How the Blockchain revolution will decentralize power and end corruption

History shows us why we can't trust centralized power. So what can we trust?

Brian Behlendorf: What are the strengths of the blockchain technology? The strengths are that we can take many business processes today—and by business processes you might even include land titles and buying and selling a home, you might include provenance tracking of products like diamonds and food supply, that sort of thing. One of the real strengths is being able to take these systems that today depend very much on bureaucracy and paperwork—very human processes for sure, but processes that get bogged down—and actually automate them and cut the cost of a lot of this, but also, by automating them, improve the auditability of them.

People pay a lot of money to have third-party auditors come in and make sure that the claims that are in their books are actually real. It’s a tremendous burden and it’s why bureaucracy often requires three signatures to do anything interesting. To send a shipping container, for example, from Asia to the United States, about half the cost of that is in the paperwork involved in coordinating between 20 to 30 different organizations for sign off, from the biller materials all the way to the person it’s delivered to.

If blockchain technology can help us automate these systems, make them more efficient, it may also ensure that we keep the opportunities for fraud and the opportunities for corruption to a minimum. If we make it hard to steal people’s land, or to ship illicit product in shipping containers—or simply in approving a permit for construction on your home, holding that up for days or months until you pay me an expediter fee—which all too often happens in home remodeling—if we can make these processes a bit more automated, more transparent, then I think we can do a lot to improve society in these ways.

And that kind of wraps together two or three different advantages of this. The other advantage is: it’s a fun space to be in. There’s a lot of dynamic thinking going on, a lot of new companies, a lot of technologists talking about very far-off concepts, and it’s finally a place to get people excited about technology, especially as it is so much about decentralization.

What are the challenges? One of the challenges right now for sure is that it’s early days with the technology. There are a couple of places where there’s clearly a lot of value being created, there’s clearly a lot of activity, say, in the cryptocurrency space, but in many ways, again, like the early days of the web we don’t yet know what the big winners will be from the technology, but we know that this is something everybody will need in one way or another.

So the challenge right now is that there are a lot of options, and many of them are fairly immature when it comes to actually building and running them for big systems. That’s one reason we’ve chosen, at Hyperledger, to focus on: what are the simplest things we can do now and ship out as product that people can use that they can actually run?

And the second thing is really understanding that—and this is really hard for many industries and many actors in industries—every use case I could give you around where blockchain technology is applicable, you could always come back to me as a technologist and say, “Wouldn’t this be more efficient, faster, cheaper to do as a central database? Isn’t somebody just going to pull a Google or pull an Amazon and build a central database to track all the fish supply catches and shipping this or that?”

And the answer is always yes, that it is more efficient and cheaper, but it’s also expensive when you think about the cost of having, politically and from a business perspective, having a central actor in a marketplace. Many marketplaces simply don’t want that.

The banks of the world don’t want one big bank at the center. People who care about their land title worry about the corruptibility of the land title office. In certain countries that’s a big issue.

Blockchain technology allows us to build these same kind of systems but in a world where we don’t want to or we can’t trust central actors. And that’s hard to wrap your head around, especially because everyone believes they can be trusted. “Hey, if I’m the center of a market you can trust me! What do you mean you can’t trust me?” It feels like a very personal affront, perhaps, even to say that. But it’s essential, I think, to realize you can’t really grow your market beyond those who can really trust you if that’s your business model.

So that’s, I think, hard for some people to get the conceptual model around, just like it might’ve been hard in 1993 to understand what it means to send an email to someone on the other side of the planet or to buy a television or buy a car through a website. You would’ve been told you were crazy to think that people would be doing that in 1993, now we take it almost for granted. So these are the challenges, but I see many people addressing these challenges.

But most recently I was a venture capitalist. And so I looked at a lot of different companies, including companies in the Bitcoin space, and increasingly the blockchain space, and I was kind of bored by all the examples I was given until I saw one company approach us and talk about land titles and emerging markets. Land titles—why would that be interesting?

Well, there’s an economist named Hernando de Soto who wrote a book 'The Fortune at the Bottom of the Pyramid', who talked about how in many countries citizens don’t have title to the land that they might have been living on for generations.

Where a title is something we understand as a set of documents recorded by a county registrar or in a government office that allows us to prove not only to someone we’re hoping to sell some property to that we actually own it, but also prove to a mortgage lender that we have this property, and we’d like a loan and if we fail to pay the loan then they get the property. That’s something that many people in the emerging markets do not have access to or historically have not.

So many countries started to digitize and introduce land titling systems and realized they had a problem where if that was digital it was also very easy for somebody to corrupt.

It’s easy for a government bureaucrat who desired a piece of property, perhaps for their son to have some beachfront property north of the capital or because an oil company wanted to come in and drill, it was pretty easy for them to step in and erase all history of somebody’s ownership of property in a way that—because it’s digital—disappears forever. When something is paper, yes, you can set fire to a paper record, but it’s actually really hard to completely eliminate a rich paper trail in something like land title.

So this is a problem and the solution to that problem that this company had come up with was to implement a land title system as a distributed ledger, as a database—but one that is shared immediately, every time something is recorded into this database it's shared with a large circle of other companies and agencies and NGOs that act as witnesses for that transaction.
And if somebody’s land was taken away from them, A, it would be noticed very quickly; that person would have a history of what happened on that property and they would be able to see that immediately, but B, if their signature wasn’t on the right document, it wouldn’t even be accepted as a transaction on that network.

So land titling, and the reason I bring it up here is this is interesting when you’re talking about a country like Honduras or the Republic of Georgia or Estonia like other countries that have started to adopt this for economic development reasons, but think about the mortgage crisis in 2008.
For any of you who have seen the movie 'The Big Short', you remember these scenes of panic selling of these instruments which were tranches of risk in the mortgage industry where nobody really had a clear understanding of what the underlying assets were, the houses and the mortgages that pointed to those houses; who owned the paperwork for those mortgages? Who owned the title on those homes? This was data that was lost inside of these bureaucracies that didn’t have the manpower to respond to the queries, and in many cases you ended up with people selling assets for pennies on the dollar and for people with homes with 95 percent paid-off mortgages getting eviction notices from somebody who owned less than a percent of the interest in that mortgage.

All of this to say there are many people who believe that if blockchain technology had been implemented at the beginning of the 2000s for the land title and mortgage industry, not only would you have had the data there to understand who owned these assets, but those mortgages, if they had been built as smart contract systems and those tranches of risk as smart contract systems, that unwinding process where everybody felt like they needed to move out of that asset might have been a more orderly, programmatic, 'Here’s all the data, here’s how it plays out; now we don’t have to sell it for pennies on the dollar, we can sell it for ten percent off of the price that we thought it was actually worth.'

And that might have saved a lot of peoples' homes, avoided a lot of real friction in the market but also a lot of the volatility that we saw. And so the opportunity for distributed ledgers to both give us new capabilities but also help us with auditing, help us with the stability of markets, even in scenarios where trust is really at a premium—that’s the real potential here. And this might sound like back-office or science fiction kind of scenarios, but that’s what’s driving a tremendous amount of interest in the industry today.

When the world has gone corrupt, who can you trust? Blockchain is stepping up. The word might ring a bell for its connection with Bitcoin, but internet pioneer Brian Behlendorf is looking at this technology beyond its use in cryptocurrency. Blockchain is an open ledger system where transactions are irreversibly recorded and immediately shared to a distributed network of witnesses (companies, agencies, individuals). The beauty of this idea is in its decentralization—if no one person or institution holds power, then that power cannot be abused. The potential for this technology is enormous: it could significantly lower corruption and eliminate fraud in many industries like banking, freight, construction, and even trace the provenance of goods like diamonds. "Blockchain technology allows us to build these same kind of systems but in a world where we don’t want to or we can’t trust central actors," says Behlendorf. Here he describes how a blockchain system is being used to protect civilian land titles in developing nations, and demonstrates how blockchain could have prevented or severely lessened the impact of the 2008 financial crisis. Brian Behlendorf is the executive director of Hyperledger; for more info, visit hyperledger.org.

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Freud is renowned, but his ideas are ill-substantiated

The Oedipal complex, repressed memories, penis envy? Sigmund Freud's ideas are far-reaching, but few have withstood the onslaught of empirical evidence.

Mind & Brain
  • Sigmund Freud stands alongside Charles Darwin and Albert Einstein as one of history's best-known scientists.
  • Despite his claim of creating a new science, Freud's psychoanalysis is unfalsifiable and based on scant empirical evidence.
  • Studies continue to show that Freud's ideas are unfounded, and Freud has come under scrutiny for fabricating his most famous case studies.

Few thinkers are as celebrated as Sigmund Freud, a figure as well-known as Charles Darwin and Albert Einstein. Neurologist and the founder of psychoanalysis, Freud's ideas didn't simply shift the paradigms in academia and psychotherapy. They indelibly disseminated into our cultural consciousness. Ideas like transference, repression, the unconscious iceberg, and the superego are ubiquitous in today's popular discourse.

Despite this renown, Freud's ideas have proven to be ill-substantiated. Worse, it is now believed that Freud himself may have fabricated many of his results, opportunistically disregarding evidence with the conscious aim of promoting preferred beliefs.

"[Freud] really didn't test his ideas," Harold Takooshian, professor of psychology at Fordham University, told ATI. "He was just very persuasive. He said things no one said before, and said them in such a way that people actually moved from their homes to Vienna and study with him."

Unlike Darwin and Einstein, Freud's brand of psychology presents the impression of a scientific endeavor but ultimately lack two of vital scientific components: falsification and empirical evidence.

Psychoanalysis

Freud's therapeutic approach may be unfounded, but at least it was more humane than other therapies of the day. In 1903, this patient is being treated in "auto-conduction cage" as a part of his electrotherapy. (Photo: Wikimedia Commons)

The discipline of psychotherapy is arguably Freud's greatest contribution to psychology. In the post-World War II era, psychoanalysis spread through Western academia, influencing not only psychotherapy but even fields such as literary criticism in profound ways.

The aim of psychoanalysis is to treat mental disorders housed in the patient's psyche. Proponents believe that such conflicts arise between conscious thoughts and unconscious drives and manifest as dreams, blunders, anxiety, depression, or neurosis. To help, therapists attempt to unearth unconscious desires that have been blocked by the mind's defense mechanisms. By raising repressed emotions and memories to the conscious fore, the therapist can liberate and help the patient heal.

That's the idea at least, but the psychoanalytic technique stands on shaky empirical ground. Data leans heavily on a therapist's arbitrary interpretations, offering no safe guards against presuppositions and implicit biases. And the free association method offers not buttress to the idea of unconscious motivation.

Don't get us wrong. Patients have improved and even claimed to be cured thanks to psychoanalytic therapy. However, the lack of methodological rigor means the division between effective treatment and placebo effect is ill-defined.

Repressed memories

Sigmund Freud, circa 1921. (Photo: Wikimedia Commons)

Nor has Freud's concept of repressed memories held up. Many papers and articles have been written to dispel the confusion surrounding repressed (aka dissociated) memories. Their arguments center on two facts of the mind neurologists have become better acquainted with since Freud's day.

First, our memories are malleable, not perfect recordings of events stored on a biological hard drive. People forget things. Childhood memories fade or are revised to suit a preferred narrative. We recall blurry gists rather than clean, sharp images. Physical changes to the brain can result in loss of memory. These realities of our mental slipperiness can easily be misinterpreted under Freud's model as repression of trauma.

Second, people who face trauma and abuse often remember it. The release of stress hormones imprints the experience, strengthening neural connections and rendering it difficult to forget. It's one of the reasons victims continue to suffer long after. As the American Psychological Association points out, there is "little or no empirical support" for dissociated memory theory, and potential occurrences are a rarity, not the norm.

More worryingly, there is evidence that people are vulnerable to constructing false memories (aka pseudomemories). A 1996 study found it could use suggestion to make one-fifth of participants believe in a fictitious childhood memory in which they were lost in a mall. And a 2007 study found that a therapy-based recollection of childhood abuse "was less likely to be corroborated by other evidence than when the memories came without help."

This has led many to wonder if the expectations of psychoanalytic therapy may inadvertently become a self-fulfilling prophecy with some patients.

"The use of various dubious techniques by therapists and counselors aimed at recovering allegedly repressed memories of [trauma] can often produce detailed and horrific false memories," writes Chris French, a professor of psychology at Goldsmiths, University of London. "In fact, there is a consensus among scientists studying memory that traumatic events are more likely to be remembered than forgotten, often leading to post-traumatic stress disorder."

The Oedipal complex

The Blind Oedipus Commending His Children to the Gods by Benigne Gagneraux. (Photo: Wikimedia Commons)

During the phallic stage, children develop fierce erotic feelings for their opposite-sex parent. This desire, in turn, leads them to hate their same-sex parent. Boys wish to replace their father and possess their mother; girls become jealous of their mothers and desire their fathers. Since they can do neither, they repress those feelings for fear of reprisal. If unresolved, the complex can result in neurosis later in life.

That's the Oedipal complex in a nutshell. You'd think such a counterintuitive theory would require strong evidence to back it up, but that isn't the case.

Studies claiming to prove the Oedipal complex look to positive sexual imprinting — that is, the phenomenon in which people choose partners with physical characteristics matching their same-sex parent. For example, a man's wife and mother have the same eye color, or woman's husband and father sport a similar nose.

But such studies don't often show strong correlation. One study reporting "a correction of 92.8 percent between the relative jaw width of a man's mother and that of [his] mates" had to be retracted for factual errors and incorrect analysis. Studies showing causation seem absent from the literature, and as we'll see, the veracity of Freud's own case studies supporting the complex is openly questioned today.

Better supported, yet still hypothetical, is the Westermarck effect. Also called reverse sexual imprinting, the effect predicts that people develop a sexual aversion to those they grow up in close proximity with, as a mean to avoid inbreeding. The effect isn't just shown in parents and siblings; even step-siblings will grow sexual averse to each other if they grow up from early childhood.

An analysis published in Behavioral Ecology and Sociobiology evaluated the literature on human mate choice. The analysis found little evidence for positive imprinting, citing study design flaws and an unwillingness of researchers to seek alternative explanations. In contrast, it found better support for negative sexual imprinting, though it did note the need for further research.

The Freudian slip

Mark notices Deborah enter the office whistling an upbeat tune. He turns to his coworker to say, "Deborah's pretty cheery this morning," but accidentally blunders, "Deborah's pretty cherry this morning." Simple slip up? Not according to Freud, who would label this a parapraxis. Today, it's colloquially known as a "Freudian slip."

"Almost invariably I discover a disturbing influence from something outside of the intended speech," Freud wrote in The Psychopathology of Everyday Life. "The disturbing element is a single unconscious thought, which comes to light through the special blunder."

In the Freudian view, Mark's mistaken word choice resulted from his unconscious desire for Deborah, as evident by the sexually-charged meanings of the word "cherry." But Rob Hartsuiker, a psycholinguist from Ghent University, says that such inferences miss the mark by ignoring how our brains process language.

According to Hartsuiker, our brains organize words by similarity and meaning. First, we must select the word in that network and then process the word's sounds. In this interplay, all sorts of conditions can prevent us from grasping the proper phonemes: inattention, sleepiness, recent activation, and even age. In a study co-authored by Hartsuiker, brain scans showed our minds can recognize and correct for taboo utterances internally.

"This is very typical, and it's also something Freud rather ignored," Hartsuiker told BBC. He added that evidence for true Freudian slips is scant.

Freud's case studies

Sergej Pankejeff, known as the "Wolf Man" in Freud's case study, claimed that Freud's analysis of his condition was "propaganda."

It's worth noting that there is much debate as to the extent that Freud falsified his own case studies. One famous example is the case of the "Wolf Man," real name Sergej Pankejeff. During their sessions, Pankejeff told Freud about a dream in which he was lying in bed and saw white wolves through an open window. Freud interpreted the dream as the manifestation of a repressed trauma. Specifically, he claimed that Pankejeff must have witnessed his parents in coitus.

For Freud this was case closed. He claimed Pankejeff successfully cured and his case as evidence for psychoanalysis's merit. Pankejeff disagreed. He found Freud's interpretation implausible and said that Freud's handling of his story was "propaganda." He remained in therapy on and off for over 60 years.

Many of Freud's other case studies, such "Dora" and "the Rat Man" cases, have come under similar scrutiny.

Sigmund Freud and his legacy

Freud's ideas may not live up to scientific inquiry, but their long shelf-life in film, literature, and criticism has created some fun readings of popular stories. Sometimes a face is just a face, but that face is a murderous phallic symbol. (Photo: Flickr)

Of course, there are many ideas we've left out. Homosexuality originating from arrested sexual development in anal phase? No way. Freudian psychosexual development theory? Unfalsifiable. Women's penis envy? Unfounded and insulting. Men's castration anxiety? Not in the way Freud meant it.

If Freud's legacy is so ill-informed, so unfounded, how did he and his cigars cast such a long shadow over the 20th century? Because there was nothing better to offer at the time.

When Freud came onto the scene, neurology was engaged in a giddy free-for-all. As New Yorker writer Louis Menand points out, the era's treatments included hypnosis, cocaine, hydrotherapy, female castration, and institutionalization. By contemporary standards, it was a horror show (as evident by these "treatments" featuring so prominently in our horror movies).

Psychoanalysis offered a comparably clement and humane alternative. "Freud's theories were like a flashlight in a candle factory," anthropologist Tanya Luhrmann told Menand.

But Freud and his advocates triumph his techniques as a science, and this is wrong. The empirical evidence for his ideas is limited and arbitrary, and his conclusions are unfalsifiable. The theory that explains every possible outcome explains none of them.

With that said, one might consider Freud's ideas to be a proto-science. As astrology heralded astronomy, and alchemy preceded chemistry, so to did Freud's psychoanalysis popularize psychology, paving the way for its more rapid development as a scientific discipline. But like astrology and alchemy, we should recognize Freud's ideas as the historic artifacts they are.

Why are so many objects in space shaped like discs?

It's one of the most consistent patterns in the unviverse. What causes it?

Videos
  • Spinning discs are everywhere – just look at our solar system, the rings of Saturn, and all the spiral galaxies in the universe.
  • Spinning discs are the result of two things: The force of gravity and a phenomenon in physics called the conservation of angular momentum.
  • Gravity brings matter together; the closer the matter gets, the more it accelerates – much like an ice skater who spins faster and faster the closer their arms get to their body. Then, this spinning cloud collapses due to up and down and diagonal collisions that cancel each other out until the only motion they have in common is the spin – and voila: A flat disc.