Cryptographic Truth

Cryptocurrency has taken truths that were purely political and started to anchor them in technical truths.

Now we have an answer to what literal truth is through cryptography. Cryptography and how the blockchain manages information online provide decentralized truth—mathematical truths, which anybody has access to.

Everybody knows exactly how much Bitcoin you have, whether you're Palestinian or Israeli, Democrat or Republican. There's actually no contention over who owns what Bitcoin, which is amazing, because it's a trillion-dollar piece of international property. That's the kind of thing people usually fight over. That says something.

To have no dispute over who owns what Bitcoin is an absolute miracle of social technology. It's worth all of the energy and computing power required to mine it because people have conflicts for way less than a trillion dollars. Entire wars have been fought over much less. What Bitcoin achieved can now be generalized and applied to other areas. This is a huge innovation.

The blockchain is the most important development in history since the advent of writing itself.

The blockchain contains a cryptographically verifiable, replicated, unfalsifiable, and provably complete digital record of a system. It’s the ultimate triumph of the technological truth view of history because there are now technical and financial incentives for passing down true facts, regardless of the sociopolitical advantages anyone might have for suppressing them.

You can’t delete history anymore.

One particular piece of decentralized truth is most interesting to me: Crypto Oracles. Many of today’s contracts or transactions are bets on things like, “Will this price go up or down?” or “Will the temperature go up?” A more complicated one: “Do I need to pay out this farmland insurance because there is a drought?”

That’s an example of a contract that combines a financial function and a fact about the world. To execute automatically through a smart contract on the blockchain, the contract needs access to data about the outside world, which is not purely financial. That's what crypto oracles do.

Oracles broadcast data onto the blockchain, saying, “I, Weather Sensor 6, say it is 82 degrees in Poughkeepsie today, at this time.” Then we get a timestamp of a temperature on-chain.

This will happen not just for temperature, but for crime statistics. It will happen not just for crime statistics, but for individual crimes from which statistics can be calculated. It will happen for medical records. A hospital won’t have to actively count and report, “We have 1,000 coronavirus patients”; it will actually have a feed of “This patient at this time, that patient at that time.” Redfin or Zillow won't publish just aggregate stats; they will provide a feed of real estate transactions happening in real time.

From all of these feeds of individual actions, aggregate stats can be computed, but you can also drill down to the individual rows in the data to do due diligence.

What's the point? Right now all of the data I'm describing are in separate places. The real estate data happens here, the medical data happens there, the price data happens way over there, the temperature data happens somewhere else. What I call the “ledger of record” is essentially the integration of all these crypto oracles.

People put data on-chain because they will earn money for supplying it. People pay for the information because they can trade off of it or use it to provide services. Each individual oracle has an incentive to put its data online. The data of all of those individual oracles go into the ledger of record, which gives us cryptographically verifiable facts about the world.

Crypto oracles are more important than people think. Today it’s global consensus on price history; tomorrow it’s global consensus on history.

Essentially all human behavior has a digital component now. Every purchase, every communication, every Uber ride, every keycard swipe, and every step with a Fitbit—all produce digital artifacts. In theory, you could eventually download the public blockchain to replay the entire cryptographically verified history of a community. That’s the future of public records. This is to our current paper-based system what paper records are to oral records.

We have digital documentation on an unprecedented scale. We have billions of people using social media each day for almost a decade now. Billions of phones taking daily photos and videos. Countless data feeds of instruments. Massive hard drives to store it all.

Measured in raw bytes, the information we now record in a single day is more than all of humanity had recorded up to the year 1900. Today, we have the most comprehensive log of human activity we’ve ever had.

Without cryptographic truth, there is only blind faith. Did Jesus rise from the dead? Well, someone must have hashed that video to the blockchain. Show us the timestamp and proof-of-work chain. It'll take a while, but eventually immutable timestamped recordings of almost every significant human event will be generated. Then, the highest truth comes not from faith in God or trust in the state, but from the ability to check the math of the network.

Assuming the concept of cryptocurrency can endure the invention of quantum decryption, future humans may think of the beginning of cryptographically verifiable history as being on par with the beginning of written history millennia ago. Future societies may think of the year 2022 AD as the year 13 AS, with “After Satoshi” as the new “Anno Domini” and the block clock as the new universal time.

You have a digital history, an unalterable history. Everyone can know what happened when.