We do tech a disservice when we over-hype it. After all, as Clay Shirky said, things get socially interesting when they become technologically boring.
My aim in defining some terms used in crypto in ‘boring’ ways, therefore, isn’t to dismiss them but to help people consider how they may be used practically in their sector. Magical thinking helps precisely no-one.
Blockchain — an append-only database stored on multiple computers.
Cryptography — using technology to try and stop third parties reading and/or modifying data.
DAO (Decentralised Autonomous Organisation) — an organisation (but not an ‘organisation’) without a currently well-defined legal status using blockchain and smart contracts to automatically process votes made by people who hold the right tokens.
Dapps (Decentralised Applications) — apps built on a blockchain using smart contracts to perform actions.
DIDs (Decentralised Identifers) — ways of identifying things in a verifiable way using cryptography, usually using a blockchain.
NFT (Non Fungible Token) — a token that can be verified using cryptography to prove that it is unique and therefore scarce and subject to property rights.
Self-sovereign identity — a method of identifying people using DIDs that they themselves control.
Smart contract — rules defined by code that are run on a blockchain.
Token — a digital asset which can be used for money, voting rights, or pretty much anything else.
Wallet — a place to store tokens.
Web3 — a way for people to refer to all of the above in a less-confusing way. Basically putting everything on some form of blockchain.
There are obviously a lot more terms, but these are the ones I think most people would benefit from learning and being able to discuss dispassionately. For more terminology, the Learn Crypto glossary is a good place to start, followed by Alexandria from CoinMarketCap.
I’ve spent most of my career in and around decentralisation of one form or another. Eighteen years ago I was part of an EU-funded project where I talked excitedly about the potential of Bittorrent in education. I’ve spent over a decade evangelising decentralised credentialing and recognition through Open Badges. I put together a team to build MoodleNet, the world’s first federated resource-sharing social network for educators.
So I want decentralisation to happen everywhere. Especially in education.
A few years ago, someone told me quite proudly that their organisation was putting the credentials they award “on the blockchain”. I asked which one. They looked confused. I don’t think they understood what it is they were doing.
There are, of course, many blockchains. Taking away the crypto-hype and the get-rich-quick schemes, a blockchain can be thought of as quite a boring technology. A back office solution where an append-only database (i.e. one can be written to, but then is read-only) is stored on multiple machines instead of centrally.
Boosters of blockchain and crypto in general call this technology ‘decentralised’. In one way it is, because it decentralises data. But decentralisation of data is something that any large organisation with a datacentre already does. And, in fact, something that smaller organisations also do by putting their data into “the cloud”. So decentralising data isn’t really very exciting.
What’s exciting is decentralising power and decision-making. One of the reasons I was so attracted to Open Badges while working within formal education was that it was a real challenge to it. The means of credentialing was, all of a sudden, disaggregated and available to, well, anyone. It’s just a paucity of imagination that has meant that most badges continue to be issued by large organisations. There’s no reason it has to be that way.
Crypto-boosters, such as those who write articles like this about the potential of “ed3” point to DAOs, or “Decentralised Autonomous Organisations” as being disruptive, egalitarian, and a step-change in how society operates.
As the founder of a co-op, an organisation that distributes power amongst its members, I beg to differ. DAOs might be able to do simple things like make a purchase based on member votes, but the hard yards when distributing power involve emotions and, well, being human. There’s a useful article on the difference between DAOs and co-ops for anyone who wants to read more here.
As Audrey Watters says, the best way to predict the future is to issue a press release. The ed3 article linked above was followed hastily by social media account, appearances on podcasts, etc. The authors are almost trying to will their conception of ed3 and the future of education into existence. While they’ve obviously done their research around the root causes of inequality around the world (access, affordability, and education) the “solutions” they point to seem to be a random mix of NFT grifts, people in developing countries playing “play-as-you-earn” games to earn minimum wage, and people who aren’t universities… setting up organisations?
I’ve tried not to let this post turn into the equivalent of Grandpa Simpson shouting at the clouds. I really, truly, want education and society in general to be decentralised. I want the means of human flourishing to be put into the hands of people. But this conceptualisation of ed3 isn’t it. It’s not even close.
If you have some time to spare (2h 18m to be precise) and are interested in this area, I highly (highly!) recommend you watch this video by Dan Olsen called Line Goes Up. It’s a really clear-headed look at what’s going on in this space, starting off with the financial crash of 2008. Very much well worth your time.
Behind most things lies nuance. Blockchain is no different. The recent controversy behind NFTs (?) has polarised debate about the ‘value’ of decentralised currencies, tokens, and the applications they allow.
There’s some important technical differences between how the decentralised networks behind various cryptocurrencies and tokens come to consensus. The point of this post is to explain these to the best of my current ability and knowledge. It’s based on my attempts to ensure that I’m not trying to save the world on the one hand while destroying it through my actions elsewhere.
In the course of buying and selling crypto, I’ve learned about an important difference between currencies such as Bitcoin which use ‘Proof-of-Work’ (PoW) consensus models, and others which use ‘Proof-of-Stake’ (PoS).
Both of these models are called ‘consensus mechanisms‘, and they are a current requirement to confirm transactions that take place on a blockchain, without the need for a third party.BitDegree
The TL;DR, as far as my understanding goes is that, broadly speaking, PoW is energy intensive and killing the planet, whereas PoS is… less problematic.
Let’s be clear: cryptocurrencies and tokens aren’t going away. And I see plenty of upside in terms of trading value independently of governments. The following definitions are taken from the glossary part of CoinMarketCap’s very helpful guide to crypto called Alexandria.
A blockchain consensus mechanism involving solving of computationally intensive puzzles to validate transactions and create new blocks.
Example: Bitcoin, Ethereum*, Zcash
*moving to PoS at some point in the future
A blockchain consensus mechanism involving choosing the creator of the next block via various combinations of random selection and wealth or age of staked coins or tokens.
Example: Cardano, Flow, Polkadot
- Proof-of-Authority (PoA) — “A blockchain consensus mechanism that delivers comparatively fast transactions using identity as a stake.”
- Proof-of-Burn (PoB) — “A blockchain consensus mechanism aiming to bootstrap one blockchain to another with increased energy efficiency, by verifying that a cost was incurred in “burning” a coin by sending it to an unspendable address.”
- Proof-of-Developer (PoD) — “Any verification that provides evidence of a real, living software developer who created a cryptocurrency, in order to prevent an anonymous developer from making away with any raised funds without delivering a working model.”
- Proof-of-Replication (PoRep) — “Proof-of-replication (PoRep) is the way that a storage miner proves to the network that they are storing an entirely unique copy of a piece of data.”
- Proof-of-Spacetime (PoSt) — “In simplest terms, PoSt means that someone can now guarantee that they are spending a certain amount of space for storage.”
The legality of cryptocurrencies varies by territory, with India currently considering a ban. I predict that the difference in consensus models will be a determining factor, with a likelihood that Proof-of-Work models are banned in some jurisdictions because of their energy usage and associated impact on the environment.
Ultimately, for better or worse, once it’s got enough traction you can’t ban innovation from happening. Governments are going to want to issue their own stablecoin, meaning that they can’t completely ban cryptocurrencies and tokens.
That’s why I predict that Proof-of-Stake will be seen as a viable model without completely destoying the environment. I may, of course, be wrong on all counts. Caveat emptor ¯\_(ツ)_/¯
This post is Day 93 of my #100DaysToOffload challenge. Want to get involved? Find out more at 100daystooffload.com. Image via BBC News.