In the previous materials of this series, we talked about the sources of social scalability and why blockchain is becoming a new tool for the exponential growth of social scalability. Today we will talk about the mechanisms themselves that make blockchain the technology of the future and also about why social zoom is the key concept of the crypto industry.
Despite the fact that, perhaps, no member of the community is capable of expressing the main mission of the crypto industry, the idea of social scalability is something that is embedded in it initially, by default.
To prove this statement, let us take the Bitcoin blockchain, which performs fewer transactions per unit of time than Visa or PayPal. But, it can perform much more important transactions due to its strong automated security. Every person from anywhere in the world can get access to Bitcoin. Thus, the social zoom of Bitcoin, which is based on technology, rather than on institutions exposed to the human factor, allows buyers, for example, from Africa to send payment to suppliers in China without incurring commission costs to any third party.
Nevertheless, not all crypto projects support this state of affairs. Some try to bypass the basic concept of blockchain by employing various tricks. "The crypto industry aims to get rid of intermediaries and create trust in an untrusted environment. These goals are achieved through social scalability, so it can be considered one of the pillars of the crypto industry. Many blockchain projects, however, are trying to move away from its principles and involve a whole arsenal of marketing tools in this process. In this regard, users need to study every cryptocurrency project they are going to use as thoroughly as possible, thereby preventing the destruction of the industry," said Daniil Lashin, a blockchain developer of the DeCenter team.
Computational Blockchain Amber vs. the Magical Computer Screen
At the same time, blockchain libraries do not guarantee the truthfulness of data. Instead, they securely seal information, excluding any subsequent changes. In this sense, computers resemble a child's toy like the "Magic Screen,” allowing one to draw on its powdered aluminum surface with magnetic pens and then erase the picture in one sweep. Blockchains can be compared to computational amber, which reliably imprisons a proverbial mosquito representing the information. In order to maximize the ensuing benefits of blockchain, any important data should be filled in the blockchain as early as possible, ideally directly from the device with the cryptographic signature on which it was created.
First of all, the Merkle tree consisting of four transactions (from tx0 to tx3) guarantees such a high degree of safety. Thanks to Proof of Work, the Merkle trees can eliminate the possibility of data falsification (e.g., transactions) after it is written using a consensus algorithm. The smart contracts reduce human interference in the blockchain and cut costs. Thus, in the 21st century, science plays one of the defining roles both in the development of the financial industry and in the allocation of resources.
It is obvious that it is vital for modern society to be open and democratic in accepting new and emerging scientific research without bias. And the source of funding for scientific institutions plays a nearly decisive role in this matter as it must be clear of lobbying interests. Blockchain will also help in this matter, as what better control mechanisms can be conceived than transparent open source platforms and distributed ledgers?
Openness is what should determine the future of all mankind. In his work "How to Succeed or Fail on a Frontier,” Nick Szabo confirms this thesis with a story about the huge Chinese navy of the XV century that still could not compete with the Portuguese empire, which did not have such impressive power in the commercial colonies yielding trade dividends. Even then, strength alone did not decide much.
What Does the Future Hold?
The Internet already plays a huge role in the development of a variety of Internet institutions, including social networks, retailers working on the “long tail” model (for example, Amazon), and many services that allow small and territorially dispersed buyers and sellers to find each other and make deals (like eBay, Uber, and AirBnB). These are only the first attempts at taking advantage of the new opportunities that have been revealed to us. Thanks to the tremendous improvements in information technology that have taken place in recent decades, the number and diversity of people who can successfully participate in online associations is considerably less restricted by the objective limitations of computers and networks than by the limitations of consciousness and institutions that are not sufficiently modified, or have not yet reached the necessary stage of development to take advantage of these technological improvements.
These initial efforts of the internet industry were very centralized. And now the blockchain that ensures the integrity of data with the help of computer science, rather than bureaucratic systems, made the emergence of cryptocurrencies possible, which allowed us to make progress in other financial areas, as well as in other areas in which transactions can be based mainly on data available on the Internet.
This does not mean, however, that such an adaptation will occur as rapidly as the development of the industrial technology industry did. Unfortunately, there are many utopian projects in the blockchain community, and they are not viable. A reboot of the old institutions will function much better than some grandiose projects designed from the ground up. Rethinking old models is the key to positive changes in the future. "Most people are always pretty conservative, so technology will not solve anything for the masses because of the ignorance of people. Of course, this problem will be levied in the future, but this process takes a long time. But people who understand the goals and mechanism of distributed systems will continue to use them. And the number of these people will grow," stated the IT consultant of VGTRK to DeCenter.
But in the end, Satoshi Nakamoto has already demonstrated a very exciting paradox by creating increased social zoom by sacrificing computational scalability and efficiency, thereby reducing the considerable costs needed to service and pay third parties. Therefore, hardly anyone will ever have doubts anymore that social scalability is the key idea of the crypto industry.