What are blockchains good for?
In this article we’ll try to understand the fundamental idea of what this technology is good for, but how blockchains are implemented or achieve these promises is out of the scope and left for future publications.
But before starting, how do we even figure out what any technology is good for?
Technologies are tools that enable previously impossible or unviable things… possible and or viable.
The created new possibilities have implications and those implications are what the new technologies end up being good for! And probably most importantly, such implications end up changing how we think about things and our lives, they create paradigm shifts.
Let’s see a concrete example, agriculture allows creating food from the ground, this implied that humanity for the first time in history did not had to constantly move from area to area in search of food and survival.
And this became a huge paradigm shift, from nomadic tribes to settlements, we were enabled to create civilisation. Just try to imagine what the conservatives of back then were thinking, why would they stop moving when for thousands of years they had to constantly move with survival depending on it. And in another hand the technologists and progressives back then probably having a really hard time trying to sell the idea of waiting for a whole season in the hope that food would literally appear magically and inexplicably from the ground.
Now for Blockchain, what it enables is that for when transacting between each other to be able to replace a third party or intermediary (human or an organisation) for a decentralised computer protocol that you can trust.
Why would you be able to trust on it and how it works is a topic for another article.
But the big implication of the replacement is that the medium to transact becomes cheap, incorruptible and free of direct manipulation.
And with this new contracts and truths we are able to unlock things like:
New financial products that before were simply unviable, like cross national micro lending.
We unlock the ability to create markets of inclusive participation and better performance because such markets are decentralised and the third party does not take big parts of the pie.
And we unlock the power to build decentralised governance for entire industries or domains, setting incentives in favour of well-behaved participants and with many properties like full transparency that were before practically impossible to have.
And in the same manner that the first farmers could probably not imagine everything that would change or unlock their newly found activity, we might still yet to discover what will forever change once blockchain has become the basis of new tools and solutions, and it is up to us to have an open mind and pioneer systems that help humanity step into a new era of prosperity and well-being.
Let us analyse again some examples:
When transacting currency the required middle man for the system to work were central banks, and arguably a limitation with this system is that it is the middle man that gets to decide how much currency to mint, affecting the economic lives of everyone for good or for bad. This has become actually the first and well-known application of blockchain, but most interesting not the only one.
In the case of artificial intelligence we might dare to say that there is a problem with not democratising the usage and accessibility to the great power that AI is. If the technology evolves rapidly within the hands of few it might create a treat at several levels. In another hand, through the process of democratisation we could end up creating a market where AI services can be freely and efficiently exchanged. A network of collaboration between AIs could also be created, maybe even opening the path to the emergence of a true benign singularity.
Actually, this is what Singularity Net is trying to accomplish.
Another example would be social media, where central services broker society’s thoughts, personal information and ability of free speech. Once more, something of such importance to the general public, that, conflict of interest easily appears for a central business that profits from them. Easy examples can be created for YouTube deciding on the policies that dictate the monetisation of videos of people whose livelihoods might depend on, or for Twitter and Facebook who get to decide who has access to the tools of free speech.
There has been attempts to replace these with protocols, but stronger incentives and better user experience have yet to be reached.
Finally, a not so spoken example would be online market places, where platforms that create enough network effects get to dictate high transaction costs, hindering both the consumer and the producer, which have a too strong dependency on the platform.
Maybe this is the industry that your protocol and your community gets to improve, or maybe it is another problem you might find that blockchain can impact.
There are plenty of other examples, from identity and trust management to decentralised accessible real state investing through NFTs, we are still discovering all the implications and applications for blockchain.
After reading all of this you might have more questions than answers, but I certainly hope that you now have increased your appetite for learning the hows and the whys, and of exploring with the community the new paradigm shifts that we have yet to discover. Feel free to contact me on Twitter to start a healthy discussion.
This is truly an exciting moment and I encourage you to join communities like the Cardano’s Catalyst project, or, to question which deficiencies and dangers exist in industries where trust, decentralisation and/or financial incentives are a strong factor.
Until the next one, have fun collaborating and building, cheers guys.