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One of the major blockchain events of this year— Ethereal — took place on May 11-12 in New York City. Many prominent people participated in it and discussed the most recent developments and future projections of blockchain technology. Joseph Lubin who is the founder of ConsenSys gave an inspiring presentation about the Future of Blockchain and Ethereum. Below are some of the thoughts on the future of blockchain and how (quickly) it is going to affect perhaps every aspect of our daily lives.
“Nothing at Stake” Problem
Probably one of the biggest problems we are facing nowadays is that there are too few people today who feel that they can make impact to society or that they are real stakeholders in human enterprise. In fact, most of us are working for the benefit of others, being unable to pursue our own economic agency. More specifically, we can notice that in our current society there is too little ownership, not much self-sufficiency or personal sovereignty. On the contrary, most environments in which we interact are permeated by hierarchical structures and top-down command and control.
This “nothing at stake” problem could be solved if each of us had a little more ownership or sense that things we do can leave a mark or make this world a better place. Economies can function only where there is excess of produced goods; excess of production enables us to build connections and interdependences, establish reliance on one another. This applies to inter-personal relationships as well as relations between states or corporations. Two entities who engage in productive enterprise are less likely to wish each other harm or attempt to plunder each other’s resources.
Imagine a world of where everyone owns a stake in everyone else’s project and is tangibly incentivized to root for everyone’s success. In such a world, each and everyone of us are builders and doers, rather than breakers of agreements or destroyers of value.
The Nature of the Firm, v.2.0
In 1937, an economist known under the name of Ronald Coase wrote a paper The Nature of the Firm. Coase looked at a corporations through the lens of transaction costs. He wondered why in democratic, free, open and efficient markets such hierarchical entities as corporations still exist.
Coase determined certain inefficiencies when individuals interact with each other. For example, significant time and effort may be required to search for necessary resources, bargain and come to an agreement with a counter-party. He found out that search and bargaining costs can be reduced by internalizing certain economic activities: it may be cheaper and faster to make by myself than buy from somebody else. As the company grows, the cost of marginal transaction may decreasing than getting that done in an open market.
By employing the notion of “transaction costs”, Coase tried to identify the optimal size of corporations. As technologies develop and the cost of communication grow, we can notice that the size of optimal corporation is shrinking and could be downsized to individual. Furthermore, in a context in which communication becomes uber-fast and cheap, it makes sense to outsource almost everything. In fact, in the wake of technological development we may be able to see small groups of individuals create and implement profound things.
Some people are afraid that new technologies such as artificial intelligence, robotics, AR/VR, or blockchain are going to destroy our jobs, or destroy our lives. Indeed, those recent technological advancements are gradually permeating more and more aspects of our lives. Instead of worrying that those technologies would destroy our jobs or cause irreparable harm, we can take a more optimistic view and believe that those technologies will create better jobs. We should should think how these new technologies could free us from scarcity mindset and help us re-orient our thinking towards pursuit of creativity, development, growth, physical and societal health.
Blockchain, or the Internet of Trusted Interactions
Blockchain enables us to move away from the society dominated by powerful and biased intermediaries towards a world are more atomic infrastructure. One of the core values of blockchain is that it creates a shared and trusted infrastructure. This is achieved by enabling different actors to have access to the data and that it is very difficult to cheat the system or regulate it. On a larger scale, the nature of our database systems influences the structure of the society (just stop and think about it).
Blockchain with its shared infrastructure is helping to create better collaborating systems. Together with robotics & AI, it enables us to move towards a society where we no longer need to be concerned about such bare necessities of life as food, shelter or transportation.
We are moving from a world where people are taking care of transportation where people are driving many hours to work and flipping burgers to earn an extra dime to a world in which we will be well-educated, festival-going gamers. :) Education will become playful, and we will be expressing ourselves in multiple different ways. We will be engaging in physical as well as virtual sports. We will be pursuing health. Wouldn’t it be interesting if the society freed from focusing on survival, scarcity mindset and becomes oriented to the pursuit of emotional and societal health? Blockchain enables us to think how we could extend our species from this blue dot we are living. Rather than being controlled by a single corporation or a single government, we can think about possible ways to collaborate on major projects such as space race.
Veridical, Trust minimizing Computing
The nature of our database systems influences the nature how we are able to structure societies. The society we live in now connected by intermediaries (“silos”), “siloed” databases and “siloed” businesses. That naturally has implications on how laws are written and how we conduct our lives. As we have this opportunity to build a shared data infrastructure, we can think of building better infrastructures.
One of the core values of blockchain is that it is building an infrastructure for trust. This is achieved because different actors on the network have access to the data which makes it almost impossible to manipulate or cheat the system When every stakeholder on the blockchain-based peer-to-peer network has their own copy of the data and their own copy of the rules (i.e., smart contracts) by which the state of the data may be affected, everyone can feel assured that there is not opportunity for improper manipulation of the system by rogue system administrators or hackers.
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