The search for a million reasons why the blockchain will not succeed has become one of the greatest innovations of the last 500 years.
What you are about to read is a funny semi-fiction story based on Stuart Hilton’s The Making of Modern Britain and my interpretation of the blockchain’s impact on the modern world. I was struck by how the description of a pioneering technology from the industrial age was reminiscent of the awe and fear of blockchain in our time. Some of the quotes are so relevant that replacing “railway company” with “blockchain protocol” would cost the same.
After several “bubbles” (eight so far) and high-profile announcements, remember Libra and TON? “I thought now would be a good time to come up with (pun intended) a story about a new technology that could be the greatest innovation in the last 500 years.
Why worry? From a distance of two centuries, it is difficult to understand, let alone believe, the impact that the development of the railway in the early 19th century must have had. Similarly, the average observer is stuck between a bitcoin (BTC) evangelist preaching the doom of the dollar and a big bank crypto skeptic. In fact, there is no clear trend as to what to expect from distributed ledger technology over the next few decades.
The physical effects of the railroads were dramatic: “Great mechanical horses, breathing fire and smoke, pull impossibly heavy trains at unimaginable speed across a landscape altered by the embankments and cuts, viaducts and tunnels that were required to pass them.” Stuart Hilton describes the powerful role that an emerging industry, often frightening and speculative, has played for the UK, a case chosen for in-depth analysis.
The author captivated me with an informative and interesting narrative that almost felt like a parallel memory of the blockchain industry. Railroads “changed the way wars are fought and peace is maintained” by allowing blockchain to destroy authoritarian regimes and propaganda machines. Early trains proved to be one of the main engines of the “dramatic industrial growth of the nineteenth century”, allowing the blockchain to revolutionize finance, which is the main artery that pumps blood into the current economy. Railroads “made the state think about hands-off politics, which was its default position,” while blockchain has yet to become a leading force in freeing people around the world and recovering their assets.
Below is a summary of what Krypto has done for us using the railroad analogy (and the structure of my future articles on the subject).
Shock and the first cryptocurrency
Electronic currency and triple-entry bookkeeping preceded Bitcoin. The blockchain property of the new block being hashed with the previous one dates back to at least 1995. Then scientists Stuart Haber and Scott Stornetta came up with a way to put digital documents with timestamps to resolve intellectual property rights. They invented a chronological chain of hashed dates to verify their authenticity in 1991, which was used in issues of The New York Times four years later.
Related: Back to the Original Purpose of Blockchain: Timestamps
Although the cryptographers did not set out to create an ambitious project, a series of discoveries inspired Satoshi Nakamoto to introduce the Bitcoin protocol as a response to unfair and opaque global banking. As Berniske and Tatar point out in their book Crypto Assets, cryptocurrencies gradually took over the minds of people from cyberpunks to traders to traders, until one journalist asked an interesting question: what exactly is Proof of Work (PoW)?
Ironically, Satoshi never mentioned “blockchain” in his 2008 white paper. It was the Bank of England who, in 2014, argued that the “distributed ledger” is “the key innovation of digital currencies.” The following year, two popular financial magazines took notice of the concept when Bloomberg Markets published an article titled “Blythe Masters Tells Banks Blockchain Changes Everything” and The Economist published “The Trust Machine”.
“What could be more absurd than the notion that locomotives travel twice as fast as stagecoaches?” wrote The Conservative Journal, The Quarterly Review, 1825.
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