You are about to read a witty semi-fiction story based on Stuart Hylton’s critique of “the making of modern Britain” and my interpretation of the impact of blockchain on the world of today. I found it fascinating to see how the depiction of cutting-edge technology in the industrial age resembled the dread and fear of blockchain in modern times. Some quotes are so relevant that changing “railway company” to “blockchain protocol” would yield the same shilling.
After several “bubbles” (actually eight so far) and some huge announcements – remember Libra and TON? “I thought it was a good time to piece of money (pun intended) the story of the emerging technology that could be the greatest innovation of the last 500 years.
An intriguing comparison
Why bother? Two centuries later, it is difficult to grasp or even believe the impact that the development of the railways must have had at the beginning of the 19th century. Similarly, the common observer is caught between a Bitcoin (BTC) evangelist preaching dollar apocalypse and a big-bank crypto-skeptic. In fact, there is no clear trend of what to expect from distributed ledger technology over the next few decades.
The physical impact of the railways was dramatic: “great mechanical horses, spitting fire and smoke and pulling impossibly heavy trains at unimaginable speeds, across a landscape transformed by embankments and rubble, overpasses and the tunnels that their passage required”. Stuart Hylton portrays the powerful role that emerging, often scary and speculative industry has had on Britain, a case chosen for close scrutiny.
The author engaged me in informative and entertaining storytelling, which almost felt like a parallel retrospective in the blockchain industry. Railroads “transformed the way war was fought and peace was kept,” so blockchain can disrupt authoritarian regimes and propaganda machines. The first trains proved to be among the main engines of the “dramatic industrial growth of the 19th century”. Blockchain can therefore revolutionize finance, which is the main artery that pumps blood in today’s economy. Railroads have forced “the state to rethink the laissez-faire policy that was its default position,” while blockchain has yet to become the driving force to liberate people across the world and their return their assets.
Below is a summary of what crypto has done for us using the railroad analogy (and the structure of my future articles on this topic).
The shock and the first crypto
E-money and triple-entry bookkeeping preceded Bitcoin. The blockchain ownership of a recent block linked to the previous one using the hash Appointment dates back to at least 1995. Then, academics Stuart Haber and Scott Stornetta devised a way to timestamp digital documents to solve intellectual property rights issues. They invented a chronological string of hashed data to verify its authenticity in 1991, used in issues of The New York Times four years later.
Related: Back to the original purpose of the blockchain: timestamping
While the cryptographers had no intention of creating an ambitious project, a series of discoveries inspired Satoshi Nakamoto to launch the Bitcoin protocol in response to unfair and non-transparent global banking. As Burniske and Tatar point out in their book Cryptoassetscrypto gradually captured the minds of various people, from cyberpunks to dealers and traders, until a journalist asked an interesting question: what is this proof of work (PoW) anyway?
Ironically, Satoshi never mentioned “blockchain” in his 2008 white paper. It was the Bank of England that argued in 2014 that a “distributed ledger” was the “[t]The key innovation of digital currencies. The following year, two popular financial magazines publicized the concept when Bloomberg Markets published an article titled “Blythe Masters Tells Banks the Blockchain Changes Everything” and The Economist published “The Trust Machine”.
“What could be more patently absurd than the prospect of locomotives traveling twice as fast as stagecoaches?” wrote the conservative newspaper, The Quarterly Review, 1825.
Likewise, people didn’t understand the value of blockchain initially. Some hailed it as the premise of Bitcoin, putting more emphasis on the cryptocurrency aspect of this technology. Others found reasons why it will not work. Interestingly, the banks themselves had overlooked and later actively opposed the idea of sharing their records with other parties. Soon after, they fully embraced the idea and started joining many consortia like We.Trade and R3.
“We see, in this magnificent creation, the source of intellectual, moral and political advantage beyond measure and price,” said The Quarterly Review, now taking the opposite side when opening the Liverpool and Manchester Railway, 1830.
The first railways existed long before George Stephenson and were mainly used for freight, such as transporting coal from the mines. When the steam engine unlocked the new powers, even then people viewed the railroad as a cumbersome, sketchy, or even dangerous “no-hassle solution” because there was already a well-established network of canals. Steam locomotion must have made its way into the future through the Rainhill trials of 1829. It reminds me of the struggle of blockchain proponents to convince VISA and SWIFT that their days are coming to an end or Andreas Antonopoulos winner common ground before the Canadian Senate.
“No one will pay a lot of money to get from Berlin to Potsdam in an hour when he can ride there on horseback in a day for free,” King Wilhelm I of Prussia said in 1864.
“High-speed train travel is not possible because the passengers, unable to breathe, would die of asphyxiation,” said Dionysius Lardner in The Steam Engine Familiarly Explained and Illustrated, 1824.
Despite widespread skepticism, railroads continued to improve because few risk-takers could foresee huge potential and put their money and careers on the line to take advantage of new technology. Suddenly, railroads defied time and space: people who were limited in territory by the speed of horses could potentially be exposed to a much larger continent. Nowadays, in the middle of the third industrial revolution, the blockchain promises confront the whole idea of exchange of value and human nature by offering a better new world. It’s inevitable. So what will happen next?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Katia Shabanova is the founder of Forward PR Studio, bringing over 20 years of experience implementing programs for IT companies ranging from Fortune 1000 companies and venture capital funds to pre-IPO startups . She holds a BA in English Philology and German Studies from Santa Clara University in California and earned an MA in Philology from the University of Göttingen in Germany. She has been published in Benzinga, Investing, iTWire, Hackernoon, Macwelt, Embedded Computing Design, CRN, CIO, Security Magazine and others.