If blockchains ran the world
The long arm of the list?扩张的清单
The trust business is little noticed but huge.Startups deploying blockchain technology threaten to disrupt it, and much elsebesides
“WE LIKE lists because wedon’t want to die.” What Umberto Eco, an Italian writer, said about humanbeings applies even more to the institutions they create. Without lists thatkeep track of people and things, most big organisations would collapse.
Lists range from simple checklists to complexdatabases, but they all have one major drawback: we must trust their keepers.Administrators hold the power. They can doctor corporate accounts, deletetitles from land registries or add names to party rolls. To stop the keepersfrom going rogue, and catch them if they do, society has come to rely on allsorts of tools, from audits to supervisory boards. Together, list-keepers andthose who watch them form one of the world’s biggest and least noticedindustries, the trust business.
Now imagine a parallel universe in which lists havedeclared independence: they maintain themselves. This, broadly, is the promiseof the “blockchain”, the system which underlies bitcoin, a digital currency,and similar “distributed-ledger” technologies. If blockchains take over, asfans are sure they will, what are the implications of the trust businessmigrating into the ether?
It would not be the first time a novel form oflist-making changed the world. More than 500 years ago a new accountingtechnique, later known as double-entry book-keeping, emerged in northern Italy.It was a big step in the development of the modern company and economy. WernerSombart, a German sociologist who died in 1941, argued that double-entrybook-keeping marked the birth of capitalism. It allowed people other than theowner of a business to keep track of its finances.
If double-entry book-keeping freed accounting fromthe merchant’s head, the blockchain frees it from the confines of anorganisation. That is probably not what Satoshi Nakamoto, the still-elusivecreator of bitcoin, had in mind when he set out on his endeavour. His aim wasto create a “purely peer-to-peer version of electronic cash”, as he put it in a“white paper” published in 2008. To do so, he created a new type of database,the blockchain. It provides proof of who owns what at any given moment. It containsthe payment history of each bitcoin in circulation; heavy-duty encryption makesit theoretically impossible to alter it once a transaction is registered;copies are spread around the computers, or “nodes”, that form the bitcoinnetwork, so that anybody can check whether something is wrong. A “consensusmechanism”, a complex cryptographic process which replaces the list-keeper,turns the blockchain into an independent entity.
Clever minds quickly saw that such a set-up can beused for things other than money. Different sorts of self-sufficient lists nowabound. Prominent among them is Ethereum. Like bitcoin, it boasts its owncrypto-currency, called “ether”, but it also allows users to add “smartcontracts”, code that encapsulates the terms of a business agreement and isexecuted automatically.
When Luca Pacioli, a Franciscan friar, wrote thefirst textbook on double-entry book-keeping in the late 15th century, he couldnot have foretold what the accounting technique would bring about. But todayplenty of startups suggest ways that blockchains could change the world.
Everledger, for example, keeps track of valuableassets. The firm has registered the ID of more than 1m diamonds, making iteasier to check whether gems were stolen or mined in war zones.
Other firms want to help keep track of people. Oneof the first things done for a baby could be to give the newborn an entry in ablockchain, the crypto-equivalent of a birth certificate. This soundsOrwellian, but it does not have to be. On the contrary, if people’s identity isanchored in one or several blockchains, this would give them more control overit and their personal data. If a potential tenant, for example, wants to proveto a landlord that his income is high enough to pay the rent, he need onlydisclose that bit of information, instead of allowing access to his entirecredit history, as is often the case today.
In a blockchain world, having such a“self-sovereign identity” may well be a fundamental human right. MoxieMarlinspike, an anarchist entrepreneur, and others have already called for theabolition of the “ID-slavery” imposed by current national registration systems.A slew of startups, including Evernym, Jolocom and uPort, are working onservices that will allow people to register identities.
Once people are able to manage their identity,other possibilities open up, says Kevin Werbach of the University ofPennsylvania’s Wharton business school. People will be able to band together invirtual countries and set their own rules. One such already exists: BITNATION.Anyone can become a citizen by accepting its constitution. To do business inBITNATION, people have to build up reputation, for instance by trading on theplatform.
This is also an example of the other big functionof such ledgers: they can serve as a source of truth. All kinds of informationcould be attached to an entry in a blockchain. In the case of a car, say, thatcould be where it came from, the history of repairs and even where it wasdriven. Taken together, these data would form the “truth” about a givenvehicle.
Many people are already working on “truthservices”. Researchers have proposed creating unique cryptographic identifiers,or “hashes”, of the descriptions of clinical trials and registering them in ablockchain, so they cannot be changed to fit desired results. Georgia, Swedenand Ukraine are testing the technology as a way of digitising parts of theirland registries. And Delaware, the American state which has made a big businessout of registering companies from all over the world, is gearing up to allowblockchains for corporate record-keeping.
Transactions on a blockchain could also serve asinput for smart contracts. Slock.it, another startup, is developing physicallocks which have a digital existence on Ethereum. When it is sent some ether,this smart rental contract opens the lock. This could enable new ways ofsharing things. If somebody wanted to rent a car, say, he could simply transfermoney to its smart contract and drive away.
Smart contracts promise to change the economy morethan any other feature of the blockchain. They could take over most routinebusiness processes. Some companies could be no more than a bundle of smartcontracts, forming true virtual firms that live only on a blockchain.Predictably, the first attempt to create such a “decentralised autonomousorganisation” ended in disaster. Named “The DAO”, the entity was set up a yearago as a sort of virtual venture-capital fund. It raised more than $160m, butthen hackers siphoned off $60m, leading to its demise.
Yet simpler versions of such structures, calledinitial coin offerings (ICOs), have since taken off—and created the firstbubble of the blockchain economy. In an automated form of crowdfunding,startups set up a smart contract on Ethereum and publish a “white paper”, orprospectus. Investors can then send ether to the smart contract, whichautomatically creates “tokens” that can be traded like shares. More than $550mhas already been invested in ICOs.
Some of these projects are scams. And many honestones leave outsiders baffled. EcoBit aims to build a market for carbon credits.Aragon wants to use blockchain tools to manage entire organisations, completewith decentralised arbitration courts. SONM is “a decentralised fogsupercomputer”: users can either buy computing power with the project’s tokensor earn them by adding their machines to the pool.