Prior Smarts - Technologies Underpinning The Invention of Smart Ledgers

There is a persistent temptation for technologists to believe that the future arrives fully formed. More often, the present arrives carrying a rather large suitcase labelled “things we forgot we already knew”, i.e. history. This is particularly true of smart ledgers.

Bitcoin’s 2008 paper and 2009 launch made distributed ledgers suddenly fashionable, and ‘blockchain’ soon became one of those words capable of making almost any presentation sound more technologically advanced, despite not being mentioned in the paper (“chain of blocks” makes one appearance). Yet the underlying ideas had been accumulating for decades. Cryptography, distributed databases, peer-to-peer networks, consensus mechanisms, digital signatures, hashing, distributed value, and executable code all have histories considerably longer than the current blockchain boom. That is the starting point for this fascinating study by Henry Price: to look backwards to help us look forwards.

The notion of “prior smarts” is deliberately more useful than the narrower legal concept of “prior art”. It asks not simply whether something was patented or published, but whether the intellectual ingredients were already available. The answer, in many cases, is strikingly yes. The modern smart ledger is less a bolt from the blue than a particularly interesting assembly of components that had been developed, tested, patented, forgotten, rediscovered, and often reinvented.

Innovation is cumulative. Understanding where ideas came from helps us distinguish genuine novelty from clever recombination, and breakthrough from branding. It also reminds us that today's technological certainties may be tomorrow's historical footnotes.

The story is wonderfully messy. Military cryptography leads to civilian privacy. Secret communications lead to public-key cryptography. Distributed files lead towards distributed databases. Hashes provide compact evidence of integrity. Consensus mechanisms address the awkward question of how machines that do not necessarily trust one another can agree on what happened. Digital cash experiments precede Bitcoin. Smart contracts follow the recognition that code itself can become part of a ledger.

None of this diminishes the achievement of modern distributed ledger systems. Quite the opposite. A great invention is often not a single invention at all. It is the moment when a collection of previously separate capabilities becomes usable together. That is why history matters to technology. It can prevent us from confusing novelty with amnesia or first use.

I have particularly enjoyed working with Henry on this project. The research ranges widely, but the underlying question remains admirably simple: how did we get here? The answer is not a single inventor, company, patent, country or white paper. It is a long chain of ideas, people and technologies, often developed for purposes quite different from those to which they are now being put.

There is a final reason to undertake this sort of excavation. As new technologies become commercially valuable, the arguments over ownership, patents and standards inevitably follow. A good understanding of what came before is therefore not merely historical housekeeping. It is part of ensuring that the future remains open to further invention.

We should be careful about declaring revolutions. Sometimes what looks like a revolution is really a very long evolution suddenly acquiring a good marketing department.

This paper tells that longer story. I hope readers find, as I have, that understanding the “prior smarts” makes today's smart ledgers both less mysterious and considerably more interesting.

Professor Michael Mainelli
Chairman, Z/Yen Group