Today we know Venice as a tourist destination but 500 years ago it was a trading empire. The Republic of Venice specialized in seafaring trade. Their boats sailed the world, securely moving goods from cities like Acre, Alexandria, Constantinople and back to Venice and other Adriatic ports.
Venice succeeded for the same reason all trading empires do, they provided settlement of goods that was cost effective, secure, and neutral. Whether Muslims, Jews, or Christians the Venetians would carry their goods.
Trading routes for physical goods have existed for millennia but the invention of blockchains has created the first trading routes for digital goods. Like their physical counterparts the best trading routes for digital goods provide neutral, secure, and cost effective settlement.
The blockchain that currently is the best trading route for digital goods is Ethereum.
Ethereum is Venice.
History shows three predictable consequences of trade.
The first is that trading is the companion of human progress. Ideas, culture, and economies are driven by trade.
The second is that trading is valuable and the majority of value accrues to the owners of the trading routes. In the case of Venice, the Venetians became very wealthy and ultimately helped catalyze the renaissance through patronage of the arts.
The third is that trading is contentious. Controlling trading routes is always a subtext or primary reason for wars. Venice had to compete against alternative trading routes and fight battles to maintain its routes.
All these elements are reflected in Ethereum as well.
We’ve seen Ethereum unlock new ways for humans to coordinate. New financial primitives invented, new forms of art and gaming emerge.
We’ve seen the owners of Ethereum accrue value. The price of the Ether token has increased from $3 to 1,693 in 8 years and millions of dollars per day is paid to settle digital goods on Ethereum.
We’ve seen competition from alternative trading routes with new blockchains and forks.
And finally, we are seeing attacks. The US government has already attacked the neutrality of the trading route by trying to make the transfer of certain types of goods illegal and more aggressive attacks are being pushed today.
We have an opportunity for a new renaissance, an unlocking of human potential and creativity brought about by the creation of the first trading routes for digital goods.
History shows us the power of this renaissance will depend on the neutrality, cost effectiveness, and security of the trading route.
Like creating physical trading routes, creating digital ones is not easy or without risk but humanity will benefit and the owners will reap rewards.