Blockchain’s implications may not be clear yet, but I…

I’ve been writing this crypto column for a few months now, and while I always read the comments on my column, I rarely choose to fight critics, knowing that a public rant never ends well for anyone, and no one ever changes their mind. But the gulf between lovers and haters is wide, and I wonder why there is so little in between.

To be fair, almost all of the comments that take issue with something I’ve written are polite and pointed, a far cry from the CryptoTwitter wars of insults and put-downs. The Twitter stuff is mainly internal stuff, Bitcoin maxis hating on Ethereum warriors, Proof-of-Stakers hating on Proof-of-Workers. That kind of thing.

But my loyal correspondents come in what seem like only two flavors. They are: yes, I agree and would like to add; or: all this is nonsense and should be banned (or predict it will die soon and good riddance).

Great progress

Why this gaping gap? From my perspective, the cryptoverse, and in particular the cryptographic magic embedded in the blockchain, represents one of the most profound advances in technology since the internet and the smartphone. It’s almost tautological to me that it will seep into all of our lives within a few years and completely rewire entire industries.

Its promise and capabilities are unprecedented and offer a new tool for society across a wide range of endeavors, not just cryptocurrencies whose price movements grab most of the headlines. Or the over-reporting of fraud and hacks – a tiny sliver of activity on the blockchain compared to what happens in the real world. (Only 0.15% of transactions on the blockchain are illegal, according to a recent report by Chainalysis, compared to 5% in the real world.)

Perhaps the wizards who built the first blockchain, Satoshi Nakamoto and his colleagues, were simply bad at communicating how big this idea is. But the nine-page white paper written by him (her or them) is articulate and persuasive and concise. As have many others since, especially Ethereum’s Vitalik Buterin and his widely read posts that often venture into the territories of society and creativity and economics and the value of public goods.

Dawn of the internet

Remember when the internet first appeared in our peripheral vision? Not many noticed either, including Microsoft who ignored it until 1995 when Bill Gates wrote his famous internal “tidal wave” memo, completely turning his huge ship around to sail the waves of the Internet and the Explorer browser, calling it the “single most important development since the PC”.

And the first smartphone, the BlackBerry. I remember people saying, why would I want to get my emails on a small screen with a small keyboard? And then Apple came along and built a whole ecosystem, and people finally got it.

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But the blockchain’s position in this pantheon of technology’s great societal transformers still seems to have few believers and a great many detractors. As I do research for a new book on the subject, I think I know why.

The PC was easy to explain, although most people thought it was a hobby for geeks at first. The Internet was easy to explain, although most people thought they would have little use for it. The smartphone was easy to explain, although most people didn’t foresee it becoming so central to our lives that we now spend hours a day doing one of many things displayed on the screen.

Blockchain fog and superficial soft targets

But the blockchain is simply not that easy to explain. Nor is cryptography and what it does, why it matters and how it will affect our everyday lives (other than some vague waffle about “security”). Worse, the industry has been painted in the lurid colors of fortunes made and lost, of vast sums of money stolen in seconds, of energy wasted and regulators failed.

It’s about infinitely more than that – these objections are just the easy-to-grab grips of a new and disruptive force, they’re superficial soft targets and low-hanging fruit that misses the mark, usually printed by journalists unwilling to dig to the basis and effects of this remarkable new invention. There is still, after 13 years of media coverage, confusion over the difference between blockchain, cryptocurrencies and the many crypto tokens that have nothing to do with “currency”.

So I propose this: Sitting at the center of civilization for millennia is human ownership. Ownership of resources. Common goods. Money. Shelter, clothing, land, animals, even culture. Ownership of ourselves, our bodies, our identities, our history. We are defined in many ways by what we own, and which parts of it we choose to share or reveal. But until now that ownership has been narrow and sclerotic. Sometimes hard to define and hard to secure.

Redefining ownership

By sweeping away the froth that can be read in the last headline, blockchain completely redefines what it means to own something. Defining the terms of ownership in an infinitely flexible number of ways. To secure possession. To hold. To refrain. To sell. It is a tool so new that its implications are not yet clear, but its impact will be invaluable.

If you’re one of those people who think crypto-overseas is just bullshit, I’m sure this column didn’t change your mind. But I’m also pretty sure you’ll be like one of those people who thought the internet would never affect you. DM

Steven Boykey Sidley is Professor of Practice at JBS, University of Johannesburg.