Immutability & Consensus. These words are hotly debated in the bitcoin & blockchain world today, and I would argue in other monetary policy circles as well, perhaps by different names.
With the recent decision of the Decentralized Autonomous Organization (or ‘DAO’) to ‘fork’ the Etherium blockchain, advocates of sound blockchains have spoken out in opposition. Anthony Diorio of the TSX, and the Medium poster by the name PatrolX have said they don’t believe the failure of a single app (the DAO), should be justification for a re-write of the code-base. In this sense, the decision (whether or not there was consensus) to fork the ETH blockchain is seen as a violation of the fundamental principle of immutability.
Which caused me to think – what actually is immutable? Some say God. Some say death & taxes. Some say math & physics. Some say The True, The Beautiful, and the Good. Whether it’s one of those or something else, it surely isn’t humans. Nothing about us is immutable. We make mistakes. We forget. We get angry. We grow old. We die.
And yet, we still seek the immutable & eternal. Perhaps this explains our fondness for precious metals, great monuments, Holy texts, and other works of enduring value that we pass down through the generations.
More recently, and especially since the introduction of bitcoin & blockchain technology, we have begun to value precious maths for their supposed immutability. Whether that’s in the form of algorithms that run pretty much everything around us or the Prime #’s used in encryption, math has become incredibly valuable in our hyper-connected world.
I see this recent debate about the Etherium blockchain fork, as essentially about what constitutes sound money, or in this case, a sound blockchain and why it’s important. A sound blockchain, just like sound money, is ultimately about “the relationship between actual work done, value created, and value received” as William Mougayar puts it. If that relationship is distorted, people lose trust in the system, and things don’t work very well.
Our beliefs about work, value, savings & investment are in a state of rapid evolution in the early decades of the 21st Century. Whether it’s US Dollars, SDRs, digital gold, bitcoins, or a panoply of alt-coins, the future of money, value, and work are anything but certain.