Blockchains Scale Socially

Sep 22, 2022

Why do humans run the world? We run the world because we are the only animal that can cooperate flexibly in large numbers. We socialize across genetic boundaries. Through stories and myths like religion, nationality and traditions.

For effective cooperation, we organize ourselves into centralized hierarchies. But centralized enforcement and coordination breaks down at national borders. It is efficient within a country, but not universal. The cultural, jurisdictional, and intellectual diversity of people who participate in an institution is important, especially in the context of Internet. The more an institution depends on local laws, customs, or language, the less socially scalable it is.

The past decade has shown us the reliability, and universality of blockchain-based coordination. It is less efficient, but operates across borders without relying on trust, and without human prejudice.

While human efficiency has, more or less, remained constant for the past thousand years, computers have been doubling in power and efficiency, and halving in size every 2 years. With our super-fast computers, we can trade off some efficiency for a different kind of scalability. We can replace institutions that were traditionally centralized, to preserve efficiency, with inefficient blockchains that provide social scalability.

Social scalability is the ability of an institution to overcome shortcomings in human minds and in the motivating or constraining aspects of said institution that limit who or how many can successfully participate. - Nick Szabo


Further reading:

How it Works: Friendcaster

Different People See Different Things

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