Dan Larimer - Blockchain is about Integrity by Design

Why do we need blockchain? At Blocksburg Summit, Dan Larimer shared his higher purpose on how building with blockchain is committing to integrity by design. Here’s a transcript of his talk. Later I will add the Q&A he did after his talk. Special thanks to Everything EOS for providing a recording!

Picture by EOS GO — Picture at Blocksburg, via EOS Go.io.

Here’s a table of content:

Why are we doing Blockchain?

I’m really interested in changing the world. What I want to talk about today is the bigger picture. Why are we doing blockchain?

We’ve just talked about, lots of different solutions, whether it’s voting or stocks or shareholders. But we’re doing all of this because of a bigger movement. I didn’t get into this to do blockchain. I’ve found blockchain because I wanted to change the world. I wanted to make the world a better place.

I set out with my mission, which I’ve said over and over again, it’s to find free market, volunteering solutions, for securing our life, our liberty, our property, and ensuring justice for everyone. That mission is bigger than blockchain. Blockchain is a tool. It’s a very powerful tool.

But if we focus on the technology, the blockchain, too much, we lose sight of the bigger purpose. The bigger purpose is what causes us to get up in the morning to pursue these technologies, to fight the fights with the regulators, to struggle with the scaling, the technology, getting adoption.

These are all things we do for a higher purpose. So let’s talk about the higher purpose, and what I view it as. We spend more time protecting ourselves from each other, then on working together to make the world a better place. So I’m going to ask, I’m going to open this up for questions here in a little bit, but before I do, I want you to think about all the different ways that we can improve integrity in our society and think about why we are doing things. Because that’s more important than any individual solution. There are other ways to do currencies that don’t rely upon blockchain, but still have integrity. So let’s not get lost in the weeds.

Blockchain’s amazing. What I like about blockchain is allows us to make society more efficient.

How many of you have bought a house? You’ve seen all those papers you’ve signed? You have no idea what’s in it. How many bought title insurance? How many have had a problem with your title insurance, and then of get any collection on it?

The point is you’re signing contracts and there are pages upon pages and you sign the last page. And the last page is nothing more than a signature page. You could be signed anything. They could just copy that last page and put whatever texts they want.

We’ve gotten into a society that’s so far removed from the concept of integrity. Our contracts are beyond our comprehension. You’re agreeing to stuff you don’t know what you’re agreeing to and there’s no proof of agreement.

We’ve got laws that are so Byzantine. No one can even possibly know them all. And you’re accountable, right? Ignorance of law is not an excuse? Well, I challenge anyone in congress to recite the laws of this country. So, what are the strategies that blockchain is built on, to force and increase integrities decentralization?

Decentralization

Decentralization is a word that I hate and love because it’s not defined well, but the spirit of decentralization is to put control down into the hands of more people to have more variety, less mono-culture.

If you look at centralization; we have an election and we elect one president to decide for 320 million people. That’s a very centralized decision-making process.

Multiple Blockchains are Needed to be Decentralized

The idea of using only one blockchain, is centralized of itself, regardless of the consensus algorithm you use. The blockchain has to decide which is the one true chain. So decentralization is about having many, many options, lots of variety and not making everything the same.

In nature, there’s lots of variety. And when there isn’t lots of variety, things are subject to disease. It’s just not sustainable. It might appear to be more efficient in the short term, but it’s a lot more fragile in the long term.

We need competition and cooperation. We need respect for each other to try different things and do things in different ways, rather than trying to get everyone to adopt one way of doing things. Blockchain technology allows smaller groups of people to form this community or that community. We need to have many different communities and not compete and say ‘my community has to grow, thus some other community needs to shrink’.

So that’s what’s going on in the cryptocurrency world; Bitcoin versus Ethereum versus EOS. Everyone’s fighting over ‘are you decentralized’? The reality is collectively we are all decentralized by providing more options for people so that if one blockchain gets corrupted because all the miners happened to be in China, well then there’s another option, run by different people. And if one governance system gets corrupted by having strong stakeholders who come to get control, then there are other alternatives that people can move to.

Imagine you only had one store where you can buy your food. Are you free? Or do you have to do whatever they say, if you don’t want to starve? Freedom is about having choices and making sure there’s lots of them.

In order to make sure that you have choices, you have to make sure nothing gets too big.

Why Centralization is Inefficient

When things get big, they get centralized, they get inefficient, and then they fail all at once.

If you look at the structure of our body, lots of individual cells, each cell is centralized in itself, but they collaborate. The design pattern scales throughout nature. Humanity is a bunch of individual humans. Some of us fail, others can succeed. We need to allow the failure of some people so that others can learn from those experiences.

That is the spirit of decentralization, just to have lots of competition, lots of variety so that some can succeed, some can fail. The principles of nature can express themselves through our technology, through our organization. Technology is a kind of anti-nature. We tend to make things rigid, straight lines, like everything, conform into one size fits all. But decentralization means lots of variety.

We’re trying to make blockchain more scalable. We went to make the technology cheaper so that more people and smaller communities can get the benefit. Every company should have its own blockchain, and we see this now, but really, every company’s going to have many different blockchains.

Why Maximalism Doesn’t Make Sense

You don’t see people arguing for one particular technology. Everything should be C sharp. How many people think everything should be C-sharp, and we should have no C++, no Java. Nobody, right? That just doesn’t make sense. We have a variety of languages. Each one serves a purpose.

We have a variety of blockchains. What I’m doing at Block.One is building the technology, making it more accessible and easier to use, so more people can experiment so that people here can pick it up and start building things more efficiently, faster and have just more variety. You’ve heard a lot of the potential ideas here in the past two days of what things people are working on.

Blockchain: for Collaboration, via Identity

The reality is, if anywhere two or more people need to collaborate, you need a blockchain. You need a way of keeping track of who agreed to what, with social networks that prove identity. Build those relationships that don’t rely on centralized identity providers, right?

Governments control your ID, they say who you are. But what we really want in society, is a mesh of identity where you are who you are because your friends are. And they are who they are because of their friends. And that will uniquely identify every individual person. And that provides more security. Like we’re using these technologies, private keys on hardware devices. It really protects your identity.

Blockchain for Integrity in Elections

When your identity is strong, we can do transparent elections. And transparent elections are an interesting thing (Adam was talking about Follow My Vote). The idea of having integrity in our elections is fundamental, because if we can’t have integrity in our elections, and some other thing has priority like there’s a take on what about coercion? And what about this?

We should first air on the side of integrity, which means you can prove who you voted for, you can prove that the vote was counted and that everyone who is participating is a real person. That is the first level of integrity.

When we compromise our integrity because of concerns about privacy, and we can design a system where it’s actually impossible to prove that the election was honest, I don’t care what voting machine system you use, paper ballots, whatnot. It’s not in votes that count, it is about who counts the votes.

If you can’t count the votes, and you can’t verify that everyone’s a valid voter, and you can’t write the software you’re using to count the votes and you have to rely on someone else, you’ve compromised the integrity of the system.

But we live in a society where people are trained in the conception that it has to be a secret and you can’t know. It’s actually against the law at many places to have a voting system that has integrity to it.

So, what I’m getting back to with these examples is that if we lose the focus of integrity, you can build systems about integrity on a blockchain. And you can all agree on the common outcome. That can be used for good, but it can be used for evil, too. That’s why it’s important to think about the higher picture.

Buying Businesses in the Blockchain Era

Blockchain is a tool. It gives us the possibility to create structures in communities and organizations where the level of integrity is higher than it has ever been before. The cost of achieving this is lower, where the opportunities for fraud and deception are minimized.

When you go to buy a company, you have to do your due diligence. How do you know you’ve got every contract that has ever been signed, and all the terms that it’s ever agreed to? You can’t do that today. You hire attorneys to sift through all kinds of documents and then you ask the sellers to make representations and warranties, that they’ve disclosed everything to you. But, it’s not actually possible to know you have everything.

Blockchain makes those things possible. It allows you to accelerate. Blockchain makes it easier to get into the capital markets, and to have new ways of providing incentives, accounting for people’s contributions to society, whether it’s donations to your church or anything else you want to track.

Banking and Accounting

You use QuickBooks and do your accounting. You want to minimize the fraud. You want to automate your taxes, how many people would like your taxes to be automated and not have to deal with the IRS anymore? How many people don’t want to have deposits on your bank disappear, because the bank violates some rules and they don’t know? No one goes to jail, but you lost hundreds of thousands of dollars, right? We shouldn’t be having that in society on our day and age. In theory, if we had more integrity, these types of things wouldn’t happen.

If we built that into our culture, we wouldn’t need blockchain as much. Blockchain allows us to commit to integrity with intention, rather than just hoping that it exists.

That’s why every bank, every government, when you’re doing buying and selling land, every contract you sign, when you get married, the keys to your car; all these things need to be, can be tracked and dealt with much more efficiently. You eliminate a lot of the work that’s currently placed on regulators to try to enforce integrity from the outside.

Choosing Blockchain is about ‘Integrity by Design’

So when businesses have to make the decision of ‘do I build on a blockchain or do I not?, the real question is do I want to build a system with integrity by design or do I want to build a system where I compromise integrity for the sake of efficiency? (EXTRA: Although I think blockchain can become just as efficient as the other solutions.) Or because I actually liked the ability to backdate things and change things after the fact. And, I’d like the flexibility it gives me to not actually commit to things and go back on things, Or I like to pay lawyers lots of money to fight over the terms in contracts that no-one can understand.

When you build your business on blockchain, you’re telling the world you’re committed to integrity, you’re telling your customers that you’re committed to it. You’re telling your employees that you’re committed to it. And that makes all the difference in the final outcome. Because, if your heart’s not in it for the right reasons, then you might have a blockchain, but you don’t get to stop the corruption.

So, that’s my high-level view of where I think all this goes. It’s a reminder of why we got here in the first place. Because we are tired of the rich getting richer only because they’re leveraging systems, and they’re biased towards centralized powers, centralized decision making.

We’re tired of one size fits all solutions. Whether it’s for healthcare or food inspections or whatever your house permitting rules are. We have a society that’s increasingly one size fits all, but then we don’t have integrity at the institutions that are running these things.

We keep thinking that bigger government and bigger organizations, will solve all the corruption, but all they do today is create more power, more concentrated, more corruption. That’s why we decentralize. That’s why we need to build integrity at the very foundation. We need to demand it from all of our institutions, whether it’s our universities, whether it’s our local government. We need to be demanding it from the companies we do business with.

So that’s my soapbox for the moment. I’d like to open up the floor to questions. I love questions about how blockchain works, how blockchain can be used at your business, about the future of EOSIO.

Q&A and Sidenotes

To read further: here’s the full Q&A.

A few sidenotes:

Here’s a full transcription of the Dan Larimer Q&A on how Blockchain is Evolving.
Special thanks to Everything EOS for providing the recording, and to EOS Writer for putting it on my radar.
Here’s a searchable full transcription of Brendan Blumer on the future of Blockchain.

Dan Larimer – Blockchain is about Integrity by Design