What’s the real value proposition of a blockchain? This is something I’ve been scratching my head over for the past year. A blockchain is a specialized database- it’s slow and expensive and shared. But why would you ever prefer something slow and expensive? When trust is required. For really sensitive information that you don’t want to take someone’s word on, a blockchain is great. Another way to think about this is where ever this a high incentive to counterfeit information, an application of blockchain would be perfect. Information such as money, health records, ballots. You have a high incentive to create counterfeit money because it’s like free money. It’s like creating money out of thin air. A blockchain is great because it makes everyone have a copy of the record. Blockchains get a lot of criticism for lagging performance wise, but Nick Szabo argues that blockchains make up for what they lack in tech scalability through social scalability.
I think blockchain based systems should be used for
public goods (money, ballots, search engine, etc.) - make something unturnoffable, uncensorable, unmutable, etc.
networks- align incentives for a network of people through a token and incentive structures.
“unmonetizable” software - launch a cryptonetwork with built-in incentives that rewards the early adopters and strongest supporters. (Bitcoin, Ethereum, etc.) We now have a mechanism for unmonetizable ideas of “web 2.0” to get funded and monetized.