Bitcoin and all of the related technology behind it seems to divide people sharply into two camps: those who think it is revolutionary and those who think it’s a scam waiting to collapse in on itself. I’m more of a mind that all of blockchain technology is a bit like Schrödinger’s Cat: it’s both alive (revolutionary!) and dead (a scam!), but we won’t find out how it all turns out until we actually “measure” it.
I’ve spent more time recently exploring the innovation happening on top of blockchain technology: buying into and exchanging some of the coins and currencies, looking at the services behind many of those coins, and playing with NFTs.
Some of these innovations are genuinely interesting: Non-Fungible Tokens take the basic idea of making a unique digital asset and apply that to art. In other words, it’s becoming possible for me to own an “original JPG.” If you want a longer explanation of NFTs, The Hustle has a great one here.
Taking it further, it’s easy to start thinking about what kinds of businesses and business models haven’t worked so far on the internet because it’s almost impossible to make something online that can’t be copied. Money was the first idea. Art is one of the most recent ones. Moments in sports? Particular matches in eSports? How about original music recordings?
In many ways, blockchains are allowing people to dream about a world where you can overlay properties of the physical world on top of the digital world. This is actually a pretty interesting idea, because some things still work better in the real world than they do in the digital world and right now the pandemic has highlighted a lot of them. Art and collectibles in the real world have tons of challenges that a blockchain can alleviate, like forgery.
In the end, the optimists and the pessimists for all these blockchain applications are waiting to see if real usefulness will emerge. Something that hasn’t been thought of yet but that can’t really be done any other way. Computers themselves were only expensive toys until they became useful replacements for paper spreadsheets — the original “killer app.”
Enthusiasts will point out that money is a pretty good killer app. I agree, but we clearly don’t have money based on any blockchain technology yet; no one is going around paying for pizza with bitcoin anymore, and even the attempts to make a stable, pegged-to-the-dollar blockchain currency have been slow to gain traction as the transaction time required and the geek-factor required haven’t gotten much lower yet. The best use cases are for moving money across international borders, and there’s still limited appetite for doing that with digital coins.
NFTs have been dominating the headlines over the last few weeks because they seem like they might be a killer app. They’ve been around for a little while now, but the public is starting to understand what it could mean to have unique digital collectibles. Before you dismiss that as nothing more than a Furby, NFTs are more like a platform: the ability to create, collect, and trade all manner of future digital Furby-like ideas.
Pretty soon it will be time to open the box and find out whether or not the cat is alive.