Farcaster user @berghans asks, “I was wondering if you have any articles which go a bit more in depth into your usage of the terms subjectivity/objectivity? Cheers!”. Well, now, you do!
As you might expect, how you define objectivity or subjectivity is… yes, you guessed is… subjective. But in the context of blockchains, we can be more precise.
The key function of blockchains is achieving strict global consensus. However, this can only be done on a set of numbers and letters with some mathematics involved in between. This is what I mean - blockchains can only process objective inputs, objective compute, and return objective outputs.
The simplest form is, Account A sends account B 1 BTC, so the Account A balance is -1, Account B balance is +1. You can have “smart contracts” which have more complex changes, but are still bound by objective variables.
We are complex beings with even more complex societies. >99% of our interactions are subjective, with different people having different interpretations of the situation, and on a broader scale, different jurisdictions having different laws.
So, a “smart contract” on a blockchain is still extremely dumb, and you can’t do actually smart contracts.
You can’t have a music artist make a contract with a publisher onchain because it comes with many subjective clauses that can never be parsed by a blockchain. They would instead need the law, and lawyers. Maybe in a far flung fantasy you have a benevolent AGI capable of doing this task, but that’s a long ways away. And no, said AGI won’t use a blockchain - it will obsolete it.
Today, the product-market fit for public blockchains is almost entirely financial in nature, and this is because a big part of finance is objective. However, we can also see its limitations and where blockchain protocols have to work around its limitations.
You can’t have subjective monetary policy, so you have to use stablecoins. But most of these stablecoins - USDT or USDC - are defacto centralized. You can’t do credit, so you have overcollateralized lending or borrowing - which kinda defeats the purpose of lending and borrowing for most people. There’s no reversibility or dispute resolution, and thus no protection against scams, mistakes etc. Probably why this space runs rampant with scams.
Now, you can start bringing oracles and such onchain, what they effectively do is take an objective output of a subjective process, and bring a representation of them onchain. You can have DAOs which can bring subjective processes and decisions to otherwise blockchain protocols. However, it’s important to note all of this is outside of the blockchain with their own points of failure.
Embrace the objective nature of blockchains, be wary of the subjective components of oracles and DAOs, and avoid trying to shove subjective things like reputation or governance onto blockchains - they can come with disastrous results. (See Black Mirror’s “Nosedive” for an entertaining spin)