Monday, February 26, 2018

What is a blockchain for and how does it fit into cyber strategy?

The best answer to what a blockchain is is here: A Letter to Jamie Dimon.

But the best answer to what it is for, is of course a chapter of Cryptonomicon, which can be read online right here.

I will paste a sliver of it below:
A: That money is not worth having if you can't spend it. That certain people have a lot of money that they badly want to spend. And that if we can give them a way to spend it, through the Crypt, that these people will be very happy, and conversely that if we screw up they will be very sad, and that whether they are happy or sad they will be eager to share these emotions with us, the shareholders and management team of Epiphyte Corp.
I think one thing you see a lot (i.e. in personal conversations with Thomas Rid, or when reading Rob Knake's latest CFR piece is a reflexive confusion as to why every technologist they seem to talk to holds what they consider extremely libertarian views.

My opinion on this is that it's a generational difference, and that the technologists at the forefront of internet technology simply reached that future earlier than their peers who went into policy. In other words, it's a facilely obvious thing to say that the Internet was built (and continues to be built) almost entirely on porn.

But beyond that, the areas where Westphalian Governments are not in line with people's desires create massive vacuums of opportunity. To wit: The global trade in illegal drugs is typically assumed to be 1% of GLOBAL GDP. But that money is not worth having if you can't spend it.

And credit card processors, built on the idea of having a secret number that you hand out to everyone you want to do business with, are a primary way governments lock down "illicit" trade. On a trip last week to Argentina, where Uber is outlawed but ubiquitous, I found you cannot use American Express or local credit cards, but a US Mastercard will work. And if you're a local, they suggest you can use bitcoin to buy a particular kind of cash-card which will work.

The same thing is true in the States when it comes to things that are completely legal, but unfavored, for example the popular FetLife website, which recently self-censored to avoid being blackballed by Visa.

In other words, you cannot look at the valuations of Bit-Currencies and not see them as a bet against the monopoly of Wesphalian states on currency and transactions that has existed since Newtonian times. What else does this let you predict?

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