Note: This post is going to be a bit more philosophical than suggestions for applied solutions, which is where I usually focus. If you’re not interested in such things, by all means, skip this one.
Feel like diving in with me to some random thoughts I’ve had recently? Great! Welcome. Let’s go…
What’s the real core value of blockchain technology? At this point, we have some idea about the many things that run on top of it. Or rather, there’s lots of things people are trying to run on top of this foundational layer and build value. Let’s see what we have here so far… Crypto, Smart Contracts, Decentralized Applications (dApps), Decentralized Autonomous Organizations (DAOs), Supply Chain Logistics with solid provenance tracking, Identity Management, Tokenization Platforms, Decentralized Storage, IoT Networks, Governance and Voting, and more coming to a hype cycle near you soon! What have I missed? Probably a lot. Each of these is at varying places on the marketplace adoption curve. As usual with our bright new shiny technologies, all of this is unevenly deployed with various niche solutions gaining a little traction here or there, core infrastructure still nascent with LayerThisOrThat still sorting themselves out, and so on. Perhaps most ironically, (I personally love this one), there’s a Root of Trust problem with the identity layer for all of this; from initial verification to who verifies the verifiers. And more. (That’s probably an article / rant all on its own.)
So what? What’s the point? What are we all really trying to do here and why?
Getting on a Universal Agreement Bus
What blockchain really is if we abstract it up, (and this is where I’m maybe going off the rails here with theorizing), is a communications layer designed for agreement. I’m not just talking about the obvious basic consensus property; I mean when more of them get fully connected. I’m going further to call it a Universal Agreement Bus. (Or come up with another name. The point is going beyond the basic within chain consensus.) This is more than being a trust layer. Or transaction log. Or a simple communications layer used for interoperable protocols for people or machines. It’s about forming a shared understanding for practically anything digital, which is increasingly where almost everything is recorded. The blockchains are individual “state machines” of various sorts, but collectively, they’re much more. The functionality does differ of course; that’s why people have invented multiple chains. Bitcoin, for example, is perhaps somewhat dumb in that it’s really all about transactions, with the “state” being mostly about unspent transaction outputs (UTXOs). Ethereum, and other Turing-Complete chains allowing for code, smart contracts and so on have additional capabilities, but should still remain deterministic. There are maybe things that could mess with this, from messy oracle data or some kind of bug, but the point is generally that determinism is a feature without which you can’t maintain trust in a trustless system.
The results so far? We have the interoperability protocols growing, (e.g, Polkadot / Cosmos), some supply chain management, IoT networks, (e.g., IOTA), Decentralized Identity options, (e.g., Sovrin, the now split up Uport, etc.), DAOs, Data Storage, (e.g., IPFS and others), and of course DeFi in general. Then just slap in everything else. And yes, I’m aware the blockchains themselves are not particularly appropriate or performant general purpose databases. But a lot of this will be hybridized to take advantage of the strengths of both performance and trust.
With all this being said, now consider the whole ecosystem writ large. The collective blockchain space goes beyond thinking of it as communications just for basic consensus of select transactions and is instead the state of collective agreement.
But Why? Why do we even need this? Yet another communication layer? Or a communications layer for trust? How did the need for this even come about?
Great Question! Let’s look at some of the core general values of blockchain. You’ve likely heard them: Decentralization, Transparency, Security, Immutability, Ownership, Programmability, Inclusivity. Depth of each might vary based on public vs. private instances and other use cases. And all relate to trust. It’s well known that part of blockchain value is supposedly permissionless trust. But there is a paradox here. Blockchain may reduce or eliminate trust in central authorities, but it doesn’t remove the need for trust entirely. Instead, it redistributes trust. Trust is shifted, not eliminated. Traditional systems place trust in centralized institutions (e.g., governments, banks, or corporations) to maintain records, enforce agreements, and secure transactions. With permissionless blockchains, we redistribute this to protocols and their cryptographic security, network participants such as miners and validators, and the consensus mechanisms themselves. That is, we trust the code and incentives built into the code. The ideas of trust among participants in a trustless system are not part of scope here. I only bring it up to point out that all we’re doing here is shifting how we’re choosing to trust for our transaction needs.
The Trust / Trustless issue is really a key understanding here. So if you want to dive deeper in these areas, see:
- What is a Trustless System?
- Blockchain as a confidence machine: The problem of trust & challenges of governance
- Trust in blockchain-based systems
- What Can You Trust in a Trustless System
- What Does Trustless Mean?
- In us we trust: Decentralized architectures and ecosystems
OK. All this is Fine. But… Why Bother?
Regarding my abstraction of the idea of blockchain to that of a communications layer far beyond simple consensus for select transactions, consider this… at a fundamental level this is what we – as humans – do. It’s arguably how we’ve evolved. There are anthropological arguments as to why humans beat out other organisms to make it to top of the food chain. Larger brains, tool usage, language, and more. But one of those theories is our ability to cooperate at scale. Besides the desire to do this we need to communicate. Think about everything we’ve built throughout history. And then, in microcosm, the evolution of digital. What did we do with it? Crude email. Eventually bulletin boards. Did we really need more communication layers? Apparently. We had several early online services that helped connect us, Prodigy, CompuServe, AOL. Then we had MySpace, (wow, that’s still there), Facebook, and so on. Did we really need Twitter/X? Or Snapchat? What about Reddit? (Love Reddit.) But didn’t we already have tons of forums / boards. And yet… we keep doing it. We keep inventing more ways to interact. Why? Because it’s just fundamental to who and what we are. We keep reaching out. And seek more ways to do this more effectively. For much of our interactions, we maybe don’t need too much depth of trust or much in the way of transaction history. For others we do.
Blockchain is more than just a way to kind of keep track of things in a trustless way. It’s how we can collectively cooperate at increasingly grand scales in a world where we are so very mobile, and increasingly will be using autonomous digital agents on our behalf.
I may be overdoing it believing blockchain tools are somehow a chapter in the manifest destiny of the human race. (Or rather, some aspects of its value.) For fun though, let’s consider some words from Yuval Harai’s Homo Deus, A Brief History of Tomorrow.
“If cooperation is the key, how come the ants and bees did not beat us to the nuclear bomb even though they learned to cooperate en masse millions of years before us? Because their cooperation lacks flexibility. Bees cooperate in very sophisticated ways, but they cannot reinvent their social system overnight. If a hive faces a new threat or a new opportunity, the bees cannot, for example, guillotine the queen and establish a republic…
To the best of our knowledge, only Sapiens can cooperate in very flexible ways with countless numbers of strangers. This concrete capability – rather than an eternal soul or some unique kind of consciousness – explains our mastery of planet Earth…
History provides ample evidence for the crucial importance of large-scale cooperations. Victory almost invariably went to those who cooperated better – not only in struggles between Homo Sapiens and other animals, but also in conflicts between different human groups.”
Trust Has to Scale
Now we’re getting to the heart of the matter. Here’s your answer… We need this layer for at least two reasons. First, human civilization has become more dispersed and interconnected and now trust has to scale. Second, we’re likely going to increasingly have autonomous agents acting on our behalf. This is the part where you might be thinking, “OK, this is all kind of obvious enough, so what?” The answer is I personally just enjoy considering root causes of things and cascade effects. We study history for at least two reasons; to try to predict or change the future. So let’s keep going. It’s been a long road, but we’re almost there.
How Did We Get Here?
In tightly knit, localized communities like those in 18th-century America, medieval England, Rome, etc., trust was largely personal and direct, built on familiarity and shared social norms. This is still true in smaller or local communities today. Though this depends on how you define community. There’s plenty of real world examples of how more disbursed suburban or rural neighbors might know each other and cooperate vs. large urban apartment buildings where neighbors don’t even know each other’s names. In earlier times, mostly local personal contact reduced the need for complex systems of decentralized or institutionalized trust. Here’s how and why that dynamic changed. We had the following occur…
- Expansion of Trade and Geographic mobility. Personal interactions used to be among those who knew each other well. Trust was maintained through social reputation, shared norms, and the possibility of direct accountability. As economies expanded, long-distance trade and migration introduced interactions between strangers. Trust could no longer rely on personal connections and instead required intermediaries (e.g., banks, governments, legal systems) to enforce agreements and reduce risks. Part of the genius of Facebook was using real identities, not pseudonyms. Sure, there’s sometimes scammer attempts, but it’s rather challenging to fake a whole set of interconnected relationships. The same is true of LinkedIn, for which part of the whole point is reputation via the transitive nature of trust in personal networks.)
- Rise of Mass Production & Globalization. We transact across borders, cultures, and legal systems. Intermediaries became necessary to bridge gaps in trust, but their role also introduced inefficiencies, costs, and potential abuse. For example, check out The History Channel’s “The Food that Built America” series. Just a handful of decades ago the food supply was shockingly unsafe. (This isn’t to say we don’t still have issues. But this was a different level.)
- Complexity, Specialization and Disbursement in the production of goods and services. Most goods and services were produced and consumed locally. Trust was implicit as producers or service providers were of the same community. Modern economies rely on specialization, where products and services pass through complex supply chains involving multiple anonymous parties. Ensuring quality, fairness, and accountability requires systems that establish trust among these disconnected actors.
- Digital / Information Age. Trust relationships were analog, rooted in personal interactions or local institutions. In a digital world, most interactions are without physical presence or personal relationships. Buying online, transferring money, or accessing services requires trust in systems rather than individuals. Blockchain addresses these challenges by providing decentralized, verifiable systems for digital interactions.
As civilization moved from small, insular communities to vast, global networks, trust evolved from a personal, localized phenomenon to a systemic, abstract requirement. Blockchain represents a response to this evolution—enabling trust at scale without relying on centralized intermediaries, which are increasingly strained under the complexity of modern interactions.
Amitai Etzioni, a prominent sociologist and communitarian thinker, extensively explored the interplay between mobile societies, privacy, and trust. He emphasized the need to balance individual privacy rights with communal responsibilities, especially in the context of technological advancements and increased mobility. Etzioni observed that as societies become more mobile and interconnected, traditional community bonds weaken, leading to a decline in shared values and social cohesion. He argued that this mobility necessitates new forms of community engagement to foster trust and mutual responsibility among individuals who no longer share long-term, stable relationships.
Etzioni also highlighted the role of trust in maintaining social order within mobile societies. He suggested that as people move and interact with unfamiliar individuals, building trust becomes more challenging yet essential. He advocated for strengthening informal social controls and community norms to enhance trust without overly relying on state surveillance, which he viewed as more invasive.
While he was highly focused on privacy, in many cases you could simply substitute the word trust. In summary, Etzioni’s perspective underscores the importance of balancing individual privacy with communal responsibilities and trust, particularly in increasingly mobile and technologically advanced societies. (See The Limits of Privacy, The New Golden Rule: Community And Morality In A Democratic Society. Note: Just to be clear: I share Etzioni’s work as reference to some of his ideas related to the changes in mobile societies. I’m not trying to push communitarianism.)
Conclusion
If you try to understand blockchain at a basic level, you’ll learn about it being a decentralized general ledger. You’ll maybe see that at one layer of abstraction, it’s a consensus mechanism enabling shared, immutable transaction records that move away from centralized authority. These might all be correct definitions. And yet, these descriptions are somehow not wholly satisfying. To me anyway. There’s a deeper impetus. A deeper Why. And Why Now.
Blockchain is really a communications tool by which we reach agreement in a society that is wildly disbursed in its transactions and seemingly will be even more so in the very near future. Are there other ways to do this? Of course. We’ve been using a variety of methods for a long time. But they don’t seem to be able to scale trust to the degree it seems we’ll have to in order to cover what could conceivably be almost everything. It’s not just about transactions or keeping track of things. It’s how we’re shifting so many of the methods by which we will fundamentally interact with each other and our world because of how we’re continuing to evolve and change our overall society.