Did the Inca envision a blockchain system?

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A mysteriously precise, mile-long band of 5,200 holes dug into Monte Sierpe, Peru, at least 600 years ago has long been a subject of speculation.

Ever since the site was popularized by aerial photography in 1933, professional archeologists have puzzled over its purpose — but hypotheses related to defense, water collection, fog capture, gardening, burial, geoglyph symbology and resource mining have all been discounted for one reason or another.

Having ruled all those out, amateur archeologists settled on the only remaining explanation: “ancient astronauts.”

Last week, however, a team of digital archeologists published an academic study that finally determined the site’s true purpose: Monte Sierpe, they explain, was “an indigenous system of accounting and exchange.”

“We hypothesise that Monte Sierpe initially served as a barter marketplace before being turned into a large-scale accounting device under the Inca Empire (1400-1532 AD) for collecting tribute from local communities.”

One hundred years before Luca Pacioli popularized the concept of double-entry accounting in Italy, Incas in Peru were keeping their books on a hillside.

The paper’s lead author, Jacob Bongers, frames this in modern terms by saying the hillside “functioned as a large spreadsheet for the Inca Empire.” 

Others call it a ledger.

But it looks like a blockchain:

Imagine a blockchain, and you’ll likely see something like Monte Sierpe: a continuous, physical stream of data stretching a mile into the horizon.

Bongers’ paper comes close to acknowledging the likeness: “The band is not continuous but rather segmented into sections or blocks.”

This is even more evident in the video, where the “blocks of holes” are more visible.

But the resemblance is much more than skin deep — because what could be more proof-of-work than digging thousands of holes?

“Depositing goods in the holes,” the paper explains, “could have been a way of publicly displaying information about the quantity of goods” used for “tribute collection.”

This is useful because you can’t have a system for tribute or large-scale economic exchange unless you first have clear rules about who owns or controls what.

Blockchains are a public display of information, designed to allow anyone to verify who owns and controls what unit of exchange.

Monte Sierpe was a public display of information that allowed anyone to verify who had paid what tribute to whom.

This public display, the paper proposes, is how a society as large as the Inca Empire was able to administer larger numbers of people without the help of currency or a system of writing.

“The visual prominence of Monte Sierpe…may have increased the probability of locating suitable trading partners, drawing together producer-specialists (e.g. farmers and fisherfolk), mobile traders (e.g. llama caravans and seafaring merchants), lords and administrators for periodic exchange. Large numbers of people depositing goods in the holes would give participants information about the quantity of goods available in an ordered way.”

In other words, they built a public blockchain. 

The key insight that led the researchers to this conclusion is that the arrangement of Monte Sierpe’s 5,200 holes into 60 distinct blocks “is structurally reminiscent of at least one locally found khipu, an Inca knotted-string device used for detailed record-keeping.”

In pre-modern Andean societies, khipus — knotted and maintained by specially trained khipukamayuq —  “were used to keep track of census information, tribute and inventory,” the paper explains. 

By that definition, the portable khipu was the spreadsheets of the time, not Monte Sierpe. 

Monte Sierpe — immutable, publicly verifiable, trustless — was the blockchain.

To trust a khipu was to trust the khipukamayuq who tied the knots…much like trusting a bank account is trusting the banker who keeps the accounts.

It’s not a perfect analogy. 

The Incas probably were not adding new blocks to their chain of holes for each new bundle of transactions that came in.

Instead, each block is thought to have corresponded to a social group, and each group would fill their assigned holes with goods when it was their turn to pay tribute to the State.

Like a blockchain, the key innovation was that the Band of Holes allowed this to be done publicly, where anyone could verify the payments — up until the goods were removed.

So this analog precursor to the modern blockchain had one limitation: reusing the blocks erased the chain’s history.

It took 600 years to invent a digital version that preserves the full history of a chain by appending new blocks rather than overwriting old ones.

This is Satoshi’s great innovation.

But the principles are unchanged — as is the value proposition. 

Digging 5,200 holes in a precise formation on top of a hill is not just a proof-of-work, it was hard work, too.

This monumental investment of labor is evidence that the Incas thought recording transactions in a public, immutable ledger had significant value as a way to organize large groups of people. 

Perhaps we are only now catching up.

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