As humans, we find ways to lower uncertainty about one another so that we can exchange value. We are entering radical evolution of how we interact and trade. For the first time, we can lower uncertainty not just with political and economic institutions like our banks or corporations or governments but we can do it with technology alone. The blockchain is basically public registry of who owns what and who transact what.
The transactions are secured throw cryptography, and over time that transaction history gets locked in blocks of data that are then cryptographically linked together.
Uncertainty is big term in economics but here are three parts of it that we face in most of our everyday transactions, where blockchains can play the role. Not knowing the other side of the deal. Blockchains lets us to make an open, worldwide platform where we can keep any corroboration about individuals from all kinds of source. With it we can design user controlled movable identity. Imagine a profile and more, it will allow you to partially reveal different characteristics about yourself that help facilitates interaction or trades.
Not having visibility to a transaction. Using the blockchain we can create a shared reality across non trusted entities. By this I mean I mean all of these nodes in the network do not need to know each other or trust each other because they each have the ability to monitor and validate the chain for themselves.
Not having records. Blockchain allows us to write code. Biding contracts between individuals and then guarantee that those contracts will bear out without a third party enforcer. Because in some way it means to some degree we can collapse institutions and their enforcement.it means a lot of human economic activities can get collateralized and automated.
Technology of the future
The truth is that this technology is in its infancy and we are going to need to see a lot of experiments take place and probably fail before we truly understand all of the use cases for our economy. But there are tons of people working on this from financial institutions to technology companies, startups, and universities and one of the reasons that it’s not just economic evolution. It’s also an innovation in computer science.
We are about to face the world where distributed autonomous institutions have a quite significant role.