so I'm gonna go back and really try and
nail this thing down so that you wind up
with an operational understanding of the
blockchain that will allow you to
correctly interpret its significance in
your life right and to do that we have
to go back really 50 or so years into
the early days of computing because what
what is making this so confusing is that
most of the practitioners in the
blockchain space have 50 years of
history parked into their heads which
forms an implicit matrix in which words
like distributed database hang so to
really get this to hang together we've
got to go all the way back and we're
gonna go through this kind of quickly
but I want to try and lay out the
foundations in the past so that we can
meaningfully talk about the future
so we conveniently have this stage which
is set out in lumps and I'm gonna make
each one of these basically a ten year
span so right back somewhere over here
in the darkness of history we've got the
Second World War which is where the
computer was was originally created
right the computer as it currently
exists was developed as a weapon to
defeat the Nazis it was used to crack
the codes that allowed the Allies to
paralyze the German war effort and
eventually defeat them and the link
between cryptography and computation
goes all the way back to the birth in
fact if you go even further back the
analog computers these monsters brass
devices which were used way back in the
day were actually created to calculate
gunnery tables for naval ships at war
they wanted to be able to calculate the
trajectory of artillery so you come
forward into the 1950s and you get this
kind of demilitarized computing all
these machines and all these engineers
that have left of services and are
coming in to you know create a new
generation and we're gonna take all this
former military gear and we're gonna put
it in the hands of businesses and back
in this prehistory the computers are the
size of this room they weighed tons the
guy from IBM famously says that there
might be a world market for perhaps five
computers a year right the data is
stored on
cards and then eventually one inch wide
magnetic tapes and the complexity of
these systems is such that it takes a
roomful of programmers to get a simple
reliable system to do something a
process an invoice right this is the
prehistory and this is the mid mid-1960s
that were talking about so the game
really begins to be recognizable in 1970
when you get the creation of an
abstraction called
SQL in IBM by a guy called coder Edward
Cod and it caught so SQL is this
extremely forceful application of
mathematics to bring order to the chaos
of tape machines back here you've got a
whole bunch of data basically just
spattered across magnetic tape and
you've got huge machines that process
the tape but when you want to retrieve
something you have to go and fish for
the day to yourself move tape number
three forward 17 feet find me the record
and give me back the first name and
programming these things is glacially
slow it's a nightmarish so here is the
first place where the heavy mouth really
enters the picture in this story which
is the SQL abstraction assumes that you
create a multi-dimensional cube one tape
machine per axis of the cube five tape
machines five dimensional cube you can
imagine it kind of hanging in space you
then have an abstract algebra which
allows you to take a locus a set space
inside of the five dimensional cube
specify in ways which make sense the
programmers fairly intuitively see where
there might be a gap there and pull that
and that set of data out into something
that looks like a spreadsheet and that
conceptual jump was at the time so
revolutionary it took people were five
years to accept that it had happened and
that actually worked and what came out
of that was the golden age of SQL right
1970 to 1990 just about all that we did
was take every single thing that we
could fit into a database in business or
in the white
world and we shoved it into a database
and right here in 1970 the machines were
incredibly expensive and incredibly
fragile the people working with the
machines actually wore white coats
because if you weren't wearing a white
coat stray fibers from your clothing
could interfere with the tapes Jam the
tape machines and destroy your customer
data Ron
so amount in this very fragile very
arcane very expensive system it's only
just become technically feasible these
things are like laboratory artifacts
right it's like going into you know CERN
or something like that when you want to
inspect one of them and this sets the
mindset for databases right the way
through 70s up until the beginning of
the 80s that's the psychological
condition of the database and the
organization's become siloed because all
the information that makes your
organization work is stored inside of
one of these data temples right right
around 84 you get the microcomputer
revolution the IBM PC the Apple all this
kind of stuff and these are appliances
there are things that you can buy like a
television and plug into your office
they are robust they're reasonably cheap
as as well as four or five thousand
dollars amazing they are fairly easy to
maintain and repair they are relatively
resistant to dust and humidity they're
pretty much like a television in terms
of their operating characteristics one
per desk seems possible and weirdly
enough they can absolutely run database
software on them you can actually have a
database kind of sort of like the big
thing you had over here but actually
living on the machine that you have in
front of you and the kind of first real
heavy use of an application that works
in that environment is a thing called
Lotus 1-2-3 which is the first
spreadsheet and this begins a revolution
that goes all the way through accounting
but we're not gonna talk about
accounting too much but if you want to
think about computers and Ledger's
starts here back in the 80s now this is
15 years from you know enormous with
fragile machinery and enormous expanse
through to its
on a desktop can you imagine how
disoriented the people that live through
that technological transformation were
it was just as weird as what's happening
now but it was happening somewhere over
there because we hadn't invented the
Internet to bring you the news that
something weird it happened with
computers now we get to kill in 1990 the
networking push really starts a long way
back but it takes a long time to get the
networking stuff to work 1990 is about
where you begin to get networking that's
practical for real stuff yeah I got my
first email account about 91 and at that
point there was no World Wide Web there
was a computer there was email there
were chat programs but if you wanted a
document from another machine you got an
interface that looked a bit like a file
browser and you clicked on the document
you want then it loaded it onto your
machine and then you opened it in
something to take a look at it and the
notion that you could build the thing to
read the document into the thing that
got you the document was quite radical
that was sort of a big deal and that was
why the web was a big deal no one were
bit weird paradigm stuff over here
through this period the computing is
very much centered around data it's
structured it's hard it's rigid it's
formulated it's tabulated the stuff is
very rigid the web builds on a different
model of computing which is called
document-centric right document-centric
computers are paper simulators right
they harm do things which look like
documents you get email it looks like a
letter am you open up a graphics program
it looks like a canvas there are things
that look like paintbrushes in term
model of computing that we're using
right now is document-centric computing
and the connection between databases and
that sort of data centric computing and
document-centric computing is extremely
weak there are two completely different
ways of getting the machine to do stuff
for you and getting data into documents
is tricky as anybody who's ever done in
Excel merge knows and seriously right
it's hard
getting documents into data is even
harder which is the entire mass of
content management systems right
scanning documents all of us these two
things don't mix together at all well so
we come out through the 90s and you kind
of get to mid 95 maybe early 96 and
people suddenly realize that one day in
the future you'll be able to make money
on the internet there's just one problem
there's no security which means if you
type your credit card into an internet
form it will be bounced all around the
internet anybody can read it and they
can steal money out of your account
it's another five years until we get a
widely deployed solution that allows us
to have encryption which lets us move
credit cards around the internet
e-commerce doesn't really become a thing
into hot 1999 2000 so we were already
here by the time you've got a computer
that is capable of taking a payment from
you know the the internet again how fast
is the rate of change does anybody even
remember when you couldn't put credit
cards into the internet but you were all
alive pretty much but we forget so
quickly what was possible or impossible
when you technology arrived so we're
just gonna wash the memory out it's
quite hard even to think about what it
was like before we had cell phones so
you come forward to 2010 by 2010 I'm
gonna suggest that more or less
everything you could do in a webpage had
been done to at least the first
approximation more or less all the basic
stuff was there if you could do it with
a computer that was basically a paper
simulator it had been done more or less
now this is also roughly when Bitcoin
gets started and Bitcoin starts in some
you know festering little weird
counterculture on the internet which I
spent my entire 1990s and called
cyberpunk and the cypherpunks are
straight out of science fiction they
can't tell the difference between
science fiction and reality they
generally speaking have an emotional
intelligence Koecher around 75 to 50 it
took me a long time to grow over and one
of the things which makes that scene
work the way that does is the enormous
prevalence of autism so whenever you
hear somebody ragging on the Nerds
right but ever you hear somebody ragging
on the nerds remember what they're doing
generally speaking is picking on
autistic people right it's really
important to understand that the people
building the technologies on put your
society completely depends the people
without whom the lights go out and the
food stays cold are heavily heavily
heavily tending towards being on the
autistic spectrum so when you hear
people laughing at the Nerds remember
they're often at people that are
disabled there are also the people that
your civilization depends on so don't
screw with them right so the cypherpunks
come out and basically say in a very
naive way why do we need government and
they go and they build this thing which
is essentially a central bank of the
internet now you sort of think well that
was a bit of a big jump how did we go
from we can finally take a credit card
to central bank of the internet that's
what all of us spent about five years
wondering as well what the hell did they
do because the technology arrived raw we
could go to ask what satoshis intent was
because Satoshi was a ghost right the
software was dropped onto the internet
there was some early discussion and then
the guy vanished so we have no idea who
Satoshi was we don't know what the
intent was there is nobody to go to
conferences and pitch the technology we
were left with an artifact that to all
intents and purposes might have been
created by a time-travel or under
dropped it's about bigger jump um so
what did they do what they did was this
right back over here the databases were
singular they existed in an atomic state
one database per enterprise the network
existed in some relational sense between
enterprises but because the database was
perceived has been too fragile to let
anybody touch the database never
directly communicated with the network
you always had a lots and lots and lots
of guards and buffers and other stuff in
between to prevent the two things
working properly and if you did actually
connect the databases kind of directly
to each other you got another problem
which was the database encoded the
worldview of the organization to
organizations to different world views
you always needed something in between
to translate
so you never got large-scale
computer-to-computer connections that
allows you to create a shared model of
reality between lots of different
organizations and this shows up everyday
when you try and do something like
process a claim on insurance and you
have to fill in the name and address
details seventy four times for different
organizations often three or four times
for the same organization the databases
are kept separate from each other
there's no real connectivity between
them and when you try and build
connections between the systems the
complexity builds to the point where
it's too expensive to do so what they
say you know mean when they say the word
distributed database is a database which
is both like a database and like a
network and this is the genius of
Bitcoin it fuses together the database
and the network into a seamless hole
called blockchain everywhere there is
data there is Network and everywhere
there is Network there is data they're
completely fused inside of these systems
so what that means is rather than having
all of these individual kind of ivory
tower computer systems connected by a
network and then all the costs of moving
things in and out you have a single
shared story of reality spread across
all the machines simultaneously and when
it changes in one place it changes
everywhere and this is such a powerful
abstraction it's such a powerful
technology that the first thing they
implemented was the central bank of the
internet that was the first thing they
did can you imagine to write you open by
creating a single global currency which
is the first thing that has worked that
way since we went off the gold standard
and the technology deployed is so
powerful that it was done by either one
individual or a small group that
remained a secret they basically
reinvented gold and that was the first
move this is unimaginable strangeness to
somebody that spent their entire
lifetime monkeying around with computers
oh my god what have we done so you get
up to kind of where we are now right
basically 2015-2016 we're sort of midway
through the process Bitcoin is well
established as a reality everybody is
comfortable with bitcoins existence to
some degree what is it it's a bank
account that stores magic internet money
that comes from the central bank of the
internet which is a decentralized
database which is everywhere anoher
maintained by a bunch of people you
don't understand but the funny thing is
that if I describe to you how your
government works it's even worse right
so every four years we hold a popularity
contest regionally we pick the person
that is most likeable on television more
or less regardless of their values we
know nothing about them because they're
protected by privacy that surrounds most
individuals so they could be a person
playing a role and then we assemble
these people into a large group that
gets to decide who lives and who dies
every day right so you know don't assume
that because the new stuff is weird it's
any weirder than the old stuff the old
stuff is just weird stuff you got used
to now let me move a little forward to
this whole smart contract thing right so
the smart contract is the third big
integrative step first we merge the
network and the database to make the
blockchain then we take computer
software code and put it into the shared
database into the blockchain so we take
a little program and they can only be
little because it's just the beginning
of the story and we take the little
program and we store it in the
blockchain and that means everybody
that's connected to the block chain has
the copy of exactly the same program and
programs when you run the program same
data same code same result so now
everybody's got a copy of the database
everybody's got a copy the code we all
run the code at the same time we all put
the output back into the blockchain if
there's a disagreement we find it
immediately we sort it out so in that
sort of environment you have these
little programs which are just as
transactional sending people money it's
like a wire transfer you
go here and my fools across the network
it pops up there it's like a Bitcoin
payment what kind of things the world
programs do if this job has been done
pay bob if the job hasn't been done by
the 31st of March send the money back to
ours how you tiny little pieces of
business logic pulled out of the
application stack and put onto the box
chain instead and this is the third big
unification I work for a company called
consensus systems that uses aetherium
which is the first really durable smart
contract platform to build lots of
applications and those little programs
do things like make sure the artists get
paid when their music is listened to
they do things like streamline
transactions between banks through all
kinds of simple useful things and we're
still only at the very beginning of the
story right now the Bitcoin system
processes about seven transactions a
second the etherium system does
something like 20 so these are way back
in terms of speed they're way back over
there her computers were in the 1960s on
punched cards now brace yourselves right
now the challenge is to produce a thing
called a scaled blockchain and a scaled
blockchain is watch-chain that doesn't
do 20 transactions a second it does
roughly the same number of transactions
a second as Visa or Swift ten thousand
50 thousand a hundred thousand
transactions a second quarter of a
million transactions a second and the
scaled blockchain is something that
begins to provide us with something that
looks like a global computing surface
onto which things like the internet
things could be loaded you could take
the entire global financial system and
push it into a scale box chain you could
take the entire Internet of Things and
push it into a scale blockchain you
could take all of those machines in the
cloud you could put blockchain software
onto them as Microsoft recently did with
a thing called a Dewar and then you
could have a single global computing
surface that took all of our different
bits and pieces of computing power and
turned them into a global knowledge
resource that basically manages the
fundamental infrastructure of our
society
instead of the cobbled-together nonsense
that you get every time you talk to your
bank right and because these computer
systems don't create new woe curses of
political control when they're built
because they're decentralized what you
don't get is a position where the basic
infrastructure of your society a stock
that your society runs on is
automatically owned by a set of
corporations or even a set of
governments what you have is something
which is constituted by the will of the
people and serves their purposes which
is after all the original intention of
government now this is where we have to
go back and separate reality from
fantasy because this is the mistake
that's made it almost impossible for
people to understand Bitcoin remember I
mentioned the cypherpunks back here and
their inability to tell the difference
between science fiction and political
reality the notion that we're simply
going to automate away all of the things
which constitute government makes a ton
of sense to people that spend 23 hours a
day online and I'm really framing this
very carefully because this is causing
enormous trouble but if you're somebody
that spends only a little bit of your
time interacting with computers it's
pretty obvious that the computer only
exists as a rectangle of glowing light
somewhere in your room or in your hand
and and out here from that perspective
it's pretty clear that if you teach
computers governed resources a lot of
trivial stuff in your life gets a lot
easier like paying your taxes or making
sure that your telephone works or you
know doing your banking whatever happens
to be but it's not obvious that this is
a replacement for the general edifice of
government and the tension between the
way the world looks to the technologists
and the way the world looks to everybody
else is what's at the heart of the fight
with entities like uber because uber
makes perfect sense to a technologist
and it really upsets people that have
run a taxi monopoly for 150 years and
those kind of discussions and tensions
are as much about the different
neurological makeup of the people who
developed the world view as they are
about the technology what we're really
having here is a discussion about what
kinds of minds run our society is our
society predominantly run by charming
glib slightly sociopathic people who are
good on television or is it
predominantly run by people that live in
front of computers and control the world
with numbers and that debate has gone on
inside of our culture since the two
cultures period of British history where
there was this discussion about whether
arts and sciences could ever get along
well turns out the sciences guys are now
figuring out how to govern instead of
the lawyers and this is creating an
enormous amount of turbulence but the
turbulence is not well described because
it's happening extremely quickly and the
only place that there's a literary canon
that really describes these processes is
science fiction right if you want mental
models of how to think about the reality
that we're currently in you have to go
back to the science fiction a thirty
years ago published under a general
title of cyberpunk right and cyberpunk
was the fiction that describes the
reality that we're now in it's about
virtual reality it's about drones it's
about biotechnology that regrows your
nervous system
it's about virtual currencies and
artificial intelligence and we would all
have a much better grip on the reality
that we found ourselves in if science
fiction hadn't been kicked out of the
Witter recon and sometime after World
War two
there's a definite push where science
fiction is pushed away from the
mainstream of literature and into its
own kind of genre box and as a result
the place where most of the thinking and
analysis has been done about these
technologies and what they mean to us as
a society has been banished from polite
company it all exists in a place called
genre fiction and it's no longer
considered to be real literature as a
result the mainstream can arts
population have been left without mythic
narratives to allow them to interpret
the reality that the technicians have
created and what we've seen this evening
is a perfect demonstration of that gap
because actually getting the message
across requires a completely different
perspective to the one which is natural
to the technicians
you know I'm lucky in that I've managed
to bridge that gap because I was always
as much a writer as I was a programmer
and I've done about you comments are
both in my life so the thing that I
wanted to leave you with is this the
dialogue about how these technologies
are going to fit into our society
is going to be a dialogue about class
it's going to be about whether the
society is run by lawyers or technicians
both are the wrong answer it has to be
run by the people but for the people to
be able to intelligently make decisions
in a society where the core technologies
that run our society are rapidly
becoming so complicated we no longer
understand them we have to do better the
guessing which technocrat or which
lawyer to put in charge without a
fundamental reawaken event of
reawakening of interest in science and
technology and without reclaiming
science fiction as a fundamental
literacy for the present that we're in
we're going to be left making decisions
more or less at random depending on what
charming person tells us the news story
so my challenge to all of you is start
reading cyberpunk it's painful right
it's painful right it's much of it is
not very well written many of the ideas
look almost like it's kind of weird
potboiler fiction about the present but
if you sift through carefully and it
suggests starting with an anthology
called mirror shades which is a short
will book with short stories nothing to
challenge you too much if you go back
and read that stuff what you could begin
to flash out is the stories that all of
the programmers hand in their heads when
they built these technologies and that's
how you get your head around what's
happening if you share the myths at the
technical class half when they create
these things you can begin to understand
the technology in a mythic way which is
how we understand it you have to learn
the ways of our people because you're
living in the world that we create for
you