Kill Bill — but you probably knew that already
After tens of articles about what the blockchain can do, we still miss out many possibilities when looking at new projects. I’m writing this piece to bring attention to a feature exclusive to blockchain.
Blockchain is all about decentralization. In every true blockchain project, the system and the tech replaces the intermediary. This matters A LOT, and is the heart of democratizing the system:
- Middle-men take a large portion of the profit. That is how they stay in business.
- Intermediates enforce their own rules that you must follow to stay in the game. Think of sending money to a friend via PayPal but noticing that PayPal is not supported in that country yet.
- The Middle-man architecture is by nature slower than a peer to peer system because there is one extra layer of complexity involved in the system.
In the words of Tom Goodwin:
“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”
Blockchain can disrupt all of that — if vehicle owners are paid for their driving, content creators are paid for their content, and real estate owners for renting their property, there will be no need for intermediaries. If you can send money to anyone, there will be no need to wait for a middle-man confirming the transaction.
Empowering creativity
As Ross Baird puts it:
“In the real world, money flows to the ideas that are the most convenient to find or the most familiar, not necessarily those that are the best”.
VCs fund products that solve problems they understand, and being mainly white, male, and elite-educated themselves, they fund people of the same backgrounds.
In the AI space, people feel that robots will take their jobs. But the counter-argument states that AI only takes the redundant part of the jobs, leaving people to work more using their creativity. Blockchain also has a similar effect.
If anyone is able to get compensated for what they create directly, they could focus on what they are best at instead of fighting for recognition.
Art is a great example.
Imagine artists that want to hold a concert. Currently they are dependent on event organizers that would only accept them only if they are “profitable”, just like an author is dependent on a publisher. But with blockchain, smart contracts can do the work and it will be the fans who have the say; not the publishers or event organizers. A good example for this is KickCity which lets fans see what is out there and promote the project of their choice, solely based on the content the artists provides.
What do the middle-men really do?
It is not that middle-men are plain rip-offs — they also bring value to the ecosystem. Systems such as escrows, disputes, rating and support are building blocks of a professional ecosystem. Blockchain tends to abstract these services and puts them in the technology, and embraces its authenticity with its hackproof nature. But there also blockchain projects that designate middle men to solve these issues. Matchpool is a great example for this; it incentivizes people to act as middle-men for their pool of expertise. Thus, it creates a democratic system where you both benefit from the services of the middle-man while not losing great shares of your efforts to them.
Is blockchain truly decentralized?
While the architecture of blockchain is based on decentralization, there are still many nodes that imply a “centralization effect” on the network. For instance crypto-exchanges are centralized gateways to the cryptocurrency world. As such, they carry the same risks of centralized projects, including being hacked.
In addition, in many of the blockchain projects I’ve seen there is still a portion of the fee going to the company that presented the system, sometimes in every transaction. That being said, these numbers tend to be significantly less than their centralized counterparts. Furthermore, the original creators are appreciated much more in blockchain projects.
For instance, DADA.nyc offers an art-selling model that pays a share (at least 30%) to the original artist of the art automatically every time that art is (re)sold — something impossible with any other technology.
Closing Thoughts
I consider blockchain as a way of thinking. Beyond the hype, democratization is a strong, progressing force. Facebook allowed everyone to easily connect and share his or her thoughts, and that’s why it gained popularity. YouTube lets anyone create a “TV channel”. Anything that brings power to the masses is welcomed to stay.
Blockchain offers this by nature.