Sunday, November 29, 2015

Magic Blockchains, but for Time? Blocktime Arbitrage

There is no doubt that blockchains are a reality-making technology, a mode and means of implementing as many flavors of our own crypto-enlightenments as we can imagine! This includes newer, flatter, more autonomous economic, political, ethical, scientific, and community systems. But not just in the familiar human social constructs like economics and politics, possibly in physical realities too like time. Blocktime’s temporal multiplicity and malleability suggest a reality feature we have never had access to before – making more time.

Blocktime: A General Temporality of Blockchains
Blocktime as blockchains’ own temporality allows the tantalizing possibility of rejiggering time and making it a malleable property of blockchains. The in-built time clock in blockchains is blocktime, the chain of time by which a certain number of blocks will have been confirmed. Time is specified in units of transaction block confirmation times, not minutes or hours like in a human time system. Block confirmation times are convertible to minutes, but these conversion metrics might change over time.

Blocktime Arbitrage
One key point is that the notion of blocktime, as an extension of computing clocktime more generally, creates a differential. Blocktime and human time already exist as different time schemas. A differential suggests that the two different systems might be used to reinforce each other, or that the differential could be exploited, arbitraging the two time frameworks. Through the differential too is the way to ‘make more time,’ by accessing events in another time trajectory. The conceptualization of time in computer science is already different than human time. Computing clocktime has more dimensions (discrete time, no time, asynchronous time, etc.) than human physical and biological time, which is continuous. Clocktime has always been different than human time. What is different with blocktime is that it builds in even more variability, and the future assignability of time through dapps and smart contracts. For example, MTL (machine trust language) time primitives might be assigned to a micropayment channel dapp as a time arbiter.
Time has not been future-specifiable before, in the way that it can be assigned in blocktime smart contracts.
Temporality as a Smart Contract Feature
Time speed-ups, slow-downs, event-waiting, and event-positing (a true futures-class technology) could become de rigueur blocktime specifications. Even the blocktime regime itself could be a contract-specifiable parameter per drop-down menu, just like legal regime. Temporality becomes a feature as smart contracts are launched and await events or changes in conditions to update contract states. Time malleability could itself be a feature, arbitraging blocktime with real time. An example of a time schema differential arising could be for example, a decentralized peer-to-peer loan that is coming due in blocktime, but where there have not been enough physical-world time cycles available for generating the ‘fiat resources’ to repay the loan. 

Blocktime Standards
In blocktime, the time interval at which things are done is by block. This is the time that it takes blocks to confirm, so blockchain system processes like those involving smart contracts are ordered around the conception of blocktime quanta or units. This is a different temporal paradigm than human lived time (whether Bergsonian doubled duration (the internal sense of time passing) or external measurable clocktime). The human time paradigm is one that is more variable and contingent. Human time is divided and unitized by the vagaries of human experience, by parameters such as day and night; week, weekend, and holiday; seasons; and more contingently, crises, eras, and historical events.

Since blocktime is an inherent blockchain feature, one of the easiest ways to programmatically specify future time intervals for event conditions and state changes in blockchain-based events is via blocktime. Arguably, it is easier, and more congruent and efficient, to call a time measure from within a system rather than from outside. It could be prohibitively costly for example, to specify an external programmatic call to NIST or another time oracle. Possibly the emerging convention could be to call NIST, including as a backup, confirmation, or comparison for blocktime. Currently, blockchain systems do not necessarily synchronize their internal clocktime with NIST, but the possibility of a vast web of worldwide smart contracts suggests the value and necessity of external time oracles, and raises new issues about global time measurement more generally. Especially since each different blockchain might have its own blocktime, there could be some standard means of coordinating blocktime synchronizations for interoperability, maybe via a time sidechain for example.

Novel Temporalities of Computing (Discontinuous) and Big Data (Predictive)
First computing clocktime made time malleable through its different discontinuous forms. Then machine learning and big data facilitated a new temporality, one oriented to the present and future, instead of responding to just the past. There was a shift from only being able to react to events retrospectively after they had passed, to now being able to model, simulate, plan, and act in real-time as events occur, and proactively structure future events. The current change is that blockchains and particularly smart contracts add exponential power to this; they are in some sense a future reality-making technology on steroids. Whole classes of industries (like mortgage servicing) might be outsourced to the seamless orchestration of blockchain dapps and DACs in the next phases of the automation economy. While Bitcoin is the spot market for transactions in the present moment, smart contracts are a robust futures market for locking in the automated orchestration of vast areas of digital activity.

Blockchain Historicity: Computer Memory of Human Events
Blockchain logs are a human event memory server. Blockchains are already event history keepers, and now with blocktime have even more responsibility as the memory computer of human events. It is now possible to think in terms of blockchain time sequences, in the anticipation and scoping of future events and activities, as blockchain reality unfolds, as opposed to human time scales and events. For example, there are normal human time sequences, like a one-year lease agreement. Other sequentiality is based on human-experienced conditions like ‘the park is open until dark,’ which makes little sense in a blocktime schema. There are time guidelines that vary per lived experience in human realities. Likewise, there could be analogs in lived experience in blockchain realities. Different events could mark the historicity of blockchains, for example, the time elapsed since the genesis block, and other metrics regarding number, amount, and the speed of transactions. In cryptophilosophy, Hegel, Benjamin, Holderlin, and Heidegger’s conceptions of historicity and temporality might be instantiated in the blocktime paradigm, where, in ecstatic temporality, historicity is the event from the future reaching back to present now (Heidegger, Being and Time, 474).

Related Crypto-philosophy Talk: Swan, M. “Bergson’s Qualitative, Kant’s Time and Imagination, and Blocktime Smart Contracts.” Spatiality & Temporality Conference. 11-13 December 2015. Warsaw, Poland. 

Monday, November 02, 2015

Machine Trust Language (MTL): Human-Machine Collaboration

Andreas Antonopoulos’s articulation of network-enforced trust primitives (Oct 2015, Feb 2014) could be extended more broadly into the concept of Machine Trust Language (MTL). While blockchains are being popularly conceived as trust machines, and as a new mode of creating societal shared trust, Andreas addresses how at the compositional level, this trust is being generated. The key idea is thinking in terms of a language of trust, of its primitives, its quanta, its elemental pieces, its phonemes, words, and grammar that can be assembled into a computational trust system.

Blockchains are a network-centric trust system that can make and enforce promises. A network is not just a decentralized architecture; a network can have functional properties built into it. Network-centric or network-enforced functionality can thus enable a more complex level of activity. As XML standardized, facilitated, and undergirded Internet I: the Internet of information transfer, MTL could similarly for the Internet II: the Internet of value transfer.

Trust Primitives: Technical Details
The atomistic building blocks of trust, trust primitives, arise from blockchain scripting languages; they are the programming functions or opcodes used to specify different situations. Some examples are OP_CHECKSIG (a script opcode used to verify that a signature is valid) and OP_CHECKLOCKTIMEVERIFY (a script opcode used for a transaction output to be made unspendable until some point in the future).

As human language components are aggregated into different levels (phonemes, morphemes, lexemes, syntax, and context), so too can blockchain trust primitives. These indivisible blockchain trust particles, trust quanta, can be assembled into larger trust structures like payments. One example could be a micropayment channel with bidirectional settlement for vendor payment, for example entered in 1000 blocktime confirmations for 10 millibits. There could be libraries of standard trust primitives that are always included, for example, to verify the signature or multi-signature status of any transaction. The possibility of fine-grained trust primitives is limitless – a very small instruction set can be used as a toolkit for innovation that is composed into infinitely complex macro expressions. Some other examples Andreas mentions in addition to payment channels are stealth addresses, payment codes, and multisig escrows.

More sophisticated examples of in-built blockchain trust are already starting to become conceptual standards. One is Lighthouse, a cryptowallet that has crowdfunding (the ability to pledge funds to an address) as an incorporated feature; essentially a decentralized network Kickstarter program. The Kickstarter functionality is in the program (there is no custodian); just as Bitcoin allows digital currency transfers without a central bank, so too the Lighthouse wallet coordinates crowdfunding for projects without a central intermediary like Kickstarter. A whole series of similar network primitives with embedded trust functionality can be envisioned. These could include crowdfunding, reputation-checking, backfeeding (emergent collaboration), insurance, multisig, payment channels, peer-to-peer tipping (ProTip), compensation, remuneration, micropayments, IP tracking, backup (specified blockchain transaction record-keeping and archival), and advocacy (via third-party oracle like Smart Contract and Early Temple).

Trust as a Feature: Human-Machine Social Contracting
When trust becomes a ‘mere’ assumed included feature as opposed to a marveled at and explicitly designed functionality, we will have really arrived somewhere as a species. In some sense, the entire apparatus and infrastructure known as society has been produced to instill and manage trust. Deception had an evolutionary benefit, but is perhaps a quality that can be reconfigured, first in machine-mediated human interaction, and later in human biology. The longer-term endgame of blockchains-as-algorithmic-trust is human-machine collaboration, particularly in the application of shifting from the labor economy to the actualization economy. Given the increasing potential prevalence of machines in human existence, a looming topic is the kinds of social contracts that may be appropriate to establish between machines and humans. For example, consider what trust primitives might be needed to write a smart contract with your personalized home robot. To open a payment channel with your home robot, first could be identifying the relevant exchange streams for services and data. These might include personal data, life-logging, backup, diagnostics, advice, empathy, sound-boarding, home maintenance services, payments, and record-keeping; a list of operations that make sense to conduct in a ‘payment channel’ structure (e.g.; two-way open transfer over time of value between parties per triggering events).

A New Kind of Language
Here the concept would be considering the possibility space of all language and noticing that there could likely be a bigger range of language than has come into existence so far. There are human languages, computational languages, math, logic, and other systems of semantics and signifying. As seen with examples like math (Husserl), computing algorithms (Wolfram), intelligence (Yudkowsky), and self-assembled locomotion (Lipson) and life forms, what has been seen through the human example may be but a few nodes in a larger possibility space. The bigger query would be what new kinds of language can be made with blockchain trust primitives. Not just solving human problems (e.g.; creating automated trust structures) but creating new languages from these new functionalities. One next step could be applying linguistic theory (Chomsky, etc.), concept theory (Lakoff, Kant, etc.), and mathematics, logic, computation, complexity math, machine-learning, and deep-learning theory to creating platforms for the emergence of new kinds of language. The first task might be to optimize for obvious new types of trust language that might be possible and that might solve low-hanging fruit problems like offloading the cognitive and behavioral energy effort of deception to move to Brin’s Transparent Society. Blockchain trust could be for society what the quantified self fourth-person perspective was for the individual (a trustable independent objective arbitrator of information about reality).

Philosophy: A New Kind of Qualitative Language
A language of trust is undeniably qualitative. Trust is exactly the qualitative easing necessary for society to function, including in more intensive human-machine collaborations, and in larger scale universally-global and extraterrestrial singularity-class endeavors. Is it possible to reach a place with computational language to say what cannot be said with human language? Perhaps not in traditional 1s/0s computational language, but with a new kind of language of qualitative trust primitives, maybe yes. Wittgenstein famously said (the type of) all there is that can be said in the Tractatus, and in this crystallization pointed to what cannot be said, in three domains, ethics, aesthetics, and religion. Now thinking in terms of trust primitives and other qualitative primitives changes the question of what kinds of sentences and language can be written; the grammar and Wittgensteinian language games that can be enacted with blockchains; in an AI DAC and other applications. There could be many diverse blockchain cliometrics implementations in MTL; e.g.; the measurement of social qualitative factors like the amount of liberty in a political system. The notion is qualitative primitives and qualitative machine language; having a pourable bag of trust elements as components. There are trust primitives, and possibly many other kinds of qualitative primitives, for example freedom, autonomy, and choice primitives; idea primitives and innovation primitives; all of these could be on tap in a multi-faceted qualitative machine language to configure a life of crypto enlightenment

Tuesday, October 27, 2015

Crypto Enlightenment: A Social Theory of Blockchains

There is something new and fundamental happening in the world which could be the start of the next enlightenment period. The core of this is shifting from centralized to decentralized models in all aspects of our lives, both individual and societally.

Cryptocurrencies (Bitcoin), blockchains, and decentralization) are not just about 1) digitizing and modernizing money, payments, economics, assets, legal contracts, and governance, thereby 2) accelerating the transition to the automation and actualization economy from the labor economy, but 3) more fundamentally, these factors are allowing us to re-explore our reality, and specify it as more internally-determined than externally-determined.



Societal Shared Trust is Algorithmic Trust
The tip of the iceberg is Bitcoin – digital money. Bitcoin runs on software called blockchain technology, which is a distributed ledger, a decentralized computational memory of human interactions. As individuals, we can place our trust in the computational system, and no longer need to trust institutions, third-party intermediaries like banks and governments, to coordinate our patterns of activity. Blockchains are a more trustworthy trust: algorithmic trust, not institutional trust.

Blockchain technology is technical (cryptographic ledgers); economic and political (a flatter more-extensible mode of organization); and psychological, sociological, and philosophical (new ways of conceiving reality). The real invitation and potentiality of blockchain technology is to radically rethink reality – what is it to decentralize everything we do and reconstitute life through a frame of abundance and immanence, attending to what is possible and desirable mindfully, not merely a reaction to a reality which seems determined by scarcity.

A New Philosophy of Economic Theory
A philosophy of economic theory is necessary since nearly all existing economic theories have taken scarcity as a central precept. These antiquated models configured by scarcity are weak philosophically because they are conceptually limited, and are also weak empirically since there is emerging and existing evidence of situations in the world where scarcity is not a parameter, and not the governing parameter. A ready example of this is digital goods, such as software or digital images, where there is essentially zero cost to producing another unit by copying the goods electronically.

Crypto Enlightenment is a Rethinking of Authority
There have been some paradigm-shifting moments in human history. The Enlightenment (1650-1800) concerned knowledge, and also importantly, authority. While there has been much rethinking and progression regarding knowledge, there has been less regarding authority since the modern notion of the individual as an agent in society arose during the Enlightenment. Now with the advent of blockchain technology and decentralized models, there can be a new consideration of authority. There is a possibility of constructing alternatives to centralized institutional power which has become a juggernaut of extraction instead of support; a less-trustworthy diminisher of rights and social goods instead of an extender and promulgator. Decentralized models empower the individual in radical new ways and call for the rethinking of authority for both the individual and society. Per the Internet revolution, we as individuals now taking self-responsibility for many activities such as deciding what and how we consume news media, entertainment, financial services, (stock-trading, credit services, portfolio management), and health services. Next is economic and governance systems.

To rethink the place and definition of authority, a philosophy of immanence is helpful and necessary. Immanence is the idea of self-determination from within; everything comes from within in a system, world, or person; structure and content are emergent and not pre-specified. Immanence contrasts with transcendence where everything comes from outside a system, world, or person; pre-determining the system externally per fixed specifications. One way of seeing reality is as immanence and transcendence; there is one side that is focused on recouping a pre-specified baseline ideal, and the other of open-ended immanence. Human emotion is an example from the natural world of baseline-immanence, where negative emotions (fear, anger) physiologically narrow possible pathways of action to fight, flight, or flee, where as positive emotions (love, compassion) trigger general, non-directional cognitive activation, a widened range of unspecified novel, creative, and unscripted courses of thought and action.

Much of human psychological activity might be said to be concerned with the attempt to attaining a baseline ideal that has been pre-specified and externally imposed, and as an ideal impossible to ever attain. Some of the contexts where these ideals impossibly govern behavior and psychology are ethics, justice, equality, liberty, subjectivation, and the pursuit of the good life. Attaining the baseline is an idea rooted in fixity, where the form (morphology) one begins with pre-determines possible outcomes. Baseline is a stance oriented to negating and critiquing, to narrowing, circumscribing, and closing-off; a ‘no’ energy. Certainly ideas of ideals may come from outside an individual, and the distinction is not acquiescing and adopting them wholesale, but introspecting as to how they would be useful appropriated individually for me; internally, reworked and reclaimed with autonomy to empower the individual. (Seeing how immanence and transcendence interact, Hegel terms this dialectics, or conversation of appropriation, as an immanent process of transcendence.)

The other side of reality is immanence, a determining from within. This is the open-ended stance of novel construction up and out from baseline into new territory; “yes-and” improvisation energy, collaboration, creativity, novelty, the new, thinking out-of-the box, greenfield, emergent, dynamic, serendipitous, flow, complexity, fractalization, and multi-dimensionality. Moving out open-endedly from baseline is an idea rooted in capability; growth is dictated by capacity (which can grow) and not morphology (which is fixed); capability and attitude determine possibility. Immanence is a stance oriented towards the affirmation of the positive, to “yes-and” energy.

Cryptocitizen Sensibility
The sensibility of the cryptocitizen is being in a stance of immanence with ourselves; trusting our internal selves more. There is more self-responsibility-taking; questioning, deciding, and designing which economic systems, political systems, communities, and labor systems (productive work effort) in which we would like to participate. The distinction is between ‘selecting governance services’ and ‘being governed,’ where increasingly, there is the possibility of a much higher degree of self-determination and self-creation in selecting the communities and structures in which we participate, particularly those related to economics and politics. Per a singularity-class technology like decentralized cryptographic models, these systems for organizing multi-party activity can scale way down to backgrounded trust-invoking microlevels in ways that were not previously possible in hierarchical models.

Abundance Theory of Flourishing
Theories of flourishing address how we might organize ourselves individually and societally towards the endeavor of the good life. Leaving aside the problematic language and valorization of the ‘good’ life, there are been three traditional types of theories of flourishing (Parfit, Reasons and Persons, 1984). Theories of flourishing have been hedonistic (seeking the greatest balance of pleasure over pain), conative (seeking desire fulfillment), and objective list theoretic (seeking to list other aspects that might constitute well-being in addition to pleasure and desire fulfillment).

1. Immanent Flourishing of Abundance: Sustenance + Actualization
A new theory can be proposed in line with modern themes, an Abundance Theory of Flourishing. An abundance theory of flourishing can be developed first through the baseline-immanence framework. The traditional conception of abundance has most-often been one-sided, focusing exclusively on reaching the baseline of post-scarcity, having all needs for material goods satisfied. Instead, an immanence theory also envisions the open-ended upside of potentiality that is now possible with this baseline of material goods satisfaction having been reached. An abundance theory of flourishing includes the two sides of reality, focusing on both survival and actualization. To count as flourishing, there is not just an alleviating of suffering in the form of having sustenance needs met, there would also need to be something in the positive register of immanence, allowing new and emergent potentiality to develop; this would constitute a true immanent flourishing of abundance.

2. Scarcity is a Social Pathology
An abundance theory of flourishing can be developed second through conceiving of scarcity as a social pathology. The conceptualization is that scarcity is not merely a constitutive parameter of existing economic theory, but that more pervasively, the notion of scarcity has been a psychologically harmful construct of thinking that needs to be overcome for a fuller realization of human potential. In an abundance theory of flourishing, scarcity is a social pathology to be resolved. Part of the justification for seeing scarcity as a social pathology is noticing the new and contributive social goods that are unavailable in the scarcity model and created by abundance. Some of these social goods include certainty, availability, reduced contingency, willingness, and cognitive easing and cognitive surplus.

Abundance creates a psychology of certainty and availability, a reliable ongoing feeling of certainty that material survival needs will be met, as opposed to the continuous uncertainty and attending-to required by scarcity. Much current human cognitive and physical effort (as individuals and groups; families, corporations, institutions, and nation-states) is devoted to anti-scarcity measures: hoarding, manipulation, and control for the purpose of ascertaining the future availability of resources. It is like doing for emotional and cognitive attending what just-in-time inventories did for manufacturing; it is an invoking of certainty and reliance about the real-time availability for need fulfillment. Through abundance, there could be the considerable social good of relief and certainty, where a whole class of cognitively-exertional activities drop off the reality of what has to be considered for basic living. This would be unprecedented in human history, a trustable source of having basic needs met such that we do not even have to think about this.

Cryptosustainability: Collaborating in the Self-sustaining Micropolis
The cryptocitizen sensibility of the individual extends to embodying new ways for the individual to be in society. Reviving the notion of the Greek statesman, there is a sense of civic duty to serve the republic. This can be recast as the self-directed cryptocitizen’s sense of civic collaboration, where part of meaning and purpose may be derived from participating in community sustainability. The new polis could be the micropolis as groups of individuals form self-sustaining cryptocommunities.

Peergrid Cryptosustaining Micropolises
The cryptocitizen’s civic collaboration is through providing peergrid resources. Here in communities of 20-50, I have a solar panel on my roof, my neighbor has a City Blooms hydroponic greens unit, the next person has a Tesla power wall, the next person is an ISP and hosts a Bitcoind node; etc. Each of us provides a piece of peergrid infrastructure supporting the overall sustainability of us as a community. The kids paper route of the future is maintaining the hydroponic greens unit. Individuals are civic infrastructure providers. Peergrids then are local community mesh networks of all needed resources including physical (energy, ICT, food, infrastructure) and emotional (empathy, belonging, contribution, meaning). Peergrid cryptosustaining micropolises can then federate, so the smartcity becomes a federation of local autonomous self-sustained communities. Blockchains are the trustable unobtrusive system for managing all of this in the background, allowing communities to move beyond free rider problems and other concerns that have prohibited easeful cooperative collaborations. Blockchains facilitate the ownership of community infrastructure (financing, transferring, operating, drawing assessments) in a community-based manner.

Crypto-Enlightenment Governance
Thus through the volitional responsibility-taking of the cryptocitizen as an individual self-determining economic and political systems of choice, and as an individual in society, collaboratively participating in self-sustaining micropolises, governance can be recast as a process of support (immanence) as opposed to extraction (baseline erosion). The actualization economy can thereby focus on (1) sustainable material survival and (2) the social goods of liberation: self-respect, self-esteem, and self-realization. Cryptosustainability communities are finally a means of prescriptively destabilizing non-value-added elites, implementing the original esprit of Rousseau, Rawls, and Locke.

Blockchains: a Grey Goo-Resistant Singularity-class Technology
The crypto-enlightenment includes seeing the potential impact of blockchains beyond the flexible recasting of human economic and political processes; blockchains are singularity-class technologies. A singularity-class technology is a technology for the large-scale trustful automated orchestration of vast and detailed processes. The power of singularity-class technologies, this level of technological orchestration of processes, possibly without our human participation, has given way to the fear of runaway technologies. The fear of runaway technology is in the same form, and persists across all singularity-class technologies, that AIs, robots, nanobots, 3D printers, matter compilers, space terraformers, synthetically-replicating bioengineered life, etc. will take over the world.

Blockchains are a potential solution to the fear of runway technology in any of these areas. The fear of runaway technology can be allayed in noticing that the very nature and design principles of singularity-class technologies, certainly blockchains, and by extension, perhaps any singularity-class technology, are that the large-scale orchestration cannot proceed otherwise than through a system of checks and balances. The key blockchain functionality principles are being a very-large scale automated system of checks and balances where all ‘transactions’ must be validated, confirm via a reputation or other mechanism, employing algorithmic trust and smartnetwork consensus mechanisms.

Singularity-class Technology Safety: Consensus Signing and Design Signing
This structure can carry into the implementation of singularity-class projects like friendly AI, autonomous lab robots (on-chain DAC IP discovery tracking), blockchain nano-compilers (Grey Goo worry: unchecked nanotech proliferation). Two key safety design principles in singularity-class technologies are 1) the required confirmation of any transaction or activity by smartnetwork consensus mechanisms which prevents non-bona fide behavior, and 2) signing; all transactions cannot help but be signed. Just as physical-world engineers sign the bridges they build (literally, as a claiming and responsibility mechanism), synbio, AI, space, etc. engineers cannot help but ‘sign’ their own building blocks like DNA designs. With traces as an inherent feature of technology, signing is unavoidable, so singularity-class technologies like propositional nanotech constructions would be either 1) signed by bona fide engineers, and 2) not be able to avoid having a traceable signature by befouled players (intentionally malicious or otherwise).

Spacechains: Blockchains in Space
A further as yet unconsidered application area for singularity-class technologies like blcockhains is spacechains: blockchains in space. The idea is that blockchains are not just an Earth-class technology, but also an extra-terrestrial-class technology for space projects. Blockchains can be used to coordinate very-large Earth-class terrestrial projects like billion-member DNA databanks and EMRs, and space-class problems too. Some of the many potential space applications of blockchains include space settlement, terraforming, asteroid mining, fuel generation, bombardment monitoring, and basic science observation. There could be colored-coin ledgers for energy, settlement, transport, and supplies. Further, spacechains are a fragility alleviation mechanism for terrestrial applications. It is surprising that we do not yet have backup for many terrestrial operations. Spacechains could help with this, providing data center back-up, geomagnetic solar protection, existential risk reduction, and Bitcoins in space (where there is an articulated project, (BitSats (like CubeSats)).

Curious what "Bitcoin and Blockchain are? Educational Resources: 
What can Blockchain do for you?
The real value of bitcoin and crypto currency technology - The Blockchain explained

Monday, October 05, 2015

Blockchain Financial Networks: Rethinking Risk and Finance with Automated Value Transfer

Internet transfers Information, and now Value
Blockchains are important because they constitute the next phase of the Internet, not just transferring information, but now transferring value: money, assets, and contracts. Blockchains are secure distributed ledgers, which can be implemented as globally-distributed financial networks. Ultimately, blockchain financial networks could automatically and independently confirm and monitor transactions, without central parties like banks or governments.

Fast-moving Crypto-economy

The crypto-economy is evolving quickly and it is crucial to watch and actively participate because
the uptake of blockchains could be extremely rapid, particularly by institutions. The crypto-economy is important to watch because:

  1. whereas a year ago crypto-technology was heresy, it is now becoming commonplace
  2. blockchains as a modernizing technology have a pervasive reach – including all cash, financial instruments, and contracts in economics and finance; and all legal, legislative, political, and governance operations 
  3. the decentralized structure of crypto-technology implies a reorganization of the existing financial system; and eventually, political system

The key benefit of blockchains as a modernizing technology is that they allow assets to be transferred immediately, not taking 3 days to settle (t=0, not t+3). This has a number of efficiency improvements including decreasing counterparty risk, reducing cost, improving liquidity, and instilling trust in the system.



Rethinking Risk
Blockchains, crypto-economics, and decentralization invite an explicit reconsideration of risk. Four risk regimes can be identified ranging from 1) traditional mutuality risk models (Lloyd’s of London) to 2) classical portfolio theory (CAPM, efficient frontiers, trinomial tress, value-at-risk) to 3) black swan risk models (more frequent unpredictable outsized events) to now 4) decentralized risk models. As we rethink the world of science through complexity, now too complexity is a model for rethinking risk. Part of the more robust consideration of risk is moving to a conceptualization of causality that is not exclusively straightforward and linear. Complexity math allows a rethinking of risk in decentralized network models of consensus trust.

Rethinking Finance
An institutional crypto-economy also calls into question the definition of finance. Finance can be seen as a spot and future contingency management system for assets and liabilities. In this definition, blockchains are improved form of contingency management, with greater precision, automation, and lower-risk. The Internet becomes a contingency management system with programmable money, smart contracts DACs, and distributed ledger transactions, all contributing to automated value transfer.



Realizing the Automation Economy
Distributed ledgers allow a more serious move into the Automation Economy, via secure value transfer previously unavailable with the Internet. Internet 1.0, the ‘non-secure’ Internet allowed the automation of several sectors such as news, information, entertainment, manufacturing, and to some extent health. Now Internet 2.0 seen as secure value transfer networks could facilitate the automation of the entire economic, money, finance sectors, as well as government, politics, and legal services. What is at stake is a fair and orderly transition from the Labor Economy to the Automation and Actualization Economy.
Automated value transfer is the bigger project of decentralization, algorithmic trust, and the automation economy.

Tuesday, September 29, 2015

Blockchain Crypto-economics: The Actualization Economy of Immanence

Phase I: P2P Economies
There is considerable room for exploration in defining what the new possibility space of personalized, self-defined, emergent economic systems might comprise. Opening up economic systems could have different stages and phases. The first position could be having the same structure of current economic systems, but opening up the parties, interaction types, and business models. The idea of ‘decentralized reddit’ is an example of one such first position. It is still the same Internet pipes, providing the same news items to consumers. What could be different is the hosting, pricing, and business model. The web property reddit could be hosted in a decentralized manner, p2p-hosted by community peers, as opposed to being centrally-served by the company, reddit, Inc. Once the content is hosted by peers, the business model too can change. Instead of indirect advertising-supported centralized models coordinating the serving of eyeballs to vendors, direct pay-for-consumption or freely-contributed content models could go more naturally with a p2p-based content community. This means perhaps leaner economic models with greater price rationalization and value assessment of consumption by users.

Phase II: Rethinking Economic Systems as Coordination Systems
However, what is possible is not just different economic systems from a business model perspective, but something more fundamentally radical, a blueprint for a new economy. All of the first position, ‘decentralized reddit,’ no matter how decentralized, is still in the same structure, in the traditional structure of how economics has been conceived – of some parties producing goods of value consumed by others for some price (including for free in gift-economies). Extending this, the fully-fledged second position challenges and redesigns what is meant by economic systems, and claims that the purpose and value of economic systems is much broader. Markets have been the only application of economic systems, but the concept is more extensive.
Economics is a coordination system, of resources, but more broadly, of reality. 
Economics is a mediating and coordination system of our interactions with reality. Elements of economic theory might still make sense, like inputs, outputs, and resources, within this broader conceptualization of mediating reality. Resources could be more expansively defined, such as 'what resources are needed as inputs to brains being able to have ideas' as opposed to 'number of units of lumber sold.' Economics, instead of being defined as the production and consumption of scarce goods and services, could be reconceived more generally as a facilitation response to reality, concretized as a discovery and interaction process where something is discovered and valorized by a party, possibly in acknowledgement, interaction, and exchange with another party.

Phase III: Crypto-economics Facilitates the Shift from the Labor Economy to the Actualization Economy
Reconceiving economics as the more generalized form of (ontologically) what it is, a coordination system, allows its purpose to be substantially opened. The primary focus of what economics is about can shift. The locus of focus can change from how scarce goods are produced and distributed to instead, something much more generalized, to what our experience of reality is, and therefore to what kinds of responses to reality we would like to facilitate and enable. The notion of reality mediation design is so greenfield that the first question is 'what is important?' Economics can become a greenfield design frame about what might be possible in general in the world.

Yes-and! Abundance Economies of Immanence expand Reality
There are arguably two levels of ‘what is important’ – sustenance and actualization. First, certainly one dimension that is important is a post-scarcity situation for the material inputs required for healthy, flourishing human lives. The blockchain automation economy is making great strides towards this. Second, once basic needs are met, the focus can become one of immanence: open-ended expansion up from baseline survival to actualization in terms of growth, learning, creativity, collaboration, and contribution. True abundance is having these two levels; not just having survival-level needs met but also and more importantly, entering more fully into an existence of immanence, of open-ended upside potentiality - the actualization economy - and spending more cognitive time in this space. Abundance Theory Studies recognizes both of these dimensions: the immanent potentiality upside of existence, together with the baseline-attaining post-scarcity situation for material goods. True Abundance Economies focus on expanding the position of yes-and improvisation energy directed to self-expression, creativity, and novelty; expanding reality in ways that matter.

Sunday, September 20, 2015

DIYastronomy Drones and Vertical DAS (Distributed Autonomous Space)

The Planetary Science Institute has announced plans for the Atsa Suborbital Observatory. Suborbital observatories are a new category of infrastructure that fits into the overall landscape of astronomical observational infrastructure between sounding rockets (expensive with only a momentary window for observation) and higher-altitude space-based observatories (Hubble, Chandra, Spitzer, Webb). Atsa is airborne-based, in this sense similar to SOFIA, though Atsa is able to access 3-5 minutes of zero-g, and is more modular, flying infrared, ultraviolet, and visible range observational equipment. For perhaps as low as $125,000, you might be able to specify your own commercial observing flight, possibly crowdfunded through Fiat Physica (‘kickstarter for physics’); in a sort of community supercomputing for astronomy.

DIYdrones and Vertical DAS (Distributed Autonomous Space)
The idea of on-demand modular observatories suggests the notion of "distributed autonomous space in space" more generally. Distributed autonomous space (self-delivering pod spaces, like mobile Airbnb for lodging, co-working, etc.) could be terrestrial, and also aerial. There is the idea of airsteading, the vertical analog to seasteading, maybe with self-flying dockable airpods; a potential feature of the future along with the road-steading one might do with self-driving vehicles. Short of funding one’s own concierge observations on Atsa, personalized drones might be employed for DIYastronomy (including via QS mind-controlled rigs). Personalized drone observatories might significantly expand the reach of both professional and amateur astronomers. There is also the possibility of adding astronomical observational nodes to space elevator stations. 3-5 minutes of zero-g time, even if expanded to 9-15 minutes by coordinated Atsa flights from Florida, Texas, and California; essentially a very-large array telescope in space, is still just a few minutes. Instead, modular, ubiquitous space elevator infrastructure might provide continual observational functionality, and other self-financing uses like solar power generation.

Cryptocitizen Decentralization Sensibility: Providing Peer Infrastructure
The emerging mindset of decentralization could include participating in networks by providing infrastructure. Citizen-supported infrastructure could supplement and eventually supplant government institution-provided infrastructure. Resilient community infrastructure and the idea of supplying peer node hosting for network resources was a hope of WiFi mesh networks. The concept of community-provided infrastructure did deploy in peer-to-peer file-sharing with Napster and BitTorrent, and community supercomputing projects like SETI@home and Protein Folding@home, and is now being considered for more kinds of infrastructure. Peer-hosted networks might be more resilient both technically and sociopolitically. Decentralized networks are more technologically sustainable and extensible. There is also a sense of self-empowerment and economic self-determination in peer-provided infrastructure, particularly as an important counterweight to corporate power in the developing blockchain industry.

Some examples of community-supported infrastructure could include self-hosted Bitcoin blockchain full transaction-history nodes (Bitcoind), datt.co (decentralized reddit), and personalized drone observation cams. DIYastronomy drones could give the world a mesh network architecture for asteroid watch and the monitoring of other space debris, and also the capture of terrestrial-based events and phenomena. Thus, the sensibility of the digital cryptocitizen could include participating in peer-supported network infrastructure for any variety of affinities; whether DIYastronomy drones for asteroid watch, blockchain ledger hosting, content hosting, decentralized Uber-Airbnb space providing, sustainable foodagtech microgreens hydroponic units, or other activities.

Sunday, September 13, 2015

A New Kind of Economic Philosophy: Network Economies of Abundance

Blockchain technology, as revolutionary as it is, is perhaps most revolutionary in exposing the corner of a whole new philosophy of economics that can be formulated as a Network Economics of Abundance. Not just a new economic theory, but a new philosophy of economics is required because the entirety of existing economic theory has been constructed around the assumption of scarcity, and reconfiguring our economic thought around abundance instead as a central parameter requires rethinking economics so profoundly as to be a new philosophical position that is outside the field of economics. Thus, it is timely to articulate a Philosophy of Abundance. Many different pieces have been emerging in the world that can be assembled into a description and future vision for this Network Economies of Abundance (Figure 1).

Click for a bigger chart.

Shifting from the Labor Economy to the Actualization Economy
First considering Paradigms, two positions can be articulated. First is Traditional Economies. We are familiar with traditional economic models where the organizing parameters are scarcity, control, hoarding, hierarchies, and relationships of power being held over others. The definition of economics concerns the production and consumption of goods and services, and success is measured by output (GDP). The goods and services that are valorized and measured in the formal economy are produced by monetary-based labor.

A second position is Network Economies of Abundance where the organizing parameters are completely reversed. This economics is based on abundance, access, availability, yes-and collaborative willingness, and power shared with others. Network Economies of Abundance are measured in fulfillment; though actualization, connection, purpose, and meaning. In a full, liberation economics, the measurement metrics are self-chosen by individuals and groups. The definition of economics has shifted, away from transactions, even if game theoretic, to interactions. Economics can be seen as a facilitation mechanism rather than a transaction mechanism. Economics becomes a discovery and exchange process, one of interaction, acknowledgement, collaboration, and creation.

Evolving Positions in Network Economies of Abundance

Network Economy: Already in the current world, distinctly different economic models have arisen and co-exist alongside the traditional model. This has always been true regarding the informal sector, and is now more recognizable. One feature that characterizes network economies is a free flow of information, and engaging and interacting with that information, and more generally active participation. Another feature is that there is a mindset shift to access rather than ownership, or at least an attunement to different ownership models, and the notions of rights, responsibilities and stewardship attached to each. There are peer-produced commons goods like Wikipedia, sharing economy properties like Uber and Airbnb, and there is a multi-currency society where other currencies such as attention and intention are monetized. Societal shared trust stems from individual identity being known by others.

Resource Grid Economy: This is what is starting to unfold now, the idea of Ubiquitous on-demand Resource Network Grids, which is fundamental in the mindshift to abundance. More and more resources are becoming fully dynamically available, lurking in the background as a resource blanket, to be called forth on-demand for use at any moment. For example, mind-controlled personalized drones could deliver on-demand items from an intention picked up by personalized QS EEG neuro-hacking rigs or smarthome personalized robots like Jibo, or the Nest. Ubiquitous resource grids are practical, and contribute to the ongoing mentality shift from scarcity to abundance. Time is freed for other higher-level cognitive engagement and enjoyment when resources are always-available on-demand, instead requiring cognitive effort to plan for availability. A simple example is having to know the bus schedule (keeping it loaded in memory) versus walking outside, opening up an app and seeing what bus is next. Societal shared trust is a function of agent reputation.

Crypto-Economy: The emerging crypto-economy uses blockchain technology and cryptocurrency tokens like Bitcoin to automate and facilitate human (and human-technology) interaction patterns. Decentralization as a new organizational paradigm extends our capabilities beyond hierarchical organizational models (both practically and values-wise (e.g.; more autonomy for all agents)) into trustless very-large scale models for coordinating world-scale activity. A million cryptocurrency tokens could bloom as the community token of individual cryptocitizens and groups for coordinating local post-monetary economies like basic income initiatives and demurrage programmable currency redistributions. Cryptographic ledgers could coordinate spot transactions (cryptocurrency) and t+n interactions with smart contracts and autonomous dapp, DAO, DAC, DCO, and datt.co entities and all physical and intangible assets registered as smart property. Societal shared trust is instantiated though smartnetwork consensus, independently non-totalizingly (integrity-preservingly) signed.

Needs-based Economy: A final position in the Network Economies of Abundance could be one in which the focal point is needs, where the needs of all entities readily surface and can be met. A needs-based economy focuses on the most important aspects and deeper level of what occurs in economic transactions. Each entity (person, group, community, country, technology entity) has needs. Some of the most important needs for humans tend to include acknowledgement, connection, contribution, meaning, and action in the world. Economics is a strategy for getting these and other needs met. Smartnetwork code entity DAOs/DACs could unobtrusively orchestrate patterns of interaction among biocryptocitizen agents to maximize needs-meeting, including by registering needs as smart assets to which token is posted to indicate degree of met-ness (basic income smart needs). Another example could be secure user-permissioned cloudmind collaborations with other human and technology entities for the purpose of problem-solving and creative expression. Societal shared trust is a priori, based on agent capacity, in digital society smartnetworks of the future.

Reference: Swan, M. (2015). Blockchain: Blueprint for a New Economy. O’Reilly Media.

Wednesday, September 02, 2015

VR Chains and DAC Brains: Upload your mind as a VR AI DAC

Blockchain thinkers or DAC Brains are the notion of having DAO/DAC entities running with smart contracts on blockchains for the purpose of conducting thinking operations. The genesis of blockchain thinkers could be organic or inorganic: human mindfile lifelogs and uploads, and any variety of brain emulations and AI ML/DL algorithms (artificial intelligence machine-learning deep-learning algorithms). One idea is to instantiate your mindfile on the blockchain as a lifelogging tracker and standalone ideation tool: your own mind as an AI DAC. Some key enablers are coming together to make personal AI DACs possible. Idea chains (lifelogging your ideas onto a blockchain) could auto-record your ideas through 1) QS (quantified self)-attached gamma wave spike tracking (recording when you are having an idea), together with 2) cortical image recognition and thought identification (what the idea is about), logged into in a 3) personalized blockchain-based VR consensus reality (coordinating ideas into your own ongoing reality view).

Immersive Virtual Reality is Digitized Experience
Immersive VR (virtual reality), like with the Oculus Rift, is not just video games, virtual worlds, or 3-D CAVE environments, it is digitized experience. Qualitatively different, immersive virtual reality is a means of making physical world experiences real in an alternative medium. VR metaverses then, are parallel realities, as distinct from multiple digital worlds. If you and I go into WoW (World of Warcraft) or SL (Second Life) separately, we see the same world. Even if different levels of views are enabled or locked (like Karl Schroeder’s tech locks in Lady of Mazes [1]), they are just different lenses on the same world. However, if you and I construct our own digital worlds, we see and create different worlds, possibly on the same basic platform, but the realities can be fundamentally different, with different participants, events, and historical records.

Reality Unity in the Physical World
Consider the physical world - there is one platform, and we each have varying reality maps or views of the physical reality platform in our heads. There is one consensus reality and historical event record, and conflicts arise out of different views of the consensus reality trying to hew to one (e.g.; “What happened? X punched Y first. No, Y shoved X first.” – we seek a unique consensus reality of events (Probability Moon further explores the notion of societal shared reality)). Centralized virtual worlds have been the same; there is one reality platform, and centralized event engines record the consensus in one shared events ledger, the game history, even in OpenGL self-hosted models. Now, however, with decentralized models powered by blockchains and dapps, DAOs, and DACs, reality multiplicity is possible. There can be simultaneously existing parallel realities. The multiverse exists, and one place it can be created is in cyberspace.

Blockchains enable Simultaneous Multiple Realities
Just as blockchains are the critical enabling technology for digital cryptocurrencies, so too are they a key facilitator of VR multiverses. Blockchains could serve as the backbone infrastructure for multiple parallel realities (VR multiverses) by coordinating the chain of event histories in these multiple realities. The transaction history is not just for transactions, but more broadly comprises the historical event record. Blockchains consensus-generate the historical record, and allow any number of separate and parallel historical records to be created simultaneously. Blockchains are the mechanism for creating and coordinating simultaneous multiple realities. The altcoin space is already an example of simultaneous separate realities.

The Selectability of all Reality Features Blockchains consensus-generate the historical record, and further, make it clear that all parameters of reality can be malleable and selectable: time, participation, reputation, memory, history (historicity), economic models (hierarchical or peer-based), and political operations (governance and decision-making). These are all selectable parameters of a reality environment. One recent revolution in economic liberation sensibility is that blockchains allow individuals and communities to self-determine economic systems. Now seen in the VR multiverse context, blockchains are revealed to be much more: they could enable all parameters of a reality environment to be selected.

Blocktime Time Malleability
One example of reality feature selectability is blocktime. The timeclock in blockchains is blocktime, the time it takes for blocks of transactions to confirm. The easiest way to specify future time moments (t+n) is via the internal time system of the blockchain, blocktime. For example, the term of a certain decentralized dapp loan might be 7000 block confirmations. Blocktime is the clocktime of blockchains. Certainly blocktime converts to physical world time, but differentials could arise and give way to arbitrage opportunities or other divergence-as-a-feature possibilities. The key point is that all reality parameters, including time and space, could become malleable in blockchains and especially in blockchain-coordinated VR metaverses. Further, if blockchains become the mechanism for keeping time and event histories, de facto they become memory, where memory is a critical functionality that feeds back directly into lifelogging and Brain-as-a-DAC idea chains.

A World of Multiple Realities
All of reality can be made malleable, personalized, self-determined, personally-constructed, emergent, and a thing of multiplicity not monolithicity. There can be an end to the tyranny of a sole reality. “End reality tyranny, create your own VR multiverse!” Deleuze's multiple inner views can bloom as described in Proust and Signs. In the new sensibility of VR multiverse reality multiplicity, an imaginable query to alien intelligence could be a Kardashev scale parameter: “To what extent do you have multiple realities in your world?

Right to Self-Determine One’s Own Realities
The earlier positions in human liberation have been the right to self-determination in certain contexts, in different parts of life and the experience of reality. These include the right to self-determination in governance, legal systems, IP protection/sharing regimes, software business models, neural data privacy rights, cognitive enhancement, and most recently, the emerging sensibility of the right to self-determine one’s own economic systems. These are all important steps in the liberty of the individual, but they are all in some sense intermediary positions on the way to the now-visible bigger position which is the right to self-determine one’s own overall reality, and really, realities (plural). A new sensibility could be seeing the right of each individual, entity (human and machine/technology entities), or group to self-define its own personal consensus reality (realities). The central component of the self-determination of organisms could be the operation of its own consensus reality(ies).

Blockchains as a Historicity Mechanism and Collaboration Space 
Blockchains are a means for consensus-generating the historical record (a historicity mechanism) to facilitate reality multiplicity, and they are the means of enabling value flow. In network economic theory, this is beyond the transactional sense of the value flow of currency from me to you, where unleashing the creation and transmission of many kinds of non-monetary value flows is the bigger picture of what is at stake and possible in creating multiple realities. Non-monetary currencies (like universal human needs for connection, contribution, mattering, and understanding) can be registered and tracked as blockchain-based smart assets. One reason for VR realities, what we are really wanting in creating new realities (via VR multiverses) is creating spaces that are free of the limiting constraints of physical realities. These constraints pertain to both the physical world and human limitations, including matter, gravity, time, illness, disability, impairment, sleep, recovery, distraction, cognitive bias, etc.) such that more freedom, exploration, collaboration, expression, creativity, fun, serendipity, progress, and contribution can be enabled. We want to cognitively enhance proximately for a better memory, sure, but ultimately to be 'bigger' in the sense of being more able to grow and participate beyond our initial position of self. We want more of the creative yes-and collaboration space of new energy and idea generation. The ‘economy’ of the future might be measured based on non-monetary value flows like ideation, which could be orchestrated by public and private reality blockchains.

Convergent Integration of Multiple Simultaneous Realities
Now possibly having a situation of multiple simultaneous realities, what is there to do with them? There are several implications for the future of privacy, sharing, and collaboration. For example, there is a question about when and how to cohere and merge VR DAC brain realities. Therefore, within realities, there might be sub-threads or other means of parsing and segmenting sub-realities.
Colored coin threads in your brain DAC could be the way to permission subreddit mind ledgers to cloudmind collaborations
Mindchains could be a means for how to safely mindshare or collaborate in a cloudmind, for example by permissioning your subreddit ledger for ideation related to certain areas as opposed to your full mindfile or meat-brain….“here, let me share everything with you I’ve thought about crowdsourced genomic studies,” or "here, join the mindslack channel for this community."

Blockchain apps could auto-merge shared realities in the way that topical queries are ambiently processed in the background now. There could be situations analogous to Hayek’s competitive currencies where reality views compete. There could be reality ecologies where repetitive threads across individual realities converge into shared group realities (the unobtrusively representative politics of the future). Right now this happens manually with the blunt tools of the physical world; we search for other individuals, groups, and institutions with our own shared values and reality view, and blockchain DACs might facilitate the automatic canvassing and convergence of all of this.

We might know that VR metaverses and the human-machine collaboration are really working when VR NPC DACs self-create in our realities per sensing our human needs (actualization, contribution, growth and learning, exploration, creation). Blockchain-based VR AI DACs could auto-sense and create whatever 'Tuscany houses' are needed to grow an entity (like a human or machine mind) in its progression. For example, in an ideas 'economy,' the most important inputs are anything which facilitates the development of ideas, and attending to this could be one purpose of a an NPC VR AI DAC in your personal VR metaverse, operating via smart contracts on your mindchain. Ideas are the demurrage-redistributable basic income of a blockchain thinker Brain DAC. Blockchain thinker Brain DACs then become another Ubiquitous Grid Resource, an important one, for idea generation, in the overall picture of the future Network Economies of Abundance.

Acknowledgement: This post was inspired by ideas from Maciej Olpinski regarding consensus in virtual reality worlds.

[1] POV HUDs are a mechanism to accommodate multiple levels of technology adoption within a society; e.g.; through my HUD, I see unimproved nature and birds tweeting; through your HUD, you see propositional nanotech 3-D printed finery self-mutating in utility fogs.

Monday, August 31, 2015

Economic Liberation: Network Economics of Abundance

Economics as API: System Design
The possibility of creating true network economies of abundance and designing personalized economic systems raises a host of issues about what kinds of behavior might result from programmed economic parameters. In moving from indirect advertiser-supported models to direct peer-supported models, for example, one first issue might be the business model - which parts of the system should (can) be free and which paid? For any paid parts, certain externalities and artificial behaviors might be created.

P2P Business Model
One of the great values of peer-produced commons goods like Wikipedia is that it is group-generated content, in part because participation has been free and easy. Further, peer-production not only powers the generation of commons resources but also flexibly shapes them into better products per multiple voices and crowd-structuring of the content. The ethos and objective of crowd-based content has been towards more participation not less. One risk is that the introduction of p2p economic system parameters might inhibit peer production by asking payment for actions that were formerly free, even if users gain more control over how their own personal data is used. Donated resources in p2p networks, freely contributed gift-economy content and hosting, are already the norm and this could persist.

Hybrid Economic Systems (economics as a system parameter)
Personalized economic systems are an equality technology and an illiberty eradication strategy, reversing the lack of liberty of not being able to self-determine one’s own economic reality. Instead, there could be greater empowerment for all individuals in being able to choose and design the economic models in which to participate. As individuals and communities, we might now be able to select the economies that correspond best to our own value systems. This could include specifically selecting a centralized or a decentralized web property or software platform. The floodgates are only just starting to open on the degree of economic system experimentation that might happen before specific models in the decentralized space become standards. Hayek advocated for each financial institution having its own currency as a market barometer of health and competitiveness (The Denationalization of Money (1976)), and this could be extended such that each individual and community has its own currency too.

Migration Plan to Hybrid Economies – Icons identify Economic System
For existing web properties, there could be a strategy to test and explore decentralized models, and ways to incorporate centralized and decentralized economic models simultaneously. This could lead to a propitious migration over time from centralized to decentralized models. One way that this could work is that the landing page of a news website could have the usual content modules of a headline and a few lines of text. This could be accompanied by two (or more) icons at the upper right of the headline identifying the economic system, for example centralized and decentralized. The user could then decide, if wanting to read the full content, whether to click for free content knowing that their data might be monetized however the site wants in the backend, or having control that their data is not going anywhere (confirmed via an inspection of the open-source software) and peer-supporting the content with a micropayment in a pre-specified and known amount. The key point is an overall sense of parameter malleability and feature-selectibility in economic systems, where the user has the freedom to decide. Users can now select economic system like any other parameter in content consumption.

Community-Voted Multi-tier Programmable Economic Systems
Economic system as a selectable parameter might be applied at different levels. For example, at the level of the content item, web property community or vertical (like Stack Exchange or Stack Overflow’s hundreds of communities), the overall website, or the collection of websites in a media consortium (all the ‘Yahoo properties’ or ‘Google properties’ have a certain economic model, for example). Each newly launching sub-property could have its own economic model, specified by the overall site owner, community moderators, facilitators, or organizers, or the community itself. Why not enroll community votes to select the economic model, or maybe launch with one model and then vote at certain liquidity intervals (e.g.; the community now has 100 or 1000 members) regarding economic model to allow different community economic models and preferences to develop over time.

Monday, August 24, 2015

Network Economies: Economic System as a Configurable Parameter

We personalize everything else, why not economic systems too? Starbucks selectability comes to economic system participations! Some interesting implications for personalized economic system design arise per a recent post about ‘Decentralized Reddit.’

The New World: Network Economies of Abundance (chart)
There are two archetypal economic systems. First is the usual indirect model that we are used to as consumers: content is free to consume, and supported by advertising, where personalized data might be sold in the backend to other parties in any number of undisclosed ways; this is true for radio, TV, and Internet content. Second is the direct model of content producers and consumers existing in a network where users (content consumers) might pay for content or for certain premium actions they can do with content like up/down-voting it. The business model is that consumer micropayments support content providers and the cost of content-hosting – this is a true peer-to-peer network ecology. The direct model is now possible due to having large and available liquid networks where supply and demand can meet in an automated auto-discovered way. Examples of decentralized p2p network concepts have been Tor, Napster, the Internet itself, and also now Bitcoin, cryptocurrencies, and blockchain technology. One way to implement the direct model is through micropayments, where users click on icons to allocate pre-specified amounts of Bitcoin or token to take community actions. The central issue in decentralized p2p content systems to be prototyped and tested is user willingness to micropay for content operations.

Economic System as a Configurable Parameter
Datt.co is engaged in developing a software platform for decentralized content hosting communities. Conceptually, this could be like a standalone decentralized reddit. The software platform could also be deployed by existing centralized content communities (like Stack Exchange and Stack Overflow) as an offered parameter at the launch of new communities. Community participants or facilitators could choose the economic model for their community, either 1) advertising-supported (the centralized indirect model), or 2) peer-supported (the decentralized direct model). Other web properties could experiment with this platform to test both kinds of economic models, for example offering private-labeled decentralized versions of Instagram, Twitter, etc. Already-existing blockchain-based decentralized versions of social networking properties like Diaspora, Twister, Gems, Reveal, and BitCloud could further extend their functionality with the decentralized content-hosting platform.

What is decentralization?
In this potentially burgeoning era of personalized economic system design at every level ranging from individual agents to group participations, there is a questioning and defining of key parameters. For example, an ongoing question is ‘What is decentralization?’ Decentralization is more than peer production. While peer production and peer participation might be a feature in decentralized economic systems, true decentralization connotes that the model itself should be decentralized, with decision-making made in a flat, non-hierarchical manner. For example, ‘peer production properties’ like AirBnB, Wikipedia, and Reddit are still centrally organized, hosted, and coordinated, and users or community participants are not able to participate in decision-making, for example about how the content they contribute is monetized, or if some of that monetization could be returned to them as content creators. The content is produced by decentralized peers, but decisions about the economy are centralized.

Tuesday, August 18, 2015

Personalized Economic Systems: Self-Determination and Economic Theory

In addition to blockchain technology, another clear node of current innovation is in self-determined economic systems. Increasingly, as individuals, we are consciously examining the economic systems into which we were born by default, and questioning their validity, utility, and reach; and proposing alternatives. In some sense capitalism is the new feudalism and there is a finally starting to be the conception and realization of a viable postcapitalist position. The new sensibility could be that economic systems are determined at the level of the individual as opposed to the level of the nation-state, and further that different economies might be appropriate at different levels of scale in an overall world of economic multiplicity. Further, economics means discovery and exchange more generally and conceptually as opposed to exclusively transactionally. As individuals we have become our own selection node for the news, information, and entertainment we consume. The same could happen with economic systems and governance systems: downscaling the locus to the level of the individual as another context for personalization and right to self-determination.

Personalized Economic Systems: Platforms and Features
There could be a new world of ‘let a million economies bloom’ (in an esprit of self-blossoming not socialism). As every individual might have their own social media platform with a channels like a blog, Twitter feed, YouTube channel, and Instagram stream, so too as individuals we might have our own personalized economic platform, with our own personal currency and economic system. A common set of feature functionality could coalesce in these programmable economic systems. The core feature set could include token issuance, exchange, and conversion mechanisms; transaction validation, confirmation, and tracking; identity and reputation management systems; bounty, reward, and appreciation systems; consensus protocol; node on-boarding/off-boarding; and basic income systems mechanism including with redistribution (demurrage) parameters.

How these features are implemented in different individual and group economies could be via a combination of pre-specification and emergence (including via community prediction market voting) through the ongoing operation of the economy. Some emerging platforms for personalized economic systems for individuals and communities include datt.co (a decentralized reddit for any user-content created community), Ethereum CIRCLES (personal economic coinplatforms for creating user-specified self-determined economies), HyLo (social network based on intentionality of asset-mapping, intent-casting, and crowd-resourcing), and those integrating direct democracy with economic empowerment like D-CENT, LiquidFeedback, and Citizen Code.

Qualitative Economics: Registering Values as Smart Assets
Blockchains are not essential but are the obvious and contemporary information technology to include to facilitate personal economic systems and enable new kinds of functionality. For example, qualitative parameters such as group values and group needs could be registered as blockchain-based smart assets to which community coin is booked, spent, or voted to indicate the level to which the group values and needs are being met. This could be an integrated and minimally-obtrusive feedback mechanism for awareness of how community values are evolving, and the extent to which they are being embodied. There could be multiple community tokens: quantitative coin for the usual basic exchange, and qualitative coin for tracking ideas, inspiration, and other values, benefits, or needs of the community registered as smart assets. Overall this is what is meant by ‘the new economic theory’ as being a means of acknowledging and attributing value in a relevant context like an individual, group, or community.

Monday, August 10, 2015

Smartgrid Life: Blockchain Cryptosustainability

The contemporary era of blockchains as an implementation mechanism for decentralization suggests a new overall conceptualization of life as being supported by any number of smartgrids. Distributed network grids is a familiar idea for resources such as water, electricity, health services, and Internet access, and might be extended to other resources, literally and conceptually. One example is on-demand microcoaching, for example guidance for playing a certain guitar solo with Piano++. Jeremy Rifkin, in Zero Marginal Cost Society and other books, outlines the grid paradigm, contemplating three smartnetworks: Internet communications grids, energy grids, and logistics grids. Evelyn Rodriguez adds another grid, local fresh produce, in the notion of Food as Distributed Commons, possibly in the form of a blockchain-based PopupFarm Grid DCO (distributed collaborative organization).

PopupFarm Grid
The idea of the PopupFarm Grid is that the 'urban farm grid' or 'fresh food grid' is like an energy grid. As the energy grid could be participative with solar panel installers selling unused power back to the grid, so too could urban fresh food be a peer-based collaborative production. Anyone could purchase a hydroponics unit and make capacity and outputs flexibly available on the urban food grid for community consumption. There could be an Uber-like mapping app to find the local hydroponics units with items fresh and maturing today, in an on-demand real-time updating reservation-taking system. This could lead to better utilization of fresh produce, improved health, and local community sustainability, knowledge-transfer, and self-sufficiency.

Consumers could own cryptoshares in virtual food cooperatives (like permacredits, the concept of a global affinity currency supporting local operations), and arrive and pay with community token. There could be dynamic supply-demand management and rebalancing at the community level. A series of smart contracts could onboard/offboard the diverse use cases and bridge time gaps. For example, land permitted for 2018 could already join the P2P network (similar to Lazooz drivers pre-earning token), to start earning community participation against future capacity. The paper-route of the future could be kids learning and participating in container maintenance for neighborhood urban food units. There could be decentralized exchange with software from OpenBazar or BitMarkets (decentralized versions of CraigsList). Another piece in the value chain could be idle Uber drivers (Lazooz in the decentralized model) and TaskRabbit, etc. gophers fulfilling delivery on-demand.

Cryptocitizen Mentality and Cryptosustainability Communities
The emerging cryptocitizen mentality is a new level of self-responsibility-taking: designing, iterating, and participating in community sustainability initiatives, including self-defining economic models. Cryptosustainability means sustainability in low-footprint mindful use of environmental resources, and also sustainability in human society organization models, where the idea is to build, prototype, and iterate new and innovative ways of doing things at various levels of scale. There can be a lot of energy when a community comes together at the beginning of a project, but keeping the energy resident over years and different phases of the project can be elusive. Blockchains are useful for this because they can help to build community trust and transparency by keeping information and record-keeping accessible. Blockchain-based cooperatives can build trust through the transparency and auditability of community operations. Anyone can check the record anytime. This could be useful for distributed decentralized governance and the coordination of cooperative shared ownership. Blockchain smart contracts can also help facilitate ongoing community processes, for example with modules for voting and decision-making with liquid democracy (e.g.; on-demand participative democracy) in proposal development, coordination, and voting; demand-planning ahead of time regarding the amount and type food wanted this year with a prediction market like from Augur; and a P2P dispute resolution and moderation with a PrecedentCoin module.