{"id":8648,"date":"2021-08-23T20:33:55","date_gmt":"2021-08-24T00:33:55","guid":{"rendered":"https:\/\/cointelegraph.com\/magazine\/?p=8648"},"modified":"2021-08-23T20:36:04","modified_gmt":"2021-08-24T00:36:04","slug":"blockchain-is-as-revolutionary-as-electricty-big-ideas-with-jason-potts","status":"publish","type":"post","link":"https:\/\/cointelegraph.com\/magazine\/2021\/08\/23\/blockchain-is-as-revolutionary-as-electricty-big-ideas-with-jason-potts","title":{"rendered":"Blockchain is as revolutionary as electricity: Big Ideas with Jason Potts"},"content":{"rendered":"

Economics Professor Jason Potts is co-director of the Blockchain Innovation <\/b>Hub<\/b><\/a> at RMIT University. He sees blockchain technology as a fundamental institutional technology revolution comparable to the emergence of companies and the internet \u2014 perhaps even as world-changing as the invention of electricity.<\/b><\/p>\n

 <\/p>\n

What’s the last big technological change that had the same sort of impact that you believe blockchain will have?<\/h4>\n

I think the obvious one is the internet, which was a profound revolution stringing together digital communication networks and computers to basically send the cost of communication and coordination to zero. But, it fundamentally didn’t change any of the economic infrastructures.<\/p>\n

You still had to use money in the real world, you still had to use companies in the real world to intermediate and you still had to use contracts that were non digitally native. This is completing the revolution that was started with the internet by bringing the rest of the economy natively digitally online.<\/p>\n

Before that, electrification of the economy was a process that took about 50 years. It was an 1860s and 1870s development, but it wasn’t really until, you know, the 1920s and \u201830s before we saw the full impact of it with electric motors and everything that just disappeared beneath the surface of the economy.<\/p>\n

So, I think it is of that kind of class.<\/p>\n

 <\/p>\n

\"\"
RMIT in Melbourne is home to the Blockchain Innovation Hub. Also, a very good journalism school that has produced notable alumni like the author (Source: Pexels)<\/figcaption><\/figure>\n

 <\/p>\n

Why is blockchain a fundamental infrastructure change rather than just another technology?<\/h4>\n

Most technologies that we have are industrial technologies for producing things: cars, steel, or whatever. Blockchain is an institutional technology. Instead of organizing matter, energy and things, it\u2019s a technology for coordinating people.<\/p>\n

We have these come along every so often. The joint-stock company invented back in the late Middle Ages was technology for organizing people. Once we had that, the world never looked back, as it fundamentally changed history and gave rise to modern capitalism.<\/p>\n

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The first ones were actually in the 16th century when the kings and queens of Spain and the Netherlands created these charter companies to go on these voyages around the world, to set up colonies and so on. The original use of companies was empire-building.<\/p>\n

And then, we gradually realized that we could use them for all sorts of things. We can use them for building railways and we can use them for building steel companies, steel plants, and so on. Now, we use companies for almost everything.<\/p>\n

So, a company is an institutional technology. Another example is clocks and synchronized time, and that gives us the ability to have timetables. And if we’ve got timetables, we can start scheduling, enabling us to have public transport systems that enable us to have factory days.<\/p>\n

These new institutional technologies are relatively rare, but when they happen, they enable millions and millions of people to start to coordinate their actions and the economy.<\/p>\n

Blockchain is exactly the same thing. It enables us to coordinate on shared information and truth, and we can all use this technology to figure out who owns a thing, what is the fundamental truth about ownership, who has agreed to buy something, or about identity, which is important for establishing reputation and rights to such things, or just anything else where we need shared agreement about information.<\/p>\n

This fundamental institutional technology to enable us to trust information enables us to build a global digital economy on top of that.<\/p>\n

This was the key understanding we arrived at. Blockchain technology isn’t just the next generation of the internet, it’s a fundamental way to create shared agreement about the sorts of facts that underpin a modern economy and to represent those in a purely digital form.<\/p>\n

 <\/p>\n

 <\/p>\n

\"Electricity\"
The electrical revolution took half a century. (Source: Pexels)<\/figcaption><\/figure>\n

 <\/p>\n

We could already do that, of course. The difference is you don’t have a centralized body telling you those things.<\/h4>\n

This is the breakthrough. We could always do that with a company if it got big enough, we can always do that with a sort of centralized government registry, especially if that registry was big enough, but none of those things scale to the level of the entire world. Any centralized solution to that problem gives whoever or whatever controls that registry an enormous amount of power.<\/p>\n

This is the breakthrough that blockchain technology brings. It provides a distributed decentralized way of having that information be trusted, potentially open to anyone but able to be fully distributed.<\/p>\n

 <\/p>\n

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Launching the DigitalCBD project today @BlockchainRMIT<\/a> @rmit<\/a> @RMITBusRes<\/a> @matt_warren__<\/a> @chrisberg<\/a> https:\/\/t.co\/8qbvLl0Lka<\/a><\/p>\n

— Jason Potts (@profjasonpotts) August 16, 2021<\/a><\/p><\/blockquote>\n