Wired Op-ed: Crypto and Blockchain Are the Pendulum Swinging Back Against Internet Giants

In a new opinion piece published by Wired, Chris Dixon, a general partner at Andreessen Horowitz (aka a16z), maps out how blockchain startups and cryptocurrency developers are building the future – and it will be televised.

A new network of applications based on decentralized, open-source platforms threaten to revoke privileges from companies that centralize data and exert controls that are designed to maximize profits for the corporation, often at the expense of consumers. Instead, emerging technologies will rebalance power structures by revamping how companies interact with people and by revoking their iron grip on data – through a new internet.

Dixon, who invests in crypto and blockchain projects, writes,

“Millions of users have had their private data misused or stolen. Creators and businesses that rely on internet platforms are subject to sudden rule changes that take away their audiences and profits. But there is a growing movement – emerging from the blockchain and cryptocurrency world – to build new internet services that combine the power of modern, centralized services with the community-led ethos of the original internet. We should embrace it.”

Blockchain projects are in their infancy. As they grow and evolve they have the power to distribute all types of data, keep it secure and disrupt the traditional structures that act as gatekeepers. Dixon says the pendulum is swinging away from the gatekeepers and toward an internet of “open, community-controlled services” that are only now possible because of blockchain technology and cryptocurrencies that can transfer value in a trustless environment.

Ali Yahya, Dixon’s colleague and partner at a16z, gave a recent presentation on how entrepreneurs are engineering trust. Instead of relying on humans in hierarchical structures who bear the weight of power struggles, performance reviews, promotions, demotions, pay raises and pay cuts, all of which incentivize, skew and impact behavior, blockchain engineers are creating new business models to reduce opaque points of intervention, limit rogue players and shrink the list of opportunities for systemic corporate abuse.

Yahya, a former software engineer at Google, underscores Dixon’s thesis, and explains the allure of cryptocurrencies and why, despite vocal critics, the movement is not planning to retreat or disappear.

Yahya says,

“In our current financial system, the integrity of any transaction is dependent on the human system that sits in the middle of it. And the reason that we trust things like banks is because they have a reputation that’s on the line. They have a track record, and there are legal incentive structures that constrain the kinds of things that they can do.”

But in the wake of ongoing tales of egregious behavior – such as the Malaysia/Goldman Sachs banking scandal – as well as corrupt business practices and criminal activities at big banking institutions such as Wells Fargo, Rabobank and Deutsche Bank, entrepreneurs are increasingly incentivized to build better systems that minimize the ability for humans in power to game the system to enrich themselves.

The way forward is by building systems that are stronger than cheesecloth – systems that don’t allow for greed and power-hungry people to run amok in the first place. By building stronger systems that can ensure its participants “can’t be evil,” Dixon says we can avoid having to tell people “don’t be evil” – a request that carries a high rate of failure.

You can check out the Wired article here.

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