Blockchain: Which Came First, the Problem or the Solution?

a smartphone on gold coins
Photo by Olya Kobruseva on Pexels.com

Knowingly creating a problem and then presenting the solution is a well-known strategy in sales, politics and even relationships. Both sides of the aisle use this manipulative tactic while accusing the other party of doing it. I don’t know which came first with blockchain technology, the problem or the solution, but either way, I don’t trust it.

I spent this cold and rainy day educating myself on the basics of DAOs and other things related to DeFi (decentralized finance) and cryptocurrency. A DAO, decentralized autonomous organization, is a blockchain structure (think of it as a safe database), that anyone can leverage to self-govern through participation, authored by rules, baked into code, and permitting voting through digital tokens (think cryptocurrency) β€” all while leveraging smart contracts. https://www.thomsonreuters.com/en-us/posts/legal/daos-business-structure/)

Blockchain is supposed to solve the problems created by centralized power institutions as seen below. Many of these problems were actually caused by the use of the internet in government and business and many of them do not affect the majority of regular people. The people who love blockchain are the people who create and work with these real-world situations.

https://101blockchains.com/problems-blockchain-solve/

Along the rabbit trail I ran into something called Proof of Humanity. This is an identity verification system that is supposedly needed because the internet has been taken over by non-human internet accounts called bots and by deep fakes like this fake Tom Cruise. But this particular system claims to protect our privacy. It works along with the Ethereum system.

Proof of Humanity opens the doors to a wide range of uses including insurance, credit scoring, quadratic funding and human DAOs. All of this, without a centralized actor controlling the process, with users maintaining full control over the network.

https://blog.kleros.io/proof-of-humanity-building-the-internet-of-humans/

As I read article after article about how blockchain can satisfy the need for trust and the need to solve inequality with cryptocurrency Universal Basic Income, and the need to prove that someone is not a robot, I suddenly realized that all of this stuff is a reaction to a problem that most of us were not even concerned about, that AI is at risk of being tricked by bad actors or bots.

As the business world rushes recklessly into the future buying new technology and replacing humans with robots and artificial intelligence, they have created new risks for themselves. Doing business via the internet provides multiple benefits, and also multiple ways for hackers to wreak havoc and steal valuable data and funds.

First they created the technology and the problems, and now they are going to provide the technology and the solutions, identity verification systems. This is something that is not needed if you go shopping at your local grocery store and pay cash. But with the so-called digitalization of the 4th Industrial Revolution, proof of identity will be required to buy and sell.

This is not the future. This is now. Already the IRS.gov and Healthcare.gov websites are asking for verification to use their website and will soon require identity verification through id.me or other means such as credit companies to access their services. Private companies are doing the same. It won’t be long before requiring facial recognition through sending in a selfie or other physical proofs of identity are the norm.

The thing that makes me feel a bit nauseous is the eager acceptance of any and all technology by anyone younger than 30 years old, no matter how invasive and potentially dangerous. Maybe I am just too old to see the benefits of these things, but I do not like the idea that cash will eventually be accepted by very few businesses and that every transaction will be recorded on a server somewhere.

One thing I do see is that a few people are going to make a lot of money off of these hard to understand, but easy to hype ideas, while the majority of blockchain investors will be like the bottom of a network-marketing scheme pyramid, wondering when the big bucks will finally roll in so they can stop living in their van. The ‘Great Reset’ will not be the end of inequality, it will be the beginning of something much worse.

What do you think? Do you welcome the day when cryptocurrency, blockchain and these things are not just for early-adopters, but are a normal, and understood, part of the digitalized world in the Metaverse and beyond? Do you see any potential problems for being required to prove your identity before we can buy or sell (wink wink)? Did you have to look up a lot of words to read this?

6 comments

  1. WoW! Most of this was as far over my head as making a deep fake would be!
    I am “compooterly” challenged for even making my blog work!
    More power to ya, Paula!! πŸ˜‰

  2. To me, block chain is the best way to launder money.
    If everyone knows how much money everyone has, how do people use crypto currency when they hack a company and demand a ransom.
    I don’t understand complete security and complete secrecy in the same technology.
    No idea how this will speed up government. In order for that to happen the government needs to upgrade the systems they have to do normal things.
    How does blockchain protect athletes or make real estate transactions fairer?
    I like to use cash. It is still legal tender for all debts public and private. I believe that it is against the law not to accept cash.

    • Good point! I think the government will eventually use digital currency for social programs. I guess it won’t be that different from food stamps that go directly into an EBT account. Good question about the athletes or real estate.

  3. Based on what I’ve read, crypto currency has the feel of a smart pyramid scheme. We see youtubers and celebrities flaunt their financial interest in NFTs and crypto in general, while all they’re doing is contribute to the problem. A part of this problem is crypto mining AKA making digital currency at home.
    I can’t see a future where citizens of the country have power in their hands to disrupt the country’s money supply while staying at home, sipping a cup of tea.
    What if there’s a blackout? What if hackers gain access? I can only put my faith into a legal and recognised tender, which is money.

    Apologies for the small rant. I may very well be a millennial stuck in a Gen Z’s body πŸ˜…

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