Dreaming Systems: Faith, Love, Hope

Dreaming Systems is a series about technology, belief, and the strange moment when imagined systems begin to feel real.

So far, we have talked about blockchains, ghosts, trust, and machines that existed first as ideas. This chapter is where the story moves from technology itself toward the worlds people began building around it.

We drifted a little. Never mind, it was necessary.

You may remember: we are still in 2016. Or perhaps it is already 2017.

The assignment about blockchain in healthcare went well. As soon as I added it to my portfolio on the freelancer platform, new requests started fluttering in. Clients seemed to be drawn to the keyword blockchain the way procrastinating students are drawn to cat videos.

At first, I found it a little strange that hardly anyone was still interested in healthcare applications anymore. Everyone just wanted blockchain expertise. But the market had spoken, and I had decided to listen.

I was still supposed to write the occasional blog post for clients, but most assignments were now more extensive: what people wanted were whitepapers.

At first, a whitepaper meant a technical documentation of a new blockchain system (or some other technical platform). Challenging, but also interesting - a crash course in everything one could do with blockchain technology.

But the focus slowly shifted. During phone calls and video meetings and in long email exchanges with clients, it became increasingly clear that they imagined a whitepaper less and less as a technical document and more as a marketing document. Yes, the technical foundation should also be explained, but above all, the potential of a project should be painted in bright colors.

And here I need to step back again for a moment:

Because at some point, the potential of a new blockchain no longer consisted merely in creating new currencies with which I could pay for the ice cream you sell me.

First of all, we have hardly talked about the internet itself so far, outside of blockchains. The internet: this thing that allows you to order sports socks with same-day delivery or display the fastest route to the nearest McDonald’s. The same thing that then keeps showing you sports sock and hamburger advertisements for days afterward.

So useful.

The internet once began as a non-commercial undertaking. Its earliest predecessor was military; later, the internet became mainly a matter for universities. When the first commercial internet providers appeared (I’m looking at you, AOL!), the search for business models began.

How could one make money in and with the internet?

Who should pay for what, and why?

And not least: how?

Because on the internet, you cannot simply slide a ten-euro bill across the counter. So digital money was needed.

Electronic payment providers had existed for a long time already: PayPal, for example, was founded in 1999, and paying online by credit card had also been possible for years. These systems worked, but they were centralized and part of the conventional banking system.

And that system had just catastrophically disqualified itself.

It is assumed that Nakamoto also wrote the Bitcoin concept under the impression of the banking crisis of 2008. In any case, the following message is permanently embedded in the very first block of the Bitcoin blockchain, the so-called Genesis Block from January 2009:

The Times 03/Jan/2009
Chancellor on brink of second bailout for banks

This refers to the front-page story of The Times in London from that day. The Chancellor mentioned here is Alistair Darling, who served as Chancellor of the Exchequer under British Prime Minister Gordon Brown from 2007 to 2010. On January 3rd, 2009, The Times reported that the Chancellor was preparing another multi-billion-pound intervention to support collapsing banks. Two weeks later, on January 19th, these measures were officially announced by the British government.

Bitcoin was therefore not born, like PayPal and similar services, out of the cool calculation that internet payments should become smoother.

It was anger and disappointment that had taken the form of code.

Not destructive anger, however, but also the search for a better alternative.

The dominant feeling for many people during the financial crisis was helplessness: the losses caused by irresponsible men in suits were distributed across the shoulders of the general public, while the profits still ended up in the pockets of a few.

Bitcoin proposed an alternative that was supposed to give individual people a small piece of power back within the financial system.

As a reminder: the blockchain containing all transactions belongs to everyone and no one. Anyone can download a copy, anyone can add blocks - provided they have enough computing power. There is a small reward in Bitcoin for doing so, so that someone is willing to perform the work at all. Nobody acts under their real name; only Bitcoin addresses are used.

If things had remained there, Bitcoin would probably have become a footnote in history. Well-intentioned, but eventually forgotten. Like Occupy Wall Street—the young activists who camped and protested for a few months in New York’s financial district.

But Bitcoin was not merely a small protest currency.

Above all, it was the premiere of a new technology on the stage of the internet.

And this technology stirred the imagination of the people watching.

One of them was a teenager named Vitalik Buterin, who was introduced to Bitcoin by his father in 2011. Buterin became fascinated by it and began writing for Bitcoin Weekly, later becoming co-founder of Bitcoin Magazine.

The longer he worked with Bitcoin, the more its limitations bothered him: Bitcoin can actually only do the thing you already encountered above - verify transactions and add them to the blockchain.

But blockchain technology can do more, and Buterin was one of the first people to notice this.

In 2013, he wrote his own whitepaper and proposed his own blockchain.

Its name: Ethereum.

He joined forces with several others, and in 2015, the Ethereum blockchain went online.

Its greatest difference from Bitcoin: program code can also be executed on the Ethereum blockchain - so-called smart contracts. Applications based on them are called decentralized apps, or dApps.

With these, entirely new possibilities for automation suddenly opened up. One could, for example, write a dApp that displays a secret piece of information - say, the access code to an apartment - once the user has transferred a certain amount of cryptocurrency to a certain address.

Countless startups now began thinking about business models in which such smart contracts could be used for useful or entertaining purposes.

It quickly became clear that this offered entirely new ways of obtaining startup capital: purely digital, without begging banks or traditional investors. Without collateral.

The idea: a startup creates a new cryptocurrency - a token or coin - and sells it to many small investors. With this startup capital, it can now implement a business model. Perhaps even one in the real world, such as the apartment rental example mentioned above. In most cases, however, the business models remained digital—but even that costs money: hosting, IT infrastructure, salaries and fees for web developers and marketing people.

So startup capital was needed.

But first, one major hurdle had to be overcome: convincing many small investors - and hopefully a few larger ones - that the project, the planned business model, had substance and was absolutely, definitely going to work.

And now we have arrived in 2017, and startups are knocking on my virtual door asking for whitepapers.

In most cases, these were no longer even halfway neutral technical descriptions of platforms, but marketing brochures focused on one thing above all else:

Painting a new world - and inviting readers into it.

Shortly before this, in 2016, I had published my first novel and invented a new world there as well: a space station.

During the first few whitepaper assignments, I did not notice it.

But eventually I realized: The parts of my brain I was using here were not the ones I had once used for scientific papers.

They were the same parts that, shortly before, had invented a future world, a protagonist, and her adventures.

Whitepapers and novels: In both cases, what matters is that readers want to turn the page.