Ethereum, upon writing, hit $100 recently… an enormous milestone, truly.
OK. Sure. I know what you’re probably thinking…
That’s great news, Chris. But what the [expletive deleted] is Ethereum?
Aha! Happy you asked!
I have a powerful formula to help you understand clearly the magnificent magnitude of this incredible technology.
The best way to explain such revolutionary ideas is not by what they are or even by what they do. That can get messy and subjective. The best way, rather, is to explain them in terms of what problems they might solve.
So in plain and, for my entertainment, mildly foul and inexplicable language, here goes…
In the current paradigm of paper tiger problem solving, every good idea must have a leader… or, at best, a facilitator, to see the idea through. Good ideas necessitate, we’re told, an arbitrary and sometimes harsh hierarchy. That person at the top rung absolutely must be present between you and I, if only for formality’s sake, to ensure a job well done.
Or else everything… and I do mean everything… falls to pieces.
Such an individual is meant, we’re scolded with no shortage of finger wagging, to serve as the neutral party. The voice of reason. The red mage. The jill-of-all trades. The lynchburg lemonade.
(Also known, in less polite circles, as the leprecorn.)
Ideally, these facilitators act as faithful servants — harmless intermediaries simply ghostriding the whip.
One would hope such individuals would not be Janus-faced Canadian quesadillas, either. Which is to say, in other words, that their “public” faces, as it were, would ideally reflect closely the ones in which they reveal in more private and intimate spaces.
Unfortunately, the warbling windbags of Washington D.C. have proven this to be clearly not the case.
Cranium-crackling amounts of wealth are flushed into serving secretive agendas, organized by professional flesh-pressing congregationalists. Such unsavory undertakings, to be sure, have little to do with the wants, needs and general well-being of the affected.
Indeed, knob-clobbering gobs of transparent and sometimes even fair-minded intentions are distorted by professional flip-flopping verbal diahrreists, blue goblins adept in the dark arts of potty-licks, selective undergarment bunching and, worst of all, wild and repulsively unbashful wankertwatting. (Disgusting, yes, but true nonetheless.)
Problem is, these incorrigible intermediaries — often trendy-sushing terrortician brownsourcers, mind you — become far too calcified. Undoubtedly, the worm-tongued fleebaggers get too gawdy for their lunch lips.
And, quadruply unfortunately, the “commoner” is much too complicit in the rise of these double-dogging doongaheaded oxygen bandits.
“We create these giants in the name of efficiently serving our needs,” the visionary Vinay Gupta scribbled onto his Medium page, “but they wind up ruling over us as if we had elected them with every dollar of our spending.”
An unfortunate situation we find ourselves in, yes. But nothing is never forever, not even nonsense. And this nonsense could soon be forced to exit stage left…
Such is, at least, the vision.
“I believe,” Gupta goes on, “the Ethereum vision of the future of the human race is different. Rather than constantly being hassled by our intermediaries — from Google through to the Department of Motor Vehicles — the idea is to disintermediate and deal directly with our neighbours and friends and strangers alike, to get the job done ourselves.”
Ethereum’s vision, in a nutshell, is to create an inherently agenda-less, relentlessly malleable world computer, made up of all of the tiny little computers around the world. Even that smartphone in your pocket. (Yes, that incredibly potent and powerful machine you just juiced up to watch a video of a squirrel barrel-rolling into a toddler’s swimming pool. That one.)
With the powers of all of these digital crotch rockets combined, we can create a global virtual sandbox, free of arbitrary censorship, spying, regulation and artificial barriers to entry.
That, dear reader, is what Ethereum, and blockchain technology in general, could make possible.
To infinity and beyond.
Make no mistake, we’re not talking about some blonde-haired, blue-eyed, Children of the Corn, homogenized web here. Differing software can operate on these networked computers just fine. Every computer can, indeed, be unique to its user. And all of these machines, large and small, with their digital tentacles linked, can kick the intermediaries to the curb and collaborate in such a way to create a secure and flat network. A network which allows for virtually infinite, unfettered creativity in the production of value — priced in the form of little frictionless digital tokens called Ether.
Moreover, individuals can, with just a tiny sliver of an Ether and a few deft clicks, create incredibly powerful decentralized organizations, beefed up by automated “smart” contracts, programmed to trigger in a pre-specified way in the wake of a pre-specified event.
In other words, the average Joanna can have the ability to conjure the miraculous, a feat once reserved solely for central bank wizards, witches, ghouls and green funny-money goblins:
She can program her own money. And so can you.
What can one do with personalizable programmable money, you ask?
Lest you forget, Gupta points out, “Nearly the entire financial system is built from programmable money. They don’t call it that, of course, but the loans and bonds and derivatives and futures and mortgages and credit default swaps and all the rest? Although at the very bottom of the stack, right in the guts of the system they might eventually be represented by a paper contract, in fact they’re represented as software for almost every step in their evolution. An individual mortgage might be a paper contract between a person and a bank, but a hundred million mortgages in the mortgage system are pure digital: software representing homes, offices, warehouses, cars, land — and more ephemeral items like airline tickets and concert tickets and even the music itself in a digital download. All of this, and more, is just software representing value, programmable money singing its songs of desire and achievement across the wires.”
The machine that nobody owns.
All of these things, assets, contracts, tickets and downloads, broken down, represent exchanges of value. And today, overweight zombie institutions, by and large, control how such value is programmed and processed.
Case in point: The current financial system, Gupta groks, “is made of tens of thousands of these institutions all networked using crude, old, unreliable computer systems in many cases. Technical processes are slow, as anybody who’s ever sent a wire transfer will attest. Systems are inscrutable: when you hit a problem with your bank, it’s you who has the problem. Accountability is slow, and often painful to extract.”
But the blockchain, in comparison, is an alien species with its head tilted sideways in confusion. There’s a better way, it screams, in an indecipherable language resembling Armenian with a hard edge of Arizonian methamphetamines. (wiehfbrufeutrgrehergrubf!)
With blockchain technology, every machine helping to run the network, tiny to titanic, is a peer.
“Each one,” says Gupta, “carries with it all the transactions in the system and each node can — as long as the software can carry the tune — run its own code. Systems like Bitcoin or Ethereum have many, many implementations. As long as they can all smoothly work together (and bugs at this level are, indeed, very rare) the whole thing works like a single machine. That nobody owns.”
But don’t call it disintermediated…
“Some would call this system disintermediated,” Gupta goes on. “But I prefer to think of it as direct. Yes, there is an intermediary between you and I if we trade on this system: in fact there are many intermediaries — every miner, every person writing the software, and all the internet providers and so on along the way. But, unlike the banking system, the intermediary in the Ethereum universe has no agenda: it doesn’t make policy. It doesn’t make rules. It doesn’t surprise you with unexpected fees. It doesn’t change the rules of the game between you kicking the ball and it arriving in the goal. The intermediary in Ethereum is transparent: it simply serves to carry out your will, your instructions.”
This, says Gupta, “is the core vision of the Ethereum community: a world in which two people can deal directly with each other, and the systems that support their interaction don’t distort the message as they carry out our instructions. You say what you want, and the machines carry your instructions to the person on the other end of the deal. Directness is the real fruit of disintermediation: people dealing as they would face-to-face, but with the benefit of a network.”
That’s why Ethereum hitting $100 is exciting. It means more visioneers are visiting the mountaintop. And they’re seeing the blockchain’s potential to toss aside the bamsticking rusty tromboners… the barking starfish cointacos… and, yes, most especially the kukuluku chubalakas…
The visionaries see its potential to push the power to create and exchange value to the edges. Right where it belongs.
Managing editor, Laissez Faire Today
P.S. Have something to say? Say it! Chris@lfb.org.