Great article, Tory Green, thanks for sharing! Is this a correct summarization of your argument?:
1) Complex systems exponentially generate further complexity as they grow, creating significant risks and opportunities?
2) IoT is rapidly increasing the complexity of the internet and digital systems
3) Blockchain, a software technology for decentralized, trust-less coordination, could be deployed across this network of devices.
4) We have no idea what this will look like in the future, but you suggest that it’s going to disrupt today’s big tech power silos while generating quadrillions of dollars of value.
I’m a crypto skeptic who’s holding on to a few bitcoins in hopes that BTC will, at some point, become relevant as a credible store of value/transaction medium outside the community of crypto nerds and Coinbase Pro speculators. My experiences interacting with Venezuelan developers who earned BTC while living in Caracas convinced me that there’s a possible future there. Beyond that, though, I’ve struggled to see where the wave of industry disruption is going to come from. Two reasons for this:
- Although the diffusion of IoT devices does indeed create a lot of nodes in the digital network, there is massive disparity between nodes in terms of how useful they are for distributed combination. Block chain mining is incredibly resource intensive, and a lot of these devices are just going to lack the bandwidth/processing power to meaningfully contribute to a distributed computation network while faithfully executing their main function (e.g. making sure your hot espresso is ready at 7.30am).
- For the past 200 years or so innovation in industry has been the result of private innovators chasing returns and, to a lesser but extremely important extent, governments sponsoring advances in technology that the private sector wasn’t going to for a variety or reasons. In both situations, the party that is taking the risk expects to capture the value. The challenge with blockchain-based business models is that, precisely because they are distributed and open-sourced, tend to pass surplus to the miners and end users, rather than to the originator of the service or product. While I’ve found crypto to be enormously intellectually appealing, it’s unclear to me what this new class of entrepreneur is going to look like. To date, the vast majority of real money in the system has come from VCs and speculators.
Just my two cents. Would love to hear your thoughts!