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Stephen Wise Blog

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With no middleman, for example, with no bank to have to deal with, we could avoid those annoying fee’s and charges.

Block chain's great Promise

Middlemen are part of our daily lives. The great promise of block chain technology is eliminating the middleman. The original / most famous application of block chain is cryptocurrency, such as bitcoin. With no middleman, for example, with no bank to have to deal with, we could avoid those annoying fee’s and charges. Sounds great! Really? Who is going to do the work to provide a monthly statement of all your deposits and withdrawals? Who is going to do the work to lend money so you can buy a house or car, or pay for the hundreds of smaller purchases you make? Who am I going to call if I am having trouble logging in and can’t access my money? Who am I going to call if my bank engages in fraudulent activity?

Block chain's technology

Block chain uses crowd sourcing, massive computing resources, and math. The result is a process to allow us to exchange value directly with each other, without using a middle man. You might think we do this already. For example, if I make a deal with the neighbour to cut my grass for $25, you may think there is no middleman. But there is a middleman. I can’t pay unless I deposit my pay cheque and take out money from my middleman/bank. The promise of Block chain is that we can eliminate the middleman and instead of using a middleman/bank to keep track of our money, we will use the crowd to keep track of our money. The block chain response is something like, ‘Isn’t this going to be fantastic? We will deal direct with each other and rely on math and big computers as a proxy for trusting our bank/middleman’. This is not so fantastic. In the current models, we have no way to reverse a fraudulent transaction, no way to track money laundering, and no way to stop terrorist financing. Governments and banks aren’t going to hand over the keys to the economy so easily.

Peak frenzy

We are approaching block chain peak frenzy. I know because I failed my second-year statistics course but still read Satoshi Nakamoto’s paper on distributed databases, probability, and time-stamping. The trouble right now is the conversation is being dominated by charlatans jumping onto the next big thing. If not charlatans it is geniuses interested in the math, or disaffected folks interested in disrupting big corporations. Or, all the above.

Steve Jobs

Something big is happening but block chain is missing it’s Steve Jobs. I think block chain’s Steve jobs will emerge from Toronto, but that is for another article.



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