There is a tremendous amount of news lately about Bitcoin and blockchain.
With each passing day, there is a discussion that is not taking place.
I will start the conversation.
Cat Videos, Bitcoin, and the Environment
Bitcoin is the most suitable place to start.
For those of you not in the know, Bitcoin is a digital currency: a fiat of a fiat. Digital coins are created based on how quickly your computer can consume electricity for the purpose of solving an arbitrary math problem. You have a money machine at your fingertips!
Let me offer an analogy for Bitcoin. In a parallel universe, there is a currency based on how many unique cat videos your computer can create. For your computer, rendering video is solving math problems. This is the 20,000 foot view of inputs vs. outputs. Absurd, right?
Bitcoin exploits many human desires. It is tempting. It is a curiosity. And it is satisfying to watch the electric meter spin in the hope that your computer is faster than your neighbor’s. That your computer will be the one to solve that math problem and get the digital coin.
We have an energy crisis in progress, a growing shortage of semiconductor materials (Conflict Minerals), and Bitcoin creation is consuming more energy per year than Ireland. Bloody conflicts, accelerated global warming, damaged ecosystems, and all to solve an arbitrary problem that never needed solved.
Bean counters are responsible for beans. Blockchain is responsible for Bitcoin.
Blockchain is being touted as bigger than the introduction of the Internet, poised to change every facet of our lives.
I will quickly define blockchain. Blockchain is a public ledger. Every “block” in the “chain” is a transaction of some sort. As a partner-in-crime of Bitcoin, blockchain provides trust for the currency. The blockchain lets your neighbor’s printing press confirm that your printed currency is as valid as theirs. As a public ledger, it also stores every transaction.
Or, in the parallel universe, the blockchain confirms that each created cat video is legitimate and original. It also stores the transaction describing purchase of widget A with cat video B.
No Trust, No Problem?
The term “public ledger” for blockchain is a misnomer. In reality, it is a distributed ledger, with every blockchain participant storing the same ledger. This underpins its idea of trust – any attempt to alter a past transaction will create a chain that does not match the other thousands to millions of copies of the ledger. This makes fraud impossible.
It is like a grocery store printing a receipt of your purchase and giving it to every shopper that has ever visited. It shows you are not shoplifting, and everyone will know if you try to return something. Except that each user is anonymous.
Blockchain enables us to carry out anonymous transactions with people we do not trust. This is how Bitcoin is used to fund child trafficking, illicit political favors, child porn, drug trafficking, and any number of human rights violations that are profitable.
Unthinkable uses aside, blockchain means that we defer trust to machines. Millions of voting computers will decide for us that our transactions are legitimate.
Just as social networks have made us anti-social, blockchain is guaranteed to reduce our human ability to trust. Trust is the foundation of human relationships.
While developing Jade, I was shocked to read just how neuroplastic we are. Everything we see, hear, or think affects the neural connections in our brains, even if only exposed for a fraction of a second.
Once we trust blockchain technology more than our neighbor, we have altered how we treat people and form relationships. And, it will not be for the better.
You are so neuroplastic that this article has already altered the trajectory of your thoughts for the day. It is the butterfly effect, and it is proven neuroscience.
Shift Sight is aligned to humanitarian, environmental, and societal needs. Bitcoin and blockchains damage all of these.
Blockchain is worse since it is an exponential growth problem. You see, every new participant in the blockchain gets a copy of every transaction, and many of the participants have to vote on legitimacy of new ledger entries. (This is a distilled version of how it works.)
There are finite Bitcoins, but there is a continually growing number of blockchain participants with a potentially infinite number of transactions.
One report estimates the power use is around 240kWh per Bitcoin transaction – enough to power 8.11 U.S. households for one day, or 2,400 100W light bulbs for an hour. A Bitcoin transaction is nothing special, either – it is money out of one account and into another. And the power use grows with each new participant / device.
It is inappropriate to say “not my circus, not my monkeys” because the aftermath affects us all. To say nothing about the pollution, Bitcoin-specific hardware is electronic waste.
Shift Sight rejects technology for the sake of technology. We are not Luddites – we see people around us suffering due to their technology. It is not making their lives better or bringing them happiness.
Shift Sight takes a pragmatic approach to technology and the Earth. If our goal is to leave the planet better than we found it, there is simply no place for Bitcoin or blockchain technology.
Ty is a Founder of Shift Sight, LLC.