Just one year ago, blockchain technologies were largely unknown to 99% of the public, let alone adopted by the business world. Even though much of society is still completely in the dark when it comes to blockchain and the ways in which it will affect society moving forward, one thing has become abundantly clear: blockchain is quite the trending buzzword lately.
In 2016, you would have been hard-pressed to find more than a few articles in major publications discussing blockchain. Today however, it seems like you can’t go a few days without coming across some new article discussing something blockchain related. It’s amazing what profits can do to the notoriety of a product…
For those who have been in the blockchain space up for to a year, if not longer, it’s been incredibly exciting to not only watch the crazy valuation increases of different projects, especially compared to other asset classes, but equally amazing to see people genuinely interested in how blockchain can transform society at some very fundamental levels. While making money is extremely stimulating and no doubt plays a major role in the amplified interest in blockchain, such as Ethereum being up over 2000% on the year, the concept of a better tomorrow through proper implementation of blockchain technology was always at the motivational heart of a large portion of early users, investors, and developers.
It’s undeniable that blockchain technologies have come a long long way since Satoshi’s original white paper on Bitcoin, which surfaced all the way back in October 2008. However, with blockchain technologies increasingly garnering mainstream attention amongst the elite businesses, governments and banks of the world, the question becomes what does the future roadmap look like for blockchain technologies, specifically as it relates to the convergence of its roots with the new voices in the space?
To answer that, we must look at the core philosophical underpinnings that are driving interest in blockchain technology, which in my opinion lies in a combination of two competing visions that act as forces on the development of the ecosystem: organization/control vs. freedom/anarchy. Money affects both sides of the equation, but for completely different reasons. By understanding the motives driving the space, we can start to imagine how the future might look, as well as the hurdles that will inevitably have to be crossed in order for success to be achieved.
While no one is exactly sure who started Bitcoin and why they created it, one of the primary reasons that many early adopters have latched onto is the idea that blockchain technology has the ability to create a new financial paradigm, which offers the common man increased freedom from central control. In particular, blockchain is revered for the potential it has to break up the current monopoly that central banks and governments have over the issuance of money and the exchange of money.
With just a little independent research, it’s not very hard to see that a small network of people/interests, such as the Bilderberg Group, have come to control a variety of the most powerful positions within governments, corporations and institutions across the planet. When the people within this network forgo their sovereignty from one another and forget the people for whom they are supposed to represent, it’s often because they have morphed into a collective with an agenda of their own, which more often than not consists of consolidating power for its own members. This is particularly true economically, as the current wealth gap according to Oxfam International shows rather clear how a few people have a majority ownership over most of the resources on the planet. These studies don’t even take into account some major families and institutions that have so much wealth and power that they are excluded from the report.
It’s not necessarily that wealth inequality in and of itself is the problem, because it makes sense to reward those who work hard and not to reward those who don’t. The real problem lies in the fact that the system has certain economic mechanisms within it — such as central banks with their monopolization over currency, and governments with their monopolization over control — that give certain people or networks an unfair advantage in both the market place and in governmental decision-making. The goal is not to take money from the rich and redistribute it to the poor, but instead to create a system that is fair for all, letting the chips fall where they may. Would a truly free market really bring this kind of wealth inequality? I would argue no.
This is where Bitcoin comes into play, a new financial paradigm that claims to be fair for all. Since the Bitcoin blockchain operates using a new digital currency that is separate from any central bank controlled fiat currency, as well as acting as a gateway for peer-to-peer transfers that bypass the need for third party middlemen or government regulators to get involved and take a cut, it’s pretty clear why blockchain is so popular amongst libertarians, anarchists, and free market lovers. Blockchain technology like Bitcoin truly has the ability to decentralize power within the world through the implementation of a level financial playing field.
In many ways, people of all philosophical beliefs, including those on the left, should start to seriously question whether or not it’s okay for third-party entities, such as governments or central banks, to centrally control economies as well as siphon off value from transactions, whether that be through taxes or regulatory control. As information is traveling at incredible velocities and technology is increasing at a rapid pace, it should come as no surprise that a new decentralized payment system emerged that is global in nature, uses only its digital unit of exchange, and allows for value to be shared between people freely without the need for trust. Just as the Internet disrupted the speed at which information/communication flows, blockchain can equally disrupt the way value is stored and transferred.
The question that really needs to be asked is whether or not society has advanced to a point where governments no longer have the rights to tax whatever they want, where regulators no longer have the authority to manage the markets, and where central banks no longer have the privilege of money/credit creation monopolies? This is a question that everyone should ponder as society moves into a technological future. In fact, whether some people are ready to discuss it or not, this question is already being pushed to the forefront of conversation, as many believers in blockchain are envisioning and working towards a world where people are able to transact without restrictions or the need for “trusted third parties.” This force is not disappearing from the blockchain space anytime soon, so taking it into consideration when thinking about the future is of the utmost importance.
Despite there being a large presence of blockchain supporters due to the potential freedom the decentralization brings, there is an emerging voice in the community that’s working towards more formal organization and control in the blockchain space. While there are many legitimate cases to be made for potential regulation of the blockchain space, one of the fundamental motives for such an attitude is achieving wide-scale mainstream adoption.
The philosophical underpinnings of such a motivation are rooted in the vision of taking the current financial system and putting it onto a blockchain. Most of these people fundamentally don’t see an ethical dilemma in bettering the current financial system through blockchain technologies. This comes in stark opposition to those in the freedom/anarchy movement who want to completely disrupt the current power structure and create a new ecosystem on blockchain. These viewpoints come from fundamentally different philosophical predispositions and are important to take into account when thinking about the future of blockchain. This is not to say one is right and one is wrong, but instead, that both viewpoints need to be explored for the positives and negatives they each respectively possess.
While I personally advocate for free markets and would like to see a paradigm shift in the way the world works, I still see value in bringing some organization and structure to the cryptocurrency space, as well as the practicality of salvaging much of the current system. Having some constraints/order within the space, as well as some continuity from the current system could turn out to be a very beneficial thing. While having freedom is key in life, having control of your surroundings is also important to bringing peace.
For example, there is a case to be made that the current uncapped ICO environment is endangering the whole blockchain space due to excessive funds being raised for undeveloped products, which results in overvaluations and financial bubbles. It’s a case where hype outpaces development, which can be dangerous for an emerging space. Another area for concern is the current pump and dumps happening on a variety of coins in the market, some of which don’t even provide any unique value to users. It’s not to say that the answer to these problems is to create enforceable rules, but it should be noted that they are making the market extremely volatile, which is stunting the rate of adoption amongst the more conservative public. How can people take a currency or asset seriously if it fluctuates in value all the time? Essentially, this uncapped environment is fermenting reasons for regulators like the SEC to get involved in some capacity to “protect investors.”
Another interesting case study is that of Bitcoin, which is currently struggling to reach its potential and possibly even at risk of self-implosion, although that might be the result of fear-mongering. While there are many variables in the ongoing development of Bitcoin, it does seem that the lack of leadership, organization, and consensus within the hierarchy of power that runs the Bitcoin project is what’s keeping it from scaling to a wider audience. This comes in contrast to Ethereum, which has a much clearer power structure in place headed by Vitalik Buterin. Again, this is not to say that one is better than the other, because having a leader sometimes leads to great success, while other times it can destroy the project or make the project cater solely to the interests of the leader.
We see this debate raging now as many in the Bitcoin community are angry over Bitcoin Core/Blockstream’s seemingly cornering control over Bitcoin, as well as many in Ethereum who are upset that the Ethereum Foundation is centrally controlling the Ethereum Project, especially when they switch to POS. However, the other sides argue that they are not the sole leaders, as well as the argument that they have everyone’s best interest in mind.
The reality is that blockchain technologies will never go mainstream unless some central organization comes into play, as society has a deep-rooted fear of volatility. Let’s face the fact that the existing system will and must get involved if it is to have a bright future, which includes governments, banks, and corporations. This is where the current power resides, and it’s naïve to think that they will just handover control of the financial system to this new blockchain world. They are going to fight tooth and nail to use the blockchain space to further their own power and cater to their own interests, which could include private blockchains, the popularization of projects they approve of, and even the tracking over everything in society through blockchain, alas George Orwell’s 1984. While some might not like this, it’s very much a possible scenario that needs to be entertained by everyone.
At this point, it shouldn’t really be debatable whether or not organization/structure will come to the blockchain space, but instead in what form? Will the current power structure of the financial system be forced to give up some of its current power? Will blockchain projects naturally become centralized as their original adopters cling to control over their direction? Will organization/control over the blockchain space be voluntary or mandatory? Or the bigger question, can they even get control over the space?
When looking at the battle going on between freedom/anarchy vs. control/organization, it seems that like many answers, it lies somewhere in the middle of the two. Both have positives and negatives, and both are fundamental forces that every human possess within them.
It very much can be compared to parenting, whereas the best parents adopt both a hands-off and a hands-on approach at the same time. On one end, it’s vital that parents lay a strong foundation for their children by putting in place the proper structure needed for them to manifest into strong-minded individuals, ready to handle a harsh and complex world. Kids without structure can lose their way and tumble off course, which most people here have probably witnessed first hand. Also, parents can help steer their child past obstacles that they would normally run into without such guidance. This can accelerate the child’s learning curve compared to if they had to do everything on their own.
On the flip side, coddling your kids too closely or being an authoritarian parent can work negatively against your child by over protecting them or causing them to rebel. All human beings desire some genuine sense of freedom to cultivate their own path in life and need to experience things first-hand in order to understand them in a deeper way. Therefore, getting in the way of their freedom and self-experience can be a sure-fire way to creating rebellious discourse and weakness within the child.
Just the same as parenting, the future needs to have plenty of space for freedom, especially considering the authoritarian past of the financial world. It’s clear that the whole blockchain excitement in general has its roots in freedom from overbearing authorities. At the same time, some added structure to the space could be necessary to harness the true potential of the movement. It can’t be denied that human beings have a natural tendency to organize and structure things so as to ease the anxiety of chaos. I might even personally venture to say that all spontaneous order eventually becomes centrally controlled in some form. However, we must be ever vigilant to act when this new form of central control becomes overbearing and counterproductive. It’s about the constant maintenance of the space to achieve a balance between the two.
So to conclude, it seems paramount that the established system of power will have to give up some control it has on society, because the freedom sentiment is real and not going away. However, freedom lovers should give up the dogmatic thought that there will never be any formal set of rules in the blockchain world. Rules can bring foundational stability, as long as they have wiggle room for change and readjustment. Nothing lasts forever.
In the end, it will be up to all of us participating in the space to define what kind of future we will create. The projects we support, the way we trade our money, the information we spread around and the rules we accept or disobey ultimately define the future. This is a landscape still being painted, so it’s important that you participate in the way you best see fit. We will all write the future of blockchain.
This work by The Last American Vagabond is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License, and may be reposted as is, with attribution to the author and TheLastAmericanVagabond.com. Permissions beyond the scope of this license may be available at Ryan@thelastamericanvagabond.com.