“We need to give blockchain technology some more time to finish its baby steps.”
COVER STORY
Yiğit Kılıçoğlu is studying computer science at Yale University and is a member of the Yale Blockchain Club.
How did you become interested in cryptocurrencies?
Cengiz Ağalar, my advanced programming teacher at RC, picked me to make a presentation on “Bitcoin and Hashtables” sparking my interest in this field. The idea of a decentralized, tamper-resistant, easily transferable and durable currency that is based on math sounded like what a modern currency should be like, and it was especially appealing to someone who grew up in the midst of economic and political turmoil.
What exactly are cryptocurrencies, blockchains and NFTs?
A blockchain is just an ordered list of data blocks. Blockchains allow everyone to be on the same page without requiring trust between participants. If we can ensure that everyone has the same information in their record book, we can also define a payment system because we can keep track of, and everyone can agree on, who owns how much. Cryptocurrencies are based on such payment systems. Each cryptocurrency has its own set of rules, and participants join the networks whose rules they like. Anyone can create their own cryptocurrency – the challenge is convincing others to join. Whereas cryptocurrencies represent collections of divisible and identical things, NFTs (non-fungible tokens) represent the indivisible and unique. An NFT functions well as a certificate of ownership, be it for a photo, for a building, or for a video game character. Ultimately, both cryptocurrencies and NFTs are just pieces of data in record books. The math-backed universality and reliability of the record book makes this data useful.
What do decentralized technologies bring to the table?
It is prohibitively hard to rewrite the past in decentralized technologies. I cannot convince others that you owe me money when you don’t. Similarly, I cannot claim to have not stated something that I actually have. Complex contracts become easier to enforce. An artist can demand to receive a certain percentage of every resale of their artwork’s NFT, and the code that handles resales can automatically reject requests that do not comply. Without a decentralized system, such a contract would probably be hard to enforce globally, wasting your life in courtrooms. We have never reached such levels of fairness, reliability and transparency before.
People are wary of these technologies. How do you respond?
We need to realize that we are not really facing anything new. If society can function without people using actual banknotes, then a currency that is electronic by nature should also work. Money without a central authority’s backing is also not unprecedented. As long as a currency is reliable and convenient, it can function as a medium of exchange. Cryptocurrencies will help create fairer and more democratic economies. We just need to give this technology some more time to finish its baby steps.
Published July 2022
