Blockchain Revolution

Breakthrough: Satoshi designed the system to work on top of the Internet stack
(TCP/IP), but it could run without the Internet if necessary. Satoshi imagined that the
typical person would be interacting with the blockchain through what he called
“simplified payment verification” (SPV) mode that can work on cell phones to
mobilize the blockchain. Now anyone with a flip phone can participate in the
economy, or in a market, as a producer or consumer. No bank account required, no
proof of citizenship required, no birth certificate required, no home address required,
no stable local currency required to use the blockchain technologies. The blockchain
drastically lowers the cost of transmitting such funds as remittances. It significantly
lowers the barrier to having a bank account, obtaining credit, and investing. And it
supports entrepreneurship and participation in global trade.
That was part of Satoshi’s vision. He understood that, for people in developing
economies, the situation was worse. When corrupt or incompetent bureaucrats in
failed states need funding to run the government, their central banks and treasuries
simply print more currency and then profit from the difference between the cost of
manufacturing and the face value of the currency. That’s seigniorage. The increase in
the money supply debases the currency. If the local economy really tanked—as it did
in Argentina and Uruguay, and more recently in Cyprus and Greece—these central
bodies could freeze the bank assets of whoever couldn’t afford a bribe. Given such a
possibility, the wealthy could store their assets in more trustworthy jurisdictions and
more stable currencies.

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But not the poor. Whatever money they have becomes worthless. Officials could
siphon off inflows of foreign aid and ribbon their borders with red tape, adding
friction to every attempt at helping their people, from mothers and children needing
food and medicine to victims of war, prolonged drought, and other natural disasters.
The Australia micropayment service mHITs (short for Mobile Handset Initiated
Transactions) has launched a new service, BitMoby, that enables consumers in more
than one hundred countries to top up their mobile phone credit by texting mHITs an
amount of bitcoin.
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According to bitcoin core developer Gavin Andresen, “You don’t
see every transaction; you see only the transactions you care about. You’re not
trusting peers with your money, you’re just trusting them to give you the information
touring across the network.”
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“The potential of using the blockchain for property records in the emerging world,
where that’s a huge issue related to poverty,” is significant, said Austin Hill. “There
isn’t a trusted entity that has governance over land title, and so allowing people to
actually say, ‘I own this property,’ and then use that for collateral to improve them and
their family situation is a fascinating use case.”
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On a technical note, Andresen called on Nielsen’s law of Internet bandwidth,
where high-end user bandwidth increases by 50 percent each year, whereas the
bandwidth of the masses tends to lag by two or three years. Bandwidth lags behind
computer processing power, which increases by about 60 percent annually (Moore’s
law). So bandwidth is the gating factor, according to Jakob Nielsen.
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Most designs—
interfaces, Web sites, digital products, services, organizations, and so forth—will need
to accommodate the technology of the masses to leverage network effects. So
inclusion means considering the full spectrum of usage—not just the state of the
science of high-end users, but the slow tech and sporadic power outages of users in
remote regions of the world’s poorest countries.