Can’t we all just get along? (Even if we don’t agree on things?)
No one is ‘right’ in this evolution around a thing called the blockchain. And it’s a good thing. A really good thing.
It’s interesting to talk to/interact with various people across various crypto domains— developers, investors, consultants, economists, lawyers, etc. — about term definitions. My group does it every single day.
It’s a funny thing because term definitions help establish governance and compliance, and at the same time, they can also stifle development. So let’s get down to brass tacks. Exploratory, open-ended, brass tacks.
To preface this fairly brief exploration, you should know a bit about my background. I’ve developed multiple skill sets primarily as a serial entrepreneur, an investor, a corporate strategist, and an environmentalist (I know, broad terms, broad domains), and I’ve also co-written/co-produced a few documentaries like this one.
I’ve also studied economics on my own for the last 15 years, choosing to forego advanced educational degrees, and instead, experimenting with various people and ideas around the world — people and ideas living ‘on the edges’. But I am a technologist at heart of roughly 25 years (a former developer), mostly with a SaaS, social network graph and data systems emphasis, to include some AI work (neural nets, NLP, etc.), and started developing enterprise encrypted technologies around 17 years ago. I got deeper into what is considered the current wave of crypto in 2011, and shortly thereafter, I helped develop what became the world’s first Bitcoin POS platform (Point of Sale, not Proof of Stake, just to be clear ;).
There were three main things I learned from that experience:
Money is a behavior more than anything else; it is difficult to move people away from the use of cash or coins, as well as shift away from the long-standing belief that cash (fiat) has intrinsic value.
Digital adoption is always tough, if not impossible, without superior user experience design. Great UXD is woefully absent from many blockchain platforms, and you can say the same about many web platforms in general.
Privacy matters to early adopters, and, they are willing to make concessions around certain personal information (Pii), provided that they trust ‘the network’. Our cohorts were less concerned with ‘trustless’ transactions, and more concerned with building trust, on- and offline. You know, the human component of this.
It’s been a wild ride since then, particularly as debates continue to flare up about the future of money, the future of technology, the future of society, the future of government, the future of… the future… all wrapped up in this often confusing bow called ‘the blockchain’.
A block is a container of encrypted data. A blockchain is recordbook of transactions with that data, specifically with encrypted keys, governed or operated through consensus.
The goal of a distributed consensus algorithm is to allow a set of computers to all agree on a single value that one of the nodes in the system proposed.
Blockchains typically talk to each other through servers, or databases, while ledgers don’t necessarily do that. For example, there are fully autonomous ledgers that exist on things like mobile mesh networks.
A distributed ledger is a series of data containers, or, a series of recordbooks, that can be observed so as to ward off cyberattacks, or false parties (bots, fake aliases, etc.). This is done through consensus as well. Although not everybody agrees on consensus mechanisms.
Blockchains are not the same as distributed ledgers, and many distributed ledgers do not contain blockchains. Some distributed ledgers are designed to avoid chains altogether, or, configure with many types of chains. Some multi-chains can replace servers, or server networks, including what is considered ‘the cloud’.
A server stores data, and the cloud is a configuration of distributed servers.
Not all blockchains or ledgers operate through server networks. Or database networks.
You can argue that what many people consider to be blockchains are not actually blockchains, while distributed ledgers are not the same as blockchains. There are permission-based and permissionless blockchains. There are public and private blockchains. There are public-private blockchains.
There are ledgers that are distributed inside as well as outside of their designated networks. There are many different types of networks. Which is partly why the nature and delivery of agreements, specifically contracts, has changed.
Smart contracts verify the performance or execution of an agreement, either within a blockchain, or a distributed ledger, or across a network, or all three. Smart contracts are evolving rapidly in their functions. They are also adapting to advances in securities — a basic pledge of fulfillment on an asset or a debt instrument — and tokens, which have evolved since the early days of Internet gaming, and before that, in the ancient trading exchanges, when they were used as physical forms of credit.
Tokens are thought to represent a particular fungible and tradable asset or a utility that is often found on a blockchain, although there are major gray areas around what assets really are, and what utilities really are, given different contexts.
Some people will argue that tokens aren’t tokens unless they are standardized by security protocols. Protocols typically perform security-related functions applying cryptographic methods. Many have different security-related functions, and the cryptographic methods can vary, as with related things like hashing, or with spunging, or with chnorring. So a token can mean different things in different contexts, just as currencies mean different things in different contexts.
A currency typically refers to money in any form when in actual use or circulation as a medium of exchange, especially circulating things like banknotes (cash) and coins. Although, understandably, many argue that something like fiat — a currency without intrinsic value that has been established as money, often by government regulation — isn’t actually currency and isn’t real money.
‘Fiat’ in Latin refers to an arbitrary order made by an authoritative body. The reality is that in most countries — and the vast majority have a central bank which prints fiat money — the authoritative body is a private group, not a government agency run by the people. In either case, fiat is subject to massive manipulation in the form of interest rate adjustments.
So, you could assert that we’ve been using money that isn’t real, even though we agree that it can be used to buy things and invest in things. The fact that most cryptos are pegged to fiat money, either directly or indirectly, shows you how bizarre, or perhaps opportunistic, this evolution in money really is.
A cryptocurrency is clinically defined as a digital asset designed to work as a medium of exchange that uses cryptography to secure financial transactions, manage the creation of additional units, and verify the transfer of assets. Yet, an asset can mean any number of different things. Assets can represent the value of ownership that can be converted into cash. They can also represent the transfer of ownership of a resource, such as land, food, water, energy, or materials.
Then there are complementary currencies. A complementary currency is clinically defined as a currency or medium of exchange which is not a national currency, but which is thought of as supplementing or complementing national currencies. Complementary currencies are usually not legal tender and their use is based on agreement between the parties exchanging the currency. Typically, complementary currencies are affixed to real assets, such as land, food, water, energy or materials, but can also exist as basic stores of value, in which the communities back that value by agreeing on what it is and how it can be used or transferred. Sometimes this involves counterparty risk — not living up to agreements, typically contractual — and often navigates volatility in the price of goods and services.
The notion and proliferation of stablecoins — which are cryptos designed to minimize the effects of price volatility — seem to mirror the intentions of complementary currencies. Yet, the main difference here is that stablecoins live on an Internet infrastructure that is highly centralized, while complementary currencies, typically as physical money, or localized units of value which can be digitized, do not necessarily rely on that infrastructure.
So, if this is the case, then we can logically infer that cryptos and fiat actually have a complementary relationship. Fiat will not just disappear tomorrow (it’s existed as a form of usury for thousands of years), and crypto is only getting started.
And so goes the veritable ‘crypto rub’.
If you’ve built something on the mainnet, it’s not truly decentralized — you don’t own the underlying cables and wires on which your code sits, multinational corporations and governments own that infrastructure. However, what you’ve built may have decentralized variance, meaning there are attributes of its architecture that are at once highly transparent, yet secure and anonymized in terms of personal information. If you’ve built something off of the mainnet — such as with a distributed mesh network — it may be truly decentralized.
Decentralization matters only insofar as people can successfully develop socioeconomic alternatives — for themselves, for their families, and for their communities. If they can’t, decentralization is just another buzzword.
There are, of course, the various positions developers and enthusiasts like to take regarding maximalism, or minimalism, or voluntaryism, or libertarianism, the Austrian Schoolers, or any number of ideologies they’ll adopt around Bitcoin, or Ethereum, or any number of altcoins. Different strokes for different folks.
The point is this: If everyone adhered to W3(C) standards, the Internet wouldn’t have its alternatives. If everyone adhered to the same crypto standards, the so-called blockchain space wouldn’t be divided like it is, and alternatives wouldn’t emerge there either.
Which leads to a final thought: There is no one solution to anything. Math and code problems are one thing, commercial and civic needs are another. Context matters. Experimentation matters. Openness matters. Courage matters. Discipline matters. Precision matters.
And… we can all get along, while we implement different, even conflicting, approaches to this thing called the blockchain. It’s what a healthy, free society is meant to support.
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