Another rant about blockchain

Kai Stinchcombe writes,

peer-to-peer interaction with no regulations, norms, middlemen, or trusted parties is actually a bad way to empower people.

…A lawless and mistrustful world where self-interest is the only principle and paranoia is the only source of safety is a not a paradise but a crypto-medieval hellhole.

Read the whole thing. Suppose that the population that is eager to adopt blockchain consists mostly of people who are really annoyed by existing laws and business practices. Dealing with such a population on a regular basis is probably not a good way to enjoy low-risk, trouble-free interactions.

On the other side, the blockchain Kool-Aid includes stories like this:

The trend toward blockchain agriculture promises to make each step of growing and distributing food simpler. It will offer all parties involved a single source of truth for the agriculture supply chain. In this article, we’ll cover four key ways that blockchain is changing agriculture.

I take Stinchcombe’s side on this one. Note that I scheduled this post a week ago, before Tyler linked to the same piece.

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3 Responses to Another rant about blockchain

  1. Handle says:

    I thought Kai’s important point was that “trustless” is a misnomer as a characterization of blockchain implementations, and thus we have the trust version of quis custodiet ipsos custodes? Instead of, “Who watches the watchers?” we have, “Who assures the trustworthiness of trust systems?”

    A trust system is some kind of design or institution that facilitates or enables the interaction of individuals as if they trusted each other, because they believe they can rely on the security or protection of “the system” to lower the incentive for and expected cost of trust violations (i.e., making such violations less likely and/or the harm less severe.)

    But how can you verify that you can trust the trust system itself? To what extent should one let ones guard down and act on faith? There’s no perfect solution. Long experience with a system that can be observed to work with only very rare reports of outcomes that are only slightly bad – that is, repeated demonstration of steadfast trustworthiness – provides a kind of empirical or statistical reason to believe in its soundness and credibility as a solid system. A design with well-aligned incentives provides another reason. But that’s no proof that it will continue to work that way in the future, or in all instances.

    Any trust system only comes to be trusted by being trustworthy, and gradually saving up periods of reliability until it has such a huge amount of trust capital that it can change the quality and character of the whole society. That capital that can either continue to be used prudently, or abused and burned up in an instant for the sake of some petty and ephemeral gain. The only way to ensure that doesn’t happen is to keep on raising generations full of people with religious devotion to preserving the reputation of the trust system that enables their properity and higher form of civilization, and to punish any defectors so harshly and certainly that the incentive to defect for personal gain is all-but eliminated.

    The general collapse in the trust capital of American institutions is probably a symptom of our culture’s failure to continue doing that, and it would take a generation of continuous, unblemished effort to rebuild what we once had. Which simply cannot be done while there is still an ideological civil war going on.

  2. T Boyle says:

    “A lawless and mistrustful world where self-interest is the only principle and paranoia is the only source of safety is a not a paradise but a crypto-medieval hellhole”

    Whu?.. I could have written the slightly less foolish “A lawless and mistrustful world where power is the only principle and violence is the only source of safety is not a paradise but a cosa-nostra-managed medieval hellhole.”

    Crypto is not lawless at all. It substitutes crypto for “men with guns, and willing to use them”. Now, whether you think crypto telling bad actors “no” is somehow more of a hellhole than violent men doing so, is up to you. I sure don’t. And it does help to address the problem that, in a violent-men-managed world, some people are above the law.

    The self-selection point, though, seems like a stronger one. And yet… some pretty mainstream companies are testing blockchain solutions, which does seem to weaken that point, too.

    I’m skeptical about blockchain myself. But not because I think that having an armed gang (an “insurance company with an army” as Paul Krugman would have it) organizing society is somehow more civilized than doing it with crypto-enabled trust.

  3. Matt says:

    I think the increasing willingness to cut out banks, regulations, and middlemen means that increasing number of people no longer consider them “trusted parties”. If, indeed, crypto currencies are a lawless hell-hole then what does the increasing preference of crypto say about the status quo?

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