Or do you still think blockchains got no use?
Technology reflects psycho
It’s been hard times for almost all crypto this year. Blockchain technologies were almost buried. No need to select any particular one, it doesn’t matter much for this post. I use Ethereum as an example. Giving no preferences, I just know it best.
So they say my beloved Ethereum is centralized, it’s dapps has no users and it’s attempt to deliver a world computer has failed. Sounds like blockchains are not perfect. Hm. But have we seen a tech like this before? Well, it takes time to grow from 0 to 1. They say blockchains got no use, I’d say we need to use our imagination better.
In this post I would like to justify blockchains by giving yet another perspective on crypto industry. The perspective of world pains.
Just like consumer products reflect our psycho (best described in The System of Objects by Jean Baudrillard) I believe the same way our psycho determines technologies that we use. The world is changing and the Internet (as well as any other technology) is changing accordingly — reflecting our needs. Thus the success of a technology is determined by how well it is aligned with the way we think.
In order to show that blockchain technology is aligned perfectly with the current world’s mindset I’d like to identify some of the most acute world’s pains and show how blockchains can help.
While there are many amazing blockchain solutions. There is Golem for decentralized computation. There is Maker DAO which despite all criticism is still working after ETH-USD pair dropped so low. There is FOAM — mind-blowing decentralized geo-positioning system. And there is Augur — the world’s first assassination platform… Of course not — it is a part of Ethereum criticism too. Actually Augur is the first of its kind prediction market and it is amazing.
These projects are completely novel and with far-reaching benefits, but they are hard to understand. It is hard to predict their future and almost impossible to draw parallels with something which already exists, thus making it harder to see the significance of blockchain technology.
Let’s compare something simpler
You’ve probably heard of a guy (Alex) who earned 1mln dollars for his college by selling pixels back in 2005. The idea was to have a web page with 1000×1000 pixels field where anybody could buy 1 pixel for 1 dollar and advertise. Alex succeeded, sold all his pixels and the project did became a part of the Internet history as was advertised.
Almost the same project is now live on Ethereum. It is called The Million Ether Homepage (MEH). It has the same 1000×1000 pixels filed. But unlike the original it also has rent functionality and ability to sell pixels through a third party exchange. The price starts with $0.01 per pixel, and doubles every 10% of pixels sold.
These two projects are very similar and easy to compare. Let’s imagine now that the original project has never existed. And Peter (author of MEH) is doing just the same thing as Alex did 13 years ago. We’ll see how hard it is to succeed with the old tech now and how blockchain can help.
Next I will identify 3 of the most acute world’s pains. For each pain I’ll show hopes which are now on the horizon thanks to blockchains. And then compare business solutions with respect to their ability to address the pains.
The first pain is trust. All of us are products now. Our data and our attention are more valuable than ever. And there are so many new ways to get attention and to collect our data. And there will be more. 90% of all data was created in the last 2 years. I see no reason for this tendency to change.
With data becoming so valuable it’s not enough to just trust some company and it’s software to treat it right. We want to be 100% sure what our programs do. We are deleting Facebook and leaving Google Chrome just because of that.
Trust is our pain. And we need software we can trust.
Blockchains give us hope for just that. Ethereum’s core feature is deterministic (read trusted) execution of smart contracts. The code of smart contract is open, you can see exactly what it is doing and you know that no other code will be run.
Maybe it sounds humble, but it is a huge thing. Huge because now businesses are able to develop solutions meeting our current demands — software we can trust.
Looking at our pixel map project. It’s main functionality is buying pixels. What would you prefer:
- Pay with your credit card to some random Russian h̶a̶c̶k̶e̶r̶ developer promising you to deliver pixels with responsibly “insured” with a 21 page user agreement valid in an unreachable jurisdiction. …or…
- Look at the publicly available smart contract code. See what it’s functions exactly do. Try to run it on testnet, try to break it. Make sure the contract is secure. Only then send money to the main net contract and get your pixels in the same transaction.
Ok, the second option is a bit from a perfect world. Most users will skip the code the same way they skip every user agreement they meet. But it illustrates very well fundamental technological advantage — no matter if you do your research or not — there is at least a possibility to see how exactly your money move.
For a small project — this is a line between success and failure now. Making a project like MEH closed sourced nowadays wouldn’t satisfy the world’s need for trust. It is Ethereum that makes the project up-to-date.
MEH is a very small step. But it shows that businesses are now able to offer solutions which can meet the demand for trust.
Scaling up imagine you could control the amount of data you allow Facebook and Google to access to (guaranteed by code, not just worlds). Or imagine a research lab getting access to somebody’s medical data without revealing their names. The demand for trust is huge and solutions will continue to emerge.
Yes, trust again. And data again. But not your data, this time — their data.
Just like our software, most organizations or entities we deal with (banks, governments, corporations, media, etc.) are black boxes too. Do exchanges manipulate markets? Do governments forge election results? Is this real news or Fake news™? We cannot be sure.
But we want to be sure. Trust is our pain. And to the same extent as we want trusted software we want trusted organizations.
While we cannot put every organization on code (yet) we can make them transparent. Blockchains now let us build systems with 100% transparency and history stored forever. If trust cannot be built in with code, it can be built over time through perfect transparency. The more history records we see, the more trustworthy an organization or project becomes.
Going back to our project. 13 years ago this genius guy Alex earned money for college. Today Peter, not so genius maybe, but probably more altruistic is giving away 80% of his income to charities (I can call Peter whatever I want because Peter is me).
What would you prefer: a tweet on spending $800k on charity or a complete record of all charity transactions kept by a trusted third party?
In MEH 80% of income is automatically stored in a special charity vault inside smart contract. These funds are then forwarded to a list of charities accepting Ether. Maximum income of the project is $1mln. If the goal is reached $800k will be donated to charities. All transactions can be tracked on chain (plus a Google spreadsheet file for convenience).
Sure with 13-years old technology charity transfers could be confirmed too. Charities could announce publicly they’d received funds. But now it is much easier, as transparency is available out-of-the-box, as a by-product of how Ethereum works making it universal source of truth. It is now possible to make tiny donations and keep publicly available record of them.
It is possible to make organizations transparent without blockchains. It’s just those who owns data were and are not interested. With Ethereum bureaucracy can be moved on chain very easily. The pressure is higher now. There are less arguments no to do it. I personally see no serious arguments not to put real estate registry on chain for instance.
Next stop — digital freedom.
Decentralization is what societies benefit the most from throughout the history (Guns, Germs, and Steel by Jared Diamond). Decentralization means competition, competition means progress. More importantly decentralization means choice and choice means freedom.
Google’s ex-CEO Eric Schmidt says the internet will split in two by 2028. To me it sounds a bit optimistic. As China, Syria, Iran, Vietnam, Egypt and many more are already splitting. In Russia Telegram, LinkedIn, PornHub, and the new design of Reddit are not available (try figure out the criteria). In March 2014 When Turkish government blocked Twitter, VPN provider Hotspot Shield acquired 2 mln new users in just 48 hours.
…because above all we need freedom.
Hope for freedom is what sells Blockchains best. Thanks to blockchains it is the first time in history we can build world-wide decentralized systems with economic incentives strong enough to keep these systems alive for a very long time (forever maybe?).
Blockchains provide availability, sustainability and choice out-of-the-box. Businesses are now able to build solutions which inherit these properties by default. Meeting the demand for freedom.
MEH for example gives you freedom to chose the way you want to interact with it:
- You can chose which parts of the project you want to use. The web page is just a representation of what is being executed on the blockchain. You can copy it and make your own mirror (a 3d-version, an animated history version, nsfw-free or nsfw-only versions).
- Each 10×10 pixels block is a standard token (ERC721). It means that you can chose whether to buy and sell pixels on the platform or allocate it on a third party exchange. Or you can create an alternative rent marketplace, for example.
- You can even copy the whole project and create your own ad platform.
There is no way to create these properties using 13 years old technology.
Freedom of selling pixels the way you want may not sound so groundbreaking and may not be a huge step towards your personal freedom. But it is a step. And the road is long and fruitful.
Imagine you could “unplug” yourself from one government and plug into another. There are many articles provisioning the whole governments on Ethereum. But got too excited. Let’s imagine some down-to-earth examples…
Move your favorites from one music streaming service to another, use your credit card history to get discount at airbnb without revealing it, migrate your RPG-character from one game to another keeping experience points and converting inventory items to its equivalents.
There is a huge room of innovation. All thanks to the fact that blockchains allow businesses to meet the demand of freedom.
They say there are hacks, centralization issues, bugs. But please, it is so very early days. 2–3 years is an infant age for almost anything. Sure there is a heap of problems. But technology is here, and businesses are now starting to compete. Give them time to learn how to use the technology right.
In the beginning I accused journalists of lack of imagination. I do lack imagination too. After all I’m trying to make money by copying an existing project. I cannot imagine all possible solutions blockchains are enabling. And I do see problems too. But I’m sure the problems will be solved and solutions are doomed to emerge. Because the world is waiting for it and demand is high.
…If you liked the article, please consider buying some of my best and freshest pixels.