Blockchains can solve the problem of Big Tech’s power

livemint.com:

Last week, the price of Bitcoin reached a record high. Friends who just a few months ago were boasting about how cleverly they had exited before the crash were now bemoaning the fact that they no longer held crypto. And then, before the week was out, it lost 7% of its peak value.

This volatility has characterized cryptocurrency trading since Bitcoin first appeared on the scene in 2009. Given its inherent scarcity—there will only ever be 21 million coins—the smallest shock drives up demand, causing severe price fluctuations. This is why most governments view Bitcoin as a commodity, a risky investment that gullible citizens need to be safeguarded against.

In his recent book, Read Write Own, Chris Dixon refers to this as “the casino" aspect of blockchain technology. It is this—the allure of making outsize profits on speculative investments in a scarce commodity—that is the single biggest driver of interest in blockchains today. As a result, this is the aspect of cryptocurrencies that governments are most interested in regulating.

But there is another, far more interesting side to crypto, one that few outside the blockchain world understand. This is what Dixon calls the ‘computer,’ and it is here, he argues, that the real value of blockchain technology lies. So, what is this ‘computer’ he is referring to? All computers are, he argues, nothing more than “state machines"—devices that store information and can make changes to the ‘state’ of that information.