Boom Times: What’s Trust Got to Do With It

in The Brick House Cooperative
on May 2, 2022

Some months back the novelist and media activist Cory Doctorow, whom I generally believe to be the bee’s knees, wrote “The Inevitability of Trusted Third Parties,” with the subhead, “The search for a crypto use case continues.” I agree with the headline: yes, trusted third parties are inevitable. Sure! The subhead, on the other hand, is plain wrong.

Doctorow, a dyed in the wool Crypto Skeptic, begins by taking issue with

the idea that we can replace fallible, untrustworthy people with immutable, decentralized ledgers, and ask them to serve as referees and/or escrow agents in complex transactions between strangers who don’t have any reason to trust one another.

It would be dumb as hell to imagine that people can be replaced by decentralized ledgers, a claim I’ve never heard anyone make.

Blockchain is a value-neutral recordkeeping tool that can only be used by people, who have all kinds of human agendas and intentions. If you have a pencil and paper, you can use it to record the truth, or lies. The paper itself is morally indifferent and will respond the same way to the operations of a pencil in either case.

Blockchain is the ideal tool for one purpose: maintaining timestamped, unfalsifiable public records, much like those that are traditionally kept by institutions such as title companies and patent offices. Blockchain can also produce bum cryptocurrencies, scams, and NFTs of Bored Apes. Like I’ve been saying, cryptocurrency, like regular money, is used both for scams and for legitimate purposes.

Any store of value is a target for charlatans and thieves, but in the case of blockchain, what cannot happen is this: once you and your counterparty sign a record on a public blockchain yourselves, with your own private keys, nobody can come in afterward and alter that event in the slightest. You and your counterparty and anyone else who cares to check and see what happened are 100% guaranteed to see identical records.

A distributed public ledger is not an umpire, and it cannot be expected to adjudicate disputes by itself. But the ledger can be programmed to record events in such a way that all parties can obtain timestamped verifications of accuracy. Again, you can use this feature however you like, poorly or well, for good purposes or bad. The system is math and it is morally neutral. The tickets are automatically sent to you when you pay X amount of crypto, perhaps, or the smart tag in the container ship pings the ledger with its GPS coordinates, or the QR code grants you access to a certain download site. You can design and schedule these verifications with failsafes or without them. Either way the records will persist on the ledger, and they cannot change, not ever, or basically until the internet ends.

The need for trusted third parties—banks and exchanges that must be trusted to move fiat in and out of cryptocurrencies, wallet companies, and the like—doesn’t alter the potential utility of blockchain in the slightest. Doctorow’s position is like arguing that computers are useless because you need electricity to run them; you do, but that’s irrelevant. Most human transactions require trust, and we have a lot of different tools for verification and recordkeeping in order to protect that trust. Blockchain is just one more, perhaps the best one yet designed.

There are a whole lot of legitimate applications for blockchain, and that’s why, despite all the furious resistance to crypto, so many industries are quietly experimenting with the many ways it can save them time and money.

To return to Doctorow’s erroneous subhead, “The search for a crypto use case continues’: Here are the two use cases that I have been working on from about 2014 onward.

  • Archiving journalism for cultural preservation, and to protect press freedom and speech rights
  • Microtipping and paid, tippable commenting for journalism

My publication, Popula, and my colleagues’ publication at Sludge, with the help of our original funders at Civil, established proof of concept of both these use cases back in 2018-19.

Please note: the use cases came first. Pretty much as soon as I understood what Bitcoin was in 2012, I began to conceive of the possibility of creating journalism archives on a public blockchain, and I spent years looking for partners who could help me achieve this. The skilled developers at Civil, including Walker Flynn and Toby Fox, made it possible; on December 17, 2018, we archived the full text of a Popula article onto the Ethereum blockchain.

What this means is that Tom Scocca’s underreported role in the genesis of the #MeToo movement is available to anyone with a web connection who cares to see it on the Ethereum blockchain, together with the timestamped proof that I recorded my thoughts on the subject that day in December of 2018. This archive cannot be erased or even remotely disturbed by Peter Thiel or Elon Musk or anyone else; no takedown notice can dislodge it, no censor can order its removal. Maybe nobody wants to read my views (though I hope they will, I really mean every word) but that is not the main point at all; the point is the archive itself, the proof of concept.

At a time when we are witnessing the literal banning of books in public school libraries by an increasingly unhinged and intolerant far right wing—at a time when the whole of independent media in Russia, Hong Kong, Hungary, Turkey and elsewhere has been summarily annihilated—the value of unfalsifiable permanent public archives can hardly be clearer. Put it this way, if such a use case had been around in 1984, the Ministry of Truth could never have come about.

Blockchain archiving is a really powerful tool, and I haven’t used it very much, preferring to wait until a better-informed consensus arises as to the potential pitfalls of creating impermeable records on the internet. But the point is made, and if Popula were a bigger institution with more resources at its disposal, I would be setting up all kinds of projects for recording threatened information right now.

As fans of the long-ago Flooz, Beenz, etc., will recall, many many internet microtipping projects have come and gone. The ETH-based microtipping system we built at Popula in 2018 is super primitive, a rough draft built at rock-bottom prices by a genius named Matthew McVickar to satisfy our second long-desired use case. The system is entirely dependent on MetaMask, an in-browser wallet maintained by ConsenSys, plus it’s very sensitive to ETH prices. At the moment, the latter impediment makes the system far too expensive to use. When we launched microtipping in February of 2019, the price of ETH was roughly $135; today’s price has been hovering under $2800. The tools to address these deficiencies already exist, in the new proof of stake blockchain systems; we’d be charging ahead on this and related projects too, but for lack of resources.

Real live blockchain use cases like ours routinely fly under the media radar for reasons I have never quite been able to fathom; it may simply be that the ‘libertarian’ tech bros and the anti-‘libertarian’-tech-bros suck up every atom of oxygen in the room. Maybe news of legitimate projects is simply drowned out by the deafening roar of Beeples and Yugus and Airdrops and OpenSea and the endless dispiriting cascade of wealth-obsessed crypto shenanigans. The real, game-changing everyday use of cryptocurrency in the global South, and the massive energy savings that proof of stake will bring about have gone perplexingly unremarked by a boatload of journalists in the US who claim to be progressives. Doctorow in particular has more than enough imagination and insight to see that real use cases for blockchain are not only evident, but exploding. But it’s hard for most public opiners to take it back, once they’ve placed a public bet like that.

Boom Times is a blog about gambling, luck, money, greed, investing, blockchain technology and cryptocurrency.

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