Calculated Thought: How cryptocurrency could change the world

Columns March 21, 2018

While the idea of trustless transactions and a more decentralized internet had early adopters excited about blockchain technology, it was the price romp that garnered public attention and drew comparisons to the dot-com bubble.

This may be why we see a holding pattern in price movement. Outside of the speculators who saw a quick path to profits, early adopters, developers, and those interested in the technology are waiting to see what it can do as it matures.

Therein lies a question: does the average person need to understand blockchain technology for it to change the world?

Calculated Thought is a column dealing with student finances that is featured in every issue of Nexus.

Ethereum co-founder Joseph Lubin was interviewed recently at SXSW; when asked about a tipping point for blockchain to be understood en masse he replied, “Probably the depths of blockchain won’t be understood by the masses ever, in the same sense that TCP/IP and HTTP aren’t understood by the masses.”

In the 1990s, those magical internet protocols still used today to help run the web weren’t understood by most people, and even fewer could comprehend the potential of a connected world. The average user of the web explored little more than email and chat rooms in its infancy. In a mid-’90s interview with Bill Gates, David Letterman balked at the idea of listening to a baseball game over the internet, and jabbed, “Does radio ring a bell?”

I can’t help but draw parallels to the criticisms of Bitcoin. Yes, we already have digital cash. You can use payment systems with the help of banks and payment-settling companies to transact all over the world.

Yet, as the internet spawned the world wide web and offered the decentralization and distribution of information—known as the “internet of information”—blockchain may offer that same effect through the “internet of value.”

Dan Tapscott, co-author of the book Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World, said in a 2016 interview with I-CIO that that the internet of information had a weakness: “You couldn’t store, move, transact value without a powerful intermediary. And that’s what blockchains solve.”

I’ve previously written on the idea that our personal information is a commodity and that we should question whether access to applications like Facebook and Google is worth the trade for that information. Blockchain may have an answer.

In that SXSW interview, Lubin says that “on the web right now, I would argue that identity is broken… it gets stored on corporate servers… and monetized by corporations.”

Lubin’s company, ConsenSys, is working on an identity construct built on the Ethereum blockchain that hopes to allow users to, according to Lubin during the SXSW interview, “control encrypted aspects of their identity, selectively and granularly disclose those aspects of their identity in situations they designate, and if they want to monetize those, they can do that.”

There is much work to be done before we see a shift to decentralized applications in our everyday online activity. But, just as the web drew confusion, excitement, speculation, a spectacular crash, and a life-altering leap in technology, blockchain technology just might change the world.