Forget for a moment about the value of the cryptocurrencies that you may or may not own. Instead of thinking of blockchains as investment bets or just cool technology, think of them as entirely new, and previously impossible, economic systems. Because that’s what they are.
Just like any economy, a blockchain requires that its designers define monetary policy* (inflation), fiscal policy (block size), taxation (fees), voting (governance/upgrades), and provide for the common defense (securing the network). Yet, unlike traditional economies, they offer the possibility of greater freedom and transparency because they avoid the problems of centralization and concentration of power.
That’s the good news. The bad news is that these new economies comes with extremely high risk.
One of the risks, ironically, is also one of the technology’s greatest strengths. As Elad Verbin points out in his post on Behavioral Crypto-Economics, “Blockchain systems are, by design, difficult to change once deployed.”
Mark Zuckerberg’s hallmark mantra “move fast and break things” does not apply here. If blockchain developers don’t start from an extremely well thought out design, they may very likely have doomed their project. Repairs and improvements to these systems are famously difficult. Protocols with billion-dollar valuations could disappear overnight. Things can get very acrimonious. Want evidence? See the Bitcoin block size debate.
Source/More: Blockchains aren’t just tech, they’re new economic systems | VentureBeat
