When you think of Godfather’s or OG’s names might include Vito Corleone, Tupac, Snoop Dogg, Notorious B.I.G, and then there is Scott Stornetta, one of the OG’s and co-founders credited for conceptualizing the idea of blockchain technology as far back as 1991. If you don’t know of Scott Stornetta he was one of the founding fathers that created the blueprint of ideas for Satoshi Nakamoto to build his legacy. His original ideas, along with Stuart Haber’s, described a digital hierarchy system known as a “block chain” that used digital timestamps to initiate transactions. He was one of the original bricklayers and I had an opportunity to listen in on a great presentation and Q&A this week and there were many great takeaways to be had.
Scott Stornetta helped pioneer a solution so that no trust was needed from a central being or authority which was a major flaw in data storage and filing systems of the time. He was trying to find ways to make sure that data could be stored and not changed, and was very close to giving up on the idea after tireless hours of work with his colleague, Stuart Haber. What’s funny is that they arrived at the solution for creating the world’s first blockchain when writing a proof paper about how creating such a decentralized system was impossible. The story goes that Stuart and Scott were writing a proof under the premise that for every person involved in the decentralization process there needed to be another person who oversaw the first person. Then there needed to be a third person to oversee the 2nd and first-person. So on and so forth. They identified that in order to develop a trust-free system you had to have collusion by everyone who is a participant in that system. After working through this idea they discovered that by including every participant in the process as a trusted witness they could then create the linking of messages cryptographically. The insightful thought they pondered thereafter was if everyone was in on a scam then it wasn’t necessarily a scam, it was just the reality of the system. This idea would go on to evolve into what Satoshi Nakamoto used to develop the system for Bitcoin.
During his presentation, Scott engaged the audience members in a trial of a basic blockchain where users inputted data. Each individual submitted their data and Scott walked the audience through the verification steps and what happened behind the scenes. We also got to see when someone tried to modify the data that was on the blockchain and the processes of the participants to verify this. I have to say, it was really interesting to see the basics and inner workings of the first basic blockchain and how it all functions. I feel like it really helped demystify the entire process and Scott did an excellent job at engaging the audience for participation and education.
This story all began with Scott’s desire and obsession of making the world a better place. A great point brought up later in his presentation was regarding how to align everyone’s selfish interests to create a collective greater good. This is exactly what the blockchain does, and Scott compared this to the construction of the Burj Khalifa in the UAE. This amazing feat of the Burj Khalifa wasn’t that it was the tallest building in the world to Scott, but it was the fact that there was a thriving city built around it. In many ways, this represents the creation of the Blockchain. Look at where we have come since the inception of this idea nearly 30 years ago. The ecosystem that is being built around his original ideas is absolutely stunning, and now we need to start figuring out ways where we can align everyone’s selfish interest to create a greater good. That is the power of blockchain and we couldn’t need it more in our world today.
This historical and informative presentation showed the audience original documents like the first white paper that Scott and Stuart wrote and the original US patent for Blockchain Technology. This was really cool to see, and for those history buffs out there you would truly enjoy hearing what Scott had to say about these documents. I want to show you some of the questions that were asked and Scott’s insights that are paraphrased below.
Q: There has been a lot of enterprises, large institutions, and open-source blockchain activity, do you see this as a competition between large institutions and the original idea of how blockchain would work?
A: The idealist believes that large institutions co-oping on blockchain technology as being a catastrophe and Scott fundamentally does not agree with that. He said that we should view it as insinuating the technology into the existing centralized systems, and one may think that this would increase the large institutions’ power; however, the power of blockchain is something that will not create more power for these large institutions and views this adoption as an intermediate state and more of an idea of localism.
Q: Do you think Bitcoin will remain the dominant cryptocurrency? When you first started working on blockchain 20 years ago, would you say today that we have gone as far as you would have imagined?
A: Scott says Bitcoin is a work of genius, on both the social incentivization side and the tech side. We owe a lot to what Satoshi did. Bitcoin is a more genius work of art than an engineering feat. The time has come we honor Satoshi and move on. Bitcoin gave us a sense of what is possible. Bitcoin has not succeeded as it was intended. There are some fundamental flaws around the incentivization process and the mining culture of Bitcoin. The mining pool centralization is the biggest problem that Satoshi didn’t envision.
It doesn’t mean that it isn’t an unimprovable project. We just haven’t seen a better solution and Scott believes Bitcoin will be superseded. He said it will be obvious when it happens that Bitcoin will lose dominance. Scott believes stable coins will play a big role as the intermediate step for people to wrap their heads around the idea and be useful. Things have definitely advanced more than Scott ever thought was possible 20 years ago. There are so many smart people working on projects that could not have imagined and the original idea becomes so vast because of the ambition of the community building around the idea.
If you want to learn more about one of the OG’s in Blockchain and hear more of his thoughts I would highly recommend watching the presentation he gave which is on Youtube. He had a great panel that asked many more insightful questions about the use cases and how Blockchain will change our world and aid as a tool to push ideas and current systems forward.