A nonproductive blockchain can’t solve the fiat problem

This post originally appeared on ZeMing M. Gao’s website, and we republished with permission from the author. Read the full piece here.

The two main points I try to make in Volume 1 of the book BIT & COIN: Merging Digitality and Physicality are:

1. Humanity needs a timechain to preserve truth (See TimeChain that preserves humanity in digital age).
2. The world’s economy needs Decentralized Human Capitalism to save it from the feudalization of traditional capitalism and the encroachment of socialism (See Decentralized Data Ownership – The Path to Decentralized Human Capitalism).

Both of the above require a vastly scalable blockchain with TPS beyond millions and an extremely low Cost Of Transaction (CoT). Bitcoin blockchain, according to Satoshi’s vision, is meant to bring exactly the same.

But 15 years later, we have BTC doing 7 TPS while promoting an open Ponzi scheme. And worse, people have been misled to think BTC is the genuine Bitcoin according to Satoshi.

Unbounded scalability and CoT are both necessary. Together, they increase productivity, not only by making existing transactions easier and less costly but, more importantly, by making non-existing transactions possible that were previously impossible.

The modern economy is a hidden process of give-and-take. Technology that increases productivity gives, but the government’s indulgence in monetary and fiscal policies takes. The productivity increase caused by technology essentially covers the sin of the government, albeit just partially (because greed always goes beyond what it can reasonably take). Had it not been for the power of technology, all modern governments and their fiats would have gone bankrupt much faster than they have lasted.

A nonproductive blockchain can only take more away from the economy. It cannot be a solution to the existing problem. It only opens another way of redistribution, if not outright stealing.

Scalability and low CoT (including the cost of payment) are far more important to the
entire economy and society than most people recognize.

BTC, along with the entire crypto industry, is a tragedy not only because it has failed to enable a scalable blockchain with low CoT but also because it has effectively suppressed the original Bitcoin blockchain, which was designed to have unbounded scalability and low CoT technology,

The fact that the crypto industry largely thrives on nonproductive financial schemes makes the failure even more egregious.

Morally, BTC and crypto are more corrupt than fiat and its financial system.

Technologically, blockchain and DLT, as most people know them, have degraded into red herrings, far less honest and useful than traditional database systems.

However, the book does not focus on diagnosing the problems but rather on advancing solutions.

The message I am preaching: A New Internet based on IPv6 integrated with a vastly scalable blockchain (TPS beyond millions) with an extremely low cost of transaction (CoT) is within our reach if enough people wake up to it.

The world needs it.

I hear people say that there is little market demand for such a thing. For the present time, I largely agree. But there is a distinction: demand and need are different things and are often not synchronized with each other. They eventually converge if the system is on a healthy path. When the Internet was invented, there was no market demand for it. It was invented because its pioneers foresaw a great potential need for it. The market demand for the Internet didn’t come until 20 years later.

The basic components of the New Internet were invented 15 years ago. A clear protocol has been emerging during the last five years. We are closer to the reality of the New Internet than the folks in the early 1980s were to the Internet.

Besides, due to existing technologies, certain applications aimed at the New Internet may see commercial adoption even before the New Internet itself takes shape as a whole. In other words, the development of the New Internet will be staged better than the old Internet.

Finally, not everyone is motivated by market demands only. There is apparently a great
demand for Ponzi schemes in crypto, but not everyone who is in blockchain pursues a Ponzi scheme. Sometimes one can actually be motivated by doing a thing that he considers right and meaningful, even if that may not fit the orthodox theories of economic motives. Surprising, but thankfully, it is true. I know someone who devotes time to guiding drug addicts to a better way of life (faith, education, etc.) when it is clear the biggest
demand in that “market” is more drugs. He’d be a fool if he didn’t understand the difference between demand and need. But he does.

Watch: What is blockchain-powered gold and can you buy coffee with it?