Ethereum's Prospects: A Matter of Trust

in crypto •  7 years ago 

I'm a skeptic by nature, and I appreciate a skeptical perspective. One thing that frustrates me about many crypto-skeptics is, however, their disinterest in investigating the matter sufficiently enough to arrive at a sound determination. Warren Buffett is the notorious example, having declared that all the coins are doomed in the same interview where he confessed that he had no idea how they work.

One particular breed of skeptic are those who believe that smart contract technologies have a highly limited application. For them, the market for smart contracts is limited almost exclusively to performing tasks which were otherwise impossible. They'll concede some novel applications and uses, but are sensibly skeptical about it dramatically changing the very landscape of the technology industry.

I get this perspective, and I even believe it should stand as the "null hypothesis" to be disproven. But with all due respect, I believe it's incorrect. I believe it's incorrect for one very simple reason: trust.

Imagine if I show up at the real estate office to sign a buyer's contract. I reach for my pen to sign the contract, but I hesitate for a moment. "Could I get a copy of what I've signed for my own records?"

The realtor is in his office. There's a copy machine right behind him. "Nah... I'll get that to you next week."

Now, if I were signing the contract at McDonald's or on the kitchen counter at the home I'm buying, a negative answer would make sense. I would be making a burdensome request and offering to get it to me next week would make sense in context.

Blockchains enable transactions to algorithmically eliminate counter-party risk in transactions. Sure. We've all grown accustomed to a world where we accept that we have to invest a degree of trust in the other parties we're relating with. But that changes when you know that the counterparty is capable of eliminating that risk but has decided not to. That raises red flags.

What I believe will happen is a gradual and iterative--but steady and inexorable--process wherein a wide variety of systems and processes integrate smart contract counterparty risk elimination. While smart contracts aren't prepared for a lot of the elaborate schemes some folks envision, the only thing standings in the way of there not being a sound business case for smart contract integration are privacy, scaling, and transaction expense issues which are on track to be resolved in the mid-term.

But they're not resolved yet, which means my conviction remains speculative. But I'm skeptical that business processes will not be forced to shift over to this technology by evolving customer expectations. In every other industry that the Internet has touched, gatekeepers have been largely marginalized and starved. Porn studios can't remain open because the girls can handle the production, promotion, and distribution themselves. All of the business world's men and institutions which base their business case on "trust" are also going to be impacted by this technological change.

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!