Blockchain’s implications may not yet be clear, but its impact will be inestimable

11 Sep 2022

The cryptoverse — and particularly the cryptographic magic embedded in the blockchain — represents one of the most profound advances in technology since the internet and smartphone. It will seep into all our lives within a few years and completely rewire entire industries.

I have been writing this crypto column for a few months now, and although I always read the comments on my column, I rarely choose to do battle with detractors, knowing full well that a public online spat never turns out well for anyone, and no one ever changes their mind. But the abyss between lovers and haters is vast, and I wonder why there is so little middle ground.

To be fair, almost all the comments that take issue with something I have written are polite and crisp, a far cry from the CryptoTwitter wars of insults and putdowns. The Twitter stuff is mainly internecine stuff, Bitcoin maxis hating on Ethereum warriors, Proof-of-Stakers hating on Proof-of-Workers. That sort of thing.

But my loyal correspondents come in what seems like only two flavours. They are: yeah, I agree and wish to add; or: this stuff is all bollocks and should be banned (or predicting that it will die soon and good riddance).

Profound advance

Why this yawning gap? From my perspective, the cryptoverse, and particularly the cryptographic magic embedded in the blockchain, represents one of the most profound advances in technology since the internet and smartphone. It is near tautological to me that it will seep into all 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 vast spectrum of endeavours, not just cryptocurrencies whose price movements grab most of the headlines. Or the over-reporting of scams and hacks — a tiny sliver of activity on the blockchain when compared with what happens in the real world. (Only 0.15% of transactions on the blockchain are illicit, according to a recent report by Chainalysis, compared with 5% in the real world.)

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

Dawn of the internet

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

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

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

The PC was easy to explain, even though most people thought it was a hobby for nerds at first. The internet was easy to explain, although most people thought that they would have little use for it. The smartphone was easy to explain, although most people did not foresee it becoming so central to our lives that we now spend hours per day doing one of many things presented on its screen.

Blockchain fog and superficial soft targets

But the blockchain is simply not that easy to explain. Neither is cryptography and what it does, why it is important and how it will affect our daily lives (other than some vague waffle about “security”). Worse, the industry has been painted in the lurid colours of fortunes made and lost, of huge wads of money stolen in seconds, of energy used and regulators roiled.

It is about infinitely more than that — those objections are merely the easy-to-grab spandrels of a new and disruptive force, they are superficial soft targets and low-hanging fruit that miss everything, usually printed by journalists who are unwilling to dig to the foundations and impacts 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 which have nothing to do with “currency”.

So I suggest this: sitting at the centre of civilisation 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 histories. We are defined, in many ways, by what we own, and what parts of that we choose to share or disclose. But until now, that ownership has been narrow and sclerotic. Sometimes hard to define and hard to secure.

Redefinition of ownership

Sweeping away the froth that one might read in the latest headline, blockchain is entirely redefining what it means to own something. To define the terms of ownership in an infinitely flexible number of ways. To securely take possession. To hold. To cede. To sell. It is a tool so new that its implications are not yet clear, but its impact will be inestimable.

If you are one of those who think the cryptoverse is all bollocks, I am sure that this column didn’t change your mind. But I am also pretty certain you will 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.

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South Africa

Profound advance

Dawn of the internet

Blockchain fog and superficial soft targets

Redefinition of ownership