Seeing the “Network for the Nodes” in Blockchain Technology

forestfortreesI often use the term “can’t see the forest for the trees” when discussing the struggle to maintain perspective. The term serves an effective metaphor to describe any instance where one is so caught up in the minutia of a subject they fail to consider the “big picture”. (i.e. so focussed on a single tree you fail to see the entire forest). In our limited capacity as mere human-beings it is no surprise that this occurs quite frequently — our tendency to focus on the micro (near-term, observable, familiar) distracts us from the macro (long-term, possible, uncertain). I believe this tendency is a core contributor to the conditions that, for many, make appreciating the implications of blockchain technology so challenging. In blockchain terms — I would say that such individuals “can’t see the network for the nodes”.

The Scale of the Conversation

It is important to define the relative scale to which I am speaking — what are the trees versus the forest? One way of answering this question is to simply define the trees as the prevailing topics of the present day and the forest as the unbridled potential of blockchain technology. I find this a suitable scope for this conversation but would stress the importance of considering the entire history of human evolution when considering the “forest” (big picture) — to limit perspective to my own minute lifespan (30 years) would be vain.

The Trees — What Many are Talking About

It comes as no surprise that much of the current dialogue surrounding blockchain technology is focussed on the use-case of bitcoin and other blockchain-based tokens as digital currencies or assets. With this focus comes a host of justifiably meaty discussions relevant to the present day. Will cryptographic currencies survive and go mainstream? Are mining incentives sufficient? Are node incentives sufficient? Are blockchains secure? How do we regulate cryptocurrencies? Oh my… look at the price volatility! I consider such questions to be the “trees” of our metaphor and believe many of their answers to be foregone conclusions.

First, a world with blockchain-based currencies inevitable. It is clear that the value of a distributed open-source protocol and asset ledger (the blockchain) will take relatively little time to be exploited for its real-world utility. Furthermore, no sufficiently secure blockchain can exist without a cryptographic token (such as bitcoin) to back it. Native tokens are inherent features to blockchains — not optional external applications. As a car cannot run without an engine nor can a blockchain operate without a native token. Jonathan Levin was the first to truly address this issue head on — if you’d like to learn more read his post here.

What really gets interesting are the places this technology can take us once established. Once blockchain technology has been refined and is backed by a token of sufficient value to provide an unimaginably secure blockchain – what impact will this have on our world?

The Forest — What Few are Talking About

If you are passionate about bitcoin, blockchain technology and decentralization you’ve probably been in, or at the center of, a conversation where blockchain technology is touted as the solution to all of the worlds problems. This is often followed by waves of skepticism and even disregard by observers. Such criticisms are easy to make of an over-zealous speaker who is passionate about the potential.

The reality is that blockchain technology is disruptive. It allows ancient problems to be approached from an angle never-before possible (i.e. Distributed Consensus, Non-Hierchical Incentive Structures). I would argue that while it is difficult for the Lehman to grasp in a 10 minute conversation — those that understand blockchain technology and decentralization as ecosystems for voluntary participation, contribution, and reward can make some convincing arguments that blockchain technology provides a potential solution to many of the worlds problems. Is a new globally-distributed cryptocurrency disruptive? You better believe it — but it is the potential of the decentralized systems made possible by blockchain technology to usher in new constructs for societal progress never before possible in traditional hierarchical structures that gets my wheels turning. When looking beyond 5 years to 50 years from now it is hard to imagine blockchain technology and distributed systems only being recognized for their inherent tokens.

With all things ‘potential’ ones outlook is often rooted upon the tendency towards optimism or pessimism. In the case of blockchain technology the pessimists view simply means more of the same — an unfulfilled potential. The optimists view opens up an entire new realm of possibility across our global financial, political, and social infrastructure. I for one am pleased to be hanging out with the optimists on this one — the forest is vast and growing by the day.

If you want to “go deep” on the concept of perspective — you might enjoy this clip, one of my favorites, by the reverent Carl Sagan from his 1994 book Pale Blue Dot. If you’re feeling pretty important this might “bring you back down to earth”.