Foreword — Blockchain in Financial Markets and Beyond
By Ally Paz and Marie Leaf
For the book:
Blockchain in Financial Markets and Beyond — Edited By Ron Quaranta
We met in the context of our shared skeptical idealism. One asked the other about how they managed to draw ethical lines when speaking with friends and family about their work. How to share our excitement about the industry, while also protecting them from the hype and blatant technical immaturity. Both working in institutional finance and large corporate tech development, we were certainly the black sheep among our more hackerati-type peers. We soon found ourselves acting as a bridge between public-chained decentralized ideals and permissioned-chained wariness in dissolving traditions. The realization that friends would invest off a Facebook post that mentioned our new favourite chain helped us evolve into acting as a responsible voice in communicating this intergenerational zeitgeist.
We straddled the worlds of both “moonshot” economic remodelling for the good of all society, and alarmist research reports that 70% of back-office banking jobs would be disintermediated within the next year. We bonded somewhere between these extremes. Was regulation going to rein in the emergent behaviour of this supranational phenomenon, or would the revolution be swift and untelevised? The rabbit hole that we had passionately fallen down over the years, often bumping our heads along the way, had hit the mainstream. Worlds were meeting. We soon felt ourselves guiding Alice through Wonderland.
AN INTERGENERATIONAL JOURNEY
Our work is divided between creation and education. Everyone wants a seminal book to read, process to adopt or YouTube video to watch. What is challenging is not the lack of information out there, but the hyperdynamism of the space. How does one create a peda- gogy for a lesson in flight? We learned personally, by hobby syndicate investing, spinning up Ethereum nodes in its early days, writing little decentralised applications (Dapps), furiously moving our DAO tokens from one wallet to another during the infamous “recursive call” attack, and reading nearly every white paper released. The ecosystem was fast-paced when we started, but it felt far from the entropic freneticism we are experiencing today.
An elementary observation of the ecosystem will tell you that crypto and blockchain enthusiasm has moved far beyond the narrow behaviour of the few, to a global conversation about a new computing paradigm – of soft power and hard power, of individuals and institutions, of capitalists and decentralists. We are now in a powerful zeitgeist of heterogenous and earnest actors; the more voices involved in the conversation, the better.
Whether you’re a hacker fighting for your data ownership, an institutional investor looking for returns on your portfolio or a non-profit trying to improve identity rights in developing nations, everyone is looking for the same thing in the end: trust. Perhaps using different words or vectors of utility, but trust nonetheless. Trust that our promises on investments are kept, trust that our products are ethically and quality sourced, or trust that our privacy and identity will be protected. As Bernard Barber (1983) wrote, trust is “the expectation of the persistence and fulfillment of the natural and the moral social orders”.
We can define money, axiomatically and perhaps simplistically, as an abstracted layer of trust, where derivative products or new currency, be it fiat or reputational, are a complex layering of promises. In Who Owns the Future, Lanier (2013) envisions a world with bilateral links to induce better data provenance for fairer value attribution; ultimately, a more growth-oriented economy where creators of data could be owners of data – think of it as the middle class of data ownership. If the Internet had failed to bilaterally link trust of ownership alongside the data we were shepherding along vast information highways, blockchain would act as the missing link. There remain zettabytes of value to be corrected, realigned and derived. As Lanier pointed out:
Much of the new money brought into the world has actuallybeen a tool of behavioural intent. It has been an account of the future as we plan it rather than the present as we measure it… If the value that can be already is, then market dynamics can only be about churn, conflict, and accumulation. Static or contracting economies make people cruel and shortsighted.
Let’s take a reductionist view, for argument’s sake, that a business is providing a good or service along the spectrum between access or trust. Magazines provide access to information; banks provide trust with your money. We had the advantage of living in a time when the efficacy, and quite frankly necessity, of both of these industries, as well as many others, was being brought into question. The Internet has provided access, but failed in, or in even some cases bastardized, the provision of trust. In this vein, we did not shy away from the digital asset age: the digital trust age. Regardless of whether Bitcoin or any crypto and blockchain systems look the same in five or 10 years time, trust is an undeniable human experience. We will always need trust to evolve.
A FAR FROM CONCLUSIVE BEGINNING
When Ron Quaranta asked us to write the Foreword to this book, despite the industry-characteristic deadline, we agreed immediately. We’ve had the distinct pleasure of working with many of the authors before, and know them for their financial markets savvy but also for their broad knowledge of decentralized systems. We could not imagine a greater group of people to hear from in one coordinated effort. While reading the proofs, we became even more aware that such diversity of thought had produced a book with a strong purpose.
While the stated goal of the book is to provide financial market colleagues with a broad overview of blockchain, the overall message seems far grander, and one that is characteristic of the collective ethos that each contributor has inarguably brought to the industry. Each possesses an ability to transcend their financial system knowledge, suspend their understanding of tradition and apply the technology to power real-world and pro-social uses.
The questions are vast, and seemingly no one person has an omniscient answer to them all. However, given the background and experience of the authors represented here, this book does provide many of them. Facts may change, and dynamics will definitely progress, but at this particular time we could not have asked for a better group of authors to hear from so that you, the reader, would get a glimpse into the conversations our industry is having.
Blockchain in Financial Markets and Beyond — Edited By Ron Quaranta
REFERENCES
Barber, B., 1983, The Logic and Limits of Trust (New Brunswick, NJ: Rutgers University Press).
Lanier, J., 2013, Who Owns the Future? (New York, NY: Simon & Schuster).
