When I first read Ray Kurzweil’s The Age of Spiritual Machines (I actually had no idea what it was the time, but was on a “spiritual” kick when I found it), I suddenly realized that much of what I had read by William Gibson, Neal Stephenson, and other science fiction authors could actually come to pass. Kurzweil’s book made me realize that much of what I had been reading since middle school was actively being worked on: Science fiction was quickly becoming science fact.
Fast forward to today and I absolutely love talking about the future. In fact, it’s one of the reasons I love doing what I do: not only do we get to talk with cool people doing cool things, but we are documenting the development of our future culture, society, economy, and psychology as it happens.
On TechNode we write a lot about the market movers (Baidu, Alibaba, Tencent, Didi, JD, etc) and the market makers (Mobike, ofo, Dianrong, naked Hub, and so on), but we don’t talk very often about the technology underpinning their ability to shape our lives. In truth, we’re not engineers… nor do we want to be, but we do our best to understand the companies and trends we cover from a social/cultural or business angle. Indeed, some of our best stories are all about the intersection of technology and business or technology and society/culture1. So when it comes to blockchain, I will be the first to tell you that our technical understanding of the topic is lacking. However, as the space heats up, we would be remiss to not educate ourselves and you, our audience, about it.
A few weeks ago, as part of the TechCrunch Shanghai 2017 event, we hosted a side stage devoted to bitcoin and blockchain. While there, we learned a lot about what is possible and what is not possible when it comes to this emerging technology. I walked away with a greater understanding and a better framework to interpret what’s happening in this space. Here, then, are my top 3 takeaways from the panels and speeches:
Bitcoin is here to stay
On the day of the event, bitcoin hit $10,000. As of writing, it is almost at $20,000! While we are certainly seeing a bubble, bitcoin’s growth has not seen much of the volatility it first experienced and its hard to see when this value growth spurt will end. It is now seen by many as a legitimate store of value and has become a mainstay in cryptocurrency. Indeed, as it evolves, it can possibly become an even greater part of the global economy as more and more investors jump on the bandwagon. That does not mean, however, that bitcoin won’t have its challenges.
The applications of bitcoin outside its role as a store of value are still unclear. We see it used as a medium of exchange in purchasing other cryptocurrencies and its use as a forex medium is compelling, but these make it little more than a commodity and not the technology for the future. While there are mining factions (those groups of people who “create” bitcoin by solving complex algorithms) that want to create different versions of bitcoin to enhance its capabilities, it will only ever be a digital currency/commodity. There are possibly other applications that either I am not aware of or that have not been developed yet, but it’s hard to imagine bitcoin becoming much more than it is now.
Crypto is as much about ideology as it is about making money
Bitcoin was created around the same time governments around the world decided to stave off what they perceived to be an economic disaster. They did this by manipulating money supply to increase inflation, and decreasing interest rates to encourage continued lending from banks. While the impacts of this are only now becoming clear, at the time, many saw this as yet another example of government overreach that distorted markets and created short-term gains in exchange for long-term instability. Above all else, it sent the message that money is not owned by citizens and is subject to the whims of those at the top. The response to this centralized manipulation was, at its heart, anarchistic: support a currency that is not subject to politics or any central authority.
However, as bitcoin and blockchain have become more profitable, an anarchist philosophy has given way to a sort of techno-libertarian purist view of crypto. This view endorses speculation, the increased value of Bitcoin, and the ultimate profitability of being early, but eschews and derides any application that is not “pure”: cryptoeconomies, decentralized applications, and distributed ledgers (which, to be fair, may not need blockchain but can learn from it). Any project that claims to be one of these things is automatically viewed with suspicion.
When bitcoin first started to gain traction, many were skeptical and rightfully so: The price could jump and fall by double digits in a matter of hours; many exchanges and wallets were hacked; there were a bunch of outright scams. That’s where we are with other cryptocurrencies: at a very early stage where people are trying to figure things out. There are still lots of scams, “blockchain” has become an overused buzzword to attract attention, and much of what could be possible with blockchain has not even seen a scalable proof of concept.
Of course, there are many ICOs that don’t need to happen and scams that were never intended to go anywhere. And there are projects that will never get off the ground. There are many more reasons to be skeptical, but that doesn’t mean that we should lump all of blockchain into the same category.
We need to be patient
What makes me excited about blockchain are all the things that we cannot yet do. Managing our individual data securely, tracking the provenance of goods (digital and analog), and automating many of the interactions and transactions so that even corporations won’t need any employees (whether this is good or bad is still up for debate). Couple this with AI and machine learning and it’s clear that we are on the cusp of yet another technology-powered revolution. However, we’re still really far away.
Exemplified by Kik’s decision to move off Ethereum, many of the blockchain applications we see being built are just not ready to scale. On top of that, I’m not sure that we as a society are ready. Certainly, businesses are, though. From supply chain to finance, from data security to data tracking, blockchain promises efficiency, automation, and security that were never possible before, bringing untold savings and speed.
Imagine, however, a digital agent (basically a bundle of machine learning-powered smart contracts) that represents you online and is empowered to act on your behalf. It can vote for you, make purchases, sell bits and pieces of your data at predetermined rates, all the while interacting with other digital agents. It could, conceivably, even continue to act after your physical body is no longer functioning. We are so not ready for the implications of a technology like this.
I may not be an engineer; I may not be a crypto insider, but I am someone passionate about creating a future we can actually stand living in. Modern living presents many challenges (for better and for worse) and blockchain could solve many of them. Almost everything that we now have has been made by other humans. We have made our world what it is and (thank god) we are very interested in making it better. If you haven’t yet, I highly recommend doing some research and following this compelling field as it develops. It is the future.
PS: Keep on the lookout for the videos of the panels. They have been delayed, but we will be posting them on the site soon.
- These are some of my favorites: