Late summer, 2015, the Hudson River reflecting sunlight up onto the trees along the esplanade. I was reading an article about the perils of doing business in the Democratic Republic of Congo (DRC)—slave labor, corruption, exploitation of endangered habitats to get rare minerals such as coltan, which is essential to making smartphones. And then the word: blockchain. Apparently, the article said, this new technology could serve as a ledger to keep track of coltan that was mined in responsible ways. Blockchain could track sustainably mined coltan step by step on its journey from the forest all the way to the phone. That way, someone in America or Europe who bought a phone could be sure that it hadn’t endangered any gorilla habitats, for instance.
That’s a good feeling for the person buying the phone, for sure. But what about the miners who dug up that coltan? A little research showed me that blockchain also offered powerful ways of leveling the playing field, so the miners’ contributions might be better recognized. An artisanal miner, for instance, who now lost track of his coltan once the local middle agent bought it, would be able to track the movement of his product all along the chain. That transparency might give the miner some ideas on how to improve various stages of that long supply chain stretching from the DRC to the Chinese factories cranking out the phones, and eventually to the Apple Store on West Fourteenth Street, not far from where I sat, watching the river flow.
What kind of economy might develop if the first person on the supply chain had access to the prices at the final stop on the supply chain? How helpful might it be for the corporation using that coltan to receive creative input from the miner, who in many ways is more intimate with the product than anyone? At the very least, an important story could be told that would help the consumer understand the product. And that seemed to be only the beginning of blockchain’s potential.
Blockchain—what a weird name for such a cool concept. I soon became obsessed and dove in. This book is where I’ve come up for air.
Blockchain technology was originally devised as a platform for bitcoin that would track the spending or sale of each digital coin, transaction by transaction. That function alone would be enough to make the technology a world-changing invention. Yet soon after the introduction of bitcoin, in 2008, technologists began to realize that the underlying blockchain might have even greater value in the long run than the cryptocurrencies it was created for.
Blockchain is a simple technology that, at its most basic, serves as a permanent, unhackable ledger for almost any kind of information you’d like to record. Yet it turns out this simple ledger technology makes an ideal platform for building all sorts of innovative and radically new applications.
For example, register the sale of an acre of land, and there will never be a question of who owns it the next time it is sold. No title company needs to certify the sale, either. This application is already being developed in Honduras, where an estimated 80 percent of private land has an improper title, or no title at all. Blockchain registry of ownership can help prevent land theft, including invasions, and help protect forests from illegal logging and settlements.
Another type of real estate—digital real estate that only exists on the Internet—is being offered in a digital realm called Genesis City. A limited number of “lots” are being sold, with title registered on a blockchain, to people who can develop the digital space however they want. Is this hucksterism on the level of selling Florida swampland to northerners in the 1950s? Or is there value in owning a section of a digital world that is expected to be visited by millions? You could build a store, a game, a magazine, or something else in this space.
The benefits of blockchain extend far beyond simple money-making schemes. In East Africa, a company called Wala uses blockchain to give formerly unbanked people access to banking via their smartphones. This allows them for the first time to participate in the modern economy. And in New York, an artist named Kevin Abosch has recorded blockchain alphanumeric codes with his own blood and offered them for sale. He also sold the cryptographic registration of a photo he took for one million dollars, photo not included.
A growing number of businesses are now being created to operate without the traditional top-down hierarchy, using blockchain to decentralize ownership and control in ways that many people hope herald the coming of a more egalitarian capitalism. Something about blockchain inspires certain people to explore the tech in wildly creative ways.
On the other hand, as I discovered in my journey through the world of blockchain, it’s a technology that generates a lot of talk, with very little real understanding of how it works. While I don’t believe it’s necessary for everyone to have a deep technical understanding of blockchain, a conceptual understanding of how the tech works makes its transformative potential in our society much easier to imagine. I’m sharing what I’ve learned, here, with the hope of inspiring you to envision how blockchain might begin to transform your own life.