currency baked into the protocol, that is priced by the free market, whose value is inextricably linked to the security of the network by incentivizing each of the participants of the network (whether validators, judges, users, etc) economically.
It’s in everyone’s self (and therefore collective) interest to maintain the integrity of the ledger (micro) and network (macro).
It is probabilistically sound, and becomes more-so with time — this means it’s lindy compatible and is the most robust form of system you can have.
That’s the innovation — an autonomous network, that’s made up of participants at multiple layers, all with skin in the game.
Not “blockchain” or “DLT”.
The Limestone Analogy
When people get up and begin telling me about how they’re going to use the blockchain to solve supply chain, or whatever other (mostly ridiculous) idea they have, it reminds of someone who just discovered that limestone aggregate in concrete makes for better strength and better overall properties in concrete, so they then apply it to everything else:
- They put some limestone in their green smoothie
- On their avocado and toast
- In their latte
- As a back rub on their partner’s skin
- And even as fuel in their car
Why?
Because of course: it makes everything better!
….it’s preposterous.
And that kind of thinking can only come from people who have a thin veneer of an ideology that they’ve adopted, without either being able to understand, or even bothering to take the time to understand what’s actually going on.
Blockchain is a buzzword at best, and affinity scamming at worst.
As an ingredient alongside others, it can help facilitate the function of a very specific type of network, for a specific set of use cases, ie; censorship resistance for Bitcoin, as part of an open, decentralised, autonomous financial network.
In the next chapter, we’ll explore some of Bitcoin’s core principles, in “Bitcoin Basics”, and how (unlike ‘Blockchain’) Bitcoin has & continues to deliver on its original promise.
