A blockchain decentralises the transfer of digital objects — or does it?
Notions of decentralised, permissionless transactions are undermined by blockchains perpetuating existing intermediaries, writes Matt Levine
The basic idea of blockchain technology is that it is supposed to let people transfer digital objects — money, securities, whatever — like they’re physical objects. Transfers of dollars rely on banks, and central banks, to keep records of who has all the money; we have to trust them; we don’t get to hold our dollars (except a few paper bills) ourselves. Transfers of securities rely on intermediaries — brokers and the Depository Trust & Clearing Corporation (DTCC) in the US — to keep records of who has all the stock; we have to trust them; we don’t get to hold our stocks ourselves. Transfers of bitcoins don’t rely on any trusted intermediary, the distributed ledger — the blockchain — of bitcoin transactions allows people to transfer bitcoins between themselves without trusting a third party. Anyone can use the ledger; you don’t have to be a member of a selective club. The blockchain idea is about decentralised, permissionless transfers of value. So it’s weird that basically every wel...
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