The Blockchain Economy: An Alternative, Not A Replacement

Since the introduction of bitcoin 10 years ago, people have been working tirelessly to build a new economy; a trustless, decentralized, and autonomous economy that runs on top of the blockchain and regulates itself through a set of predefined rules. I find this interesting, and possibly useful, but I would never promote it as a replacement for our current economic system.

The main problem with an autonomous economy is that people are never protected, if your private address is stolen, you could lose all your money in a matter of seconds, and there will be no one to call and ask for help; your money is just gone! If a smart contract tells you it will withdraw 10 tokens from your account, but ends up withdrawing 20, because you didn't really understand the code of that smart contract, then your money is gone, and there is no one to call!

Of course, there are many ways to protect your address from being stolen, and many other ways to make sure a contract actually does what you are told it will do, but these are only two examples, and there are tons of other things that you need to know in order to be able to function in a trustless, dangerous economy. Thus, your only protector in the autonomous, trustless world is how much you know about how this world works. There is no one to protect you, no one to get you your right back. You were played by the rules of the system, and you lost, dearly.

An autonomous economic system should not be imposed upon everyone, because it is not for everyone; whether we like it or not, some people need to be protected from their own selves, and this protection goes directly against the definition of what an autonomous system is!

I believe that the autonomous economic system should run in parallel with the traditional, trustful economic system, and not try to replace it. This economic system will have its own properties. Those properties are pros and cons at the same time, depending on your use case. For example:

• The system will be trustless; 
• Pro: as long as you know how the system works, you don't need to trust anyone. This is great, because history has shown over and over again how trusted people have misused their trust and acted for their own, selfish benefit. In this system, this will never be the case
• Con: you won't get the benefits that you get when dealing with a trusted party; Specifically, the notion of reversing actions is not that easily achievable in trustless systems
• It is extremely hard to change the rules of the system;
• Pro: No one can just come and force new rules upon everyone, so you are mostly protected from sudden, abusive changes
• Con: If some aspects of the system prove to be bad, or are compromised, it is very hard to gain a big-enough consensus to fix those aspects
• The system will be transparent;
• Pro: With enough knowledge, you can fully understand the system, and be up-to-date with all its changes. This knowledge will help you make sure no one is deceiving you,  and will provide you with valuable data that you could use for many purposes
• Con: If you don't understand the system, then the system is not really transparent for you. Also, transparency might not always be desired. You might not want people knowing your every purchase. There are ways (ZeroCash and ZeroCoin) to make the system more anonymous, but they are not widely adopted
• You cannot reliably map identities to real-world identities. You can predict real-world identities from certain behaviors, but there isn't a systematic way to do this mapping;
• Pro: You are pseudonymous (anonymous, but only to a degree), which is great for all cases where privacy matters
• Con: It is hard to use it in applications that require users to have real-world identities, like voting in governmental elections. There is no reliable way to make sure that people don't register multiple accounts, or that people from one country vote in the elections of another. Of course, there are ways to deal with that, like assigning addresses to people after they register their names in a governmental center, but that requires a trusted party, which the trustless economy is trying its best to get rid of
• It is global;
• Pro: It is global! you're not limited by a certain country, you can deal with anyone around the whole world with no restrictions
• Con: There is no specific country backing this economy, which means that it won't benefit from the improvement in the economic state of this country, nor will the country be able to save it if it ever falters

And I am sure that there are many other properties that distinguish this economy from its traditional counterpart, but what we need to realize is that those properties are both a blessing and a curse, depending on where you stand. And thus, proposing the autonomous economy as a replacement for the traditional one means overstepping many real-world use cases that cannot be addressed by this economy. 

In the end, I would like to imagine a bright future containing several economies working in parallel: one trustful economy, and a bunch of trustless economies that differ in the properties that they offer, each solving a different use case.