Korean cable TV network JTBC recently hosted a debate on the use and utility of the technology behind bitcoins, whose vicissitudinous qualities are taking the country by storm. The debate featured Si-min Rhyu, an acclaimed writer and a politician who served as the 44th Minister of Health and Welfare, and Jae Seung Jeong, Professor of Bio and Brain Engineering here at KAIST. Let it be clear that if the matters behind bitcoins were something that could be resolved within an hour and twenty minutes, the fuss about it would have halted long before the advent of cryptocurrency victims who fell harder than most coins did the previous few months. Even with that in mind, the debate was void of a few clear elements that should have been apparent.
Despite the laid-out motion to facilitate it, the debate was one that lacked common ground. Whilst Rhyu seemed to put forth plausible points on how cryptocurrency is invalid as a form of currency and should consequently be banned for its lack of societal merits, his arguments ran on an entirely different predicate from that of Professor Jeong’s throughout the whole course of the exchange. The irreconcilable nature of the debate was almost directly allegorical to the the history-long dispute on the dichotomy of human nature between intrinsic evil and intrinsic good; the proponents believe that technology makes it needless for us to worry about human nature, whilst the opposition claims that the technology is incorporated into a network that can be exploited by ill-intended corporal entities. It would have been convenient if they had stuck to one basis, and built their arguments from there to eventually reach a conclusion. But we can’t blame them for how the debate turned out as it did, as it’s that same matter of basis that the people can’t decide upon in the real world.
The key term where our attentions are rightfully due is the “third parties” in all parts of the system we have come to consort our lives with. Because we need to be assured that our transactions can be processed through safely, any exchange now incorporates a third party that can approve of the identity of the two parties and the validity of the transactions. But how have the middlemen reshaped modern capitalism? The largest flow of funds into the developing world is not foreign aid or direct foreign investment; it is remittance money repatriated to poor countries from their diasporas living abroad. But this incurs a seven percent fee, and takes a week to process — all because of the approval procedures performed by the “middlemen”. With blockchain technology, however, you could directly send the money to its intended destination without risking a hefty loss of funds through commissions. Also, with an immutable ledger, you can hold institutions accountable for meddling with your funds, exposing them red-handed. Think of cases that are more pertinent to demographics of our age — the internet was supposed to liberate entrepreneurs by giving them the tools and capabilities of big companies without many of the liabilities such as legacy culture, ossified processes, and dead weight. Likewise, the blockchain can be utilized as a channel to effectively deliver funds for fledgling companies and young start-up seekers without anchoring them to ineffective legislative loads. These are only some of the benefits that we can foresee with the absence of middlemen whilst retaining the idea of trust.
As it has clearly come to light during the JTBC debate, few users of bitcoin fathom these macro values of blockchain technology beyond the charts of bitcoin’s temporal value. Satoshi Nakamoto clarifies that coins and the correlated “Byzantine General’s Dilemma” that he proposed were only incentives for people to participate in the blockchain network — as more participants (or nodes) imply a more consolidated network of security for transactions to take place. An important takeaway from the debate is that it is impossible to reap individual benefits from the blockchain without benefitting the entire system. Such is the basic principle that makes blockchain technology secure and we have to get our heads around the fact that adversaries do not have anything to gain from attempting to break the system (the amount of resources that need to be expended to corrupt the system far exceeds the benefits gained out from doing so). The debate, recent news about Paris Hilton’s initial coin offering (ICO) of Gravity4, and the struggling US Security and Exchange Commission (SEC) in tackling the new financial product all comes down to what The New Yorker’s Adam Davidson said about this whole mess: “Somehow, we need to be at once stricter and freer. Maybe the grandstanding of Congress and the SEC — flashy warnings with no teeth — is the best we can do for now.” The struggle that the government is displaying is, counterintuitively, exactly what we need. Stocks were a novel way to fund the Dutch East India Company, and we let it slowly seep into the pre-existing financial infrastructure, just as we did for bonds, bank accounts, the printing press, newspapers, and railroads. So where’s that same display of grace? We simply have to give the blockchain more time to grow into our society.