1/ Some thoughts on this recent and popular bearish article about blockchains/cryptocurrency "Ten years in, nobody has come up with a use for blockchain" hackernoon.com/ten-years-in-n…
2/ First, it is one of the most intelligent, well-reasoned and thoughtful critiques I have read. I hope more like it is written (and please send me anything you've found in a similar vein).
3/ Second, the way he structured the post is potentially problematic if he's trying to argue that it's not a significant technological innovation.
4/ He just lists existing business models and business functions and why blockchain is not that much better than current solutions.
5/ If blockchain does end up being a big deal, it will be a "blue ocean" and create some new form of value, not just make existing forms of value more efficient.
6/ This is an imperfect analogy, but the article is like someone in 1994 writing a long article about why it's not that much better to read the NYT or WSJ on the internet as opposed to just reading the physical paper.
7/ It's true, but clearly misses the point about how the internet affected media.
8/ It did not make existing business models more effective, it created business models which no one had ever imagined. Facebook, Twitter, Snap, etc.
9/ or to give another imperfect analogy, cars did not make it easier to go the corner store, they restructured society by making Walmart and other superstores popular b/c it was possible to commute a few miles to do your shopping.
10/ Technological revolutions do not make the existing system more efficient, they subvert it and build a new one.
11/ Third, there is a structural similarity between blockchain/crypto projections and AI forecasts.
12/ There is one faction (represented in this article) that works with the tech day-to-day and is very knowledgeable about its current state which responds to forecasts by saying they are overhyped: the people writing them don't really understand the tech.
13/ The other faction is less involved in the day-to-day building of the tech and thinks the other side is missing the forest for the trees and lacks the imagination to see the full potential at scale.
14/ The reality is probably somewhere in between.
15/ The internet was not the panacea of freedom and disintermediation that it's strongest believers in the 90's forecast that it would be.
16/ Nor was it as insignificant as Krugman projected - "the Internet's impact on the economy has been no greater than the fax machine's."
17/ These quotes apply as usual: "Things are never as good or as bad as they seem." and "We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten."
18/ Fourth, cryptocurrency/blockchains are more of a cultural phenomenon than a technical one and so purely technical critiques like this one may somewhat miss the point.
19/ It's probably true that almost every proposed blockchain application could be solved using a public database with a public user interface.
20/ However, there is no social movement behind public databases. The religious elements of bitcoin/crypto (genesis block, mythical creator) are not incidental, they are essential to its popularity.
21/ Core developers are the college of cardinals, miners and hashrates are priests and prayers, and users are the congretation that worships through the shared rituals of the Ledger.
22/ Popular religions are not "technically sophisticated," but are influential beause they latch on to a need for a mythical strucure which gives order to a seemingly chaotic universe. The same may be true of blockchains and cryptocurrency.
23/ Just like religions, blockchains and crypto could be said to have incredible memetic fitness - they are very good at convincing people they are important, which actually makes them more important which makes it easier to convince a new wave of converts, ad infinitum.
24/ Said another way, if you built a successful religion around public databases, they would suddenly become much more influential and impactful even without technical innovation.
25/ This is not to say the article was not well thought out and good (it is) or that we aren't in a bubble (I don't know if we are or not).
26/ As always, thoughts, feedback and criticism are welcome and apprecciated.
