Sockchain: A Blockchain Fairy Story
Now listen carefully please.
Once upon a time, in a land far, far away called Preposteros, (well to the West of Westeros) the country was filled with people that could not trust each other. They spent a lot of time cheating each other and stabbing each other in the back, stealing, and lying and failing to keep their promises. This was, apparently because of something called ‘human nature’- stay away from it if you can. And, despite their various gods telling them not to do it, life got really, really unpleasant.
Fortunately, in Preposteros, there lived a bunch of people called Riskeaters. These people thrived on fresh, wholesome risk. They took it in and ate it up. And all the other people who lived in that land went to them and asked them to eat their risk. Of course, the Riskeaters agreed to eat the risk and charged the people to do it.
Because there is so much risk in the world, the Riskeaters became very rich and very fat, and they needed big limousines to carry them from place to place. And this caused real concern, because a lot of them were getting ill from Riskobesity, so they decided to pass some of the risk on. They went to their risk larders and looked in their risk refrigerators, found the risk that was getting a bit past its sell by date, or they didn’t really like the taste of and repackaged it as a CDO or some other form of risk food that — packaging wise- looked really yummy.
And they sold it.
But unfortunately, this risk did not agree with the people they sold it to. It made them really, really ill. Some of them even died from risk poisoning. Imagine that! And risk poisoning went through the land like wildfire infecting lots of people who had never expected- or agreed- to eat risk at all. They didn’t like the taste.
Fortunately, a couple of years before the great risk epidemic of 2008, a man, or a woman, or a bunch of men and women decided that there was a problem with the Riskeater model. He, she, or they saw that the only reason there was any risk, was because people didn’t trust each other. If people trusted each other, there wasn’t any risk. He, she or they had obviously watched Reservoir Dogs too many times, or had seen what cocaine fuelled paranoia did to financial markets. So, they decided to build a system where the Riskeaters were not needed.
And although they called this a trustless distributed system, it wasn’t really. It was a system where trust in people was replaced by trust in systems.
Yes, I know systems are made by people, but let’s not worry about that right now. Do you want to hear the end of the story or not?
He/she/they called this system Sockchain. And it involved a thing called a ledger which is like a big book where everybody’s transactions were recorded. Only this ledger was different. Because you copied the ledger each time it changed but kept a record of the original. and because the ledger was available to and held by every person or entity who participated in a transaction, you couldn’t change the ledger. This meant that you could have absolute trust in the ledger and the system that sustained it.
Almost everybody went batshit crazy for Sockchain. It was clearly going to change society forever. After hundreds of thousands of years, we didn’t need to worry that people would stab us in the back or lie to us. It would we there- in black and white (or faintly glowing Matrix green). We could manage transactions without trust.
It wasn’t long before some people realised that Sockchain was just an accounting system- just a way of keeping track of your socks, so they didn’t disappear in the wash. But the socks, man, the socks- they could be worth something. This led to a number of people getting together and developing a thing called Cryptosock.
Like Sockchain, this was also tremendously exciting, because it meant that the Riskeaters who still had a lot of money left could be punished for failing to eat the risk and- even worse- making us eat it instead. Boy, people were angry. Payback needed to be a bitch.
Cryptosock was a bit (ha!) different to Sockchain, because it was meant to replace fiat money with digital money- even though we have had digital money for years. But that was mostly just in transactions between Riskeaters which could double or triple the money they had available. .
Now instead of waiting -and begging- for Riskeaters to print money we could ‘print’ it ourselves. But if we just printed our own money, what would it be worth? Because even an undergraduate economics major knows that Hungarian inflation reached 46 quintillion percent and who wants to pay a quintillion cents for a stick of gum?
So like other- traditional- currencies Cryptosock relied on engineered scarcity. And just like gold or silver scarce things — like socks- are worth money. So they invented a way of ‘mining’ numbers which represented another unchangeable record, and started issuing Cryptosocks in lots of different forms. And these were still socks, even though they got way too volatile to wear. Nonetheless, speculators made and lost lots of money betting on them. And that means that Riskshifters started to regulate them, while Riskeaters started to look for ways of using them.
Ok, that’s the end of the story. I know it didn’t have a real end, but then real life doesn’t. What do you means “What are you supposed to learn from it?” Well I guess you are supposed to learn that data is as unreliable as the people that control it. And that maybe you shouldn’t listen to fairy stories
And maybe the problem of trust needs a better solution. Okay?
