Is the Truth in the Blockchain?
What is truth? That’s a question that comes up often these days. Michael Casey, a senior advisor at MIT Media Lab’s Digital Currency Institute and former Wall Street Journal reporter, says that to answer that question we must first distinguish between “absolute truth” and “truth by consensus.” In reality, much of what makes the world tick depends upon the latter, a notion of truth that’s based on whatever people agree upon. And he sees the blockchain as a tool that can make it easier to build that consensus.
Casey spoke to a group of 25 Prosek clients, friends and employees as part of our quarterly Corporate Communicators Luncheon series. The goal of these luncheons is to help people see around corners and understand the trends and technologies that are re-shaping our industry.
The conversation with Casey centered around his new book, “The Truth Machine: The Blockchain and the Future of Everything.” He began by referring to work from Israeli historian Yuval Harari in which Harari explains that civilization is built around consensus on things that may or not be objectively “true.” Religion is the best example of this. Money is another one. A dollar only has value because we have all agreed that it does, not because of any intrinsic quality.
These agreements are often founded on a commonly accepted record of the history of our social interactions, in other words transactions. Agreeing on that record helps society foster trust. But as polarization increases, this kind of trust is harder to maintain. Casey explained that this has real economic costs.
“Think about how many accountants sit in back offices somewhere reconciling contracts and ledgers between parties,” said Casey. “Those jobs only exist because of mistrust. Couldn’t their skills and the money spent on them be put to more productive uses if people were able to trust each other’s data?”
According to Casey, the blockchain is a potential solution. Because of its distributed trust architecture – living in many places rather than a central data repository controlled by a single institution – you don’t have to rely on one entity to get it right or wrong. There’s no longer a need to reconcile my ledger with your ledger when there is one decentralized “true” ledger.
This decentralized solution can also empower consumers. For example, instead of all your data living within Amazon’s servers, where the e-commerce giant has exclusive capacity to use the data to its advantage, a blockchain-based system for trusting each other’s information would allow individual people and businesses to retain control over their data. That would give merchants the opportunity to commercialize it themselves.
Perhaps the biggest change the blockchain may bring about is a shift in who decides what’s trustworthy. Something like the five-star rating system currently used by services such as Uber, Lyft and eBay may end up becoming more ubiquitous and portable – that is, people’s ratings will be detached from those centralized platforms. In that case, it could become the ultimate form of currency, as people could now use the blockchain to get crowdsourced insight into dealings others have had with you – from university professors to bosses to store owners. Many background check companies might soon find themselves going out of business.
As the Facebook/Cambridge Analytica scandal proved, the sharing of data can have unintended consequences. The question before us now is whether blockchain will usher in a new era of trust or further damage social cohesion by creating a new class of the haves (the “trusted”) and the have nots. As communicators, it will be incumbent on us to understand and explain the benefits and the drawbacks of this and other new technologies so that we can harness the positive qualities and mitigate potentially negative effects, both for the companies we work for and for society as a whole.