People talk a lot about blockchain these days, but blockchain is nothing more than an append-only log, where data is inserted through consensus (PoW, PoS, and so on). It may or may not have a native token (Ethereum/Hyperledger), and it may be public or private (permissioned/permissionless).

I got caught up in this hype about five years ago and started studying it. Along the way, I came across a great MIT course, which I recommend. You can find the syllabus here.

One question the course raises, and one I keep coming back to, is whether there is really so much demand for decentralization through blockchain.

Could other solutions, through private organizations, already solve the problem of decentralization more effectively? Microservices, for example.

In recent years, I have seen a lot of hype and very little delivery. In my view, supply chains and notaries are among the sectors that could benefit from this architecture. Of course, many businesses could become possible, but with Web 2.0, new businesses tend to reinvent old models: Airbnb (newspaper classifieds), Uber (taxis), iFood (phone directories), Netflix (video rental stores). With mobile technology, of course, these businesses are far better than their predecessors and have already surpassed them.

As for currency, I am not sure. PIX itself is entirely centralized, and it is the foundation the Central Bank of Brazil is using to create its CBDC, the Digital Real. I like Bitcoin as a defense of individual freedom, as an ideology, and even as a store of value, but in terms of usability, PIX beats it by a mile today.

Other areas people point to are insurance, financing, and education. But when we enter these markets, the issue changes: the disruption that is actually needed is about governance.

Who is responsible for fraud? Who has the authority to approve or reject something? I know this could be done through smart contracts and decentralized governance, but that is exactly my point.

On rent-seekers

A pause to talk about rent-seekers. Economic actors are always looking for steady, secure income. Since nothing is safer than the government and nothing in life is more constant than taxes, these actors try to influence the government to approve regulations and rules that benefit them. There is even a name for this: rent-seeking. Rent-seeking is possible because power is centralized; the only way to fight it once and for all is to decentralize power.

Conclusion

We talk about blockchain all the time, even though it is only a tool for decentralized governance. Vitalik, Ethereum’s co-founder, has been publishing good articles on the subject.

How do we fund decentralized institutions? How do we resolve disputes and fraud? I think these and many other questions cannot and should not be answered with a simple “blockchain.” We need to take the discussion further in Web3. Blockchain can be the beginning, but it should not be the end.