Can Blockchain Replace SQL Database? Or It is Just An Aberration
I was re-listening to a Future Thinkers podcast episode with Vinay Gupta recently and he gave a very different perspective to this bitcoin maximalist rhetoric that I was proverbially sword fencing with the evening prior. It is this difference I want to talk about.
When ‘SQL’ was invented in the early 1970’s by IBM, it monopolized the data storage process entirely. SQL offered everything a 20th-century capitalist ideologue dreamt about at night. It fundamentally transformed the way we organized society at every level beyond the individual. Businesses, cooperations, and even entire countries could now record, track and manage data at unprecedented scale and efficiency.
Some context before we continue. Several decades ago, an anthropologist by the name of Robin Dunbar proposed a theory claiming that Homo Sapiens living in pre-historical Earth can only prosper in tribes of no more than 150 members. That is to say, our community ‘glass ceiling’, if left with nothing but the basic human interaction, can only reach a size of 150 people. The reason being is that after this number we cognitively can’t manage any more relationships so the social cohesion of the group inevitably breaks and splinters into subgroups.
This is important context because clearly, we can now interact globally on a scale that dwarfs the Dunbar number. How? Technology. We first superseded it by inventing money. Over several millennia, the money used between fragmented tribal groups became more homogenous, allowing for greater trade, prosperity, and social scalability. Then we hit another glass ceiling. We invented the written word and then accounting systems, and then mathematical systems. This gave us empires, taxation and…guess what…even more social scalability.
Fast forward 30,000+ years to today, our technology enabling social scalability is relentlessly unifying humanity. SQL enabled the organization to create, read, update and delete any data they wanted, at will, with unbelievable speed. Data, along with its babysitter SQL, tracked everything from inventory in supply chains to tax statements in government. If it was legible, it was put in a database.
After we became to rely on and trust SQL (/NoSQL) and indirectly the companies wielding it, data quickly became a highly valuable asset as we kept handed over more and more control to it. More data means more knowledge and insight to streamline business inefficiency or create new business models entirely. This often translated into more money. And thus, the information economy was born. Using what currency? Data.
Database culture works as follows. Three of the more popular kids in school decides to host 3 separate parties at each of their houses on exactly the same night every week. Their goal is to attract as many of their school friends as possible because it will get them more popular in school for the coming week. Each kid wants to have all the popularity so ideally wants every possible school child at his party and none at the other two kids’ party.
The big night rolls around and each party attracts some school kids, one party, however, gets, by chance, noticeably more attendants the first time around. Whilst the party is going on, every host tracks and stores each of their attendants’ behavior: their likes dislike, what music they prefer, what room they spend the most time in etc. After the party is over, each host analyses the data they’ve archived and uses the results to improve their party next week. The kid who had the most attendants and therefore the most data available is now better able to draw more accurate predictions to what his attendants next week will like and therefore throw a better party. A few more parties role by and now this host is attracting an increasing number of attendants that increases the accuracy of his party predictions even more, which, in turn, attract more attendants and so on in a positive feedback loop.
These marginal iterations improving the quality of service week on week because of a better data(base); it is not too difficult to extrapolate into the real world and see how a user(base) centralizes around one or two service providers as well.
Database culture is, by design, non-cooperative. Each host wants to keep his data hidden from all the other hosts because he doesn’t want to give up party insights and lose himself, attendants. Customer and customer data acquisitions are characteristic of a zero-sum game in this regard. This is not to mention the inefficiency and inoperability of actually attempting to move data from one highly protected, wall-gardened data harvester to another.
All in all, corporatised database culture doesn’t incentivise the free-flow data democracy that human network culture would otherwise prefer.
Without getting to crypto-political here, I want to simply talk agnostically about blockchain without making any specific blockchain preference.
Blockchain is a networking technology that disperses control out to the edges and away from any one central authority. Its existence can broadly be seen as imposing a tension between two generations of technology; the database and the network.
This tension should be reasoned through as if we were thinking about property rights. The database grants its master sovereignty. The owner of the data being held is relegated to secondary importance over the manager of the data. SQL is an all-knowing source of truth, knowledge, and power; access to it can only be granted via an API. Blockchain flips this on its head and grants property rights to the data owner. Every network node is self-sovereign to do as they chose and any third party that wants access to your data must ask you for permission. It is fundamentally a different paradigm to how groups of humans interact digitally.
Blockchain is a social innovation that enables coordination amongst diverse groups of people without having to trust any of them directly. It enables the social scalability that SQL offers but without the main centralizing design features suiting complex bureaucracies over actual humans. SQL made sense to outsource coordination and access controls to central authorities because we needed somebody to manage it for us. Blockchain outsources the coordination to no-one and everyone simultaneously.
This article has talked about a techno-social system. Technology influences the way we organize society, much the same as how society chooses our technology. If SQL the technology was designed in a way that enabled open access collaboration that fitted our rapidly changing amorphous human networks, society would function very differently. In the same way, if we are able to choose to migrate to a network culture built on blockchain technology, our macro social systems are going to look very different within the next 20 years.
Note: this article is by no means meant to say blockchains will replace SQL database’s; in fact, I believe the vast majority of applications currently proposed by blockchain(ers) can more effectively be done using an SQL database with M of N permissions and private key cryptography. It is just a pure form of blue sky thinking about how the behavioral nature of technology affects the behavioral nature of society.
Special thanks to Vinay for inspiring the ideas presented in this article!
Theo discovered Bitcoin nearly 4 years ago and realised its value immediately as an uncorrelated new asset class after researching traditional finance and macroeconomics. Theo since began a successful trading career before running a company building P2P trading platforms. He now works full time as a cryptoasset analyst for hedgefunds, DLT incubators and for personal investment.