By Nick Emmons, CEO of Upshot
We are living in a post-truth era.
It’s a refrain that owes its popularity to the rising prevalence of misinformation, fake news, and conspiracy theories circulating throughout the U.S.; a refrain that signals the growing mistrust that’s come to characterize much of our society. And it’s no accident that blockchain technology, celebrated for its ability to provide an immutable record of truth, has emerged side-by-side with fears that it’s no longer possible to agree on one truth.
Blockchain technology has removed the need for trust and replaced it with consensus. By making it virtually impossible to alter a record of transactions once they have been verified and added to the distributed ledger, blockchains create effectively immutable records of truth. In a time when society is defined by its growing distrust in media, politicians and each other, it’s no wonder blockchain technology, which guarantees agreement on a single true record of transactions, has gathered tens of millions of users.
Searching for Subjective Truths
It’s a common misconception among crypto novices that this ability for the blockchain to produce truth is limited to financial transactions, but its use-cases actually extend much further, preventing unlawful changes in criminal records and verifying the authenticity of news to prevent fake news stories from circulating, to name a few. At the heart of blockchain’s ability to create these records of truth lies a “consensus protocol.”
On a basic level, consensus protocols work through a peer-to-peer network, tasking participants on the blockchain with verifying which transactions actually occurred, in what order, and between whom. The idea is that the majority of participants will agree on the same truth, making it the permanent truth stored on the distributed ledger. By tasking blockchain participants with agreeing on one truth, consensus protocols enable us to create truth in what might otherwise seem like subjective territories.
Finding the True Value of NFTs
However, what if instead of agreeing on the details of transactions, users agreed on something else, and created an immutable record of those other agreements?
Take the value of nonfungible tokens (NFTs), for example. NFTs are unique digital units of data that are stored on the blockchain and represent real-world objects such as art, music and videos. Typically, they’re one-of-a-kind, creating digital scarcity that drives up their value. In fact, in recent months the most valuable of these NFTs have sold for upwards of $69 million, leaving many to question whether they are as valuable as their buyers have deemed them to be.
It’s helpful to think about NFTs in relation to fine art and real estate – all three are unique assets that rarely trade hands; assets whose values are often determined by expert appraisers. But who gave one person, expert or otherwise, the power to decide the seemingly subjective value of a painting?
Unlike art and real estate, NFTs are built on the blockchain, creating the potential for a whole peer-to-peer network of appraisers to create consensus over the value of an NFT and document that consensus in a fixed record on the distributed ledger. Rather than one expert declaring an NFT’s value, a whole network of experts can weigh-in until an agreement is reached and the true value of the NFT is recorded.
Implications of a Blockchain-Based Truth: A New Kind of Work
Why would any expert take the time to appraise NFTs on the blockchain? For financial compensation, of course. Any NFT creator, distributor, or individual interested in determining the value of an NFT can pay the network to task users with completing an appraisal. Think about what that means for the future of work.
Blockchain technology is reshaping how people are paid for their niche areas of expertise, creating a space where professional success is unrelated to your name, family, location, alma mater, or job title; it has nothing to do with connections. Your value as an appraiser is reduced purely to your expertise.
In a post-truth society where economic inequality is at an all-time high, blockchain technology represents a source of immutable truth with the potential to revolutionize the way we think about work. Don’t be surprised to see future generations of self-employed individuals earning income on their expertise; profiting off their ability to agree on a true value of art, NFTs, or even your house.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.