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Why Blockchain Is a Revolution

in busy •  3 months ago

I was browsing Medium and an article caught my eye: "Blockchain Isn't a Revolution", by a fellow named Kevin Werbach, a Wharton professor.

I wanted to read his arguments, about blockchain rather being "two big innovations and one promising idea" but instead I got this:


No kidding!

Well, guess what, I don't want to "upgrade". I don't want to "become a member" and pay Medium $5/month in order to read interesting articles written for Medium by others.

I do not want to let Medium decide what it does with my $5/month (whether I read or not, whether I appreciate the content or not). I don't agree to let Medium decide how to split them between the authors (I suppose "a little") and its VC backers (I suppose "a lot").

Even if I'm wrong to "suppose" what I suppose, what matters is:

  • in the present, my perception influences my behaviour
  • in the future, Medium can decide to change its policies any way it pleases, and prove my prior suppositions right, without even letting anyone know about the change.

Also I do not want Medium to possibly take my reading habits and those of other people like me and do fancy AI stuff on it and then sell it to whoever is ready to pay for it.

Don't know if they do it but that's beyond the point: they have complete control and thus can decide to do it at any given time in the future, even if they don't do it now.

Yes, you can say I do not trust Medium on that. I've been had too many times in the past already with all these platforms that were providing me with some other people's services and were taking a smaller (at first) or bigger (and constantly increasing) cut in the process, one way (direct payment) or another (reselling the data to advertisers).

But, you'd say, then how would people writing those beautiful and insightful pieces get compensated for their efforts if it wasn't for all these platforms? Surely one needs to pay the intermediary and implicitly trust it to aggregate the revenues and then redistribute them to the authors according to some clever algorithms, right?

To which my first reply would be: "Why don't they write on Steemit?"

Nobody would need to pay anything, their creative and insightful writing would be compensated by ... the blockchain! Yes, you know, that ... apparently non-revolutionary thing ...

And the irony of the situation dawned on me: actually, it makes sense that someone who hasn't yet discovered or understood the power of the steem blockchain and its "Medium-like" applications (Steemit and cannot have understood why Blockchain, on the contrary, Is Revolutionary.

Had he understood the fundamental difference between Medium, a despotic system where most authors provide value for free for the Despot to do as it pleases with it, and steem, he would have started by publishing on Steemit first. And consequently he couldn't have published something with that title.

Ivan the Terrible and Harsey
via Wikimedia Commons

Absolute Despotism versus Plutocracy

"But", could you say, "isn't the steem blockchain in essence just another Despot, like Medium ? What good it is to renounce one Despot only to bow to another?"

Actually this is not what most people say. They usually retort "but steem (or any other blockchain for that matter) is not a democracy either!" Which I think is fair.

As far as I know, there's no blockchain system yet that appropriately models the advanced and sophisticated governance models perfected by humanity over several millenia.

Not yet.

But the fact that no blockchain offers a perfect system yet does not mean that none improves (ever so slightly) on the "Platform Despotism" in which we are living right now.

Delegated Proof Of Stake (DPOS) systems such as steem allow participants to commit to a set of predetermined rules which are enforced by the consensus algorithm.

One can compare the operating parameters of a DPOS blockchain (block reward, inflation rate, reward pool, etc.) with the Magna Carta.

Yes, in a sense one may see the glass half empty, as Vitalik does when attacking EOS, and say that "plutocracy is still bad".

But for those living under the rule of King John, going from absolute despotism to a "plutocracy" was an advancement that is still celebrated as one of the most significant political moments in mankind's history.

A Chronicle of England - Page 226 - John Signs the Great Charter
via Wikimedia Commons

And I contend this is about the development stage we are in, with respect to the governance of decentralized systems of record and computation commonly referred to as "blockchains".

We are living in a platform despotism (think Facebook, Mark Zuckerberg and the Cambridge Analytica scandal).

Despite a (probably) sincere belief to the contrary, Ethereum simply replaces Mark Zuckerberg with Vitalik Buterin, as has been proved already back in 2016 in the times of The DAO.


Delegated Proof of Stake platforms are no modern democracies either. But they propose more sophisticated decision-making frameworks, able to achieve control over a broader variety of inputs

Unlike in Ethereum, where only miners have a (minor) say on the evolution of the protocol (while in truth the last word lays with Vitalik and Vlad Zamfir), DPOS systems offer each user, by design, a possibility to express an opinion on the direction taken by the platform, by voting for witnesses.

This is not yet "representative democracy" as users' opinions are weighted by their stake in the protocol, hence the accusation of "plutocracy". What is needed here to improve the political system is a "social ladder", a way for any user to climb the ranks of this virtual feudal society and join the "blockchain plutocrats" on the back of hard work and some specific talent, despite having started from nothing.

There are two notable points here:

  • "Platforms", companies that made possible and viable other businesses, thus demultiplying their streams of income, were the biggest economic innovation we knew about. Until the apparition of the theoretical possibility of building blockchain-based decentralized organizations.
  • The latter were better only on paper than the former, as the embarassement of The DAO situation has shown.

In theory, blockchain enables better organizational paradigms than were socially and economically viable before.

In practice, that involves solving a pile of new, hard problems. And when you combine our acquired habit of using old mental models with the fact that not every solution is a good solution, you may be excused for not being impressed with what blockchain has achieved until now.

But when dealing with exponential technology, one should strive to always look ahead and interpolate from the rate of progress. Just like the Magna Carta eight centuries ago, the rise of the Delegated Proof Of Stake consensus, in which participants can vote for the system's evolution, represents a milestone on the path toward blockchain based social-backbone systems

Looking back when trying to imagine how the future evolution of such a system will unfold, and extrapolating, is treacherous. This is probably what had limited the analysis of Kevin Werbach.

National Money versus Ad-Hoc Money

Although, I must say, I did not read his article, because Medium would not let me to, unless I upgrade ... so I need to wait a bit in order to get another free allowance ...

Had he published his article on Steemit (or instead, he would have reached a larger audience (everybody who can read on Medium can also read on Steemit but the opposite is not true ... unless you upgrade). And he would have had a much better idea of how much his content is appreciated because instead of useless "claps", which Medium then translates into $ if it pleases and as it pleases, he would have been directly paid by the readers through upvotes.

"Yeah", you could say, but then Medium pays its successful authors with real dollars. What steem does is simply allocating sums of a cryptocurrency which has value today, because of the general obsession with cryptocurrencies, but which could become completely worthless tomorrow.

That is a fair criticism and many people have a hard time explaining why bitcoin has a monetary value, why ether has a monetary value and more generally why a cryptoasset such as STEEM has monetary value.

There have been many explanations but none is simple and straightforward. I believe that is only fair: the concepts involved are intricate and we were shielded from having to really understand them by the incredible success of money and by its gradual evolution toward pure fiat forms, backed by nothing more than social convention.

We can now use money without having to truly understand what it really is or how it truly works.

I do not have a simple explanation either and I believe the focus on simplifying the explanation is wrong. Instead we should focus on encouraging people to think harder, use their System 2 more in order to become conversant with more complex realities.

I won't attempt to simplify: if you want to understand, don't be lazy, use your neurons!

You may start by reading this piece: Blockchain revolution: Money and Credit

As society has evolved, we became less and less dependent on physical assets, more and more dependent on communicating and collaborating with our fellow humans. The backing of fiat money is thus the set of rules and conventions that organize the present world into Nation States.

As technology progresses and spawns channels of communication and collaboration unknown before, additional forms of organization beside Nation States become manageable.

At a macro level, some people reckon we all belong to humankind and need to build a planetary organization. Such a global organisation would be far better suited at tackling global challenges, such as climate change, in the common interest, than are existing Nation State and their intricate webs of often conflicting agendas. Economic interactions between people inside such an organization would be mediated through a global currency that we can now envision thanks to ... blockchain technology.

At a more granular level, other people reckon all kinds of micro societies could be created to enhance people prosperity (the economic dimension) but also their happiness (the social dimension).

Micro societies had a hard time surviving and thriving before, because of the high cost, high rigidity and corrupting influence of fiat money. Thanks to the ability of blockchain technologies to easily provide a bespoke, configurable "unit of account, medium of exchange, and store of value" (a.k.a. "currency") as well as more elaborate financial instruments such as debt and equity, such "anational" micro societies either become sustainable or are given the needed boost to expand.

Take for instance the one aggregated around - and thanks to - the steem blockchain. It started with blogging but the power of the DPOS protocol took it further.

Now there are ways for people to start from zero and begin earning the blockchain's currency in several ways, reminiscent of the real world (earning from both labour and capital):

  • blogging of course but also
  • posting photographs, videos (DTube and DLive), music, and podcasts (DSound)
  • writing code, designing graphic or more generally working on tasks for the projects selected by
  • accrue "capital gains" by delegating ("leasing" without risk) their existing "stake" in the platform to other people who might know better what to do with it (or to platform-specific "content promotion" bots)

Moreover, there are also several ways to spend the earned currency inside the platform, in order to acquire desirable goods and services:

  • promotion services for one's posts
  • on-blockchain collectible cards from
  • trading services, arbitraging between the two platform liquid assets, STEEM and SBD
  • equity in the platform by "powering up" (i.e. acquiring the third, staking asset, VESTS)
  • charity donations through @fundition
  • specific, private information through encrypted messaging
  • any other goods or services where the seller accepts payment in STEEM or SBD

This is the equivalent of a fledgling micro-economy. Moreover, around topics (travel, life, homesteading, cryptocurrencies, etc.) many people have aggregated communities of interest and soft-coupled the steem "accounting" system with a Discord server for social interaction.

The ability to foster human communities interacting on both the economic and the social dimensions is something that previously was only offered by Nation States and their rather unwieldy para-statal organisations.

For the first time in history, thanks to blockchain technology, we can organize ourselves and interact with others along the whole human spectrum in a "nation agnostic" way, at both finer and coarser levels than those of a Country. These applications, these meaningful human interactions on both the social and economic dimensions were not possible or not sustainable before the advent of blockchain technology.

In addition, existing convertibility between STEEM and BTC or ETH on several exchanges allows people to convert the cryptocurrency earned thanks to their unique deployment of skills and effort on one of the steem-backed applications into fiat currencies necessary for basic needs in their countries.

People in places such as Venezuela, Nigeria, Bangladesh, Indonesia and others can afford a better dress or an additional meal on the family table because they found in the steem blockchain ecosystem a means to express themselves in a way that someone, somewhere, found valuable and rewarded.

Without having to pull out their credit card. With no need to surrender personal data and be assaulted by ads. With no one having the power to arbitrarily change the rules of the system overnight. With no one "taking a cut" in the process.

I believe that is nothing short of a revolution.

Other posts on the impact blockchain and cryptocurrencies are likely to have on our societies:

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I still think there is a lot of work to be done in the direction of educating the people of the benefits of this technology. The problem is that we don't spent enough time highlighting the pros and also the cons of blockchain with existing techs. There is too much focus on pros and we should offer a whole perspective. Also, there has to be a shift and stop hailing Bitcoin in every blockchain discussion. The regular human mind hears "Bitcoin" and all the rest ...well it doesn't matter. They already have a stamp on your back like "ala e cu dracu il el" ("the devil resides in it").


There is indeed a lot of educating work to be done. Especially since the topic is truly complex


Ca n'aurait pas pu mieux tomber pour illustrer mon propos, ce "snaffus" avec Status ...


Je pense que tu vis dans le futur :D


merci pour le compliment :)

@sorin.cristescu what do you think will be the most influential social platform in future? A decentralized social platform or the centralized giants like facebook will still be the leaders??


Might not be the giants of today. I think people begin to realize how much power they are handing to these companies whose interests are not at all aligned. If you had a car and wanted to drive North, would you take the back seat and give the wheel to a random person who makes no mystery of wanting to drive South ? This is what people have done with Facebook

Decentralized is a complex word - decentralized yes, in the sense of a "platform with a governance structure which aligns the interest of the operators and the data owners"

If you want to read Kevin Werbach's article this month without upgrading, it's on!xYMyFSQC!RUJpp6ZP_5nILZO59F5gE9qr_WqWYA3b7njoSOCisBg


Wow, you were fast to do a fan a favor ! :-) Thank you !

In my opinion, the blockchain technology resembles the Industrial Revolution and it will produce equally profound changes in the economy and society.


It's a commonly held opinion. But I see more and more disbelief and dismissive hand-waving - possibly a psychological fallout from the cryptomarket retreat

Thank you for an excellent piece!

And he would have had a much better idea of how much his content is appreciated because instead of useless "claps",

Yeah, write on Medium and you might get the clap. And not just once but dozens times! :D

Coins mentioned in post:

CoinPrice (USD)📉 24h📉 7d
SBDSteem Dollars1.083$0.36%-16.35%

Electronic currencies are very large and carry very large sums
Really great thing very well published, my dear friend

I think it's nature is to free every one , and so should call it from now "freechain" not block chain.😀😀

Hey friend please help me to join me in your community my friend please upvote comment me I hope you like my content plz support me.