Taylor Pearson is the author of " The End of the Jobs " and writes about entrepreneurship and blockchain technologies at TaylorPearson.me .
Although cryptographic networks are often compared to private companies, a better analogy is to compare them to cities.
As a city, a crypto network is a community of loosely affiliated individuals who agree on a set of rules for their way of life and work – laws for cities, protocols for cryptographic networks.
Unlike businesses, cities and cryptographic networks are organized from bottom to top rather than from top to bottom.
Individual leaders are more important for business than for cities. Who is the CEO of a company plays a major role in an investment decision, while the mayor of a city plays little role in the choice of a person? move there. Many Bitcoin investors can not name a single main developer, but this only plays a minor role in the investment decision.
Business growth tends to slow as it grows, but city growth tends to accelerate even as the population grows because of network effects. The 18 million people who already live in New York are "a feature, not a bug."
The same goes for crypto networks; the larger and more robust the community, the more valuable the encryption network.
This analogy is important because the way you design a prosperous city and how you design a successful business is very different.
If we take the lessons of how to build successful businesses and apply them to build crypto networks, it will end in failure. We need to study not how successful businesses are built, but how successful cities are built and apply those lessons to cryptographic networks.
Bitcoin is worse it is better
In his essay Bitcoin-is-Worse-is-Better the early bitcoin researcher Gwern argues:
"The long gestation and early opposition of Bitcoin indicate that it is an example of the paradigm" worse it is better " in which a complex and ugly design with few attractive theoretical properties compared to purer competitors.
From the point of view of network design, bitcoin is ugly and inelegant.
It's ugly and inelegant because network security only depends on having more brute-force computing power than your opponents. It's ugly and inelegant because the hash keeps growing.
And with the arbitrary limit of 21 million bitcoins? Could not it have been a rounder number or a power of 2?
Lessons from Brasilia
The paradigm of "Worse is Better" was also studied by Professor Yale James C. Scott in his book " S as a state . "
In his book, Scott asked why so many Utopian projects had failed miserably in the twentieth century. One of the main areas that he studied was the construction of cities, and in particular he compared Paris to Brazil's new capital, Brasilia, which was built from scratch in the 1950s.
The architects and planners in charge of the project thought that they could conceive of Brasilia as the perfect city.
Unlike working with an existing city where they felt congested by the existing infrastructure, they had a completely empty slate without the luggage that cluttered up existing cities like Paris.
If you look at a map of a big city like Paris, it looks, good, ugly and inelegant.
On a map, Brasilia has a look of beauty and elegance. Straight roads and geometric buildings are interspersed with equally geometric parks.
This is the pinnacle of what Scott calls "great modernism", the desire to make a aesthetically pleasing city from the point of view of a central planner.
And yet, the carefully ordered plan in Brasilia against the disorder evolved reality in Paris makes the lived experience of Brasilia soulless and empty while Paris feels vibrant and rich.
From the perspective of the central planner, Paris is a mess with apartments above shops and factories, while Brasilia is tidy with separate residential and commercial areas.
Which of these two cities would you rather live in?
Scott observed that the most popular cities (NYC, Paris, Tokyo Hong Kong, Sao Paulo, and London to name a few) tend to be ugly and inelegant from a modernist point of view from top to bottom. They should be worse, yet they are more popular.
Although Brasilia is beautiful and elegant on a map, the result of a resident is that "the city center feels clearly devoid of life on the squares, where the pigeons are much more numerous than people". From the planner's point of view, it should be better, but it's less popular and worse.
Similar to the best crypto networks, the best cities where people want to live are convincing from an upward and not downward point of view. Despite their ugly appearance on a map, people really want to live there and so cities continue to grow and prosper.
In the case of cities, modern central planners presented a common failure model :
- A well-intentioned planner enters and looks at a complex reality from top to bottom.
- They do not understand how it works because it's complex and messy. Like the map of Paris, it is difficult to understand from the outside.
- Rather than trying to understand why the city looks like a mess and if it serves a deeper purpose, they attribute it to the city planning being "irrational".
- They propose an idealized map of what a perfect city should look like in theory.
- They use their power to impose this idealized map to the current city and it turns into a disaster.
The planners ignored Gall's law:
"A complex system that works has always evolved from a simple system that has worked.A complex system designed from scratch never works and can not be repaired for the to operate with a simple and functional system. "
Bitcoin and Paris follow Gall's law. They evolved from simple systems. These systems, in their now complex form, can have no meaning and look like a complete mess from top to bottom.
In the same way that it's hard to explain what's so irresistible in cities like Paris, London, or Hong Kong, it's hard to say what's going on. explain what is really fascinating to someone who has never used it. In either case, you must experience from a bottom-up perspective to understand.
These features are essential properties of any complex system of long duration, whether it be a city, a crypto network or a network. tropical forest.
Most new cryptographic projects will fail for the same reasons as Brasilia.
If crypto networks are like cities, then many of the current projects are approached from the same point of view, modernist and upscale, as central planners approach Brasilia and meet again devoid of life and communities.
These projects have the premise that "the bitcoin is so ugly or inelegant to do X, so we corrected it so that it is beautiful and pretty in this white paper"
These arguments are similar to those that urban planners argued by saying that "Paris looks like such a mess on the map, I designed Brasilia to look pretty and pretty on this card."
These crypto networks will have a familiar failure model:
- A well-intentioned protocol designer comes in and looks at a complex reality.
- They do not understand how it works because it's complex and messy.
- Rather than trying to understand why this sounds like a mess and if it serves a deeper purpose, they attribute it to the current conception being "irrational, ugly and inelegant" ]
- They propose an idealized protocol that makes sense on paper
- After the initial hype and buzz that fade, protocol users and the community do not like "live there" and migrate slowly.
Many of these projects have raised large sums of money because, like Brasilia, they look well designed and thought out on paper.
However, the cryptographic networks that will survive in the long term will be those that will progressively evolve with a deep understanding of the projects that preceded them. They will simply start and evolve over time, integrating their community of developers, users, investors and miners.
A complex encryption network designed from scratch never works and can not be repaired to make it work. You have to start over with a simple cryptographic network and build from there.
Burning out via Shutterstock