Crypto has created the first global-scale network of trust.
Do I think Bitcoin is revolutionary?
Look, Bitcoin and the whole crypto-currency universe is one thing. And we can talk about that.
But blockchain technology – the innovation underpinning crypto-currencies – that is a revolution.
Because blockchain scales trust.
If you don’t understand this point, then you probably don’t get the revolution that’s coming down on us right now.
Trust is the engine of our society. Humans are random, messy and sometimes violent creatures. Yet we manage to all get along – interact, even trade with each other, because of one thing – trust.
Sometimes that trust is built on social contracts. I don’t snaffle your parking spot at Woollies because that would be bad manners.
Sometimes it’s built on institutions. I can drive past your car coming the other way, both of us doing 100km/hr, and we can come within mere meters of each because there’s a painted white line between us.
I trust that you’re not going to cross that line because, well, it’d be a bad outcome for you too, but we have also created a culture where everyone keeps left, and we have enforced that culture with a rule of law.
And when I buy a pie from the local bakery, I can trust that it’s not filled with powdered glass because there are serious legal consequences for that. Just as there is for all sorts of murder and misbehaviour.
Those legal consequences, and our collective faith in the absolute power of the police force, creates a climate of trust where we can just generally get along with our happy lives.
Trust is everything.
And this is where the blockchain comes in.
The first wave of the digital revolution – the internet – globalised communication. It gave us email and Skype, and massively expanded the reach of all of our communication frontiers.
30 years ago, getting a message to Nigeria was a massive headache. Now, I have Nigerian princes emailing me on a daily basis.
But while the internet scaled communication, it didn’t scale trust. If I wanted to transact with someone on the internet, I needed the cover of a trust-enforcer. If I wanted to send money, I needed the global banking network. If I wanted to buy something, I needed a body like ebay.
I needed to go through an institution that itself had submitted to local trust enforcers. E-bay was answerable to Australian law, therefore I could trust its trust.
Trust was still locally determined.
But now we have an alternative.
Bitcoin, like any money system, is built on trust. However, that trust is now a feature of the system itself. It doesn’t rely on an external enforcer, but comes with the structure of the network itself.
There are rules without rulers.
So I can have a trusted connection with anyone on the network, simply because I know that the network’s got my back.
That means I don’t need something like ebay to enforce trust for me. I can go to the system itself.
Suddenly the expansion of our networks of trust, our networks of trade, doesn’t rely on the growth of third-party providers anymore.
Now, wherever there is the internet, there is trust.
So welcome to a market of 8 billion and counting.
And the question is, what opportunities are available now that humanity has scaled trust and made it global?
Whatever they are, they’re going to be massive.