A recent article on Medium denounced blockchain for its current flaws, not least of all its claims to trustlessness, summarily dismissing the technology as “crappy technology (and) a bad vision for the future” (in the article title no less).
How useful this wholesale dismissal of a potentially transformative, foundational technology transpires to be depends on where you stand on this debate. If you feel, as we do, that blockchain shows near-limitless promise to liberate humanity from the type of manipulation and oppression that centralisation always seems to favour, then a more reasoned analysis of the “crappy technology” argument might prove more enlightening.
That is, of course, unless you are happy with a “vision for the future” that is a digital retread of the aggressively hyper centralised mistakes and misappropriations of the past and present. (Us neither.)
The author makes it pretty clear where he stands on this issue: the problem is the article’s core argument falls apart – not on technological grounds, as the points are individually valid (if obvious and retreading old ground) – but on the grounds of basic human nature, heterodox economic principles and behavioural psychology (in other words, as our R&D has demonstrated, to understand and develop better blockchain requires an interdisciplinary approach). The author has with a kind of inverted, surgical precision neatly lined up all the arguments on each side of the debate, and then weighed in with a set of conclusions that (when seen in the appropriate context) actually argue in favour of his opposing position.
The article is written by Kai Stinchcombe, and whilst we are certainly not singling out this writer – he writes articulately and well, and it is worth giving his considered points more attention – his faulty reasoning is typical of a lot of misinformation and misunderstanding on all sides of the blockchain/crypto debate. For this reason, this article and its underlying assumptions, are worth deconstructing in some detail – otherwise, such reasoning will continue to contribute to a distorted notion of what blockchain is and what direction its future development aspires (or should aspire) to take.
Stinchcombe seems to be conflating cryptocurrencies with blockchain (a pretty obvious trap he should have known better than to fall into), while citing infamous instances of hackable code and smart contract loopholes, to arrive at the by-now-tired and frankly trite argument that goes something like this: “Trusting in a ‘trustless’ system leads to theft and hacking, and therefore such a system and the underlying technology is redundant and cannot ever find any useful purpose.”
This reductive argument only faintly rings true on the most superficial of levels: if that is the only argument against blockchain (and with current blockchains, agreed, it is an argument that is valid on many critical levels) then we need to find a way to develop people’s trust while continuing to develop the tech. The only way to do that is through scalability – not of the transfers per second (TPS) kind, but by promoting mainstream adoption.
“Trusting” in Proof-of-Engagement – not in Proof-of-Work
Stinchcombe unwittingly underscores the necessity for the safe, secure, immutable public adoption of blockchain as a pre-condition of its utility: he notes that on the dark web website, Silk Road, it is not the “trustless” payments system that creates user trust (with bitcoin simply being used to evade detection) but the user rating system that distinguishes a “trustworthy” (in so far as the definition can be said to apply in this line of e-business) drug dealer from an “untrustworthy” one. This function of bitcoin within the context of such an online transaction precisely underscores our point as well – though we are coming at it from a very different perspective than Stinchcombe.
As regards the Silk Road example – fine. We are in agreement. It then stands to reason – by Stinchcombe’s own inverted logic – that it is desirable to put the user rating system – identified by Stinchcombe himself as containing the core social elements of “trust” in this transaction (and therefore by default already containing value) – on blockchain as part of a proof-of-engagement (PoE) protocol. This is because by doing so it bolsters the blockchain miner’s PoE activities, meaning trust is redoubled many fold by public consensus as well as the immutability of the financial trade. (Throwing the metaphorical baby out with the bathwater is not exactly a great way to do R&D on any teething system or technology.)
Our DApp, called DECENTR, demonstrates in practice that this PoE paradigm is viable for precisely this kind of application and next-generation internet. Our tech achieves this by basing our algorithms on a radically-new application of cooperative-game theory. As a result, our DApp pretty much eliminates Stinchcombe’s (and others) concerns about current blockchain leading to (in Stinchcombe’s admittedly catchy phrasing) “Medieval blockchain” and “Somalia on purpose” – again, legitimate concerns with current blockchain, and ones we are working to iron out. Blockchain is only “Somalia on purpose” if you miss-apply it as a tool for wider public engagement and genuinely trustless social good: the only way to ensure malicious actors cannot be party to this misapplication (and are no longer motivated to try) is to get the technology right.
Fix Blockchain Tech… or “Fix” Human Nature
Decentralised tech needs to be as flexible as it is immutable: the choice is to either achieve this paradigm or, alternatively, fundamentally change human nature (and leave the tech as it is, in all its buggy and hackable glory). Why would it take a change in human nature? Because to realise all that has been claimed for the technology would necessitate that human greed be removed from the equation. At least it would require the removal of this primary human trait if blockchain were to ever deliver on the more overblown rhetoric attached to an imagined, egalitarian utopia that no serious developer would ever claim for the tech.
Clearly, “eliminating greed” is a rhetorical analogy (Communism tried to achieve exactly that and we saw how that experiment worked out). The point this analogy underscores is that the tech must accommodate this primary trait (as well as the wider palette of human foibles). Blockchain needs to be developed in line with how we as a society and as individuals seek to deploy the technology – and, sure, no one has really figured out any viable, large-scale public use cases yet. But that does not automatically mean the technology is redundant, and to jump to such a conclusion is reflexive folly of the most counterintuitive kind.
Part of the problem is blockchain’s high-profile development curve. It is unreasonable to judge blockchain (or any new technology, innovation or invention) until it has matured past its painful teething stage; in the case of blockchain, this pain has been redoubled because the only environment blockchain can be “tested” in is as an open public environment. Blockchain is an early-stage social and technological experiment of the scale and scope of the internet itself – and the internet took decades to get where it is today (which is actually not very far in terms of realising the technology’s true promise). Developing blockchain in such an open environment is akin to conducting an experiment to grow bacteria in an agar-filled Petri dish – but doing so on the side of a public highway at rush hour. It is not conducive to best scientific practice and, as a result, it is hardly surprising if initial outcomes fall short of collective expectations.
But blockchain developers are left with no choice: it is the nature of the beast. This exposes blockchain to a level of early-stage public scrutiny that has no historical precedent – and this is during what is essentially blockchain’s early- to mid-R&D phase. Elevating its reputed “failures” to the level of front page news (incremental successes do not make great media sound bites) whilst obfuscating the technology’s transformative potential achieves nothing. It is counterproductive, borderline hysterical, and plain bad science. To judge the “failures” of blockchain by the bitcoin debacle because a bunch of idiots who should have known better lost their shirts is a farce. To hype the fantasy-level egalitarianism that is oft claimed for the technology then have the same media decry its very existence when a digital token takes a dip in value is really the stuff of hyperbolic media frenzy and populist speculation rather than serious R&D.
Promoting “Trustless Greed” – Blockchain’s True Legacy
We need to maintain focus – and our nerves in the face of insensible opposition: correctly developed and deployed blockchain can and does bring greed to account, and hence the worst aspects of human nature, and the entities and organisations that are run – almost by definition – by the venal, the vain and the pathologically grasping. Stinchcombe (and others) is adamant that this is not the case with blockchain, and that it is in fact unnecessary to seek to use decentralised tech to cut out the middleman in this way, suggesting instead that “a credit union’s members elect its directors, and the transaction-processing revenue is divided up among the members”, and this in some way makes this a more trustworthy system than a workable trustless alternative.
Stinchcombe also seems to think crypto advocates are in it because they “prefer a deflationary monetary policy” and the solution is that “central bankers are appointed by elected leaders” – when it is the nature of fiat itself as an easily manipulated medium of exchange that is the problem blockchain seeks to solve, not how dishonest-by-default, agenda-driven central bankers are appointed.
The bottom line in any society – democratic or demagogic (you know who you are) – is this: trust and integrity are every time negated (or at the very least tempered) by greed and greed is what fuels capitalism: blockchain, when you get it right, creates an environment that promotes – for want of a better expression – “trustless greed”. Why blockchain continues to chip away at myriad creaking and corrupted, integrity-free legacy institutions that keep us all in check is because any centralised organisation or entity has to pretend it aspires to integrity when we all know this is a cruel and cynical, manipulative farce.
Blockchain, on the other hand, accepts this inherent, instinctive individual and societal compulsion and works with it: it does not try to change human nature because it doesn’t need to. It underwrites it. Trustless digital payments on blockchain can only ever underscore so-called “trusted transactions” online in the same way as fiat given by me to a shopkeeper for a real-world transaction underscores the level of trust I have in his genuine desire to sell me a quart of vodka that he has not cut with turpentine.
Fundamentally, that is all the tech is supposed to do.
As our R&D has demonstrated, blockchain’s true strength is that it fulfils the role of an immutable middleman; a safe and secure way to exchange digital currency but only as part of a decentralised, democratic system that views all data – and not just digital trades – as containing assignable, payable and tradable value. Anyone who has misread blockchain – and the increasingly devalued digital tokens it spawns – as purporting to be endemically a great social – or even financial – equaliser has simply redoubled the point (and opportunity) they are missing. Blockchain’s true value exclusively lies in mainstream public adoption whereby its open source nature will by default ensure wider public consensus and hence security and utility, creating data-as-a-value-store as the fundamental building block for a truly decentralised and democratic data economy.
Or not. Does blockchain need radical change to fulfill the potential we are describing? Sure. No one is disputing that, and it is why we are building the tech we are building. Is it a perfect system? No. But human nature isn’t either: blockchain’s true strength, once debugged and reoriented towards public adoption (and using less gas), is accommodating this fact.
Feel free to get in touch with me for more DECENTR Project details at [email protected]