Towards a Dynamic Economic, Social and Political Mesh

Transcript

[Music] cool good morning um is this working cool um day five it's been awesome so far um I'm going to speak on uh uh towards a dynamic economic social and political mesh um November 2013 after uh working on various Bitcoin Bitcoin 2.0 projects V uh wrote version one of the ethereum white paper uh in January 2014 in Miami uh it was announced uh to some

Fanfare actually um July 30 2015 ethereum 1 was released many people around the world constructed their own Genesis blocks um fired up the client they downloaded and watched in amazement as this tool which embodied a new organizing principle for Humanity organized itself into existence uh the ethereum project has built the first general purpose World computer its Dynamics and capabilities arise from a Synergy of five interacting technological elements that are common between the Bitcoin and the ethereum protocols uh first is a blockchain um data structure sure that you're all uh quite aware of uh second is the

cryptographic token the Bitcoin or ether uh third is p toer networking systems so that turns a traditional client server like infrastructure into a an infrastructure in which all nodes are clients and servers um consensus formation algorithm in ethereum all transaction processors uh come to consensus about what happened and when with respect to transmission and storage of The Ether value token as well as coming to an agreement about all the processing that occurs on all the shared programs on the world computer um Fifth Element is a virtual machine uh uh Bitcoin has a a very simple virtual machine a very simple

programming language um essentially if you're going to build an application on bitcoin um you need to figure out how to stuff all the data that you care about into a a small number of bites um and you need to build Behavior onto that you have to build that generally outside of the protocol um and if you want it to be secure you need specialist developers to to use cryptographic Primitives to do so um so ethereum's core value at least with uh uh with respect to bitcoin um is that ARB arbitrarily complex decentralized applications can be built by non-specialist programmers uh entirely within the protocol

um so these five components uh combined to represent a computational resource a bandwidth resource and uh very expensive storage resource um and essentially ethereum is a global computational resource um Beyond um it can do all the things that Bitcoin can do and Beyond what Bitcoin can do it enables uncensorable uh pseudonymous transmission of value on a global system in which all the transaction processors agree on what happened and when um to this decentralized world computation substrate uh we can add storage uh on other types of decentralized systems and bandwidth on

other types of decentralized systems and you get the ethereum world computer uh it's transparent um deeply secure non-repudiable um transactions um and natively interoperable meaning it's easy to uh have one program use another program's data or to call functions from another program um and essentially the ethereum world computer serves as a substrate for building global economic social and political systems um ethereum world computer also represents a strong cryptographic or mathematical foundation on which to build all of our systems um as compared to um systems that are built um uh of

humans and laws um uh so um legal business Information Systems in those contexts uh tend to be siloed um improper manipulation of information uh is common and consequently over concentration of power prevails um the ethereum ethereum version one is largely feature complete um it's released it's running beautifully lots of people around the world including many people here are building decentralized applications for it uh it was important to get it out in the world as quickly as possible so that we could all learn to build decentralized applications and figure out how to to build companies and

decentralized companies um in the space um I think we have a few years before we really require a scalable protocol um and that is certainly underway so there lots of projects that have been going on for a year or so um towards that um and in my opinion scalability is the Holy Grail uh first system to achieve it um will probably dominate for quite a while um so consensus and uh many other developers here and around the world um are building uh at the foundation uh application layer of ethereum an economic social and political operating

system so that's a a set of core components on which we can all build applications that that will enable the world to run itself according to a horizontal consensus driven organizing Principle as opposed to the tra traditional top- down command and control Paradigm um some of these core components include wallet identity reputation system Registries token issuance and management token exchange stable token systems voting systems cron systems glue systems uh and more cron systems apparently um uh micro payment channels uh another um critical element for um for massive

scalability uh dap stores dap stores everywhere for lots of different uh uh kinds of purposes uh uh many different libraries we're going to have to uh essentially um build all of the libraries onto this decentralized infrastructure uh eventually um and metamask so um browsers different kinds of browsers to uh to enable different kinds of devices um in different context to be nodes on the network um on top of these components we and others are building Standalone decentralized applications so triple entry accounting system smart document creation and management system decentralized Reddit uh governance

system crowdfunding system uh we're experimenting with different financial instruments including a total return Swap and and a call spread um we're building a couple of games um and more games soon um the other major component of what we're doing and what other groups are doing are open platforms or open industry platforms uh so these platforms are one approach to building a mesh of businesses um so we build the platform Define an initial set of interacting roles on the platform uh possibly fill some of those roles stand up some businesses to fill those roles initially and um and let Market forces uh take over and let the platform evolve so we

anticipate that uh um uh people in their Ingenuity will um create many more roles on these open platforms um to create these platforms uh we sell tokens that are intrinsic to the operation of the platform um tokens Can represent governance and dividend rights uh tokens uh can fund a foundation uh which Shepherds future development um might sound familiar um many people and companies uh can be on these platforms uh and make a living or make a partial living um so some of the platforms uh that are under development our our prediction markets platform our music

industry platform our event and community community management platform ether poker will be a platform and ether loan is also under development um other platforms that are out there uh include slock uh slock is both uh software and soon to be a decentralized organization uh maker same thing um two of the platforms that we built are uh an open energy markets platform or that we are building is an open energy markets platform and a community supported agriculture platform these are resource generation platforms um so they both have the same underlying architecture there are gener ators um photovoltaic arrays or Farms um soil

seeds water um and these on these platforms uh um stakeholders generate a resource kilowatt hours apples potatoes uh they optionally store the resource uh they issue tokens against the resource um and they sell tokens into the open market which can be deemed either on a spot Market um or they can also issue Futures and options um so that uh the generators can hedge their activity and consumers can plan and provision um uh these platforms will each constitute meshes of businesses and these meshes will probably interoperate

there will be uh overlapping meshes of meshes um so you can imagine in a day or in a a year or two um Alice can possibly trade her kilowatt hours and potato tokens for Bob's Apple tokens um probably on ether um so the invention of money um has been spectacular for society even top down command and control has taken us to this which is quite spectacular um but we can probably do better uh money is an abstra an abstraction that facilitates barter um but the money abstraction has required levers of control and power um money those lever cause money to SLO around the world

creating um tremendous growth or tremendous dir uh essentially um instabilities it's a control system that uh uh tends to overshoot quite often um so having our tokens directly backed by assets um or resources should reduce much of the instability that the use of money systems introduces um this gives you all the goodness of barter without having to carry a cow or be oil around with you um so the nothing at stake problem so perhaps the biggest problem we face in the world today is that there are too few people uh who feel they have real stake uh in the human Enterprise um

there's too little ownership too little self-sufficiency too little personal sovereignty um too much leeching on the week or looting from the state a gentleman named Ronald Coos won the nobbel prize for his theory of the the corporation um um as a company grows the cost of the marginal transaction uh needs to be less than getting that same task done in the open market um there are efficiencies um when communication is expensive and de decision- making is slow and expensive there are inefficiencies in in keeping those mechanisms internal rather than throwing them into the open market um so that effectively um um when he was thinking

about that that limited the optimal size of the corporation um but if you turn this thinking around then we can think about uh um the minimal optimal size of the corporation uh so in a context in which Communications and decision- making are fast and cheap um makes sense to Outsource everything uh into the open market except your core competency um 10 years ago cost a lot of money to do a tech startup today costs less money um two years from now um will probably cost remarkably less money um when it costs $500 or $50 to form a startup that solves a local or Global problem recognized by a smart

entrepreneur anywhere in the world um we will really be on our way to becoming a planet of stakeholders uh so consensus is still working out the details of its organizational structuring plans but uh in Broad Strokes uh consensus is a constellation of projects or companies projects that will become companies in a hub and spoke architecture every member um will have equity in the hub every member will have direct equity in their own projects um we aim uh it is our major goal to um have and continue to facilitate rapid full open Communications sharing collaboration um

and we will do this uh with me mechanisms that incentivize all to share information help each other out um and essentially root for each other to succeed because we all own everything um so we're currently constructing protocols which make use of some of the core components we built to structure govern and operate the consensus Hub on the blockchain um also each of our spoke projects will be able to independently structure govern and perhaps fund uh and operate themselves using those exact same tools so each spoke project is essentially a quasi independent entity um and all of those quasi

independent entities are actually quite interdependent on one another when that ceases to be the case um then there's nothing stopping them from spinning out and and doing their own thing uh so consensus encourages the entrepreneurial Spirit uh Founders on a project will form the project using these same tools Uh define equity splits and then negotiate terms with their consensus peers um if they wish to attach that project to the consensus mesh um going to these are partially written these are protocols for using a bunch of the tools that uh we've built um for building blockchainbased orgs um and also potentially building blockchainbased orgs that have uh State

registration as well so the visible hand Protocols are in the early stages of development they suggestions they're not mandatory if an org uh wants to form itself Fork any of the protocols modify them they're certainly free to do so um the visible hand protocols make use of a suite of tools we're calling blockwork org uh for building and running blockchain resident organizations um The Suite of tools includes wallet ID Persona reputation boardroom way fund regist token issuance and management token exchange uh accounting smart document formation and management um and eventually uh we would love to see a

GitHub like system to enable us to manage uh some of our day-to-day or all of our day-to-day activity so what that would look like would be uh core members of a project essentially Define a suite of tests and throw some bounties out into uh the system and ideally people from all over the world world uh show up uh write some code pass the test doesn't even have to be code it can be a logo or a piece of Pros as long as the tests um can be passed and that can involve a suite of oracles perhaps um then the Bounty gets paid um so this mesh and government

structure enables startup minded entrepreneurs to pursue one or more of their projects while benefiting from the diversification of the entire consensus portfolio ideally this mesh will be composed of many intern interconnected Hub and spoke structures with more being constantly added or fading out of existence as they're no longer necessary um we expect that with people all all over the world contributing to projects and collecting bounties the boundaries of of the consensus mesh will fade um and perhaps uh in time consensus will be seen as the Genesis Hub of a large spreading mesh of hubs so consensus as a hub and spoke system and ideally many of

our spokes will grow into Hub and spoke systems in their own right uh consensus and some of these blockchain resident spoke orgs will often be anchored in the real corporate world uh with properly constructed articles of Association that reference blockchain governance mechanisms uh certain jurisdictions have expressed to us interest in helping create hybrid blockchain resident uh black blockchainbased State resident organizations uh and I expect that this will supercharge jurisdictional uh incentives Taxation and Regulatory competition uh other platforms that you've heard about at this conference and in other places are constructing

their own meshes uh Nexus uh is it sounds like they're putting together a a decentralized organization um for their ethereum name system maker will be a decentralized organization augur has done a great job on building a decentralized organization slock will do a great job on building a decentralized organization um slock is an amazing proposition um basically giving everybody a chance to own a large piece of The Internet of Things um that's a pretty tangible stake in the world um I expect that there will be meshes of blockchains uh so underlying meshes of businesses will have an infrastructure

constituting uh constituted of Mees meshes of blockchain so the public ethereum network because of its computational power can be side chained to any other blockchain protocol uh private and semi-private Consortium chains um can be side chains of public ethereum um or um it's very easy to access a public chain a Consortium chain and the public chain um in a single business process uh so it should be easier and less expensive to start fund and operate a wide variety of businesses on the blockchain so I expect that

non-developers um will also benefit massively from this mesh um uh I imagine there will be many Innovative uh developments but you can imagine cognitive tasks like uh translation um so I've been hearing some people say uh that this blockchain thing is going to take over the world or that ethereum will take over over the world even a couple people jokingly said that consensus is going to take over the world um so top down centralized command and control with its concomitant siloed information and power is unstable uh it's inefficient it's not very well it's

reasonably effective but it could be more effective um but big prizes uh like The Wealth of Nations um tend to attract capture by well-resourced patient groups um so they're always have been uh cycles of Revolution and consolidation um and if inevitably since power corrupts uh the new boss becomes just like the old boss um but the mesh is fine grain flat responsive and efficient so Solutions will emerge from it to solve problems when and when done the elements will reconfigure themselves and solve a different problem these are Quasi stable Dynamic equilibria imbalances and frictions or blockages will not be able

to persist enabling Fair more fluid unsoed systems so if successful this blockchain thing might just make it impossible to take over the world so if we combine A fine grain set of overlapping economic meshes with a plethora of resource or asset back tokens uh you might just have a quasi stable foundation for a global economy this could enable a world of mostly stakeholders uh and with nothing but stakeholders there's much creation and little destruction um which sets the stage for extremely rapid exponential growth to the Moon thank you