Blockchain Technology for a Broken World

Article was originally posted here

Who can you trust? In this service economy, my answer used to be “not many people.”

Those were the good ol’ days! Now my response would be “nobody.”

Just in the last few months, I’ve encountered several instances of neglect, ineptitude and possible dishonesty…

  • I hired a contractor to do an addition to our house. He left halfway through. I sued and won, but it was a huge hassle.
  • Two weeks after we got our ice maker fixed, it stopped working again. The repairman said it was a completely different problem and charged us another few hundred on top of the original sum we paid.
  • Every time I go to the dentist these days, it seems I have to get another crown. It happened again last week.
  • I noticed my wife’s car was vibrating. I thought it was a simple case of wheel misalignment. But the garage charged her $1,400 to put in new struts.
  • I opened a new checking account recently and selected the best free account that suited my needs, only to find out later that I was given the most expensive checking account instead. “Not our fault,” the bank told me.

In an age of greater trust, the above list wouldn’t be a big deal. We could give service providers the benefit of the doubt in almost every case. But not in our current dysfunctional consumer economy.

Some of the biggest companies have worked hard to earn our distrust, like Facebook. Roger McNamee, an early advisor to Facebook, captures its approach quite nicely: “Move fast, break things, apologize, repeat.” And now Google is busy feeding its voracious appetite for everyone’s personal data. Its original slogan – “don’t be evil” – is an ironic reminder of a bygone age. Companies that used to champion the values of honesty and integrity are now merely paying lip service to them.

It wasn’t always like this. I remember a very different country where trust was woven into our daily lives. When I was growing up in the 1960s, we brought the family car to the garage three blocks away. We were on a first-name basis with the mechanics. There was not only trust but also a sense of friendship.

We bought our prescriptions at the corner drug store. And the pharmacist wouldn’t let us leave the store until he heard the latest news about every last person in the family.

When part of our house burned down, my father, who ran his own clothing business and used the basement as his second warehouse, lost a large part of his inventory. A clerical error left him without insurance. His agent offered to pay him the money he lost out of his own pocket. Can you imagine anyone making such an offer these days?

Times have changed. The very people and institutions we should trust the most, we trust the least.

  • Politicians. Does anybody really believe that politicians put the welfare of the country or their constituency before their own perpetual re-election campaigns?
  • Newspapers. I read them just as voraciously now as I did 40 years ago. But I don’t trust them the way I used to. Newspapers are too easily manipulated. I also assume they push a point of view that isn’t necessarily supported by the facts. (There are heroic journalists out there who care about the truth… just not enough of them.)
  • Police. To counter the growing vortex of suspicion surrounding their behavior, more and more police are being required to wear body cameras. My son, who’s a cop (and proud of it), says if he had to do it all over again, he would choose another profession.
  • Hospitals. Last time I went to the emergency room, the hospital insisted on getting my Social Security number. I refused. Paranoia, you say? Well, hospitals have already begun sharing medical health records with Apple’s healthcare app. And I don’t trust Apple.
  • The justice system. U.S. courts continue to send petty criminals to prison in record numbers, giving America the highest per capital prison population among developed nations. It’s a national disgrace. It doesn’t help matters that the courts are chronically overloaded, leaving plea agreements as the easy out of choice, landing thousands in jail without their case ever being heard before a judge.

The corrosion of trust – and in its place a growing sense of suspicion and cynicism – is one of the most divisive issues of our time. Sadly, once that trust is lost, it’s almost impossible to re-establish.

But I’m hopeful that not all is lost. Blockchain and the many decentralized solutions derived from blockchain technology were created just for this kind of broken world.

You don’t trust Facebook? The banks? Mainstream media? Decentralize them.

Thousands of developers are working behind the scenes to create decentralized solutions. There’s still a lot of work to do. The user experience has to be sharpened, and the technology has to find a way to scale. But the technology is far enough along that crypto insiders are confident that it will happen.

Blockchain technology is giving individuals the option to own and control their own data. (See here for more of my thoughts on this.)

And more and more blockchain companies, like Steemit, are quantifying trust and putting those “scores” to work. Uber and Airbnb, among the first to use trust scores, have shown how effective these models can be.

The more widespread these technologies become, the sooner we can restore trust in a society that sorely misses it.

Good investing,

Andy Gordon
Co-Founder, Early Investing

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