Top comment at the bottom of the article:
I completely agree with much of what you wrote here. I’d like to point out a couple things:
First, in regards to “There is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast.” There is in fact at least one such person: me. In 2010 I was looking for a payment system which did not have any possibility for chargebacks. It turns out that bitcoin is GREAT for that, and I became a blockchain enthusiast as a result.
The ugly truth about blockchain is that it is immensely useful, but only when you are in some way trying to circumvent an authority of some sort. In my case, I wanted to take payments for digital goods without losing any to chargebacks. It’s also great for sending money to Venezuela (circumventing the authority of the government of Venezuela, which would really rather you not). It’s great for raising money for projects (ICOs are really about circumventing various regulatory authorities who make that difficult). It’s great for buying drugs, taking payment for ransomware, and any number of terrible illegal things related to human trafficking, money laundering, etc.
Frankly, the day that significant trading of derivatives (gold futures, oil futures, options, etc) starts happening on blockchain, I expect a bubble that will make previous crypto bubbles look tiny in comparison. This is not because blockchain is an easier way to trade these contracts! It is because some percentage of rich traders would like to do anonymous trading and avoid pesky laws about paying taxes on trading profits and not doing insider trading.
I sum it up like this: are you trying to do something with money that requires avoiding an authority somewhere? If not, there is a better technical solution than blockchain. That does NOT mean that what you are doing is illegal for you (it’s perfectly legal for me to send money to Venezuela). It just means that some authority somewhere doesn’t like what you are doing.
Blockchain is inherently in opposition to governmental control of the world of finance. The only reason governments aren’t more antagonistic towards blockchain is that they don’t truly understand how dangerous it is. I wrote at length about this back in 2013 in an article called “Bitcoin’s Dystopian Future”:
Lastly, I believe the opposite of a futurist is a troglodyte. “a person who is regarded as being deliberately old-fashioned.” I sometimes use that word in reference to myself.
Thanks for your thoughtful blog post.
Also, you have to admire the authors optimism with this line:
"Prefer a deflationary monetary policy? Central bankers are appointed by elected leaders. Want to make elections more secure and democratic? Help write open source voting software, go out and register voters, or volunteer as an election observer here or abroad!"
Yes, well, Mish's eutopia of abolished central banking realised or not, let me ask two damming questions:
-> Can we ever truly abolish the unconscious inclination of the populous to treat the debt of a financial institution (that co-owns the payment system) or a government (with a monopoly on the use of force against that payment system) as money itself?
-> Can we ever truly abolish the unconscious inclination of the populous to treat the government as an infinitely competent authority that can extinguish all life's problems away by printing money or "borrowing" it into existence?
You cannot force reason onto people, we are as a species emotional and impulsive to the core. Only the existence of something that utterly transcends authority can constrain the natural powers that be from exploiting this emotional impulsivity.
And that is the existence of a transnational, fully anonymized and decentralized peer-to-peer digital monetary system. That, and only that, will truly bring an end to the inflationary theft of government-banking institutional order.
As to the bigger, more philosophical question of trust, in light of what I just said, it's just another manifestation of the fallacy of elimination of error by centralisation. Taleb has written endlessly about this.
If you try to eliminate all of those small informationally-rich errors of any given decentralized system, say a free market for example, by centralizing that system, you only create the illusion of an error free system.
What actually happens is all those errors are consolidated into one ginormous error that manifests itself intermittently over the long term.
So you can't always trust people. Occasionally they abuse that trust. So everyone trusts the banks and the government instead. What happens? Society is weakened at the end of every short term debt cycle (~15 years), and collapses at the end of every long term debt cycle (~90 years).
That's what you get for living in a society where the individual has no credibility (trust) and the monolithic institution has infinite credibility (trust).
Let me guess, we should trust govt. Who's working on the alternative to the current debt-based system when it implodes in the next few years?