Think Bigger. Aim Higher. Go Further.

Month: December 2013

The NWO On The Block Chain

frictionThe first line of Satoshi Nakamoto’s white paper reads as follows: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”  The goal is achieved quite simply by removing three frictions to the exchange of value among people.  

The First Friction:

The Bitcoin protocol goes to great effort to foil the bad players and reward the good kids with game based incentives.  The probable cost of an attack is greater than the likely benefit of attempting to do so.  This wipes out the massive and hugely expensive vetting apparatus of verification, fraud investigators, audits, charge backs, legal claims, and courts. 

The Second Friction:

With the judicial use of cryptography, the BCP wipes out a colossal industry of third party brokerage activity that withholds information about transactions ostensibly in the name of trust, fairness, and privacy.

The Bitcoin Protocol Analogy

The most obvious Bitcoin analog is to Gold; everyone gets this.  Due to the economics of scarcity, miners have an incentive to expend resources in order to add more gold to circulation.  However, as the scarce resource becomes more expensive to extract, the incentive shifts to transaction fees as reward for participating in the digital value exchange.  

Transactions are abundant. There is potentially no limit to the amount of transactions that can take place.  Participating in a transaction today does not remove future transactions from the account balance.  In fact, transactions can be created by anyone at any time, and combined or subdivided in any number or ways.  

The Third Friction:

The social analogy should be crystal clear, if not prophetic.  As Consumption Capital becomes unsustainable, Abundance Capital will emerge as the primary generator of value creation between people.  As such, the strategy for success in the BCP era, is not in the domain of tangible consumption, it is in the domain of intangible transactions.  In other words, everything that we call “intangible” in the Era of Scarcity, becomes “tangible” in the Era of Abundance, and vice versa.  

The New Tangibles:

The tangibles assets of the post BCP era are knowledge, innovation, and wisdom of people and communities of people as an abundant and recurring resource.  The business methods of the post BCP era will require the promotion, exchange, and manifestation of knowledge, innovation, and wisdom among communities of people.

New Factors of Production:

Productivity is in the old economy meant increasing the amount of stuff that can be made a certain amount of time.  In the new, productivity will involve maximizing the interaction of people within a certain amount of time, where the largest denomination is a natural lifetime.  The World According to the BCP is the world that was meant to be, not the world that exists today.

What if Everyone Was a Bitcoin?

BuckyCoinThere is no shortage of articles waxing aloof about how Bitcoin is just another example of a very few people controlling a very large percentage of an impossibly scarce object.  Others argue that the carbon footprint of Bitcoin mining is so excessive that the last coin will require all the energy of the Sun to finally extract.  Finally, Bitcoin are not backed by real form of productivity, instead, they are backed by the “the full faith and credit of the issuing algorithm”…. and, we all know how that goes.

What if all three of these problems could be solved quickly, cheaply, and permanently?  Suppose then that every person was represented by his or her own colored coin?  As such, each person owns all 21 million shares.  Proof of work is, in fact, a real proof of having created something through thoughts or actions managed through smart contracts in the block chain protocol. 

You don’t need to understand the mechanics, except that your currency is backed by your true net productivity.  Simple.

But the plot thickens.  A person with 21 million shares can give those shares to another person in exchange for something valuable.  The holder of the shares now has it in their best interest that the issuer is successful in life so that holder may enjoy increased valuation as the issuer’s coin become scarcer.  Of course it would be wise to diversify one’s holdings so an investor would try to hold as many different coins representing as many different people as possible, you know, in case one of them gets hit by a bus.

Talking about busses, it would be in the best interest of society to make sure that public transportation is safe and efficient because at any given time, they carry a valuable collection of social agreements to their collective proof-of-work event – an social analogy to a block chain itself.   

Now if we were all issuing currencies to each other and it was in all of our best interest that the other is successful, then a “generalized reciprocity” of favors, exchanges, and values would emerge in society.  The value of one’s community would reflect on the value of one’s personal coinage and vice versa.  The incentive to innovate new ways to create value in a community would be staggering having an impact on everything from governance to medical care.  The highest impact humans would become wealthy as everyone invests in their coinage.  Volatility would be reduced as everyone learns to be high impact as well. 

Not unlike any talented actress or gifted athlete, a form of human agency would emerge where some people specialize in the support and representation of high impact persons.   Teachers for example, would forego tuition in exchange for a dividend in their student’s future productivity.  Mentors would “cash in” their world experience by teaching people how to be successful instead of competing to the death (literally and figuratively). The things that people would build and create will reflect things that are useful to their stockholders.   

So as we look at the Block Chain Protocol for social utility far beyond Bitcoin, consider that the current flaws may be the future cures in disguise for some of our own deepest societal failures.   Do not overlook the implications of an economy where the intangibles become tangible.  This fact alone will measure into existence trillions of “units” of invisible value that are nowhere to be found in current accounting balance sheets.   That may be the fastest and most practical way to pay off the debt we owe to ourselves and our planet.

Occupy BitCoin

occupy BTC picOccupy Wall Street had the effect of “measuring into existence” the 99% of people who subsidize the economic liberty of the top 1%. Now, with the BitCoin Protocol, the financial information gap between the 99% and the 1% is about to disappear. This is a fleeting moment in history and an opportunity that we must take for all it’s worth.

BitCoin, used as a currency, is a sideshow in comparison to the possibilities in the Block Chain Protocol (BCP) for frictionless transfer of ALL forms of value.  The best description that I’ve heard is that BitCoin is a “protocol for the synchronization of information”.   This feature alone – not the digital currency itself – is what will eventually doom brokers to a life of actually producing something of value for society.

The Block Chain Protocol can eliminate trillions of dollars in unnecessary friction from ANY transfer of value – not just money. But most importantly, the BCP provides a way to “measure into existence” human value attributes such as knowledge, innovation, and wisdom in a digital format and public repository.  Speculators are clearly not counting on 7 billion virtual currencies representing each individual contributor in an economy.  

People are Corporations

A well know politician once said “Corporations are people, my friend”. What he failed to realize, is that people could also be corporations.  The BCP allows everyone to equally access the right to become their own economic entity responding to real supply and demand for useful goods and services; raising money in a public stock market; holding individual IPOs; combining knowledge assets with others of their choosing; affixing contracts; time stamping tranactions; and issuing “BitShares” against future productivity as currency – all without any financial friction or corporate barriers whatsoever.   

The post-Dollar economy

Anyone with basic understanding of high-school mathematics can demonstrate how 50 Trillion Dollars in global debt, at compounding interest, can never be paid back.  This is an economic reality.  The question becomes, what kind of world do we want after the expiration of fiat currencies?  Will BitCoin, as a storage of value, amount to a convenient placeholder while the old financial system reboots anew in digital form, or is there a greater opportunity for humanity in mining BitShares?

When a currency enters hyperinflation, the results are characterized by the rapid and chaotic transfer of government (public) property to private holders – or vice versa. However, things could be very different with a third option that could actually advance civilization to a higher order.

In its nascent state, we describe this third option with terms like; The Commons, Open Source, Crowd Source, Crowd Fund, Social Capital, P2P, etc.  There are hundreds of thousands of start-ups and co-operatives (formal and informal) separately aiming down this path.  They need tools that help them integrate so that the output of one application becomes the input of the next application. The longer that they can operate outside of the fiat system (without reconversion to dollars), the greater they will fortify the next economic paradigm against unsecured currencies.

The End Game

Politicians have demonstrated their willingness and ability to bring the economy, and everyone’s associated assets, to the brink of collapse. This game survives only because the extractive 1% cannot build walls high enough to protect them against a complete financial meltdown. They still need food, clean water, electricity, medical care, education, civil services, transportation, and renewable energy … all the stuff produced by the 99%!

Suppose that the world were given the choice between a BitCoin, backed by nothing, and a BitShare backed by community productivity of all useful things?  The choice would be obvious thus creating the mother of all hedge funds resulting in the decentralization of value and power to the “The Commons” regulated by the open source technology of the Block Chain Protocol.    

Call to Action

We have a great opportunity ahead of us and only a few years to accomplish it before the BCP is compromised by decentralize money without also decentralizing all factors of production.  We simply can’t afford to let this go unanswered.   

We need to build the interfaces, the structures, application, and governance that will allow human “Intangibles” to become digital “tangibles”.  Only this will enable human flourishing over human extinguishing.  We need to turn our collective intelligence and computational horsepower to the epic task of mining BitShares, not necessarily BitCoins.

References:

How The Bitcoin Protocol Actually Works

Bitcoin Wiki – Contracts

True Value of Bitcoin – Stefan Molyneux

 

Factors Of Production For The Crypto Economy

One of the more interesting definitions and implications of BitCoin comes from Stephan Molyneux in this video.  His key points include:

1. Definition of BitCoin: a protocol for the synchronization of information.

2. The BitCoin block chain ledger can contain ANY information such as contracts, user agreements, DNA sequence, Patents, time stamps, contingency claims, even other crypto-currencies, etc, etc, … via scripts.

3. The greatest innovations will be in the development of these scripts as society re-organizes itself displacing banks, lawyers, conflict, and poverty to more productive enterprise.

With the reinvention of money comes the reinvention of productivity.  Each and every person now has the ability to become their own “corporation” by creating scripts that embed knowledge in the form of a tangible asset.   

The Ingenesist Project has been working in this area for a long time and we will unveil Curiosumé at the Future of Money and Technology Summit in San Francisco on December 9, 2013. The following images explain the Curiosumé protocol.

 

FOM&T Promo 1.1

FOM&T Promo 2

 

 

 

 

 

 

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