Tag Archives: Blockchain

The economy is more a messy, fractal living thing than a machine


In Our Own Image: Savior or Destroyer? The History and Future of Artificial Intelligence, Author: George Zarkadakis.

By George Zarkadakis – Mainstream economics is built on the premise that the economy is a machine-like system operating at equilibrium. According to this idea, individual actors – such as companies, government departments and consumers – behave in a rational way.

Ever since the invention of the assembly line, corporations have been like medieval cities: building walls around themselves and then trading with other ‘cities’ and consumers.

The so-called ‘gig economy’ is only the beginning of a profound economic, social and political transformation. For the moment, these new ways of working are still controlled by old-style businesses models – platforms that essentially sell ‘trust’ via reviews and verification, or by plugging into existing financial and legal systems.

Blockchain technologies promise to replace these trusted third parties with a huge digital record book, spreading out organically across a network of computers that grows and changes but can’t be meddled with.

By getting rid of middlemen, they’re likely to radically reduce transaction costs, and accelerate the mixing of many different actors in the new economy who have been freed from the grip of leaders or institutions. more> https://goo.gl/Gs6f4B

Updates from GE

Beyond Bitcoin: Digital Currency Among Many Industrial Applications For Blockchain
By Mark Egan & Dorothy Pomerantz – Ben Beckmann works as the lead scientist in the complex systems engineering lab at GE Global Research in Niskayuna, New York. In 2012, he made a seemingly inconsequential wager: He bet one of his colleagues that the electronic currency bitcoin would fail.

Bitcoins started trading for pennies after the currency launched in 2009. Today, you can buy one bitcoin for $2,200. Beckmann lost the bet and took his colleague for a nice meal. “If we had taken the $100 we spent on dinner and invested it in bitcoins at the start, we would be millionaires,” Beckmann laughs.

Losing the bet pushed Beckman to take a closer look at the code behind bitcoin. He and others at GE discovered that the real magic that made it work was a public digital ledger called blockchain that keeps a chronological record of all bitcoin transactions. But the currency is just one blockchain application. The technology could be used for tracking trade, contracts, and even renewable energy.

Maja Vujinovic, technical product manager at GE Digital, is leading a push to explore and develop blockchain across the company. She’s looking at everything from purchase orders and budget reconciliation and parts tracking. “The bank receives a fee for every transaction,” Vujinovic  says. “If we can remove the bank and establish a trust mechanism instead, that will save us a lot of money.” more> https://goo.gl/5XIWo7

The Blockchain Will Do to the Financial System What the Internet Did to Media

By Joichi ItoNeha NarulaRobleh Ali – Even years into the deployment of the internet, many believed that it was still a fad.

Fast forward two decades: Will we soon be seeing a similar impact from cryptocurrencies and blockchains?

There are certainly many parallels. Like the internet, cryptocurrencies such as Bitcoin are driven by advances in core technologies along with a new, open architecture — the Bitcoin blockchain. Like the internet, this technology is designed to be decentralized, with “layers,” where each layer is defined by an interoperable open protocol on top of which companies, as well as individuals, can build products and services.

Like the internet, in the early stages of development there are many competing technologies, so it’s important to specify which blockchain you’re talking about.

The internet and its layers took decades to develop, with each technical layer unlocking an explosion of creative and entrepreneurial activity.

Early on, Ethernet standardized the way in which computers transmitted bits over wires, and companies such as 3Com were able to build empires on their network switching products.

The TCP/IP protocol was used to address and control how packets of data were routed between computers. Cisco built products like network routers, capitalizing on that protocol, and by March 2000 Cisco was the most valuable company in the world.

In 1989 Tim Berners-Lee developed HTTP, another open, permissionless protocol, and the web enabled businesses such as eBay, Google, and Amazon. more> https://goo.gl/LCuZG0

The great cryptocurrency heist

By E J Spode – We need to talk about trust and its place in the fabric of our lives. Trust seems to be in short supply these days, although we have no choice but to rely on it.

We trust schools and babysitters to look after our children. We trust banks to hold our money and to transfer it safely for us. We trust insurance companies to pay us should we meet with some disaster. When we make a large purchase – such as a house – we trust our solicitors or an escrow company to hold the funds until the transaction is complete. We trust regulators and governments to make sure these institutions are doing what they are supposed to be doing.

A good way to wrap our minds around ‘blockchain’ concept is to think of its most famous application: Bitcoin. And the best way to think about Bitcoin is not in terms of coins at all but rather as a giant ledger.

Bitcoin is just one version of the blockchain. The fundamental technology has the potential to replace a much wider range of human institutions in which we use trust to reach a consensus about a state of affairs. It could provide a definitive record for property transfers, from diamonds to Porsches to original Picassos. It could be used to record contracts, to certify the authenticity of valuable goods, or to securely store your health records (and keep track of anyone who’s ever accessed them).

But there’s a catch: what about the faithful ‘execution’ of a contract? Doesn’t that require trust as well?

What good is an agr’ement, after all, if the text is there but people don’t respect it, and don’t follow through on their obligations? more> https://goo.gl/rW7huO

Central Bank Digital Currencies: A Revolution in Banking?

By Ellen Brown – To reiterate: this is what banks do now. Banks are not intermediaries taking in deposits and lending them out. When a bank issues a loan for a mortgage, it simply writes the sum into the borrower’s account. The borrower writes a check to his seller, which is deposited in the seller’s bank, where it is called a “new” deposit and added to that bank’s “excess reserves.” The issuing bank then borrows this money back from the banking system overnight if necessary to balance its books, returning the funds the next morning.

The whole rigmarole is repeated the next night, and the next and the next.

In a public blockchain system, this shell game could be dispensed with. The borrower would be his own banker, turning his own promise to repay into money. “Smart contracts” coded into the blockchain could make these transactions subject to terms and conditions similar to those for loans now.

Favoritism and corruption could be eliminated, by eliminating the need for a banker middleman who serves as gatekeeper to the public credit machine. The fees extracted by an army of service providers could also be eliminated, because blockchain has no transaction costs. more> https://goo.gl/zpa6OM


What You Need to Know About the Future of Money

By Jason Dorrier – Finance has been computerized for decades. An ungodly number of daily trades are executed by algorithm. The speed of the market is superhuman—on the order of microseconds—and finance’s population of wonks is probably second only to tech.

Fintech is more about how the ethos of startups, apps, the internet, and all things digital has begun to infiltrate Wall Street, taking aim at long-standing business models. It’s the promise that small teams coding software can be corporate killers.

According to Catheryne Nicholson, CEO and cofounder of BlockCypher, no distributed ledger like blockchain would work without the incentive to validate transactions—and digital currency (in the form, for example, of Bitcoin mining) is that incentive.

Blockchain and digital currencies may mean no more fees for ferrying cash between pockets, a vastly simplified financial back office—which today is consumed by clearing and validating transactions—and even companies that fund and then run themselves.

Middlemen. Who needs ’em? more> http://goo.gl/peMhAz


Bring On the Blockchain Future

Bloomberg – Could the technology behind bitcoin, the alternative currency much loved by anarchists and drug dealers, make the world less vulnerable to financial disasters?

Surprisingly enough, it could.

Finance is all about trust: Essentially, financial institutions evolved to enable transactions with strangers. Centralized intermediaries of various kinds solved that problem, keeping track of who owns what and who owes whom. But centralized intermediaries also create points of systemic vulnerability. Regulators continue to wrestle with this underlying — and hitherto unavoidable — dilemma.

Blockchain establishes trust in a new way. It creates a so-called distributed ledger, which maintains a complete history of all participants’ transactions — a history that’s verified and recorded across a network of computers spread around the world.

There’s no need to trust a single source. The record resides in so many places that it can’t be lost or tampered with.

Technically, this seeming utopia is within reach. The question is how to make it happen. more> http://goo.gl/DjQrR7

In proof we trust

By Dominic Frisby – The impact of record-keeping on the course of history cannot be overstated.

William the Conqueror’s [2, 3, 4, 5] Domesday Book [2, 3], compiled in 1086, was still being used to settle land disputes as late as the 1960s.

Today there is a new system of digital record-keeping. Its impact could be equally large. It is called the blockchain.

Imagine an enormous digital record. Anyone with internet access can look at the information within: it is open for all to see. Nobody is in charge of this record. It is not maintained by a person, a company or a government department, but by 8,000-9,000 computers at different locations around the world in a distributed network. Participation is quite voluntary. The computers’ owners choose to add their machines to the network because, in exchange for their computer’s services, they sometimes receive payment. You can add your computer to the network, if you so wish.

All the information in the record is permanent – it cannot be changed – and each of the computers keeps a copy of the record to ensure this.

It is the breakthrough tech behind the digital cash system, Bitcoin [2, 3, 4], but its impact will soon be far wider than just alternative money. more> https://goo.gl/67rmID

Crypto Enlightenment: A Social Theory of Blockchains

By Melanie Swan – 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.

There have been some paradigm-shifting moments in human history. The Enlightenment [2, 3] (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.

A new 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.

Now with the advent of blockchain technology [2, 3] 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. more> http://tinyurl.com/qz5jrce