As usual, I start my post apologizing for my bad English.
Since I am working into "Emerging technologies" area, often I read this articles about steemit "economy", as well about articles about the "blockchain economy" and I realize , under the pure technology point of view, my feeling is pretty different.
First, I expose my bias. I actually worked with a project deploying a blockchain (the IBM blockchain) in finance some months ago. So I see the advantages in comparison with other transactional systems, like CICS or Tuxedo to do an example, or together with it. I see a blockchain as a very cheap transactional system, compared with other ones.
I suspect people talking about "blockchain economy" is not talking about the technology itself. Sure, before of blockchain John Doe had a little chance to deploy a mainframe at home, neither to use one for its purposes. Nevertheless, in the Gartner's hype cycle we have "microdatacenter" issue, so it was anyhow a question of time, and John Doe would have been capable to host some wide scale transactional system.
The point of blockchain is not technological. Anyone could deploy a transactional system and offer it as a service. The problem is not technology itself, the point is about "who is doing what, and why".
We must be honest: without digital currencies most of common users would have found a distributed transactional system (with a public ledger), as much interesting as learning Klingon. Which is funny, at least.
So the reason why blockchain entered immediately into the hype was very easy: the economy. The first example of it, Bitcoin, seemed fair to everyone. Seemed "ethic". And the reason people is looking for more ethics in economy is that when it comes to ethics economy is failing: if there was no demand, supply would have failed, right? If there is demand of ethics into economy, is because of some kind of scarcity in this field.
I exit my comfort zone and I try to guess the original ethic of economy. What is the etic behind an economy, then a market, then a currency?
Why you build an economy?
Well, if you are a stand-alone specie, like Tigers, you don't . You don't cooperate, because you don't experience any scarcity, and you don't feel so much risks. I mean, if you are a Tiger you live alone, you are self sufficient , and the only predator is, more or less, this strange monkey with no fur. Which is also food, sometimes.
So you do not need to cooperate , if you want to achieve safety and abundance.
If you are a wolf then you are a little weaker, so better to be a pack, so better to cooperate. Then you need to share the food you hunt together, so the aim of economy is to make cooperation to pay for everybody. Let's take this as an example:
- You build an economy to make cooperation to pay for everybody.
Then when you start to have a strict job expertise, so one is a farmer and the other is doing shoes, you want the farmer to have shoes and the other to have food, then you need a market. So you need to exchange. To put everything in common is not enough. You need to share the exceeding resources, in order to have the whole community to have a little advantage from everyone else's job.
- You build a market in order to allow everyone to contribute in its own way.
Then the point comes with quantity, which means, how many shoes you must supply to be entitled to have enough food. So the best tool known to fix this issue is "money".
- You do currency to set a proper balance between the cost of supply and the value of demand.
So, the ethics of economy is working until everyone can get what they need to live a certain amount of time, at the cost of spending this time to provide supply to fulfil some other's demand.
And this is what is failing now: people is allowed to cooperate, this is not the issue. People is allowed to contribute its own way, so this is not an issue. When it comes to balance costs and prices, the system is failing. Blatantly failing. If we have unemployed people, by example, this is a failure.
What is failing is the 3rd layer: money.
Regardless of the reason this is failing (there are many theories), it is evident "money" is failing. And this is why Bitcoin has hit the culture. We hope, basically, a new currency may fail "a bit less". Which means, we hope a new money is going to fix what is wrong into the "old" one.
Now, although there are many views, most of time what is wrong with the old currency is that:
- a few people is allowed to grow a terrible amount of it , making it unavailable for others
- when this happens, there is no compensation for the people owning the rest of the money
why this is not happening with Bitcoin, Litecoin and others? Mostly because they are terribly (=non polynomial) hard to mine, and there is a fixed amount of it. The result is , basically, if a few people (i.e. the world infamous 1%) would be able to get 99% of bitcoin, the remaining 1% of money would grow so much in value that the 99% of people would be compensated.
And this happens just because there is a limited amount of it, regardless of demand. There is a higher limit.
In short, the hope for "cryptocoins being the next currencies" could be translated to "the hope only a fixed amount of money being printed".
Here is why I don't think it is about technology: basically, the same job could be done just making the amount of money printed as a constant. To say, just write it into the constitution: "the maximal amount of money the government is allowed to print is X dollars/euro/whatever".
In general, the cryptocurrency is not fulfilling any technological gap: ATM, E-commerce, E-payments, could do the same in terms of service. The issue is: a cryptocurrency is not being print every time the 1% is collecting too much money (and keeping them unavailable).
Yet this request could be done to the government too: please don't print more money.
It is a political request.
The reason cryptocurrencies are that popular is, they are seen as a solution for a political request which no government cares about.
It is not about technology. It is not about enabling people to do this and that. It is about: if there is scarcity of BitCoin because someone owns 99% of them, as a result the remaining ones would grow in value. So there is some automatic compensation for being the 99% of poor people . This could be achieved without all that technology: in the past, the gold standard was putting some hard limit to the amount of money.
This is why I am pretty skeptic when I read people talking about the new cryptocurrencies as a solution "because of technology". This is not true. Is not the technology behind of it: the issue is about the political achievement.
Could it happen a technology alone is able to achieve a political agenda? I think not. Sure, you cannot have more than 20999999.9769 BTC. But, imagine this was the new currency: how many blockchains you may have , working in parallel? So in theory, if in the future cryptocurrencies will be the new currency, it will not mean the government cannot add a second one , "printing money".
There is no technology which can solve a political issue. Sure, technology may change the issue, may mitigate the impacts, it may dramatically change costs : nevertheless, if the problem is a decision like "stop printing more money" , people needs to do politics in order to enforce this policy.
Sure, a blockchain may solve a lot of problems. Unicity of transactions, by example. This is good, but... really, there was no alternative before? Are you allowed to print money at home, just because there is no cryptocurrency ongoing? Are you allowed to register a domain which is assigned already?
All of the achievements of a blockchain are very interesting when it comes to industry, finance and others. As a professional, I would say, "finally transactional systems got cheap(er)". Good. Nevertheless, I don't see any of this key features being the very reasons behind mass adoption. The reasons are:
- Transactions with normal banks are too expensive.
- Uniqueness are only granted by central authorities, which are expensive and abusive.
- Doing a business with normal money pays a lot of taxes.
- We are not happy about our central bank's job.
- There is no border fee between countries when using cryptocurrency.
- There is only a limited amount of it.
- We (some of us) can understand better what is behind it.
- ...
all of them are political issues. The government could solve them quite easily: behind the adoption of blockchain cryptocurrencies, there is a political issue.
Adopters are asking a technology to implement a political agenda.
I am sorry to say, I find very unlikely a technology by itself will implement a political agenda.Technology drives economy, which somehow impacts on politics, but politicians will never do what people wants just because of a new economy due to a new technology.
Any hope from the people must match with regulator's will. If not, the regulator will work to adapt the new economy to the old agenda. It happened already.
I find the blockchain a very interesting invention, and by the way a very good chance in the consulting area. I am not sure it will achieve such a political agenda, until the agenda is not being push using politics itself.
It may impact the finance like an asteroid, sure: until you aren't sure who is the dinosaur, I am not convinced hope in asteroids is a good political agenda. Banks are experimenting both blockchains and cryptocurrencies right now, which means they aren't scared of it. Not as much I would expect when a dinosaur realizes there is an asteroid in the sky.
It may happen, the dinosaur is you.
