Blockchain: The Digital Wild West

Outline

Introduction

• Blockchain is changing rapidly everyday: new releases, new whitepapers, new tokens and coins
• There is a lot of noise is this space. It's quite similar to the Wild-West. It's the new frontier of innovation. Similar to the Internet bubble
• Every celebrity, personality and media host is talking about it or plan to. Every investor knows what crypto is about and have their opinions on the asset.
• But everyone knows there is potential for serious impact and wealth to be made here. Everyone is rushing for that prize, it's a serious gold rush.
• Those who will be successful are those who will see through the noise and find the signal.
• The goal is: to find the signal in the noise and make sense of this chaotic and everchanging field

2 months at IAN

• The IAN blockchain lab started when I joined at the end of February as an IAN Product Development Fellow.
• I had an interest and I thought I would give it a shot. I opened my browser and got to the research on this vibrant space
• From NFTs to DeFi, I have come across developments that have changed my perspective on how the world will look like in the future.
• When Marc Andreeseen said that software is eating the world, he wasn't kidding.
• First, software came for paperwork with the PC revolution, it came for letters with email, it took over media with blogs and social media, it run-down brick and mortar stores with e-commerce. Now, it is coming for our money with crypto.
• But the revolutionary technology, called blockchain, is not just coming for money. It has it's eyes on value-exchange. Anything of value that you can think of can theoretically, be tracked and exchanged on the blockchain.
• Think of artwork, title deeds, votes, leases and so on.
• These valuable materials have been managed by central authorities like the Ministry of Lands, IEBC and Copyright boards. They manage this valuable data by placing it in one place, away from the public eye, where it is vulnerable to malicious manipulation and accidental loss.
• In short, our valuable data is not safe with central authorities. Some might say there are efficient and we should not worry, but this is simply not true.
• We don't put up walls for the good times, we put them up for the bad times. This goes for the every security measure and policy. We have standing armies because they offer security for the bad times, because they will come.
• Therefore, why do we place so much faith in traditional and centralised systems when we know that they have a fatal flaw? A flaw which can be exploited and lead to dramatic and disastrous results.
• Remember, we can get lucky many times and have our data safe, but the aggressor only needs to get lucky once. Then it's game over.

The Plan of Attack

• There is a Japanese saying, "Defense is the delay of defeat". We have our centralised systems and we have built firewalls to protect them from hacks. We have played the defense card and it has worked for now. Cryptography has been used for passwords, keys and pins. It authorises the relevant people and rejects the unauthorised and malicious ones.
• However, we have fortified our digital systems but left out our human systems. How do you stop a bad but authorised actor from making illegal transactions? He has the rights to do it, so why wouldn't he? Will you pay him enough? Block that function?
• This situation is difficult, especially if he is the owner of the system. You can't just take the system away from him. This is the issue that regulators face with central authorities like Safaricom, Twitter, Facebook, banks and so on.
• They own the systems and they are entitled to use them, even though they may infringe on people's rights. You can enact laws that make certain actions illegal, but you didn't take away the power for them to do it.
• We are still on the defense and we can never win with our current strategy.
• From my findings, blockchain is the solution that can launch an attack on these malicious human actors.
• It's a system that takes away the need to trust the central authorities for good will. It does this by shifting it to the algorithms and mechanisms that make up the system. We trust the system, not the people that made them.
• In doing so, blockchain launches a structural attack on central authorities and how they do business. The aim is to make them irrelevant and pave the way for a new world.
• We live in a world of social hierarchies, where the few rule the many and make rules to keep it so. But this will change, from social hierarchies to flatter systems of cooperation and coordination. Each node has it's unique function and shares it's expertise and information with many other nodes.
• The new world will be run, not by social hierarchies, but by networks of individual nodes, pursuing their own self-interests
• I will leave a short snippet that I keep in my journal below for reflection:

You and I can bring civilisation back into order neither by seizing political power, nor by attacking it, but by moving away from it, by diverting our focus from marbled temples and legislative halls to the conduct of our daily lives. The "order" of a creative civilisation will emerge in much the same way that order manifests itself through the rest of nature: not from those who fashion themselves leaders of others, but from the inter-connectedness of individuals pursuing their respective self-interests.
- Butler Shaffer (The Wizards of Ozymandias)