Decentralization, accountability, and shared sources of truth.

Most of the green blobs we encounter, be it for-profit companies, non-profit organizations, or states, tend to have three things in common. They’re bounded, usually hierarchical, and — at least in theory — accountable.

Green blobs and red lines. Photo by Vino Li on Unsplash.

Ultimately this is what allows us to rent things out, to buy something but pay later or in instalments, to keep track of things we own and things we owe, of claims and obligations.

Once you allow things to sit in different warehouses, you can think of building and storing things in different locations. Once you source things from different locations, you can think of sourcing them from different companies in different locations. We are now leaving the green blob and are stepping onto the red lines between them.

To compress the lifetime efforts of multiple Nobelists into a tweet-length summary, make-or-buy is about solving the tradeoff between cost and control. Most big companies have struggled with this question, outsourced their entire supply chain and then brought it back in-house or vice versa at enormous costs, without a clear answer.

One major contribution of the Internet was the emergence of platforms — a bundle of services that brings together prospective sellers and buyers to guide the whole matchmaking process from finding each other via recommender systems to resolving conflicts via recourse and reputation systems.

So step by step we went from corporate accountability to corporate efficiency to market efficiency. What is still missing is a way to hold markets accountable in the same way we hold enterprises accountable, but without turning them into enterprises.

The point of blockchains and shared ledgers is not to run queries and extract reports. It is about coming to a mutual agreement about what should be written into the database, and in extreme cases what should be removed. In other words, going from a single source of truth, controlled by a single entity, to a shared truth without a single source.

But we are seeing the first design patterns — Lego bricks that can be put together in order to build shared platforms — emerge that will allow us to finally connect Herb Simon’s red lines without turning them into blobs.

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I write about how technology shapes the world we live in.

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