These are the 12 Blockchain Truths
.1. Blockchains are computer programs (“Software”). They have been written by someone, with a goal. When considering one, it’s worth asking “what is its design goal?”
.2. “Blockchain” is not a trademarked label. Anyone can call anything a “Blockchain”. Buyers beware.
.3. Blockchains’ theoretical design has been known since the 1990-ies. Yet no significant application reached mainstream before BITCOIN.
.4. Corollary: analyzing any blockchain without constant reference to BITCOIN and its success is a mistake.
.5. Blockchain is a structurally inefficient software design. If one looks to optimize one’s IT costs, one should steer clear of blockchains.
.6. Trust is one of the most important and costly resources of human societies. Blockchains reduce the cost of trust. The trade-off is increased IT costs. There is no free lunch.
.7. Bitcoin’s success is undergirded by the fact that “the desire of gain is a universal passion which operates at all times, at all places, and upon all persons” (D. Hume, 1740)
.8. Blockchains foster trust and collaboration whenever participants can be expected to desire the blockchain’s coin.
.9. Blockchains can be designed without a coin. Blockchains without a coin are just slow, expensive, inefficient databases. They are a diversion.
.10. Blockchains are primarily a social, economic, and institutional innovation. They are best used as building blocks for IT solutions that strengthen or replace contracts and laws.
.11. Blockchains and their coins are tools and cannot be held accountable for how unscrupulous humans wield them.
.12. Blockchains and their coins can be the basis for software solutions which are strictly inferior to existing, contract- and law-based ones. Yet even so, such solution have the merit of offering an alternative, however imperfect. On balance, the world is better off WITH them than WITHOUT them.
Blockchain-powered governance and monies are a secular institutional evolution
