Blockchain: Blueprint for a New Economy

forcing function, and the best “worker”

for the job is a human/algorithmic

pairing. 193 Perfunctory repetitive tasks

are automated with blockchain registries

and smart contracts, whereas

government employees can move up the

value chain.

Privacy Challenges for

Personal Records

There are many issues to be resolved

before individuals would feel

comfortable storing their personal

records in a decentralized manner with a

pointer and possibly access via the

blockchain. The potential privacy

nightmare is that if all your data is online

and the secret key is stolen or exposed,

you have little recourse. In the current

cryptocurrency architecture, there are

many scenarios in which this might

happen, just as today with personal and

corporate passwords being routinely

stolen or databases hacked—with broad

but shallow consequences; tens of

thousands of people deal with a usually

minor inconvenience. If a thorough

personal record is stolen, the

implications could be staggering for an

individual: identity theft to the degree

that you no longer have your identity at

all.

Overall: Decentralization

Trends Likely to Persist

However, despite all of the potential

limitations with the still-nascent

blockchain economy, there is virtually

no question that Bitcoin is a disruptive

force and that its impact will be

significant. Even if all of the current

infrastructure developed by the

blockchain industry were to disappear

(or fall out of popularity, as virtual

worlds have), much of their legacy could

persist. The blockchain economy has

provided new larger-scale ideas about

how to do things. Even if you don’t buy

into the future of Bitcoin as a stable,

long-term cryptocurrency, or blockchain

technology as it is currently conceived

and developing, there is a very strong

case for decentralized models.

Decentralization is an idea whose time

has come. The Internet is large enough

and liquid enough to accommodate

decentralized models in new and more

pervasive ways than has been possible

previously. Centralized models were a

good idea at the time, an innovation and

revolution in human coordination

hundreds of years ago, but now we have

a new cultural technology, the Internet,

and techniques such as distributed public

blockchain ledgers that could facilitate

activity to not only include all seven

billion people for the first time, but also

allow larger-scale, more complicated

coordination, and speed our progress

toward becoming a truly advanced

society. If not the blockchain industry,

there would probably be something else,

and in fact there probably will be other

complements to the blockchain industry

anyway. It is just that the blockchain

industry is one of the first identifiable

large-scale implementations of

decentralization models, conceived and

executed at a new and more complex

level of human activity.

Chapter 7. Conclusion

This book has tried to demonstrate that

blockchain technology’s many concepts

and features might be broadly extensible

to a wide variety of situations. These

features apply not just to the immediate

context of currency and payments

(Blockchain 1.0), or to contracts,

property, and all financial markets

transactions (Blockchain 2.0), but

beyond to segments as diverse as

government, health, science, literacy,

publishing, economic development, art,

and culture (Blockchain 3.0), and

possibly even more broadly to enable

orders-of-magnitude larger-scale human

progress.

Blockchain technology could be quite

complementary in a possibility space for

the future world that includes both

centralized and decentralized models.

Like any new technology, the blockchain

is an idea that initially disrupts, and over

time it could promote the development

of a larger ecosystem that includes both

the old way and the new innovation.

Some historical examples are that the

advent of the radio in fact led to

increased record sales, and ereaders

such as the Kindle have increased book

sales. Now, we obtain news from the

New York Times, blogs, Twitter, and

personalized drone feeds alike. We

consume media from both large

entertainment companies and YouTube.

Thus, over time, blockchain technology

could exist in a larger ecosystem with

both centralized and decentralized

models.

There could be a large collection of both

fiat currencies and cryptocurrencies

existing side by side. In his book

Denationalization of Money, economist

Friedrich Hayek envisions

complementary currencies competing for

consumer attention. He saw multiple

currencies at the level of financial

institutions, but as everyone now has

their own news outlets through their own

blog, Twitter account, YouTube channel,

and Instagram handle, so too could there

be arbitrarily many cryptocurrencies, at

the level of individuals or special

interest groups and communities. Each of

these cryptocurrencies could exist in its

local economy, fully relevant and valid

for value exchange and economic

operation in that local context, like the

Let’s Talk Bitcoin community coin,

musical artistÕs Tatianacoin, or

community coin in your local farmers

market, DIY maker lab, or school