Two heads are better than one. Unsurprisingly, this adage means that two people are generally better at solving problems than a single person. If you scale this concept up to ten, a hundred, or ten thousand heads, you’ll get what’s called “the wisdom of crowds” or “collective wisdom.” The wisdom of crowds — a phenomenon known to humankind for thousands of years — implies that large groups of regular people can be smarter than experts in certain fields.
The wisdom of crowds has been applied to solve complex tasks in engineering, corporate governance, environmental protection, and even search and rescue operations. When the Internet arrived and enabled people to communicate and collect data faster and easier than ever before, the concept of collective wisdom got a whole new life.
Now it seems that blockchain technology has also found a way to use this phenomenon on the emerging market of decentralized systems.
Wisdom of Crowds: Origins and Evolution
By definition, the wisdom of crowds refers to the principle which suggests that large groups of people perform better at solving problems, making decisions, and generating new ideas collectively. The principle itself was described back in the antiquity in Aristotle’s Politics.
“The many, who are not as individuals excellent men, nevertheless can, when they have come together, be better than the few best people, not individually but collectively, just as feasts to which many contribute are better than feasts provided at one person’s expense,” reads Aristotle’s Politics (Reeve Edition, 1998).
Aristotle emphasized that the better decisions made by a group of people come as the result of collective discussion and combination of pieces of information and contradicting arguments from different members of the group.