In my previous post on blockchain technology I suggested that the impact of blockchain technology on society will be enormous. While there are a number of skeptics out there dismissing the potential impact out of hand, I would argue that criticising blockchain technology is akin to criticising the alphabet.
In its time the invention of the alphabet had a revolutionary impact on how humans communicate with each other and I think that the wonderful, beautiful simplicity of the alphabet is often underappreciated. I can hardly improve upon how E.H. Gombrich describes the foundation of the alphabet in “A Little History of the World” below:
“Isn’t that amazing. With twenty-six simple signs, each no more than a couple of squiggles, you can write down anything you like, be it wise or silly, angelic or wicked. It wasn’t anything like as easy for the ancient Egyptians with their hieroglyphics. Nor was it for the people who used the cuneiform script, for which they kept on inventing new signs that didn’t stand for single letter sounds, but for whole syllables or more. The idea that each sign might represent one sound, and that just twenty-six of those signs were all you needed to write every conceivable word, was a wholly new invention, one that can only have been made by people who did a lot of writing. Not just sacred texts and songs, but all sorts of letters, contracts and receipts.”
The Phoenicians, who invented the alphabet, were merchants and their craftmanship was revered and valued across the globe where they travelled and traded their wares. Many Phoenicians happily settled abroad at trading posts and they never felt completely cut off from home “because they could write letters to their friends in Tyre and Sidon, using the wonderfully simple script they invented, which we still use today.”
It is not denied that the alphabet has been used to communicate the wise, the silly, the angelic and the wicked over many centuries. Without the alphabet, Mein Kampf and Apartheid legislation may never have been written, but it would be foolish for anyone to blame the alphabet for such things. Similarly, there is no doubt that illicit goods such as weapons and drugs that have been traded for Bitcoin and there was famously a heist of over $30million of the cryptocurrency ether on the Ethereum platform (the volatility of the price of Bitcoin remains a concern for many too). There will be good and bad applications running on blockchain technology, but to criticise the technology itself is short-sighted.
There is an article published by the Harvard Business Review titled, The Truth About Blockchain, which discusses how blockchain is a foundational technology which has the potential to create new foundations for our economic and social systems. The potential impact of blockchain is not different to the impact of the alphabet, laying the foundations for the ordinary man to communicate (and transact) freely, and without intermediaries.
“… blockchain is not a “disruptive” technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum.”
Blockchain technology is the foundation for systems which are secure yet open, transparent yet private, powerful yet decentralised. Marc Andreessen, billionaire venture capitalist and author describes Why Bitcoin Matters in a fantastic article on the New York Times:
“Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”
In Don and Alex Tapscott’s book Blockchain Revolution they neatly describe how the impact goes far beyond the now super-wealthy Bitcoin speculators but to the immigrant who wants to send money home to his family:
“We believe the truth can set us free and distributed trust will profoundly affect people in all walks of life. Maybe you’re a consumer who wants to know where that hamburger meat really came from. Perhaps you’re an immigrant who’s sick of paying big fees to send money home to loved ones. Maybe you’re an aid worker who needs to identify land titles of landowners so you can rebuild their homes after an earthquake. Or a citizen fed up with the lack of transparency and accountability of political leaders. Or a user of social media who values your privacy and thinks all the data you generate might be worth something—to you. Even as we write, innovators are building blockchain-based applications that serve these ends. And they are just the beginning.”
Adrian Hope-Bailie from Ripple Labs describes here the impact of being able to move value between people in with simple, accessible, low-cost alternatives to the status quo at present:
“I think it’s difficult to envision at first, but when you start to see what that does to financial inclusion, what it does in terms of the economic impact for countries, where you are freeing up money that’s been locked between clearing and settlement systems—it has the potential to make a profound impact.
Imagine a small business at the end of a supply chain. Goods move up the chain, from the supplier to the wholesaler to the retailer to the end customer, who pays for the final product or service. The faster that value flows back down to the small business owner at the bottom, the bigger the impact on the little guy. That’s something everyone at Ripple Labs feels passionate about making happen.
Blockchain technology will produce several fly-by-night successes who may crash-and-burn and it will also unearth many wildly successful projects. Bitcoin’s market-cap is said to be more than Coca-Cola’s at $197billion at the moment here which is quite astounding. Even if the Bitcoin bubble bursts it will not detract from the potential of the foundational effect of blockchain technology. There is little dispute that the technology is safe, secure, open, decentralised and immutable.
In that respect, criticising blockchain technology itself is akin to criticising the alphabet.