The original vision of Bitcoin's inventor Satoshi Nakamoto, was to create an online financial system that didn't rely on human trust.
In his original whitepaper, Satoshi lays out the foundation for the first cryptocurrency, Bitcoin. He describes how Bitcoin will use a proof-of-work algorithm, to create an immutable chain of events.
Time and time again throughout the whitepaper, Satoshi talks about trust, and how the blockchain has taken the place of a trusted 3rd party.
Smart Contracts For A New Era
The Bitcoin whitepaper shows that Satoshi was only thinking of digital cash at the time he was creating Bitcoin. However today we see that the blockchain is being used outside the purely financial arena.
However cryptocurrency has evolved, today we have the smart contract, which has taken crypto beyond Bitcoin into a whole new realm.
An excellent example of smart contracts at work, is the cryptocurrency XEM (NEM), a platform which will allow Chinese investors to buy, rent, and sell traditional stocks and shares in foreign companies, without the need for a broker.
Investors will even be able to set their own terms on shares they own, with no need for escrow companies or any other 3rd parties.
Perhaps the most popular example of smart contract execution is the much maligned ICO, (Initial Coin Offering), whereby developers can create a coin to distribute to investors, whilst attaching contractual rules than can be dealt with by the blockchain.
We are seeing more and more uses for smart contracts, and perhaps the only thing we can be sure of, is we are only glimpsing the tip of the iceberg.
A Democratic Union?
When it comes to settling disputes and differences, it seems the best system we have come up with is the majority rule of democracy.
For the most part it works well, however when we use democracy in a political setting things can become a little skewed.
Trust rears its ugly head once again, do we trust our politicians and officials to carry out the will of the people? The current system says we have no other choice but to trust them.
A Taxing Thought Experiment
When thinking about big things like this, I find it helpful to try and break it down to a smaller more manageable component.
In this case, let's look at tax, and more specifically tax to be spent on repair of roads and pavements (sidewalks).
At the moment, we simply have to trust that our money goes where it is supposed to, and that the council are getting maximum value out of that money.
Now let's replace the council with the blockchain . . .
We wouldn't have to trust where our money was going, we could see it.
We wouldn't even have to trust that the best firm, with the best price had been chosen for the job, everything would be taken care of by a smart contract or two, and the results would be available for all to view.
If we could do this for roads, then we could do it for other services, and my guess is people would be much more engaged, and willing to pay taxes when they could see exactly where they were going.
I even feel in that scenario, a lot of people wouldn't mind paying even more tax . . .
Is It A Nail?
To the man holding a new hammer, everything starts to look like a nail.
Of course there is a possibility that we are over egging the power of the blockchain. Perhaps it will forever be an incredibly useful financial tool, and just that.
Maybe the transference of value is only relevant in an online financial world. It is a hard question to answer with any confidence of being right.
At one point we thought laser discs were how future generations would store video. Now you have to be at least 40 to have even heard of them, let alone know what they are (were), and even then, it's unlikely.
Seeing A Smarter Future
I'm not sure if the blockchain will be able to replace every aspect of human administration, however there can be little doubt it would do a better job at administration, than corruptible human beings.
The fact that it has the power to remove the need for human trust, makes it an immensely useful tool. Whether it's making sure money goes where it is supposed to, or that the numbers given in an election are real, the blockchain will forever be part of our smart future.
Further reading:
More Musings
WHAT DO YOU THINK; WILL THE BLOCKCHAIN HAVE A LARGER ROLE TO PLAY IN TOMORROW'S SOCIETY? OR ARE WE SEEING ELECTRONIC NAILS FOR OUR DIGITAL HAMMER? AS EVER, LET ME KNOW BELOW!