It’s not greed. It’s trust. Why blockchains matter.

tl;dr: Crypto isn’t about money. It’s about trust. Bitcoin was the way to get attention. And it worked.

Many people think that the story of blockchains is a story about money or greed.

Common Misperceptions about Crypto

I saw a video the other day with Warren Buffet. Warren recently had lunch with Justin Sun, the founder of Tron, one of the larger blockchain networks.

Justin paid over $4 million dollars for the right to lunch w/Buffet.

Apparently, in that meeting, Justin gave Warren a Bitcoin and tried to explain it to him. That doesn’t seem to have worked.

If you watch the video, Buffet says something like (paraphrasing) “I don’t understand it. I could just go and create money and give it to anyone I want saying it’s worth something.”

No, Warren, you cannot do that. If no one believes it has value, then they won’t take your coin. Just like if people didn’t believe Berkshire Hathaway had value, they wouldn’t hold it.

I’ve met Justin. He’s an incredible marketer even though there’s plenty of debate about the credibility of Tron as a network. No offense intended, but he is NOT the guy I want explaining crypto to Buffett.

First of all, I’m not sure anyone could explain it to Buffett. Second, I don’t know about Buffett’s Mandarin skills, but Justin’s English skills are not the strongest. There were others at the lunch, but I’m sure everyone was acutely aware of the power structure.

That’s an aside, because the larger point is that Buffett represents the majority. He thinks it’s either worthless or a “ponzi scheme.” It’s essentially counterfeit money, in his mind.

What Crypto and Blockchains Really Are All About

As Satoshi wrote in one of his earliest posts after Bitcoin launched,

“The root problem with conventional currency is all the trust that’s required to make it work.

The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.

Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.

We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.”

https://p2pfoundation.ning.com/forum/topics/bitcoin-open-source

In the 11 years since that was written, we’ve seen the emergence of a global “post-truth” society.

The lack of trust is all around us.

• As the Coronavirus started to emerge this year, did anyone believe China’s health numbers?
• Democrats don’t trust Republicans
• Republicans don’t trust Dems
• Tories don’t trust Labour.
• Labour don’t trust Tories.
• Some don’t trust CNN. Others don’t trust Fox.
• Many don’t trust banks, credit card companies
• Elizabeth Warren tells us not to trust the government.

And in countries around the world, governments don’t trust their citizens to use the Internet, so access is turned off. That doesn’t engender trust.

Absolute Power Corrupts Absolutely

We’re seeing a rise of digital authoritarianism globally that threatens to take away more rights and more freedoms.

That’s the real problem that Satoshi was trying to solve. When we put too much trust in others, we put ourselves at risk.

And with the tools and tech of today, it’s easier than ever for others to seize control of our lives.

Why we need Public Blockhains

Public blockchains can serve as a bulwark against the malfeasance that comes from excessive centralized control.

Money, being something that almost everyone touches, but which only a few people control, was the best and most important target to attack. That’s why it was first.

In the context of the 2008 financial crisis, that also made sense.

But it’s not the only target.

Any place where power can get concentrated so as to make individuals more vulnerable, that’s a problem for which blockchains exist.