Web3

As Mugatu would say “Web3 and crypto, so hot right now”. Nothing like new financial instruments to stir up passions and web3 might be one of the greatest branding campaigns ever. Crypto currencies like Bitcoin and Ethereum have captured the imagination with their run to over $1 trillion dollars in value. These cryptocurrencies also have received a lot of criticism as their proof of work validation schemes consume more power than Sweden using over 110 Terawatt Hours per year. .

As hard as it may be I’d like to put aside all the currency speculation, NFT speculation, web3, decentralized web, proof of work, proof of stake, etc. I’d like to focus on the part of blockchain like technologies that I do think will be transformative.

Digital Verification

“Trust but verify” is a Russian proverb that cuts to the core of the issue of how different individuals can work together effectively. Without some verification trust cannot scale as it becomes too easy to counterfit and the incentives become to cheat rather than work together. Verification can be surprisingly hard at scale though and can be difficult to retrofit. As more and more of critical data becomes digital and hosted by 3rd parties how can we be sure that it hasn’t been tampered with? Currently when using database to store information we assume that the data goes in the same way it comes out. Internally modern databases use row or page level checksums to verify data integrity, but that isn’t exposed to the end user. This inability to verify data integrity was always a little worrying even when inidivduals ran the database on their physical machine in their physical control. Now however databases are being run in the cloud on managed hardware and software stacks that are uknown to the end user which requires even more trust. Imagine if these databases did something similar to blockchain and emitted a token after each transaction that could later be checked to ensure that data hadn’t changed, or possibly even been read again. How does one audit their data in the cloud? The notion of verification can be very broad. Identity verification for privacy and privileges. Ownership and authority verification. Transaction status verification (the all important escrow). Verification of statements like credit score, salary, etc. when getting a loan. Currently many of these verifications are done in an ad-hoc way that has evolved in conjuntion with local laws and courts rather than designed for safety and scalability.

I firmly believe that the ability to trust and verify at scale will continue to be transformational and that while the payoff isn’t obvious at first, we should be leaning into these technologies that enable us to all work together more effectively. Imagine what the internet would be like if we weren’t able to verify website credentials to utilize SSL protocol that powers the https encryption that makes web commerce possible. Linus Torvalds paused development on the Linux kernel to develop git to allow fast and distributed development. For git the verification is implicit in that the very naming convention for every branch, or software configuration, is the SHA-1 hash of the repository at that state. Implicitly the verification is the name, so it is possible for an external party to verify that they get the same hash.

My personal bias is that the quiet power of collaboration is very under appreciated. We all love a good hero story. The myth of the titans, superheros, superstars, etc. are plentiful and popular. In contrast, the teams of people that installed potable water throughout the nation have few movies made about them. There are surpsingly few movies made in general about hard working folks, showing up to work with their colleagues, helping the kids with homework, getting the dishes done. Our museums are filled with the relics of those that spent the most on their own funerals, weddings, paintings and a lot less with those individuals

In my opinion the web is just the latest phase of an evolution of humans figuring out more effective ways to work together. Many inventions like common currencies, courts and rules of law, authority of institutions, stock and debt markets have transformed the scale of what is possible for humans. The ability to deeply specialize, add enormous value through efficiency and share that value across a society has transformed humanity allowing us to 20x our population and 3x our average lifespan. The development of open systems that encourages us to work cooperatively and constructively will continue to change what is possible for humans to achieve. There is a natural desire to control the platform. It is very adventageous the be Apple doing the role of verification in their app store and charging 15% for their blessing. It is adventageous to be the US with the dollar printing press as the defactor standard. It seems very adventageous to be the authoritarian who holds all the power and control, however that centralization is rarely scalable. How do effective governments set up laws and processes that encourage people to work constructively together? Digital verification will be at least one part of that answer in the future, even if it isn’t fully distributed on a block chain.