Crypto(ˈkriptō) analogies(əˈnaləjē)

Crypto(ˈkriptō) analogies(əˈnaləjē)

By John(jän) Gordon

I was listening to Tim Urban(ˈərbən) on Kevin Rose’s(rōz) podcast, and he brought up the distinction that Elon Musk has made between reasoning by analogy and reasoning from first principles. It got me thinking about how analogies are used in the blockchain/crypto space.

Urban, who has spoken with and written extensively about Elon Musk on Wait But Why (if you’ve never visited his site, either bookmark it or get ready to lose an afternoon), identifies Musks’ reasoning from first principles as opposed to by analogy as one of the core elements(ˈeləmənt) of his success. One example he gave on the podcast was that everyone expects(ikˈspekt) airplanes to look like, well, airplanes, with wings and runways, while Musk has envisioned(enˈviZHən) them to look and travel(ˈtravəl) more like rockets (of course(kôrs), I guess that’s just using a space travel analogy).

In the blockchain space, the most powerful and persuasive(-ziv,pərˈswāsiv) analogy seems to be to compare today to the early days of the internet. (Or, okay, maybe tulips(ˈt(y)o͞oləp).)

Sometimes this is used to emphasize(ˈemfəˌsīz) how early we are: It’s like the internet in 1994! 1973!

Sometimes it’s used to caution(ˈkôSHən) that we’re probably(ˈpräblē,ˈpräbəblē) in a bubble(ˈbəbəl): It’s like the internet of 1999! Remember pets.com!

Sometimes it’s used to emphasize that even if it is a bubble it still has huge((h)yo͞oj) potential(pəˈtenCHəl), or to emphasize that current(ˈkə-rənt,ˈkərənt) top coins might be overtaken: Amazon(-zən,ˈaməˌzän) and Google came out of the bubble! Bitcoin might be Ask Jeeves!

It’s important to recognize(ˈrekigˌnīz,ˈrekə(g)ˌnīz) both the power of reasoning from first principles and the value of analogies. Failing to think from first principles can limit creativity and innovation(ˌinəˈvāSHən), with the adjacent(əˈjāsənt) possible(ˈpäsəbəl) blinding(blīnd) us to alternative(ôlˈtərnətiv) paradigms(ˈparəˌdīm) and solutions. Failing to make us of analogies can make it harder for innovation to take root within existing(igˈzistiNG) frameworks(ˈfrāmˌwərk) and paradigms, and blind us to the patterns(ˈpatərn) of the past that might repeat themselves.

Bringing this line of thought back to the blockchain space, it is helpful to use analogies to think about the state and development of the blockchain space, but it’s also important to point out that the analogies are not necessarily(ˌnesəˈse(ə)rəlē) apt(apt), and certainly(ˈsərtnlē) are not robust(rōˈbəst,ˈrōˌbəst) predictors of the future. To paraphrase(ˈparəˌfrāz) a friend: illustration(ˌiləˈstrāSHən) by analogy is very helpful, but reasoning by analogy is foolish(ˈfo͞oliSH).

And while it is important to, for instance, think about how to redesign(ˌrēdiˈzīn) a financial(fī-,fəˈnanCHəl) system from the ground up (perhaps using blockchain technology), it’s also crucial(ˈkro͞oSHəl) to develop and test stories of how both drastic(ˈdrastik) and incremental change may be realized(ˈrē(ə)ˌlīz) given the current state of systems.

https://medium.com/@jagordon/crypto-analogies-2a1b511211a2