distributed ledger

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Mastering Blockchain, Second Edition by Imran Bashir

3D printing, altcoin, augmented reality, autonomous vehicles, bitcoin, blockchain, business process, carbon footprint, centralized clearinghouse, cloud computing, connected car, cryptocurrency, data acquisition, Debian, disintermediation, disruptive innovation, distributed ledger, domain-specific language, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, Firefox, full stack developer, general-purpose programming language, gravity well, interest rate swap, Internet of things, litecoin, loose coupling, MITM: man-in-the-middle, MVC pattern, Network effects, new economy, node package manager, Oculus Rift, peer-to-peer, platform as a service, prediction markets, QR code, RAND corporation, Real Time Gross Settlement, reversible computing, RFC: Request For Comment, RFID, ride hailing / ride sharing, Satoshi Nakamoto, single page application, smart cities, smart contracts, smart grid, smart meter, supply-chain management, transaction costs, Turing complete, Turing machine, web application, x509 certificate

In this section we'll examine: Distributed ledgers Distributed Ledger Technology (DLT) Blockchains Ledgers Distributed ledgers First, I need to clarify an ambiguity. It should be noted that a distributed ledger is a broad term describing shared databases; hence, all blockchains technically fall under the umbrella of shared databases or distributed ledgers. Although all blockchains are fundamentally distributed ledgers, all distributed ledgers are not necessarily a blockchain. A critical difference between a distributed ledger and blockchain is that a distributed ledger does not necessarily consist of blocks of transactions to keep the ledger growing. Rather, a blockchain is a special type of shared database that is comprised of blocks of transactions. An example of a distributed ledger that does not use blocks of transactions is R3's Corda.

Corda is a distributed ledger which is developed to record and manage agreements and is especially focused on financial services industry. On the other hand, more widely-known blockchains like Bitcoin and Ethereum make use of blocks to update the shared database. As the name suggests, a distributed ledger is distributed among its participants and spread across multiple sites or organizations. This type of ledger can be either private or public. The fundamental idea here is that, unlike many other blockchains, the records are stored contiguously instead of being sorted into blocks. This concept is used in Ripple which is a blockchain and cryptocurrency based global payment network. Distributed Ledger Technology It should be noted that over the last few years, the terms distributed ledger or Distributed Ledger Technology (DLT) have grown to be commonly used to describe blockchain in finance industry.

For decentralized communication in Ethereum, the Whisper protocol provides the decentralized communication layer. This will serve as an identity-based messaging layer for Ethereum. Both Swarm and Whisper are envisaged to be enabling technologies for Web 3.0. Distributed ledgers The concept of permissioned distributed ledgers is fundamentally different to a public blockchain. The key idea behind distributed ledgers is that they are permissioned as opposed to an open public blockchain. DLTs do not perform any mining as all the participants are already vetted and known to the network and there is no requirement for mining to secure the network. There is also no concept of digital currency on private permissioned distributed ledgers because the aim of the permissioned blockchain is different from a public blockchain. In a public blockchain, access is open to everyone and requires some form of incentive and network effect in order to grow; on the contrary, in permissioned DLTs, there are no such requirements.


pages: 348 words: 97,277

The Truth Machine: The Blockchain and the Future of Everything by Paul Vigna, Michael J. Casey

3D printing, additive manufacturing, Airbnb, altcoin, Amazon Web Services, barriers to entry, basic income, Berlin Wall, Bernie Madoff, bitcoin, blockchain, blood diamonds, Blythe Masters, business process, buy and hold, carbon footprint, cashless society, cloud computing, computer age, computerized trading, conceptual framework, Credit Default Swap, crowdsourcing, cryptocurrency, cyber-physical system, dematerialisation, disintermediation, distributed ledger, Donald Trump, double entry bookkeeping, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, failed state, fault tolerance, fiat currency, financial innovation, financial intermediation, global supply chain, Hernando de Soto, hive mind, informal economy, intangible asset, Internet of things, Joi Ito, Kickstarter, linked data, litecoin, longitudinal study, Lyft, M-Pesa, Marc Andreessen, market clearing, mobile money, money: store of value / unit of account / medium of exchange, Network effects, off grid, pets.com, prediction markets, pre–internet, price mechanism, profit maximization, profit motive, ransomware, rent-seeking, RFID, ride hailing / ride sharing, Ross Ulbricht, Satoshi Nakamoto, self-driving car, sharing economy, Silicon Valley, smart contracts, smart meter, Snapchat, social web, software is eating the world, supply-chain management, Ted Nelson, the market place, too big to fail, trade route, transaction costs, Travis Kalanick, Turing complete, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, universal basic income, web of trust, zero-sum game

The former refers to bitcoin’s status as a currency, the latter is a reference to the overarching system and protocol that underpins that currency and other uses for the Bitcoin blockchain ledger. * Addressing an inconsistency in popular parlance, we generally employ three distinct usages of the word “blockchain”: “The blockchain,” which refers to Bitcoin’s original distributed ledger; “a blockchain”—or, pluralized, “blockchains”—to cover a variety of more recent distributed ledgers that share Bitcoin’s chain-of-blocks structure; and “blockchain technology,” referring to the overall field. We also use “distributed ledger technology” to encompass both blockchain and non-blockchain distributed ledgers. We mostly avoid the popular construct of “blockchain” as a non-countable noun. We view a blockchain, like any ledger, as a distinct, identifiable thing, not a process. The book’s title uses the definite article form to acknowledge the catalytic role that the original Bitcoin blockchain played in unleashing this field.

Using a reliable, distributed ledger that a consortium of banks can update simultaneously in real time could reduce back-office costs and unshackle large amounts of new capital for investment. That’s great news for investment banks such as Goldman Sachs, but not so great for custodial banks like State Street or clearinghouses like the Depository Trust & Clearing Corporation, whose business model is based on handling those back-office functions. Still, the institutions on both sides of that disruption story all feel compelled to engage in research and development in this field. R3 CEV, a New York–based technology developer, for one, raised $107 million from more than a hundred of the world’s biggest financial institutions and tech companies to develop a proprietary distributed ledger technology. Inspired by blockchains but eschewing that label, R3’s Corda platform is built to comply with banks’ business and regulatory models while streamlining trillions of dollars in daily interbank securities transfers.

On stage at the time, Adam Ludwin, the CEO of blockchain/distributed ledger services company Chain Inc., took advantage of the result to call out Wall Street firms for failing to see how this technology offers a different paradigm. Ludwin, whose clients include household names like Visa and Nasdaq, said he could understand why people saw a continued market for cybersecurity services, since his audience was full of people paid to worry about data breaches constantly. But their answers suggested they didn’t understand that the blockchain offered a solution. Unlike other system-design software, for which cybersecurity is an add-on, this technology “incorporates security by design,” he said. For the private “permissioned” blockchains that Wall Street is typically exploring—distributed ledger models in which all the validating computers must be pre-authorized to join the network—Ludwin’s “by design” notion refers solely to the fact that the data is distributed among many nodes rather than held solely by one.


pages: 309 words: 54,839

Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts by David Gerard

altcoin, Amazon Web Services, augmented reality, Bernie Madoff, bitcoin, blockchain, Blythe Masters, Bretton Woods, clean water, cloud computing, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, distributed ledger, Ethereum, ethereum blockchain, Extropian, fiat currency, financial innovation, Firefox, Flash crash, Fractional reserve banking, index fund, Internet Archive, Internet of things, Kickstarter, litecoin, M-Pesa, margin call, Network effects, peer-to-peer, Peter Thiel, pets.com, Ponzi scheme, Potemkin village, prediction markets, quantitative easing, RAND corporation, ransomware, Ray Kurzweil, Ross Ulbricht, Ruby on Rails, Satoshi Nakamoto, short selling, Silicon Valley, Silicon Valley ideology, Singularitarianism, slashdot, smart contracts, South Sea Bubble, tulip mania, Turing complete, Turing machine, WikiLeaks

It solves the secure distributed consensus problem in an obvious and sensible manner: blocks are generated only by designated official core nodes.395 Distributed consensus is so much simpler if you don’t distribute it. 2016 press stories that Visa was using it in the real world were in fact forward-looking versions of Visa’s press release that they were planning a pilot programme for 2017.396 R3 Corda: The R3 Consortium’s Corda Distributed Ledger Designed for Financial Services is the most sensible of all these approaches: after careful consideration of the fact that the Bitcoin-style blockchain was expressly designed to be the direct opposite of what large paying customers with money want, their “Blockchain Product” does not, in its default configuration … contain a blockchain.397 UK Government Office for Science: “ Distributed Ledger Technology: beyond block chain” The UK’s Chief Scientific Adviser, Sir Mark Walpole, released a report in January 2016, “Distributed Ledger Technology: beyond block chain,”398 which caught some attention at the time, as an official government publication concerning the issue.

If you have programmers, they probably save their code in Git, which is the closest I can think of to a useful blockchain-like technology: it saves individual code edits as transactions in Merkle trees with tamper-evident hashes, and developers routinely copy entire Git repositories around, identifying them by hash. It’s a distributed ledger, but for computer programs rather than money. What it doesn’t have is the blockchain consensus mechanism – you take or leave the version of the repository you’re offered. (I have had one “distributed ledger technology” developer admit his product was basically a simplified version of Git.) Git was released in 2005 and was based on work going back to the late 1990s; Merkle trees were invented in 1979. The good bits of blockchain are not original, and the original bits of blockchain turn out not to be much good.

Many start from a hypothetical use case – often lifted directly from the wildest Bitcoin advocacy – then tout the hypothetical as if it were an existing and practical technology. This includes claims made for “distributed ledger technology,” which also mostly originate in Bitcoin advocacy.365 IBM’s promotional e-book Making Blockchain Ready for Business366 is a good example. It sells vague and implied future potential – “discover what new business models could emerge if trust & manual processes are eliminated”; “how might a faster, more secure, standardized, and operationally efficient transaction model create new opportunities for your business?” Almost every solid-looking “is” statement concerning blockchains – “an enterprise-class, cross-industry open standard for distributed ledgers that can transform the way business transactions are conducted globally”; “highly secure blockchain services and frameworks that address regulatory compliance across financial services, government, and healthcare” – is really a “might” or “could”; no blockchain has all the claimed abilities in the present day, and certainly not Hyperledger, the basis of IBM Blockchain.


pages: 161 words: 44,488

The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology by William Mougayar

Airbnb, airport security, Albert Einstein, altcoin, Amazon Web Services, bitcoin, Black Swan, blockchain, business process, centralized clearinghouse, Clayton Christensen, cloud computing, cryptocurrency, disintermediation, distributed ledger, Edward Snowden, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, fixed income, global value chain, Innovator's Dilemma, Internet of things, Kevin Kelly, Kickstarter, market clearing, Network effects, new economy, peer-to-peer, peer-to-peer lending, prediction markets, pull request, QR code, ride hailing / ride sharing, Satoshi Nakamoto, sharing economy, smart contracts, social web, software as a service, too big to fail, Turing complete, web application

Programs written in Smart Contract Language get compiled into the Virtual Machine, and to create the contracts you send the transaction containing your code. Historical Record Transactions are actually recorded in sequential data blocks (hence the word blockchain), so there is a historical, append-only log of these transactions that is continuously maintained and updated. A fallacy is that the blockchain is a distributed ledger. In the technical sense, it is not, but it acts as one, because the collection of transactions on blocks is equivalent to a distributed ledger. However, you can build immutable distributed ledger applications based on the historical records that the blockchain provides. State Balances Bitcoin was not designed around accounts, although accounts are a more common way to think about the transactions that are taking place, because we are used to looking at our banking transactions as such.

With Satoshi’s abstract still in your mind, let us dive deeper with three different but complementary definitions of the blockchain: a technical, business, and legal one. Technically, the blockchain is a back-end database that maintains a distributed ledger that can be inspected openly. Business-wise, the blockchain is an exchange network for moving transactions, value, assets between peers, without the assistance of intermediaries. Legally speaking, the blockchain validates transactions, replacing previously trusted entities. TECHNICAL Back-end database that maintains a distributed ledger, openly. BUSINESS Exchange network for moving value between peers. LEGAL A transaction validation mechanism, not requiring intermediary assistance. Blockchain Capabilities = Technical + Business + Legal. THE WEB, ALL OVER AGAIN The past is not an accurate compass to the future, but understanding where we came from helps us gain an enlightened perspective and a better context for where we are going.

We could think of the traditional holders of central trust as today's guilds, and we could question why they should continue holding that trust, if technology (the blockchain) performed that function as well or even better. Blockchains liberate the trust function from outside existing boundaries, in the same way as medieval institutions were forced to cede control of printing. It is deceptive to view the blockchain primarily as a distributed ledger, because it represents only one of its many dimensions. It's like describing the Internet as a network only, or as just a publishing platform. These are necessary but not sufficient conditions or properties; blockchains are also greater than the sum of their parts. Blockchain proponents believe that trust should be free, and not in the hands of central forces that tax it, or control it in one form or another (e.g., fees, access rights, or permissions).


pages: 515 words: 126,820

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World by Don Tapscott, Alex Tapscott

Airbnb, altcoin, asset-backed security, autonomous vehicles, barriers to entry, bitcoin, blockchain, Blythe Masters, Bretton Woods, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, cloud computing, cognitive dissonance, commoditize, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crowdsourcing, cryptocurrency, disintermediation, disruptive innovation, distributed ledger, Donald Trump, double entry bookkeeping, Edward Snowden, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, failed state, fiat currency, financial innovation, Firefox, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, Galaxy Zoo, George Gilder, glass ceiling, Google bus, Hernando de Soto, income inequality, informal economy, information asymmetry, intangible asset, interest rate swap, Internet of things, Jeff Bezos, jimmy wales, Kickstarter, knowledge worker, Kodak vs Instagram, Lean Startup, litecoin, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, means of production, microcredit, mobile money, money market fund, Network effects, new economy, Oculus Rift, off grid, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, performance metric, Peter Thiel, planetary scale, Ponzi scheme, prediction markets, price mechanism, Productivity paradox, QR code, quantitative easing, ransomware, Ray Kurzweil, renewable energy credits, rent-seeking, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, seigniorage, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, smart grid, social graph, social intelligence, social software, standardized shipping container, Stephen Hawking, Steve Jobs, Steve Wozniak, Stewart Brand, supply-chain management, TaskRabbit, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, The Wisdom of Crowds, transaction costs, Turing complete, Turing test, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, unorthodox policies, wealth creators, X Prize, Y2K, Zipcar

Each block must refer to the preceding block to be valid. This structure permanently time-stamps and stores exchanges of value, preventing anyone from altering the ledger. If you wanted to steal a bitcoin, you’d have to rewrite the coin’s entire history on the blockchain in broad daylight. That’s practically impossible. So the blockchain is a distributed ledger representing a network consensus of every transaction that has ever occurred. Like the World Wide Web of information, it’s the World Wide Ledger of value—a distributed ledger that everyone can download and run on their personal computer. Some scholars have argued that the invention of double-entry bookkeeping enabled the rise of capitalism and the nation-state. This new digital ledger of economic transactions can be programmed to record virtually everything of value and importance to humankind: birth and death certificates, marriage licenses, deeds and titles of ownership, educational degrees, financial accounts, medical procedures, insurance claims, votes, provenance of food, and anything else that can be expressed in code.

Peter Todd, “Re: [Bitcoin-development] Fwd: Block Size Increase Requirements,” The Mail Archive, June 1, 2015; www.mail-archive.com/, http://tinyurl.com/pk4ordw, accessed August 26, 2015. 44. Satoshi Nakamoto, “Re: Bitcoin P2P E-cash Paper,” Mailing List, Cryptography, Metzger, Dowdeswell & Co. LLC, November 11, 2008. Web. July 13, 2015, www.metzdowd.com/mailman/listinfo/cryptography. 45. Pascal Bouvier, “Distributed Ledgers Part I: Bitcoin Is Dead,” FiniCulture blog, August 4, 2015; http://finiculture.com/distributed-ledgers-part-i-bitcoin-is-dead/, accessed August 28, 2015. 46. Western Union, “Company Facts,” Western Union, Western Union Holdings, Inc., December 31, 2014. Web. January 13, 2016; http://corporate.westernunion.com/Corporate_Fact_Sheet.html. 47. Interview with Gavin Andresen, June 8, 2015. 48. Ibid. 49. Interview with Austin Hill, July 22, 2015. 50.

This has never happened before—trusted transactions directly between two or more parties, authenticated by mass collaboration and powered by collective self-interests, rather than by large corporations motivated by profit. It may not be the Almighty, but a trustworthy global platform for our transactions is something very big. We’re calling it the Trust Protocol. This protocol is the foundation of a growing number of global distributed ledgers called blockchains—of which the bitcoin blockchain is the largest. While the technology is complicated and the word blockchain isn’t exactly sonorous, the main idea is simple. Blockchains enable us to send money directly and safely from me to you, without going through a bank, a credit card company, or PayPal. Rather than the Internet of Information, it’s the Internet of Value or of Money.


pages: 492 words: 118,882

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory by Kariappa Bheemaiah

accounting loophole / creative accounting, Ada Lovelace, Airbnb, algorithmic trading, asset allocation, autonomous vehicles, balance sheet recession, bank run, banks create money, Basel III, basic income, Ben Bernanke: helicopter money, bitcoin, blockchain, Bretton Woods, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, cashless society, cellular automata, central bank independence, Claude Shannon: information theory, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, complexity theory, constrained optimization, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, David Graeber, deskilling, Diane Coyle, discrete time, disruptive innovation, distributed ledger, diversification, double entry bookkeeping, Ethereum, ethereum blockchain, fiat currency, financial innovation, financial intermediation, Flash crash, floating exchange rates, Fractional reserve banking, full employment, George Akerlof, illegal immigration, income inequality, income per capita, inflation targeting, information asymmetry, interest rate derivative, inventory management, invisible hand, John Maynard Keynes: technological unemployment, John von Neumann, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, knowledge economy, large denomination, liquidity trap, London Whale, low skilled workers, M-Pesa, Marc Andreessen, market bubble, market fundamentalism, Mexican peso crisis / tequila crisis, MITM: man-in-the-middle, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, natural language processing, Network effects, new economy, Nikolai Kondratiev, offshore financial centre, packet switching, Pareto efficiency, pattern recognition, peer-to-peer lending, Ponzi scheme, precariat, pre–internet, price mechanism, price stability, private sector deleveraging, profit maximization, QR code, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, Real Time Gross Settlement, rent control, rent-seeking, Satoshi Nakamoto, Satyajit Das, savings glut, seigniorage, Silicon Valley, Skype, smart contracts, software as a service, software is eating the world, speech recognition, statistical model, Stephen Hawking, supply-chain management, technology bubble, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Nature of the Firm, the payments system, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, trade liberalization, transaction costs, Turing machine, Turing test, universal basic income, Von Neumann architecture, Washington Consensus

The R3 Consortium is a partnership with over 50 of the world's leading financial institutions (including all the TBTF banks) who are working together, and independently, to create “distributed ledger technologies” for the modern financial market. Banks have realized that if they are to gain the benefits of this technology, then it is imperative that common standards and shared platforms be established. Corda is the underlying distributed ledger software which functions as a universal platform. It is important to state the distinction between the term “Distributed Ledger Technology (DLT)” and Blockchain. Distributed ledgers and cryptocurrency systems are different in the way transactions are validated: While Bitcoin uses pseudonymous and anonymous nodes to validate transactions, distributed ledgers require legal identities (permissioned nodes) to validate transactions (Swanson, 2015).

This aspect of regulation in a digital environment was admirably and succinctly analyzed in Chapter 3 of the UK Government report, “Distributed ledger technology: beyond block chain” (2016), where it states, “One fundamental difference between legal code and technical code is the mechanism by which each influences activity. Legal code is “extrinsic”: the rules can be broken, but consequences flow from that breach to ensure compliance. Technical code, in contrast, is “intrinsic”: if its rules are broken then an error is returned and no activity occurs, so compliance is ensured through the operation of the code itself. Another characteristic of software is that a machine will rigidly follow the rules even where that compliance produces unforeseen or undesirable outcomes. This leads to some striking differences in the operation of distributed ledger systems compared with the current financial system.”

BIEN. (2016, September). About Basic Income. Retrieved from Basic Income Earth Network: http://basicincome.org/ Bregman, R. (2016). Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15- hour Workweek . Amazon Digital Services LLC. Brown, R. G. (2016, April 05). Introducing R3 Corda™: A distributed ledger designed for financial services. Retrieved from Thoughts on the future of finance: https://gendal. me/2016/04/05/introducing-r3-corda-a-distributed-ledger-designed-forfinancial-services/ Busby, M. J. (2016, August 6). Chatbots will not replace 5 million jobs, as the data suggests. Retrieved from Venture Beat: http://venturebeat.com/2016/08/03/chatbotswill-not-replace-5-million-jobs-as-the-data-suggests/ CB Insights. (2016, September 7). 51 Corporate Chatbots Across Industries Including Travel, Media, Retail, And Insurance.


pages: 410 words: 119,823

Radical Technologies: The Design of Everyday Life by Adam Greenfield

3D printing, Airbnb, augmented reality, autonomous vehicles, bank run, barriers to entry, basic income, bitcoin, blockchain, business intelligence, business process, call centre, cellular automata, centralized clearinghouse, centre right, Chuck Templeton: OpenTable:, cloud computing, collective bargaining, combinatorial explosion, Computer Numeric Control, computer vision, Conway's Game of Life, cryptocurrency, David Graeber, dematerialisation, digital map, disruptive innovation, distributed ledger, drone strike, Elon Musk, Ethereum, ethereum blockchain, facts on the ground, fiat currency, global supply chain, global village, Google Glasses, IBM and the Holocaust, industrial robot, informal economy, information retrieval, Internet of things, James Watt: steam engine, Jane Jacobs, Jeff Bezos, job automation, John Conway, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, joint-stock company, Kevin Kelly, Kickstarter, late capitalism, license plate recognition, lifelogging, M-Pesa, Mark Zuckerberg, means of production, megacity, megastructure, minimum viable product, money: store of value / unit of account / medium of exchange, natural language processing, Network effects, New Urbanism, Occupy movement, Oculus Rift, Pareto efficiency, pattern recognition, Pearl River Delta, performance metric, Peter Eisenman, Peter Thiel, planetary scale, Ponzi scheme, post scarcity, post-work, RAND corporation, recommendation engine, RFID, rolodex, Satoshi Nakamoto, self-driving car, sentiment analysis, shareholder value, sharing economy, Silicon Valley, smart cities, smart contracts, social intelligence, sorting algorithm, special economic zone, speech recognition, stakhanovite, statistical model, stem cell, technoutopianism, Tesla Model S, the built environment, The Death and Life of Great American Cities, The Future of Employment, transaction costs, Uber for X, undersea cable, universal basic income, urban planning, urban sprawl, Whole Earth Review, WikiLeaks, women in the workforce

, London: Verso, 1994. 4.Nathaniel Popper, “Ethereum, a Virtual Currency, Enables Transactions That Rival Bitcoin’s,” New York Times, March 27, 2016. 5.Nick Szabo, “Smart Contracts,” 1994, szabo.best.vwh.net/smart.contracts.html. 6.Ronald Bailey, “Live from Extro-5,” Reason, June 20, 2001. At the same conference, Szabo also apparently presented “an ambitious project in which all property is embedded with information about who owns it”; see the discussion of smart property that follows. 7.See the comments of Vili Lehdonvirta and Robleh Ali, Government Office for Science. “Distributed Ledger Technology: Beyond blockchain,” 2016, p. 41, gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf. 8.Michael Del Castillo, “Prenup Built in Ethereum Smart Contract Rethinks Marriage Obligations,” CoinDesk, June 1, 2016. 9.Chrystia Freeland, “When Labor Is Flexible, And Paid Less,” International Herald-Tribune, June 28, 2013. 10.Stafford Beer, “What Is Cybernetics?”, Kybernetes, Volume 31, Issue 2, 2002. 11.Kickstarter exacts a 5 percent commission on successfully funded projects, kickstarter.com/help/faq/kickstarter+basics. 12.Graham Rapier, “Yellen Reportedly Urges Central Banks to Study Blockchain, Bitcoin,” American Banker, June 6, 2016; see also Nathaniel Popper, “Central Banks Consider Bitcoin’s Technology, if Not Bitcoin,” New York Times, October 11, 2016. 13.Pete Rizzo, “Bank of Canada Demos Blockchain-Based Digital Dollar,” CoinDesk, June 16, 2016. 14.See, e.g., a proposal for London’s budget to be executed via blockchain.

., “Computerised Physician Order Entry-Related Medication Errors: Analysis of Reported Errors and Vulnerability Testing of Current Systems,” BMJ Quality & Safety, April 2015; Raymond Bonner, “ ‘No-Fly List’ Riddled with Errors, Impossible to Get Off Of,” Informed Comment, December 16, 2015. 17.Michael McFarland, “The Human Cost of Computer Errors,” Markkula Center for Applied Ethics blog, June 1, 2012, scu.edu/ethics/focus-areas/internet-ethics/resources/the-human-cost-of-computer-errors; Wayne W Eckerson, “Data Quality and the Bottom Line,” The Data Warehousing Institute, 2002. 18.Antony Lewis, “Confused by Blockchain? Separating Revolution from Evolution,” CoinDesk, May 17, 2016; see also Chris Skinner, “Will the Blockchain Replace SWIFT?,” American Banker, March 8, 2016. 19.Simon Taylor, “Chapter 1: Vision,” in Government Office for Science, “Distributed Ledger Technology: Beyond blockchain,” 2016, pp. 20–30, gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf. 20.Vitalik Buterin, “Bitcoin Multisig Wallet: The Future of Bitcoin,” Bitcoin Magazine, March 13, 2014. 21.Slock.it UG, “DAO,” undated, slock.it/dao.html. 22.At least, they intend to do so. The developers of the Eris DAO platform appear to regard this process as a mere formality, and therefore “incorporation and other legal matters will be dealt with at a later date”: Dennis McKinnon, Casey Kuhlman, Preston Byrne, “Eris—The Dawn of Distribute Autonomous Organizations and the Future of Governance,” hplusmagazine.com, June 17, 2014. 23.Aaron Wright and Primavera di Filippi.

Because each successive block’s hash value is generated with the signature of the one immediately preceding it in time, it folds into itself the details of every block of Bitcoin transactions ever executed, tailing all the way back to the very first, the so-called Genesis Block. And again, because every participant in the network holds their own local copy of the blockchain, at no point is there the slightest need for transactions to be checked against any central registry or clearinghouse. The entire network works to maintain and protect the blockchain: its shared, public, distributed ledger. Once a block has been confirmed by the network and added to the blockchain, all of the transactions bundled into it are considered to have been settled; from this point forward, they are a part of the permanent record. For very low-value transactions, this is where the story ends; a single-pass confirmation is sufficient to ensure that they probably won’t be overturned. (The Bitcoin documentation describes such one-confirmation transactions as “safe if you trust the person paying you.”)11 Because the validity of the entire chain is computationally reverified every time a new block is added to it, though, any given transaction gets exponentially more reliable over time.


pages: 275 words: 84,980

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives) by David Birch

agricultural Revolution, Airbnb, bank run, banks create money, bitcoin, blockchain, Bretton Woods, British Empire, Broken windows theory, Burning Man, business cycle, capital controls, cashless society, Clayton Christensen, clockwork universe, creative destruction, credit crunch, cross-subsidies, crowdsourcing, cryptocurrency, David Graeber, dematerialisation, Diane Coyle, disruptive innovation, distributed ledger, double entry bookkeeping, Ethereum, ethereum blockchain, facts on the ground, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, index card, informal economy, Internet of things, invention of the printing press, invention of the telegraph, invention of the telephone, invisible hand, Irish bank strikes, Isaac Newton, Jane Jacobs, Kenneth Rogoff, knowledge economy, Kuwabatake Sanjuro: assassination market, large denomination, M-Pesa, market clearing, market fundamentalism, Marshall McLuhan, Martin Wolf, mobile money, money: store of value / unit of account / medium of exchange, new economy, Northern Rock, Pingit, prediction markets, price stability, QR code, quantitative easing, railway mania, Ralph Waldo Emerson, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social graph, special drawing rights, technoutopianism, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, wage slave, Washington Consensus, wikimedia commons

Number 1 was the printing press, but what caught my attention was the appearance of paper money at number 42. It made me think that in the great sweep of things the replacement of stuff of some kind by records of some kind goes back a lot further – to the grain banks of ancient Babylonia and to the marks made on cuneiform clay tablets – and extends right up to the present day, where there are fascinating discussions going on around the use of cryptography to manage distributed ledgers. Was paper money as big a technological breakthrough as the clay tablet was to ancient Babylon or the blockchain may be to the pervasive Internet? The interaction between money and the technology of money is more complex and less well understood than you might think, given just how long both have been around. As Jevons wrote, back in Victorian times (Jevons 1884): It is a misfortune of what may be called the science of monetary technology, that its study is almost of necessity confined to the few officers employed in government mints.

, they were easy to store and transport, and they were easily understood by those who couldn’t read (i.e. almost everyone). As a new technology, however, they soon began to exhibit some unforeseen characteristics (in the context of their record-keeping function). During the extended period of use of any technology, creative people come along and find new ways to use the technology in different times and in different cultural contexts. Tally sticks were a form of distributed ledger to record debt, and were soon being used as money. Tally-ho! By the time of the reign of Henry II (who died in France in 1189) the exchequer was already a sophisticated and organized department of the king’s court, with an elaborate staff of officers. The use of tallies to enable this operation had an interesting consequence. Since (as is generally the case) the king couldn’t be bothered to wait until taxes fell due, and could not borrow money at interest, he would sell the tallies at a discount.

Someone in (say) Bristol who was holding a tally for taxes due in (say) York would have to travel to collect their due payment or find someone else who would, for an appropriate discount, buy the tally. Thus, a market for tallies grew, arbitrating various temporal and spatial preferences by discounting. It is known from recorded instances that officials working in the exchequer helped this market to operate smoothly (Davies 1995b). The distributed ledger technology of the tally had been used to convert a means for deferred payment into a store of value and then into a means of exchange, and the sticks remained in widespread use for hundreds of years. The Bank of England, being a sensible and conservative institution naturally suspicious of new technologies, continued to use wooden tally sticks until 1826: some 500 years after the invention of double-entry bookkeeping and 400 years after Johannes Gutenberg’s invention of the printing press.


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Machine, Platform, Crowd: Harnessing Our Digital Future by Andrew McAfee, Erik Brynjolfsson

"Robert Solow", 3D printing, additive manufacturing, AI winter, Airbnb, airline deregulation, airport security, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, backtesting, barriers to entry, bitcoin, blockchain, British Empire, business cycle, business process, carbon footprint, Cass Sunstein, centralized clearinghouse, Chris Urmson, cloud computing, cognitive bias, commoditize, complexity theory, computer age, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, Dean Kamen, discovery of DNA, disintermediation, disruptive innovation, distributed ledger, double helix, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Ethereum, ethereum blockchain, everywhere but in the productivity statistics, family office, fiat currency, financial innovation, George Akerlof, global supply chain, Hernando de Soto, hive mind, information asymmetry, Internet of things, inventory management, iterative process, Jean Tirole, Jeff Bezos, jimmy wales, John Markoff, joint-stock company, Joseph Schumpeter, Kickstarter, law of one price, longitudinal study, Lyft, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, Marc Andreessen, Mark Zuckerberg, meta analysis, meta-analysis, Mitch Kapor, moral hazard, multi-sided market, Myron Scholes, natural language processing, Network effects, new economy, Norbert Wiener, Oculus Rift, PageRank, pattern recognition, peer-to-peer lending, performance metric, plutocrats, Plutocrats, precision agriculture, prediction markets, pre–internet, price stability, principal–agent problem, Ray Kurzweil, Renaissance Technologies, Richard Stallman, ride hailing / ride sharing, risk tolerance, Ronald Coase, Satoshi Nakamoto, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Skype, slashdot, smart contracts, Snapchat, speech recognition, statistical model, Steve Ballmer, Steve Jobs, Steven Pinker, supply-chain management, TaskRabbit, Ted Nelson, The Market for Lemons, The Nature of the Firm, Thomas Davenport, Thomas L Friedman, too big to fail, transaction costs, transportation-network company, traveling salesman, Travis Kalanick, two-sided market, Uber and Lyft, Uber for X, uber lyft, ubercab, Watson beat the top human players on Jeopardy!, winner-take-all economy, yield management, zero day

Almost twenty years later, the world of the blockchain appeared and seemed to provide exactly the structure and world that Szabo was describing. Entrepreneurs, programmers, and visionaries took notice, and efforts to combine distributed ledgers and smart contracts blossomed. By the end of 2016, the best known of these was probably Ethereum, which described itself as “a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.” A number of ambitious efforts were launched on the Ethereum platform, one of which we’ll encounter in the next chapter. Toppling the Stacks: The Crypto Assault on the Core At least some efforts involving cryptocurrencies, distributed ledgers, and smart contracts seemed to be motivated by a desire to decentralize activities and information that had previously been concentrated, and to explicitly favor the crowd over the core.

But the value of the Bitcoin, as expressed by its exchange rate against currencies like the dollar, fluctuated wildly, rising to a high of over $1,100 in November 2013 before plummeting 77% to less than $250 in January 2015 and then recovering to more than $830 two years later. This volatility made the digital currency interesting for risk-tolerant investors†† but unsuitable as a mainstream means of exchange or store of value. While the debate about Bitcoin’s ability to ever be a true currency was unfolding, a small group of people began to make a different point: that the truly valuable innovation was not the new digital money, but instead the distributed ledger that it rested on. It was the blockchain that really mattered, not Bitcoins. Bitcoin’s tumultuous history was evidence that the blockchain could actually work. For years, it functioned as designed: as a completely decentralized, undirected, apparently immutable record of transactions.‡‡ The transactions it was originally intended to record were limited to the mining and exchange of Bitcoins, but why stop there?

It is expected that moving elements of the process onto the blockchain can reduce costs for homeowners and other users, while also reducing possibilities for corruption (since the land records, like everything else on the blockchain, will be unalterable). Why Not Get Smart about Contracts? As it became apparent that the blockchain could be used to record all kinds of transactions, not just those related to Bitcoins, it also became clear to some that a distributed ledger was the ideal home for digital “smart contracts.” This was a phrase coined in the mid-1990s by Nick Szabo, a computer scientist and legal scholar.## Szabo observed that business contracts, one of the foundations of modern capitalist economies, are similar to computer programs in many ways. Both involve clear definitions (in programs, of variables; in contracts, of the parties involved and their roles), and both specify what will happen under different conditions.


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Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond by Chris Burniske, Jack Tatar

Airbnb, altcoin, asset allocation, asset-backed security, autonomous vehicles, bitcoin, blockchain, Blythe Masters, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, correlation coefficient, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, disintermediation, distributed ledger, diversification, diversified portfolio, Donald Trump, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, fiat currency, financial innovation, fixed income, George Gilder, Google Hangouts, high net worth, Jeff Bezos, Kenneth Rogoff, Kickstarter, Leonard Kleinrock, litecoin, Marc Andreessen, Mark Zuckerberg, market bubble, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, packet switching, passive investing, peer-to-peer, peer-to-peer lending, Peter Thiel, pets.com, Ponzi scheme, prediction markets, quantitative easing, RAND corporation, random walk, Renaissance Technologies, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, Sharpe ratio, Silicon Valley, Simon Singh, Skype, smart contracts, social web, South Sea Bubble, Steve Jobs, transaction costs, tulip mania, Turing complete, Uber for X, Vanguard fund, WikiLeaks, Y2K

Once the big company swallows the startup, or begins meddling, it is often hard for the startup to retain its fast-moving and flexible culture. Nimble cultures are key to succeeding in the early stages of a disruptive technology, and if the startup is tainted by corporate bureaucracy, then it will quickly lose its edge. Circle the Wagons Industry consortiums have been extremely popular among incumbents investigating how to apply distributed ledger technology to their industry. On one hand, a consortium makes perfect sense, as a distributed ledger needs to be shared among many parties for it to have any use. A collaborative consortium helps financial services companies—many of which have historically been competitors that keep their business processes close to their chest—learn how to share. On the other hand, these consortiums can hit snags if too many big names and big egos become involved.

See also The DAO Deloitte, 270 Demographics, 281 Derivatives, 219 Deutsche Bundesbank, 12 Devaluation, 116 Developers, 54 community and, 182 miners and, 112 rewards for, 60 software and, 194–198 Devil Take the Hindmost: A History of Financial Speculation (Chancellor), 138, 157 DigiCash, 34 Digital Asset Holdings, 25 Digital Currency Council, 243 Digital Currency Group (DCG), 231 Digital payment systems decentralization and, 35 ecash as, 34 Dimon, Jamie, 267 Discounting method risk and, 180 valuation and, 179–182 Disruption, xiv, 9 for incumbents, 271 portfolios and blockchains as, 263–277 public blockchains and, 21 resilience to, 65 technology and, 28, 264 Distributed ledger technology (DLT), 266, 269–270, 274 Distribution, 13–14, 42 Diversification cryptoassets and, 102–105 risk and, 101 Divestment, 271 DJIA. See Dow Jones Industrial Average DLT. See Distributed ledger technology DNS. See Domain naming service Documents, 258. See also Articles Dodd, David, 139 Dogecoin, 43–44 Dollar, U. S. (USD), 114 Bitcoin and, 122 Velocity of, 178 Domain naming service (DNS), 39 Domingos, Pedro, 19 Dow Jones Industrial Average (DJIA), 85, 87, 100 Duffield, Evan, 48, 49 Dutch East India Company, 121, 161 shares of, 141–142 Dutch Republic, 141, 143 Economics, 140 asset classes and, 111–120 The Economist, 143 Economy, 32 as global, 37 Internet and, 176 Edelman, Ric, 244–245 Education, 286 Efficient frontier, 71 correlation of returns and, 74–76 Emergency Economic Stabilization Act of 2008, 8 Encryption, 14 Endpoint sensitivity, 84 Enterprise Ethereum Alliance, 273 Equities, 76, 102, 116, 137 as asset class, 108, 110 ETC.

Since Satoshi only places “proof-of-work” directly before “chain,” many early Bitcoiners are adamant that the term blockchain should only be used if it is proof-of-work based. Remember that proof-of-work is a mechanism whereby all the computers building Bitcoin’s blockchain remain in sync on how to construct it. BLOCKCHAIN, NOT BITCOIN Articles like one from the Bank of England in the third quarter of 2014 argued, “The key innovation of digital currencies is the ‘distributed ledger,’ which allows a payment system to operate in an entirely decentralized way, without intermediaries such as banks.”11 In emphasizing the technology and not the native asset, the Bank of England left an open question whether the native asset was needed. At the Inside Bitcoins conference in April 2015,12 many longtime Bitcoiners commented on how many Wall Street suits were in attendance. While Bitcoin was still king, there were growing whispers of “blockchain not bitcoin,” which was heresy to Bitcoiners.


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Robot Rules: Regulating Artificial Intelligence by Jacob Turner

Ada Lovelace, Affordable Care Act / Obamacare, AI winter, algorithmic trading, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, autonomous vehicles, Basel III, bitcoin, blockchain, brain emulation, Clapham omnibus, cognitive dissonance, corporate governance, corporate social responsibility, correlation does not imply causation, crowdsourcing, distributed ledger, don't be evil, Donald Trump, easy for humans, difficult for computers, effective altruism, Elon Musk, financial exclusion, financial innovation, friendly fire, future of work, hive mind, Internet of things, iterative process, job automation, John Markoff, John von Neumann, Loebner Prize, medical malpractice, Nate Silver, natural language processing, nudge unit, obamacare, off grid, pattern recognition, Peace of Westphalia, race to the bottom, Ray Kurzweil, Rodney Brooks, self-driving car, Silicon Valley, Stanislav Petrov, Stephen Hawking, Steve Wozniak, strong AI, technological singularity, Tesla Model S, The Coming Technological Singularity, The Future of Employment, The Signal and the Noise by Nate Silver, Turing test, Vernor Vinge

Fumio Shimpo points out that not all such contracts will be binding under Japanese Law; if the AI fails to identify itself as such and entices a person to enter into a contract , then such contract might be deemed “equivalent to a mistake of an element (Article 95 of the Japanese Civil Code)”, and potentially rendered ineffective.91 There are many automated contractual systems operating today—from consumer sales to high-frequency trading of financial instruments. At present, these all conclude contracts on behalf of recognised legal people. That may not always need to be the case. Blockchain technology is a system of automated records, known as distributed ledgers. Its uses can include chains of “self-executing” contracts, which can be executed without any need for human input. This technology has already given rise to novel and uncertain questions as to liability arising from a particular blockchain system in which all parts are interconnected.92 In a situation where AI concludes a contract without direct or indirect instructions from a principal, it remains unclear how a legal system would address liability arising from such an agreement; the AI would require legal personality to be able to go to court to enforce such contract —the possibility of which is discussed further in Chapter 5.

Many systems require certain transactions to be recorded on a public register, such as those relating to land. One solution to the secrecy issue would be for contracts concerning liability for AI to be made public. The obvious objection to this is that it would be enormously bureaucratic to store such details on a public register, and commercial parties may well refuse to do so, on the basis of well-established legal principles including confidentiality and privacy. Distributed ledger technology such as blockchain offers one option as to how contracts relating to AI might be made a matter of public record. However, it seems unlikely that many market participants would agree to this level of public scrutiny unless they were required to by law. Quasi-Hidden Contracts Contractual arrangements concerning AI will work best where arrangements are made between parties who are able to understand the obligations to which they are binding themselves, and are able to weigh up the benefits and disadvantages of the position they have taken.

When a person buys a crate of apples, there is usually an implied term that those apples will not be full of maggots. 89Kirsten Korosec, “Volvo CEO: We Will Accept All Liability When Our Cars Are in Autonomous Mode”, Fortune, 7 October 2015, http://​fortune.​com/​2015/​10/​07/​volvo-liability-self-driving-cars/​, accessed 1 June 2018. 90[1892] EWCA Civ 1. 91Fumio Shimpo, “The Principal Japanese AI and Robot Strategy and Research toward Establishing Basic Principles”, Journal of Law and Information Systems, Vol. 3 (May 2018). 92Dirk A. Zetzsche, Ross P. Buckley, and Douglas W. Arner, “The Distributed Liability of Distributed Ledgers: Legal Risks of Blockchain ”, EBI Working Paper Series (2017), No. 14; “Blockchain & Liability”, Oxford Business Law Blog, 28 September 2017, https://​www.​law.​ox.​ac.​uk/​business-law-blog/​blog/​2017/​09/​blockchain-liability, accessed 1 June 2018. 93Paulius Čerkaa, Jurgita Grigienėa, Gintarė Sirbikytėb, “Liability for Damages Caused By Artificial Intelligence”, Computer Law & Security Review, Vol. 31, No. 3 (June 2015), 376–389. 94However, the conclusion they point to was apparently reached by UNCITRAL in its deliberations, though does not formally form part of the convention.


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The Curse of Cash by Kenneth S Rogoff

Andrei Shleifer, Asian financial crisis, bank run, Ben Bernanke: helicopter money, Berlin Wall, bitcoin, blockchain, Boris Johnson, Bretton Woods, business cycle, capital controls, Carmen Reinhart, cashless society, central bank independence, cryptocurrency, debt deflation, disruptive innovation, distributed ledger, Edward Snowden, Ethereum, ethereum blockchain, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial exclusion, financial intermediation, financial repression, forward guidance, frictionless, full employment, George Akerlof, German hyperinflation, illegal immigration, inflation targeting, informal economy, interest rate swap, Isaac Newton, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, moveable type in China, New Economic Geography, offshore financial centre, oil shock, open economy, payday loans, price stability, purchasing power parity, quantitative easing, RAND corporation, RFID, savings glut, secular stagnation, seigniorage, The Great Moderation, the payments system, The Rise and Fall of American Growth, transaction costs, unbanked and underbanked, unconventional monetary instruments, underbanked, unorthodox policies, Y2K, yield curve

A simple but important point is that, ironically, the end objective of many cybertheft schemes often involves cash, typically withdrawn from an ATM.15 This is sometimes how criminals ultimately remove the funds they have transferred to bank accounts they control, possibly withdrawing currency via a network of people to avoid being conspicuous. Because the technology is evolving so rapidly, I am hesitant to go into much more detail, beyond saying that phasing out paper currency does not really move the needle much on society’s vulnerability to cybercrime. Some of the present-day obstacles to improving security are really more political than economic. Some innovations in security, such as the potentially disruptive distributed-ledger technology embodied in cryptocurrencies like Bitcoin or Ethereum, may eventually lead to major improvements in financial security, at least at the core of the payment system, as discussed further in chapter 14. It is particularly hard to see in any of these arguments why large-denomination notes are important. Probably they would be looked on askance after a power outage, earthquake, or other kind of catastrophe.

As things currently stand, the Federal Reserve does not directly weigh the welfare of other countries when determining its policy; they count only to the extent that any adverse effects might rebound back on the United States. This is hardly a desirable state of global governance but is not an issue I aim to tackle here. CHAPTER 14 Digital Currencies and Gold When I suggest to people that there might be benefits to phasing out paper currency, they almost invariably assume I am advocating a cryptocurrency like Bitcoin and are a bit disappointed to find out otherwise.1 No doubt anyone who looks at distributed-ledger technologies has to be excited about their potential applications in financial services and record keeping in general. For the foreseeable future, however, the best system is one in which a government-issued currency is the unit of account, though of course it will eventually morph into a fully electronic one. I appreciate that many leaders in the alternative payment space hold the libertarian view that new web-based transaction technologies can free people from the tyranny of government currency and regulation.

Plenty of other targets in the transaction ecosystem in theory could be overtaken by digital currencies, even after adjusting to regulation. The huge fees collected by credit card agencies, wire services, and other extant electronic transaction technologies make these media extremely vulnerable to disruptive innovators. Already, digital currencies are far cheaper for transmitting money internationally than wire services, where the charges can often run as much as 10–15% of the amount transmitted. And some applications of distributed-ledger technology offer the promise of cutting out intermediaries in transactions between, say, two banks. This would substantially reduce costs, particularly in international transactions. The approach can also be used to save on legal contracting costs. Some of Bitcoin’s competitors, notably the newer Ethereum platform, aim to offer the possibility of creating secure exchanges for transactions of almost any type.


Data and the City by Rob Kitchin,Tracey P. Lauriault,Gavin McArdle

A Declaration of the Independence of Cyberspace, bike sharing scheme, bitcoin, blockchain, Bretton Woods, Chelsea Manning, citizen journalism, Claude Shannon: information theory, clean water, cloud computing, complexity theory, conceptual framework, corporate governance, correlation does not imply causation, create, read, update, delete, crowdsourcing, cryptocurrency, dematerialisation, digital map, distributed ledger, fault tolerance, fiat currency, Filter Bubble, floating exchange rates, global value chain, Google Earth, hive mind, Internet of things, Kickstarter, knowledge economy, lifelogging, linked data, loose coupling, new economy, New Urbanism, Nicholas Carr, open economy, openstreetmap, packet switching, pattern recognition, performance metric, place-making, RAND corporation, RFID, Richard Florida, ride hailing / ride sharing, semantic web, sentiment analysis, sharing economy, Silicon Valley, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, smart contracts, smart grid, smart meter, social graph, software studies, statistical model, TaskRabbit, text mining, The Chicago School, The Death and Life of Great American Cities, the market place, the medium is the message, the scientific method, Toyota Production System, urban planning, urban sprawl, web application

These bindings enable platform independency and agile and straightforward communication between systems, thus creating accessible, flexible, scalable and interoperable smart city platforms and more easily implementable city data portals, urban control rooms and city dashboards. An alternative and emerging form of data infrastructure for city dashboards and services are blockchains. Blockchains are sealed and encrypted distributed ledgers of all transactions ever conducted within a system. Each block records key metadata regarding a transaction such as information about sender and receiver, time, value, fees and IP address, and once recorded cannot be altered, thus creating trust. Each block adds to the sequence of transactions forming a chain that leads back to the start of the database. While blockchains are most commonly associated with new financial currencies such as Bitcoin, Chris Speed, Deborah Maxwell and Larissa Pschetz examine their utility for recording and sharing other kinds of transactions.

This chapter explores different perspectives upon economic and socio/geographical ledgers and the complexity that they involve as they inevitably collide with concepts of chronological time, representation and actions. Three means of approaching the concept and practice of the ledger are discussed: (1) money, time and the blockchain: an exploration of how the representation of money shifts from material representation within fiat currencies (i.e. those underpinned by governments or precious metals) to the blockchain, the sealed distributed ledger that supports the Bitcoin cryptocurrency; (2) city as ledger: a recovery of the role of time in the production of economic geographies with a focus upon Hägerstrand’s approach to time-geography that accounted for personal and group actions within temporal and spatial frames, and inevitably a recovery of Marx and the obfuscation of histories and geographies; and (3) cognitive and practice-based ledgers: an introduction of the use of filmic storytelling as a cognitive ledger using the Dardennes’ film Two Days and One Night.

By reflecting on the role of ledgers across different forms, this formative chapter establishes the complexity of capturing and producing data across a myriad of social practices using linear systems. 142 C. Speed, D. Maxwell and L. Pschetz Ledger 1: money, time and the blockchain There are many elements that make Bitcoin an interesting alternative currency, but critically it is the development and implementation of the blockchain – a distributed ledger that contains all transaction records ever conducted. The Bitcoin blockchain is an encrypted, cumulative ledger composed of ‘blocks’ of transactions that are verified by miners and which lead back to the first ‘Genesis’ block whose instance is timed as 18:15:05 GMT, on 3 January 2009, signifying the start of the currency. Blocks can contain the social, economic and geographic information about the senders and receivers of Bitcoin wallets, time of transaction, amount of Bitcoins being transferred, fees and IP addresses from which location can also be identified.


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The Bitcoin Guidebook: How to Obtain, Invest, and Spend the World's First Decentralized Cryptocurrency by Ian Demartino

3D printing, AltaVista, altcoin, bitcoin, blockchain, buy low sell high, capital controls, cloud computing, corporate governance, crowdsourcing, cryptocurrency, distributed ledger, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, Firefox, forensic accounting, global village, GnuPG, Google Earth, Haight Ashbury, Jacob Appelbaum, Kevin Kelly, Kickstarter, litecoin, M-Pesa, Marc Andreessen, Marshall McLuhan, Oculus Rift, peer-to-peer, peer-to-peer lending, Ponzi scheme, prediction markets, QR code, ransomware, Ross Ulbricht, Satoshi Nakamoto, self-driving car, Skype, smart contracts, Steven Levy, the medium is the message, underbanked, WikiLeaks, Zimmermann PGP

Any person can digitally “hand” someone a bitcoin, multiple bitcoins, or a fraction of bitcoin, across the world or in the same room. Like handing someone cash, and unlike older digital financial systems, the money doesn’t have to go through an intermediary like a bank or another company. The advantages of using Bitcoin, which I will get to later, are what gives it its value. Bitcoin is also a distributed ledger, i.e., a record of every transaction and every Bitcoin wallet’s balance (you can think of a wallet as something akin to an account for now). This ledger is also called a blockchain. Every wallet, rather than being stored in a bank’s database, exists on this ledger; each wallet has its own private key and public key. The public key is also called the Bitcoin address. It is between 25 and 36 alphanumeric characters and begins with either a 1 or 3.

I won’t even make the argument that cash has been used for criminal activities far more often and for far longer than digital currencies, because the truth is that digital currencies are better suited for certain criminal activities than even cash is. Bitcoin is a useful tool and people will find uses for it, both good and bad. I suspect criminal activities surrounding digital currencies will only get more advanced in the future, but at the same time, so will legitimate investments and innovations. Bitcoin is many things. It is an online currency, a distributed ledger, and a decentralized network. And yet it may also become the fulfillment of the predictions, desires, and even fears of the early pioneers of the Internet. 1 “Statistics and Facts about Online Shopping.” Statista. June 2014. Accessed May 19, 2015. http://www.statista.com/topics/2477/online-shopping-behavior/. 2 Lewis, Peter H. “Attention Shoppers: Internet Is Open.” Editorial. The New York Times.

Some currencies failed because the company issuing them merely acted as money transactors themselves, adding an unnecessary middleman instead of eliminating one. Others failed because the issuer abused their power and scammed those who had bought in. Yet others ran afoul of government regulations.6 These issues are avoided with decentralization. When Satoshi Nakamoto invented the blockchain by combining the distributed ledger and proof-of-work concepts, he fulfilled the long-held vision of a workable, distributed, decentralized currency for the Internet. With it, anyone can transfer virtually any amount for a few cents or less. The blockchain tracks every transaction and its distributed nature ensures that no government agency can shut it down. The details of how this works will be covered in another chapter but the first use case of Bitcoin and the blockchain is the ability to transfer value on the Internet as easily as sending an email and almost as cheaply.


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The Levelling: What’s Next After Globalization by Michael O’sullivan

"Robert Solow", 3D printing, Airbnb, algorithmic trading, bank run, banking crisis, barriers to entry, Bernie Sanders, bitcoin, Black Swan, blockchain, Boris Johnson, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, capital controls, Celtic Tiger, central bank independence, cloud computing, continuation of politics by other means, corporate governance, credit crunch, cryptocurrency, deglobalization, deindustrialization, disruptive innovation, distributed ledger, Donald Trump, eurozone crisis, financial innovation, first-past-the-post, fixed income, Geoffrey West, Santa Fe Institute, Gini coefficient, global value chain, housing crisis, income inequality, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, liberal world order, Long Term Capital Management, longitudinal study, market bubble, minimum wage unemployment, new economy, Northern Rock, offshore financial centre, open economy, pattern recognition, Peace of Westphalia, performance metric, private military company, quantitative easing, race to the bottom, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Scramble for Africa, secular stagnation, Silicon Valley, Sinatra Doctrine, South China Sea, South Sea Bubble, special drawing rights, supply-chain management, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, tulip mania, Valery Gerasimov, Washington Consensus

My objective is not to obsess about President Trump and his modus operandi but to look for new ways of narrowing the gap between people and those who are given the privilege of governing them. The starting point in this challenge is for people, rather than their leaders, to decide what they want from politics. One of the best examples of how this can be done lies with the example of the Levellers. * Distributed ledger technology “allows simultaneous access, validation and record updating… across a network spread across multiple entities or locations. [It is] more commonly known as the blockchain technology.” “Distributed Ledger Technology,” Investopedia, https://www.investopedia.com/terms/d/distributed-ledger-technology-dlt.asp. * What I have in mind here is that some countries condone and accept practices in areas like genetic editing that are not commonly or legally accepted around the world. FOUR THE LEVELLERS Agreements of the People St.

Many of them will have failed to spot the emergence of the new trend but are quick to align themselves with it (which tells us more about the labor market than about anything else: people align their careers with hot trends). For instance, the December 2017 spike in the price of bitcoin was accompanied by a raft of new research opinions on the cryptocurrency from new cryptocoin brokers and large banks. For what it is worth, my own view on cryptocurrencies is that the future will be characterized as “Blockchain everywhere, bitcoin nowhere”—that is, the distributed ledger technology behind bitcoin will become more pervasive across economic sectors, but bitcoin will fail to prove itself as a currency proper and will live out an existence as a lurid, speculative asset.* To return to the business of forecasting, I am also often struck by the number of times that bodies like the IMF and central banks follow up a crisis or market event with a downward adjustment to their GDP forecasts.

In the future, however, more data on our lives and behavior will be generated by different industries. Health care is one. Many people might not be overly concerned if their Yahoo account was hacked but would be upset to find that their medical data had fallen into the wrong hands or was being used against them, by insurance companies, for instance. This suggests the need for tougher regulation of personal data, and it also points the way toward new technologies such as blockchain (i.e., distributed ledger technology) being deployed to protect data, and of the need to think about how fifth-generation telecommunications networks are protected. With blockchain, data is much more secure, and data owners can explicitly give permission for the use of their data (e.g., to doctors or pharmacists in the case of medicine). The potential use of blockchain—where not only can someone’s data be better protected, but a person’s identity can also be more easily verified—opens up the possibility that internet users could carry a form of verified online identification certificate.


Demystifying Smart Cities by Anders Lisdorf

3D printing, artificial general intelligence, autonomous vehicles, bitcoin, business intelligence, business process, chief data officer, clean water, cloud computing, computer vision, continuous integration, crowdsourcing, data is the new oil, digital twin, distributed ledger, don't be evil, Elon Musk, en.wikipedia.org, facts on the ground, Google Glasses, income inequality, Infrastructure as a Service, Internet of things, Masdar, microservices, Minecraft, platform as a service, ransomware, RFID, ride hailing / ride sharing, risk tolerance, self-driving car, smart cities, smart meter, software as a service, speech recognition, Stephen Hawking, Steve Jobs, Steve Wozniak, Stuxnet, Thomas Bayes, Turing test, urban sprawl, zero-sum game

This is being done today of course by banks, but it requires an elaborate system to clear that a transaction is correct and make it official. Once a transaction has been stored in the distributed ledger, it can no longer be disputed or reversed in any way, and it is free and open for anyone to see that it has been done. This is why block chain is good for problems where trust and validating data is an issue. As a general storage option, it has serious drawbacks because it is very slow. From the time a transaction is made until it is validated by the block chain, it can take minutes. For the original Bitcoin block chain, it was around 10 minutes. Other block chains have been developed that are faster, but it will never be able to compete with any other storage technology in terms of latency. It is also very costly in terms of processing, since all nodes in the distributed ledger need to process everything and generate new blocks.

This type of database has also been around for decades but only recently come into focus due to open source efforts like Neo4J. It is well suited to problems that have a network structure to them since it is optimized for identifying relationships between observations like social networks, criminal investigations, fraud detection, and so on. Block chain The block chain is actually also a way of storing data. It operates with a so-called distributed ledger, which means that everyone has the same ledger and operates on it. The same could in principle be done with a file that everyone shared, but the block chain has been optimized for synchronizing data between copies and doing it in a format that makes it impossible to alter afterward. This is called non-repudiation in technical terms and refers to the possibility of proving transactions. This is a key property which no other storage technology does as well.


pages: 340 words: 97,723

The Big Nine: How the Tech Titans and Their Thinking Machines Could Warp Humanity by Amy Webb

Ada Lovelace, AI winter, Airbnb, airport security, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, artificial general intelligence, Asilomar, autonomous vehicles, Bayesian statistics, Bernie Sanders, bioinformatics, blockchain, Bretton Woods, business intelligence, Cass Sunstein, Claude Shannon: information theory, cloud computing, cognitive bias, complexity theory, computer vision, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, Deng Xiaoping, distributed ledger, don't be evil, Donald Trump, Elon Musk, Filter Bubble, Flynn Effect, gig economy, Google Glasses, Grace Hopper, Gödel, Escher, Bach, Inbox Zero, Internet of things, Jacques de Vaucanson, Jeff Bezos, Joan Didion, job automation, John von Neumann, knowledge worker, Lyft, Mark Zuckerberg, Menlo Park, move fast and break things, move fast and break things, natural language processing, New Urbanism, one-China policy, optical character recognition, packet switching, pattern recognition, personalized medicine, RAND corporation, Ray Kurzweil, ride hailing / ride sharing, Rodney Brooks, Rubik’s Cube, Sand Hill Road, Second Machine Age, self-driving car, SETI@home, side project, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart cities, South China Sea, sovereign wealth fund, speech recognition, Stephen Hawking, strong AI, superintelligent machines, technological singularity, The Coming Technological Singularity, theory of mind, Tim Cook: Apple, trade route, Turing machine, Turing test, uber lyft, Von Neumann architecture, Watson beat the top human players on Jeopardy!, zero day

GAIA nations sign accords, explicitly agreeing to value safety over speed, and dedicate considerable resources to cleaning up all of our current systems: the databases and algorithms already in use, the frameworks they rely on, the enterprise-level products that incorporate AI (like those being used at banks and within law enforcements) and the consumer devices that harness AI for everyday tasks (our smart speakers, watches, and phones). GAIA invites—and rewards—public accountability. Within GAIA, a decision is made to treat our personal data records (PDRs) like we do the distributed ledgers of blockchains. Distributed ledgers use thousands of independent computers to record, share, and synchronize transactions. By design, they don’t keep data centralized under the umbrella of just one company or agency. Because the G-MAFIA Coalition adopts a set of standards and deploys unified AI technologies, our PDRs don’t really need a centrally coordinating company to manage transactions. As a result, individuals own their own PDRs, which are as private or as public as we want them to be and are fully interoperable—we can connect them to any or all of the G-MAFIA and to many other AI-powered services simultaneously, like our doctors’ offices, schools, and city infrastructure.

See also names of specific companies Future and AI, optimistic scenario of, 151, 155–178, 233; architectural trends, 171–172; brain-to-machine interfaces, 176–177; business management, 166; China adoption of GAIA norms and standards, 172; computational pharmacists and pharmacies, 173; construction and building industries, 165; Contributing Team Member Test, 169, 171, 175; crime, 172, 175–176; cubesat networks, 168; Dartmouth inaugural intergovernmental forum, 157–158; dating, sex, and marriage, 164–165, 174; education, 167; face recognition payment options in stores, 162; Federal Smart Infrastructure Administration (FSIA), 176; filmmaking, 165–166; first artificial general intelligence system (AGI), 169–171; G-MAFIA actions against China’s nefarious AI use, 156; G-MAFIA addressing climate change, 171–172; G-MAFIA Coalition adoption of transparency as core value, 157; G-MAFIA Coalition formalization, 157; G-MAFIA privacy commitment, 168; G-MAFIA mixed reality products and services partnerships, 160–161, 165; G-MAFIA nudging toward healthier lifestyles, 162–163; GAIA (Global Alliance on Intelligence Augmentation) and, 158, 159, 176; GAIA decision and actions to prevent ASI creation, 177–178; GAIA regular meetings, 160; genome sequencing, 174; grocery shopping and delivery services, 161–162; health care systems, 163–164, 173–174; home AI systems and appliances, 161, 172–173; job displacement and AGI, 172; journalism, 167–168, 175; law enforcement, 176; meal-kit services linked to household PDR, 162; music, 174–175; new types of criminal activity and AGI, 172; PDR individual ownership 159; PDRs treated as distributed ledgers, 159; PDRs and privacy, 168; Project Hermione (AGI), 169–171; quick-service stores, 162; robotic pets, 162; sensory computation, 160; smart camera surveillance in retail stores, 162; smart city pilot programs, 168, 176; 2049, 169–177; 2069, 177–178; 2029, 159–169; U.S. government AI funding, 156; workforce preparation for computing’s third era, 157. See also names of specific companies; China, optimistic scenario of future Future and AI, pragmatic scenario of, 151, 179–206; adversarial examples in AI training programs, 183–184; Applezon, 188, 189, 190, 192, 194, 202, 203, 205; Applezon Health System, 195, 196, 204; Applezon versus Google mega-OS choice, 191; Applezon Vision glasses, 191; backup analog tools, 190; Big Nine prioritizing speed over safety and, 180; brain-machine interfaces, 193–194; competing algorithms, 184–185; crime, 198–199; data collection/labeling and, 181; decline of Western civilization and democratic ideals, 205; digital caste system, 197; digital emissaries, 187; economy in peril, 205; electronic headbands linking minds, 204; EU ban on NAGIs, 203; fake news proliferation, 198; G-MAFIA divvying up of functions and features, 186; G-MAFIA nonexistent core values, 186; G-MAFIA loss of Facebook, 201–202; gigware, 196; harassment by physical robots, 199; healthcare, 182, 194, 195–196, 204; healthy lifestyle nagging, 194; home as marketing container, 203–204; human-animal chimeras, 204–205; ignoring China and, 179, 185–186; ill-behaved AGIs, 202–203; information contamination, 198; job search use of AI, 196–197; journalism, 198; law enforcement and G-Mafia locked systems, 199; learned helplessness, 190–201; machine creativity, 197; mega-OS (Google), 187, 188, 189, 190; middle management jobs elimination, 197; nanny AGIs (NAGIs), 202–203, 205; neuroenchancing headband, 193–194; parrot attacks, 193; PDR G-MAFIA ownership, 187; PDR linked to insurance premium, 194; PDR third-party use, 189; reward hacking, 183; smart glasses, 191, 192; smartphones, 191; splinternets, 198; subscription model for smart wearables and tools, 192–193; transparency, 188; 2049, 201-205; 2069, 205–206; 2029, 190-201; two-OS system, 188–189, 190; Watson-Calico Health System, 195, 196, 204.

See also Alphabet; Google Palantir, 87 Parrot attacks: in pragmatic scenario of future, 193 Pascal, Blaise, 20–21 Patagonia, 210 Peking University, China Credit Research Center at, 80 Peloton, 87 People’s Liberation Army, 78 People’s Republic of China (PRC), Centennial of, 223 Perception system, 32 Personal data records (PDRs), catastrophic scenario of future and, 208–209, 218, 226; as social credit score, 209; corporate ownership of, 209 Personal data records (PDRs), optimistic scenario of future and, 152–153; China and, 152, 154; as heritable, 153; individual ownership of, 159; privacy and, 168; treated as distributed ledgers, 159 Personal data records (PDRs), pragmatic scenario of future and: G-MAFIA ownership, 187; linked to insurance premium, 194; third-party use, 189 Personally identifiable information (PII), 237; need for citizen-owned, 237 Pets, robotic: in optimistic scenario of future, 162 Pharmacists and pharmacies: computational in optimistic scenario of future, 173 Pichai, Sundar, 64–65, 101 Pitts, Walter, 26; neural network theory, 26–27 Plato, 17 Police Cloud, 6, 82 Portal, 54 Pratt, Gill, 149 Privacy: Chinese view of, 79–82; Cook, Tim, on future of, 95; G-MAFIA commitment to in optimistic scenario of future, 168; PDRs and in optimistic scenario of future, 168 Processors: as part of AI ecosystem, 17 Project Maven, 78–79; Google employee resignations and, 79, 101 Purcell, Henry, 16 Python programming language, 60 R programming language, 60 Recursive self-improvement, 149 Regulations, government: eliminating most for G-MAFIA AI development, 250 Reinforcement learning, 49 Réngōng Zhinéng (Artificial Intelligence) Dynasty: in catastrophic scenario of future, 223, 229, 233 Reward hacking, pragmatic scenario of future and, 183 Robots, physical: Electro the Moto-Man, 25; in film and TV, 2; harassment by in pragmatic scenario of future, 199; physical danger from, 58.


pages: 430 words: 68,225

Blockchain Basics: A Non-Technical Introduction in 25 Steps by Daniel Drescher

bitcoin, blockchain, business process, central bank independence, collaborative editing, cryptocurrency, disintermediation, disruptive innovation, distributed ledger, Ethereum, ethereum blockchain, fiat currency, job automation, linked data, peer-to-peer, place-making, Satoshi Nakamoto, smart contracts, transaction costs

His recent activities have focused on automation, machine learning, and big data in the context of security trading. Among others, Daniel holds a doctorate in econometrics from the Technical University of Berlin and an MSc in software engineering from the University of Oxford. About the Technical Reviewer Laurence Kirk who after a successful career writing low latency financial applications for the City of London, was captivated by the potential of distributed ledger technology. He moved to Oxford to study for his master’s degree and set up Extropy.io, a consultancy working with start- ups to develop applications on the Ethereum platform. Passionate about distributed technol- ogy, he now works as a developer, evangelist, and educator about Ethereum. Introduction This introduction answers the most important question that every author has to answer: Why should anyone read this book?

Drescher, Blockchain Basics, DOI 10.1007/978-1-4842-2604-9_21 190 Step 21 | Bringing the Pieces Together Table 21-1. Review of the Tasks of Designing a Distributed Peer-to-Peer System for Managing Ownership Task Number Goal Step Number Major Concept 1 Describing Ownership 9 History of Transaction Data 2 Protecting Ownership 10–13 Digital Signature 3 Storing Transaction Data 10, 11, 14, 15 Blockchain-Data-Structure 4 Preparing Ledgers for 16 Immutability Being Distributed 5 Distributing Ledgers 17 Information Forwarding in Networks 6 Adding New Transactions 18 Blockchain-Algorithm 7 Deciding Which Ledger 19 Distributed Consensus Represents the Truth It is important to understand that these major concepts that make up the blockchain rely on other concepts and technologies. Understanding the block- chain requires at least an appreciation of these concepts as well. For that reason, Table 21-2 summarizes on a more detailed level the technologies that make up the blockchain.

What these unwanted consequences are and how they may limit the use of the blockchain will be discussed in the next step. Summary • The blockchain is a purely distributed peer-to-peer system that addresses the following aspects of managing ownership: • Describing ownership: History of Transaction Data • Protecting ownership: Digital Signature • Storing transaction data: Blockchain-Data-Structure • Preparing ledgers for being distributed: Immutability • Distributing ledgers: Gossip-Style Information Forwarding Through a Network Blockchain Basics 201 • Processing new transactions: Blockchain-Algorithm • Deciding which ledger represents the truth: Distributed Consensus • Analyzing the blockchain involves the following aspects: • The application goal • Its properties • Its internal functioning • The blockchain has two application goals: • Clarifying ownership • Transferring ownership • The blockchain fulfills its application goals while exhibiting the following qualities: • Highly available • Censorship proof • Reliable • Open • Pseudoanonymous • Secure • Resilient • Eventually consistent • Keeping integrity • Internally the blockchain consists of components that are either specific or agnostic to the application goal of managing ownership


pages: 304 words: 80,143

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines by William Davidow, Michael Malone

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, Airbnb, American Society of Civil Engineers: Report Card, Automated Insights, autonomous vehicles, basic income, bitcoin, blockchain, blue-collar work, Bob Noyce, business process, call centre, cashless society, citizen journalism, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, cryptocurrency, disintermediation, disruptive innovation, distributed ledger, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Francis Fukuyama: the end of history, Geoffrey West, Santa Fe Institute, gig economy, Gini coefficient, Hyperloop, income inequality, industrial robot, Internet of things, invention of agriculture, invention of movable type, invention of the printing press, invisible hand, Jane Jacobs, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, license plate recognition, Lyft, Mark Zuckerberg, mass immigration, Network effects, new economy, peer-to-peer lending, QWERTY keyboard, ransomware, Richard Florida, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Simon Kuznets, Snapchat, speech recognition, Stuxnet, TaskRabbit, The Death and Life of Great American Cities, The Rise and Fall of American Growth, the scientific method, trade route, Turing test, Uber and Lyft, uber lyft, universal basic income, uranium enrichment, urban planning, zero day, zero-sum game, Zipcar

It had fewer than one hundred as recently as 2014.31 WHEN MONEY GOES VIRTUAL Then there are cybercurrencies such as Bitcoin. Bitcoin has proved that extremely secure, anonymous, inexpensive, and fast payment systems can be implemented using distributed ledgers, a system in which multiple copies of the same ledger are stored on geographically dispersed systems. The ledgers are virtually impossible to hack, because there are so many of them—thousands in Bitcoin’s case. If a hacker penetrated one of them to steal something, he would also have to figure out how to alter the records on the thousands of other systems. By comparison, the single-copy ledgers that banks use to keep track of bank accounts and credit card transactions are much less secure. In payment systems based on distributed ledgers, only the source of a payment is identified; no account information is ever revealed to the payee. This makes it virtually impossible to acquire information from a payee, such as Arby’s, to access money from a payer’s account.

This makes it virtually impossible to acquire information from a payee, such as Arby’s, to access money from a payer’s account. Transactions using blockchain technology (a form of distributed ledger technology in which data can only be added to databases and not altered or deleted) can also be made very secure and anonymous. In the case of Bitcoin, a cryptographic algorithm is used to ensure that Bitcoins are transferred from the correct payer’s wallet to the correct recipient’s wallet.32 In the credit card world, the typical fee for transferring money is about 2 percent of the size of the transaction, and a merchant will typically have to wait one to three days before money is deposited in its account. Things are very different with Bitcoin. The charge for the transfer is based on the length of the message required to specify the transfer and the current value of a Bitcoin.


Bit by Bit: How P2P Is Freeing the World by Jeffrey Tucker

Affordable Care Act / Obamacare, Airbnb, airport security, altcoin, bank run, bitcoin, blockchain, business cycle, crowdsourcing, cryptocurrency, disintermediation, distributed ledger, Fractional reserve banking, George Gilder, Google Hangouts, informal economy, invisible hand, Kickstarter, litecoin, Lyft, obamacare, Occupy movement, peer-to-peer, peer-to-peer lending, QR code, ride hailing / ride sharing, Ross Ulbricht, Satoshi Nakamoto, sharing economy, Silicon Valley, Skype, TaskRabbit, the payments system, uber lyft

The structure and language of this paper sent the message: This currency is for computer technicians, not economists nor political pundits. The paper's circulation was limited; novices who read it were mystified. But the lack of interest didn’t stop history from moving forward. Two months later, those who were paying attention saw the emergence of the “Genesis Block,” the first group of bitcoins generated through Nakamoto’s concept of a distributed ledger that lived on any computer node in the world that wanted to host it. Here we are six years later and a single bitcoin trades at $400 and has been as high as $1,200 per coin. The currency is accepted by many thousands of institutions, both online and offline. Its payment system is very popular in poor countries without vast banking infrastructures but also in developed countries. And major institutions—including the Federal Reserve, the OECD, the World Bank, and major investment houses—are paying respectful attention.

But if you isolate the merit of the blockchain itself, you find an extraordinary innovation that is capable of doing far more than provide a new, de-politicized money for the world. The blockchain is a system of providing durable, verifiable, time-stamped records of information transfer, peer to peer and without third-party trust relationships. It holds out the possibility of reinventing the way we think of all contracts and even contract law. This realm of distributed ledger technology is only now being explored. Just imagine its use in business-to-business contracting, futures contracts, public stock offerings, titles and mortgages, and so much more. What if all the institutions that are currently doing these things come to be displaced by the same P2P system of shared exchange that is reinventing so many other services today? Does it sound outlandish, this idea of removing contracts and laws from the realm of the State?


pages: 349 words: 102,827

The Infinite Machine: How an Army of Crypto-Hackers Is Building the Next Internet With Ethereum by Camila Russo

4chan, Airbnb, algorithmic trading, altcoin, always be closing, Any sufficiently advanced technology is indistinguishable from magic, Asian financial crisis, bitcoin, blockchain, Burning Man, crowdsourcing, cryptocurrency, distributed ledger, diversification, Donald Trump, East Village, Ethereum, ethereum blockchain, Flash crash, Google Glasses, Google Hangouts, hacker house, Internet of things, Mark Zuckerberg, Maui Hawaii, mobile money, new economy, peer-to-peer, Peter Thiel, pets.com, Ponzi scheme, prediction markets, QR code, reserve currency, RFC: Request For Comment, Richard Stallman, Robert Shiller, Robert Shiller, Sand Hill Road, Satoshi Nakamoto, semantic web, sharing economy, side project, Silicon Valley, Skype, slashdot, smart contracts, South of Market, San Francisco, the payments system, too big to fail, tulip mania, Turing complete, Uber for X

He gave Rune a technical suggestion, which Rune’s project, called MakerDAO, ended up implementing.5 Rune says the system would have probably been hacked and a total disaster if he had released it as it was, but at the time, he was part of a cohort of Ethereans who believed smart contracts were invincible and unbreakable. “Build unstoppable applications,” the Ethereum.org website would later say. Not only that, but many believed anything was better if it was decentralized. The thinking was, if you picked any business idea and somehow added blockchain technology, it would be an instant success. It didn’t matter if a distributed ledger was actually needed. Decentralization was hailed as a goal in itself, rather than a tool. The purpose of Rune’s stable cryptocurrency was that people would be able to interact with Ethereum applications without having to worry about the crazy volatility of ether. It would be pegged to the dollar in value, meaning 1 eDollar would be worth 1 US dollar. The difference with BitShares was that rather than having a single asset as collateral it would use multiple cryptocurrencies on the Ethereum blockchain to be more decentralized and stable.

Like so many Fortune 500 companies, the world’s most powerful governments were also looking at blockchain technology. Russian officials had a hot and cold relationship with cryptos, at times calling them a Ponzi scheme, at times backing blockchain initiatives. After the meeting with Vitalik, a constant stream of news reports suggested that Russia was turning more pro-crypto. A consortium of the country’s biggest banks developed Masterchain, a distributed ledger using a modified Ethereum protocol; some headlines suggested the country wanted to create its own national digital currency; and most outrageous of all: when the country’s Burger King chains started offering a loyalty points token called “Whoppercoin.” Authoritarian governments don’t spark much love from the libertarian-leaning crypto community, and many were quick to criticize Vitalik for his meeting with Putin.

It wasn’t just this grassroots financial movement using Ethereum. Big companies were building on the decentralized network more than ever. Some two years after JPMorgan’s CEO Jamie Dimon labeled Bitcoin a “fraud,” the US bank launched its own cryptocurrency created on Quorum, an enterprise-focused version of Ethereum. Microsoft and Amazon use Ethereum for their blockchain-as-a-service platforms, which aims to help users implement distributed ledger technology. Accounting firm EY built tools to allow companies to privately create, trade, and destroy tokens on top of Ethereum, in a project called Nightfall. By the time New York blockchain week came around in mid-2019, there were no Lambos or Aston Martins, no parties at strip clubs making headlines. But stats on Ethereum were healthier than ever. The network had higher transaction volume than Bitcoin and four times the number of developers, according to a report by Electric Capital.


pages: 385 words: 111,113

Augmented: Life in the Smart Lane by Brett King

23andMe, 3D printing, additive manufacturing, Affordable Care Act / Obamacare, agricultural Revolution, Airbnb, Albert Einstein, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, Apple II, artificial general intelligence, asset allocation, augmented reality, autonomous vehicles, barriers to entry, bitcoin, blockchain, business intelligence, business process, call centre, chief data officer, Chris Urmson, Clayton Christensen, clean water, congestion charging, crowdsourcing, cryptocurrency, deskilling, different worldview, disruptive innovation, distributed generation, distributed ledger, double helix, drone strike, Elon Musk, Erik Brynjolfsson, Fellow of the Royal Society, fiat currency, financial exclusion, Flash crash, Flynn Effect, future of work, gig economy, Google Glasses, Google X / Alphabet X, Hans Lippershey, Hyperloop, income inequality, industrial robot, information asymmetry, Internet of things, invention of movable type, invention of the printing press, invention of the telephone, invention of the wheel, James Dyson, Jeff Bezos, job automation, job-hopping, John Markoff, John von Neumann, Kevin Kelly, Kickstarter, Kodak vs Instagram, Leonard Kleinrock, lifelogging, low earth orbit, low skilled workers, Lyft, M-Pesa, Mark Zuckerberg, Marshall McLuhan, megacity, Metcalfe’s law, Minecraft, mobile money, money market fund, more computing power than Apollo, Network effects, new economy, obamacare, Occupy movement, Oculus Rift, off grid, packet switching, pattern recognition, peer-to-peer, Ray Kurzweil, RFID, ride hailing / ride sharing, Robert Metcalfe, Satoshi Nakamoto, Second Machine Age, selective serotonin reuptake inhibitor (SSRI), self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, smart transportation, Snapchat, social graph, software as a service, speech recognition, statistical model, stem cell, Stephen Hawking, Steve Jobs, Steve Wozniak, strong AI, TaskRabbit, technological singularity, telemarketer, telepresence, telepresence robot, Tesla Model S, The Future of Employment, Tim Cook: Apple, trade route, Travis Kalanick, Turing complete, Turing test, uber lyft, undersea cable, urban sprawl, V2 rocket, Watson beat the top human players on Jeopardy!, white picket fence, WikiLeaks

Today, the primary method of transferring money between banks globally is a transaction called a wire transfer or telegraphic transfer, so named because the instructions for these transfers were sent via telegraph or “wire” initially, then later by Telex and now via interbank electronic networks like SWIFT.1 The first mainframe computer ever built was for a bank, too. Today, we talk about using distributed ledger systems like the blockchain to send money from wallet to wallet, or account to account, instantly between devices or value stores across the globe. The future of money, payments and elements of the banking system is going to be materially and fundamentally changed by a range of technologies being deployed today. The biggest change will likely be in respect to what we call our “bank account”, and how people get access to banking around the world, but the way banks and payments operate is also being transformed fundamentally.

This enabled the regulator to ensure that each user or owner of a Bitcoin wallet had his identity verified as per the traditional banking system. The motivation was twofold: identify users of the Bitcoin system/currency and prevent criminal money laundering systems from circumventing existing controls. At the core of Bitcoin is a decentralised ledger system that means that no one person, organisation or government controls the way Bitcoin works. There are only a few thousand Bitcoin nodes,13 but the distributed ledger system that allocates the millions of bitcoins around the world is constantly syncing and updating the records of digital currency moving from one wallet to another. For the same reason that regulators generally don’t like the Bitcoin system, i.e. a wallet functioning independent of the wallet holder’s identity, it makes the blockchain or something similar, much better suited to the future of money.

For the same reason that regulators generally don’t like the Bitcoin system, i.e. a wallet functioning independent of the wallet holder’s identity, it makes the blockchain or something similar, much better suited to the future of money. It has much higher redundancy than exiting banking systems, and works to reinforce itself constantly. There is no such thing as a bitcoin, of course, at least not in the physical sense. The blockchain simply keeps track of an ever-expanding list of addresses, and how many units of bitcoin are at each of those addresses. Figure 9.5: At the heart of Bitcoin is a distributed ledger system that is far more efficient for digital transactions than the existing banking system. If you own bitcoin, what you actually own is the private cryptographic key to unlock a specific address with a value stored in it—it just so happens that value corresponds to the number of bitcoins you hold. The private key looks like a long string of numbers and letters. You may choose to store your key, or keys if you have multiple addresses, in a number of places including a paper printout, a metal coin, a hard drive or via an online service.


pages: 237 words: 67,154

Ours to Hack and to Own: The Rise of Platform Cooperativism, a New Vision for the Future of Work and a Fairer Internet by Trebor Scholz, Nathan Schneider

1960s counterculture, activist fund / activist shareholder / activist investor, Airbnb, Amazon Mechanical Turk, barriers to entry, basic income, bitcoin, blockchain, Build a better mousetrap, Burning Man, capital controls, citizen journalism, collaborative economy, collaborative editing, collective bargaining, commoditize, conceptual framework, crowdsourcing, cryptocurrency, Debian, deskilling, disintermediation, distributed ledger, Ethereum, ethereum blockchain, future of work, gig economy, Google bus, hiring and firing, income inequality, information asymmetry, Internet of things, Jacob Appelbaum, Jeff Bezos, job automation, Julian Assange, Kickstarter, lake wobegon effect, low skilled workers, Lyft, Mark Zuckerberg, means of production, minimum viable product, moral hazard, Network effects, new economy, offshore financial centre, openstreetmap, peer-to-peer, post-work, profit maximization, race to the bottom, ride hailing / ride sharing, SETI@home, shareholder value, sharing economy, Shoshana Zuboff, Silicon Valley, smart cities, smart contracts, Snapchat, TaskRabbit, technoutopianism, transaction costs, Travis Kalanick, Uber for X, uber lyft, union organizing, universal basic income, Whole Earth Catalog, WikiLeaks, women in the workforce, Zipcar

This record is public, shared by all, and it cannot be amended. This distributed database can be used for applications other than monetary transactions. With the rise of what some are calling “blockchain 2.0,” the accounting technology underpinning Bitcoin is now taking on non-monetary applications as diverse as electronic voting, file tracking, property title management, and the organization of worker cooperatives. Very quickly, it seems, distributed ledger technologies have made their way into any project broadly related to social or political transformation for the left—“put a blockchain on it!”—until its mention, sooner or later, looks like the basis for a dangerous drinking game. On the other side of things, poking fun at blockchain evangelism is now a nerdy pastime, more enjoyable even than ridiculing handlebar moustaches and fixie bicycles.

So let me show my hand. I’m interested in the blockchain (or blockchain-based technologies) as one tool that, in a very pragmatic way, could assist with cooperative activities—helping us to share resources, to arbitrate, adjudicate, disambiguate, and make collective decisions. Some fledgling examples are La’Zooz, an alternative ride-sharing app; Swarm, a fundraising app; and proposals for the use of distributed ledgers to manage land ownership or critical infrastructures like water and energy. Many of these activities are difficult outside of local communities or in the absence of some trusted intermediary. However, I also think that much of the current rhetoric around the blockchain hints at problems with the techno-utopian ideologies that surround digital activism, and points to the assumptions these projects fall into time and again.


The Rise of Carry: The Dangerous Consequences of Volatility Suppression and the New Financial Order of Decaying Growth and Recurring Crisis by Tim Lee, Jamie Lee, Kevin Coldiron

active measures, Asian financial crisis, asset-backed security, backtesting, bank run, Bernie Madoff, Bretton Woods, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, debt deflation, distributed ledger, diversification, financial intermediation, Flash crash, global reserve currency, implied volatility, income inequality, inflation targeting, labor-force participation, Long Term Capital Management, Lyft, margin call, market bubble, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, negative equity, Network effects, Ponzi scheme, purchasing power parity, quantitative easing, random walk, rent-seeking, reserve currency, rising living standards, risk/return, sharing economy, short selling, sovereign wealth fund, Uber and Lyft, uber lyft, yield curve

The claim that this should not be allowed to happen is rooted in the idea that there is no such thing as a free lunch, but it could be said to be also tied up with the notion that money is, at core, based on trust. Existing cryptocurrencies do not have the property of being linked to the economy’s asset base in any way. The provenance of a holding 212 THE RISE OF CARRY of crypto­currencies is instead achieved through the distributed ledger rather than as a financial claim. But cryptocurrencies do have a significant cost of production, meaning that the contention that they will develop into an alternative or even a superior form of money cannot be dismissed out of hand. The ultimate solution to the problem of money could be technology that allows the use of assets—whether shares, bonds, property, or otherwise — directly as a medium of exchange.

This would address the requirement that viable money should correspond to a claim on the real economy. It would eliminate the possibility of bank runs, in exchange for each currency holder accepting a small amount of day-to-day variability in purchasing power depending on the performance of the particular assets that the currency holder owns. With modern, liquid, electronic financial markets, such a solution may now be technologically possible. It could be implemented through a distributed ledger like cryptocurrencies, or through competing centralized private “banks” (which would be something between mutual funds and banks as understood today), or even through a service provided by a government monopoly. At the moment such a solution seems unlikely to be widely accepted, as both the status quo and revealed preferences of the public seem to favor taking the risk of runs and crises over accepting floating purchasing power in normal conditions.


pages: 87 words: 25,823

The Politics of Bitcoin: Software as Right-Wing Extremism by David Golumbia

3D printing, A Declaration of the Independence of Cyberspace, Affordable Care Act / Obamacare, bitcoin, blockchain, Burning Man, crony capitalism, cryptocurrency, currency peg, distributed ledger, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, Extropian, fiat currency, Fractional reserve banking, George Gilder, jimmy wales, litecoin, Marc Andreessen, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, new economy, obamacare, Peter Thiel, Philip Mirowski, risk tolerance, Ronald Reagan, Satoshi Nakamoto, seigniorage, Silicon Valley, Singularitarianism, smart contracts, Stewart Brand, technoutopianism, The Chicago School, Travis Kalanick, WikiLeaks

In this sense, it becomes a tool for existing power to concentrate itself, rather than a challenge to the existing order: as some better economically informed commentators consistently point out, Bitcoin functions much more like a speculative investment than a currency (Worstall 2013; Yermack 2014), although what one is investing in, beyond Bitcoin itself, is not at all clear. 6. The Future of Bitcoin and the Blockchain BITCOIN IS NOT SO MUCH a single software program as it is software written using a model called the blockchain that is can be used to build other very similar programs (related cryptocurrencies like Litecoin, Dogecoin, and so on), but also less similar ones. The cryptographically enabled distributed ledger, and the blockchain used to implement it, advocates insist, have wide application outside of their current uses.[1] We hear (not infrequently) that the blockchain is as revolutionary today as were “personal computers in 1975, the internet in 1993” (Andreessen 2014). Networks built on such technologies are formally decentralized, we are told, in a way that the current internet is not, and thus allow a new range of services and opacity to oversight (and therefore legal as well as unlawful surveillance).


pages: 375 words: 88,306

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism by Arun Sundararajan

additive manufacturing, Airbnb, AltaVista, Amazon Mechanical Turk, autonomous vehicles, barriers to entry, basic income, bitcoin, blockchain, Burning Man, call centre, collaborative consumption, collaborative economy, collective bargaining, commoditize, corporate social responsibility, cryptocurrency, David Graeber, distributed ledger, employer provided health coverage, Erik Brynjolfsson, Ethereum, ethereum blockchain, Frank Levy and Richard Murnane: The New Division of Labor, future of work, George Akerlof, gig economy, housing crisis, Howard Rheingold, information asymmetry, Internet of things, inventory management, invisible hand, job automation, job-hopping, Kickstarter, knowledge worker, Kula ring, Lyft, Marc Andreessen, megacity, minimum wage unemployment, moral hazard, moral panic, Network effects, new economy, Oculus Rift, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, peer-to-peer rental, profit motive, purchasing power parity, race to the bottom, recommendation engine, regulatory arbitrage, rent control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Ross Ulbricht, Second Machine Age, self-driving car, sharing economy, Silicon Valley, smart contracts, Snapchat, social software, supply-chain management, TaskRabbit, The Nature of the Firm, total factor productivity, transaction costs, transportation-network company, two-sided market, Uber and Lyft, Uber for X, uber lyft, universal basic income, Zipcar

Historically, protocols have emerged from either research projects or from individuals / small groups simply throwing something out that sticks. In the debate about bitcoin it is critical to understand that bitcoin has the potential to be such a protocol that enables a lot of new innovation to take place.9 Although the exact details of how Bitcoin works are a little more complicated than my short description in this section, a few key ideas come across: digital signatures that facilitate identity; the distributed ledger (the blockchain) that is stored on every client’s device; the crowd collectively clearing each transaction; the need to make clearing transactions challenging to avoid a potential takeover of the blockchain; and the need for an incentive (some equivalent of money, typically called the “coin” that is generated from within the system) to get the crowd interested in performing the challenging work that accompanies verifying transactions.

As the venture capitalist Chris Dixon wrote on his blog in 2014, Bitcoin makes activities like international microfinance, markets for computing capacity, incentivized social software, and other micropayments possible—not because we haven’t considered the value of these before, but because the transaction costs were too high.16 There are signs that traditional businesses will embrace many of the new capabilities of decentralized peer-to-peer technologies, much like Facebook actively uses BitTorrent within its privately owned server farms. In spring 2015, NASDAQ announced plans to leverage blockchain technology to support the development of a distributed ledger function for securities trading that will provide enhanced integrity, audit capabilities, governance, and transfer of ownership capabilities. The startup R3CEV has assembled a consortium of 25 of the world’s largest banks that are creating a framework for using blockchain technology in world financial markets.17 The startup Provenance provides a blockchain-based authentication service, where, for example, you can credibly establish the provenance of a high-value item by keeping track of and being able to access every trade associated with its ownership.


pages: 135 words: 26,407

How to DeFi by Coingecko, Darren Lau, Sze Jin Teh, Kristian Kho, Erina Azmi, Tm Lee, Bobby Ong

algorithmic trading, asset allocation, Bernie Madoff, bitcoin, blockchain, buy and hold, capital controls, collapse of Lehman Brothers, cryptocurrency, distributed ledger, diversification, Ethereum, ethereum blockchain, fiat currency, Firefox, information retrieval, litecoin, margin call, new economy, passive income, payday loans, peer-to-peer, prediction markets, QR code, reserve currency, smart contracts, tulip mania, two-sided market

It is a process used as a last resort to settle the Maker Platform by shutting the system down. The process is to ensure the holders of Dai holders and Vault users receive the net value of assets they are entitled to. ~ Why Use Maker? As previously mentioned in Section 2: Stablecoins, there are many stablecoins out there and the core distinctions of these coins lie in their protocol. Unlike most stablecoin platforms, Maker is fully operating on the distributed ledger. Thus, Maker inherently possesses the characteristics of the blockchain: secured, immutable and most importantly, transparent. Additionally, Maker’s infrastructures have strengthened the security of the system with comprehensive risk protocols and mechanisms via real-time information. And that’s it for Makers’ Stablecoin, Dai—if you’re keen to get started or test it out, we’ve included step-by-step guides on how to (i) mint some DAI for yourself and (ii) save DAI to earn interest.


Martin Kleppmann-Designing Data-Intensive Applications. The Big Ideas Behind Reliable, Scalable and Maintainable Systems-O’Reilly (2017) by Unknown

active measures, Amazon Web Services, bitcoin, blockchain, business intelligence, business process, c2.com, cloud computing, collaborative editing, commoditize, conceptual framework, cryptocurrency, database schema, DevOps, distributed ledger, Donald Knuth, Edward Snowden, Ethereum, ethereum blockchain, fault tolerance, finite state, Flash crash, full text search, general-purpose programming language, informal economy, information retrieval, Internet of things, iterative process, John von Neumann, Kubernetes, loose coupling, Marc Andreessen, microservices, natural language processing, Network effects, packet switching, peer-to-peer, performance metric, place-making, premature optimization, recommendation engine, Richard Feynman, self-driving car, semantic web, Shoshana Zuboff, social graph, social web, software as a service, software is eating the world, sorting algorithm, source of truth, SPARQL, speech recognition, statistical model, undersea cable, web application, WebSocket, wikimedia commons

A transaction log can be made tamper-proof by periodically signing it with a hardware security module, but that does not guarantee that the right transactions went into the log in the first place. It would be interesting to use cryptographic tools to prove the integrity of a system in a way that is robust to a wide range of hardware and software issues, and even poten‐ tially malicious actions. Cryptocurrencies, blockchains, and distributed ledger tech‐ nologies such as Bitcoin, Ethereum, Ripple, Stellar, and various others [71, 72, 73] have sprung up to explore this area. I am not qualified to comment on the merits of these technologies as currencies or mechanisms for agreeing contracts. However, from a data systems point of view they contain some interesting ideas. Essentially, they are distributed databases, with a data model and transaction mechanism, in which different replicas can be hosted by mutually untrusting organizations.

Cryptographic auditing and integrity checking often relies on Merkle trees [74], which are trees of hashes that can be used to efficiently prove that a record appears in some dataset (and a few other things). Outside of the hype of cryptocurrencies, certif‐ icate transparency is a security technology that relies on Merkle trees to check the val‐ idity of TLS/SSL certificates [75, 76]. 532 | Chapter 12: The Future of Data Systems I could imagine integrity-checking and auditing algorithms, like those of certificate transparency and distributed ledgers, becoming more widely used in data systems in general. Some work will be needed to make them equally scalable as systems without cryptographic auditing, and to keep the performance penalty as low as possible. But I think this is an interesting area to watch in the future. Doing the Right Thing In the final section of this book, I would like to take a step back. Throughout this book we have examined a wide range of different architectures for data systems, eval‐ uated their pros and cons, and explored techniques for building reliable, scalable, and maintainable applications.

Gray and Catharine van Ingen: “Empirical Measurements of Disk Failure Rates and Error Rates,” Microsoft Research, MSR-TR-2005-166, December 2005. [65] Annamalai Gurusami and Daniel Price: “Bug #73170: Duplicates in Unique Sec‐ ondary Index Because of Fix of Bug#68021,” bugs.mysql.com, July 2014. [66] Gary Fredericks: “Postgres Serializability Bug,” github.com, September 2015. [67] Xiao Chen: “HDFS DataNode Scanners and Disk Checker Explained,” blog.clou‐ dera.com, December 20, 2016. [68] Jay Kreps: “Getting Real About Distributed System Reliability,” blog.empathy‐ box.com, March 19, 2012. [69] Martin Fowler: “The LMAX Architecture,” martinfowler.com, July 12, 2011. [70] Sam Stokes: “Move Fast with Confidence,” blog.samstokes.co.uk, July 11, 2016. [71] “Sawtooth Lake Documentation,” Intel Corporation, intelledger.github.io, 2016. [72] Richard Gendal Brown: “Introducing R3 Corda™: A Distributed Ledger Designed for Financial Services,” gendal.me, April 5, 2016. [73] Trent McConaghy, Rodolphe Marques, Andreas Müller, et al.: “BigchainDB: A Scalable Blockchain Database,” bigchaindb.com, June 8, 2016. [74] Ralph C. Merkle: “A Digital Signature Based on a Conventional Encryption Function,” at CRYPTO ’87, August 1987. doi:10.1007/3-540-48184-2_32 [75] Ben Laurie: “Certificate Transparency,” ACM Queue, volume 12, number 8, pages 10-19, August 2014. doi:10.1145/2668152.2668154 Summary | 549 [76] Mark D.


pages: 571 words: 106,255

The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous

Airbnb, altcoin, bank run, banks create money, bitcoin, Black Swan, blockchain, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, conceptual framework, creative destruction, cryptocurrency, currency manipulation / currency intervention, currency peg, delayed gratification, disintermediation, distributed ledger, Ethereum, ethereum blockchain, fiat currency, fixed income, floating exchange rates, Fractional reserve banking, full employment, George Gilder, global reserve currency, high net worth, invention of the telegraph, Isaac Newton, iterative process, jimmy wales, Joseph Schumpeter, market bubble, market clearing, means of production, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, Paul Samuelson, peer-to-peer, Peter Thiel, price mechanism, price stability, profit motive, QR code, ransomware, reserve currency, Richard Feynman, risk tolerance, Satoshi Nakamoto, secular stagnation, smart contracts, special drawing rights, Stanford marshmallow experiment, The Nature of the Firm, the payments system, too big to fail, transaction costs, Walter Mischel, zero-sum game

Even in the heyday of the international gold standard, money was redeemable in gold, but central banks rarely had enough to cover the entire supply of currency they introduced, and thus always had a margin for increasing the supply of paper to back up the currency. This is much harder with Bitcoin, which brings cryptographic digital certainty to accounting and can help expose banks engaging in fractional reserve banking. The future use of Bitcoin for small payments will likely not be carried out over the distributed ledger, as explained in the discussion on scaling in Chapter 10, but through second layers. Bitcoin can be seen as the new emerging reserve currency for online transactions, where the online equivalent of banks will issue Bitcoin‐backed tokens to users while keeping their hoard of Bitcoins in cold storage, with each individual being able to audit in real time the holdings of the intermediary, and with online verification and reputation systems able to verify that no inflation is taking place.

For implementing contracts dealing with real‐world businesses under legal jurisdictions, there will still be legal oversight relating to the real‐world implementation of these contracts that can override the network consensus, making the extra cost of decentralization pointless. The same applies for decentralizing databases of financial institutions that will remain as trusted third parties in their own operations with one another or with their clients. Second, the initial process itself needs to be simple enough to ensure the ability to run the distributed ledger on many nodes, without the blockchain becoming too heavy to be distributed. As the process continues to repeat over time, the size of the blockchain will grow and become more and more unmanageable for distributed nodes to hold a full copy of the blockchain, ensuring that only a few large computers can operate the blockchain and rendering decentralization obsolete. Note here the distinction between nodes that carry the ledger and dedicated miners who solve the proof‐of‐work, which is discussed in Chapter 8: miners need to expend enormous processing power to commit transactions to the joint ledger, whereas nodes need very little power to keep a copy of the ledger with which to verify the accuracy of miners' transactions.


pages: 179 words: 43,441

The Fourth Industrial Revolution by Klaus Schwab

3D printing, additive manufacturing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, barriers to entry, Baxter: Rethink Robotics, bitcoin, blockchain, Buckminster Fuller, call centre, clean water, collaborative consumption, commoditize, conceptual framework, continuous integration, crowdsourcing, digital twin, disintermediation, disruptive innovation, distributed ledger, Edward Snowden, Elon Musk, epigenetics, Erik Brynjolfsson, future of work, global value chain, Google Glasses, income inequality, Internet Archive, Internet of things, invention of the steam engine, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, life extension, Lyft, mass immigration, megacity, meta analysis, meta-analysis, more computing power than Apollo, mutually assured destruction, Narrative Science, Network effects, Nicholas Carr, personalized medicine, precariat, precision agriculture, Productivity paradox, race to the bottom, randomized controlled trial, reshoring, RFID, rising living standards, Sam Altman, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, smart cities, smart contracts, software as a service, Stephen Hawking, Steve Jobs, Steven Levy, Stuxnet, supercomputer in your pocket, TaskRabbit, The Future of Employment, The Spirit Level, total factor productivity, transaction costs, Uber and Lyft, uber lyft, Watson beat the top human players on Jeopardy!, WikiLeaks, winner-take-all economy, women in the workforce, working-age population, Y Combinator, Zipcar

For companies that are in the business of operating long and complex supply chains, this is transformative. In the near future, similar monitoring systems will also be applied to the movement and tracking of people. The digital revolution is creating radically new approaches that revolutionize the way in which individuals and institutions engage and collaborate. For example, the blockchain, often described as a “distributed ledger”, is a secure protocol where a network of computers collectively verifies a transaction before it can be recorded and approved. The technology that underpins the blockchain creates trust by enabling people who do not know each other (and thus have no underlying basis for trust) to collaborate without having to go through a neutral central authority – i.e. a custodian or central ledger. In essence, the blockchain is a shared, programmable, cryptographically secure and therefore trusted ledger which no single user controls and which can be inspected by everyone.


pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

"Robert Solow", Airbnb, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

Asked why, Will Wang Graylin, the CEO of LoopPay, a digital wallet company focusing on the interface between merchants and credit card firms, explained to MIT Technology Review: “Think about the infrastructure and how long it took to create that. It is very difficult to change merchant behavior.”16 No one knows how this market will evolve, but markets, competition, and consumer behavior – not only the technology itself – will determine its future success. The same is true for another promising technology that can be applied to the payments market: blockchain, or mutual distributed ledger technology (like bitcoin). The market clearly sees a big potential in blockchain technology. It could reduce the costs and risks in transactions, and create a far better system for sharing information in financial markets. Some have billed it as a greater technological leap than the internet for capital markets. Perhaps it will be, but the hype around the technology is premature and the expectation of big market changes is an aspiration.

Chance character (i), (ii) Belgium profit margins (i) taxi services and regulation (i) Bell, Alexander Graham (i), (ii) Bell Labs (AT&T) (i) Bellamy, Edward (i) Bellman, Richard (i) benchmarking (i), (ii) benefits, and incomes (i) Benz, Karl (i) Bergman, Ingmar (i) Berkshire Hathaway (i) Berle, Adolf (i) Berra, Yogi (i) Bezos, Jeff (i) Bhide, Amar (i) big firms big firm market dominance (i) and investment allocation for innovation (i) and private standards (i) relative importance of in European countries (i) reputation of (i) see also firm boundaries; firms; multinational (global) companies “big swinging dicks” (i) big-data business models (i) biofuels and EU regulation (i) see also energy sector biotechnological sector, and EU regulation (i) Bismarck, Otto von (i) bitcoin (i) BlackBerry (i) blackboard economics (i) Blackrock (i) blockchain (mutual distributed ledger) technology (i) Blue Ribbon Commission (US) (i) The Blues Brothers (movie) (i) boom and bust cycles (i), (ii), (iii) boomer (or baby boomer) generation (i), (ii), (iii), (iv) Boston Consulting Group index of complicatedness (i) on performance imperatives (i) on working time of managing teams (i) branding (i), (ii) Brazil and BRIC concept (i), (ii) taxi services and regulation (i) BRIC as a Bloody Ridiculous Investment Concept (i) countries (Brazil, India, Russia, and China) (i), (ii) Bridgewater (i) Brin, Sergey (i) Britain see United Kingdom (UK) British managerialism (i) Brockovich, Erin (i) Brookings (i) Brown, Gordon (i) Brynjolfsson, Erik, The Second Machine Age (Brynjolfsson and McAfee) (i), (ii) budget process, and compliance officers (i) Buffett, Warren (i), (ii) bureaucracy and capitalism (i), (ii) and competition (i) and compliance officers (i) and globalization (i), (ii), (iii), (iv) and IBM (i) and index of complicatedness (Boston Consulting Group) (i) and Indian economy (i) and managerialism (i), (ii), (iii) and organizational diversification (i) and principal–agent debate (i) and socialism (i) see also bureaucracy brake; bureaucrats; corporate managerialism; managerialism bureaucracy brake, and regulation (Germany) (i) bureaucrats vs. entrepreneurs (i), (ii) see also bureaucracy; bureaucracy brake Burning Man festival (Nevada) (i) Burns, Scott, The Clash of Generations (Kotlikoff and Burns) (i) business-building skills, vs. financial skills (i) business cycles, and productivity (i) business development, and strategy (i), (ii) business information technology (IT) services (i) business investment and cash hoarding (i) and corporate net lending (i), (ii) declining trend (i) explanations for decline (i) and financial regulation (i), (ii) and gray capitalism (i) investment allocation for innovation and big firms (i) low investment growth vs. fast corporate borrowing growth (i) measuring issues (i) and mergers and acquisitions (i) and policy uncertainty (i), (ii) and shareholders (i), (ii), (iii) UK business investment (i), (ii) US business investment (i), (ii) see also asset managers; investment; R&D business management (i), (ii) see also corporate managerialism business productivity growth (i) Business Week, on Peter Drucker (i) CAC 40 index (France) (i) cadmium (i), (ii) Canada diffusion of innovations (i) GDP figures (i) North American Free Trade Agreement (i) cancer research, and innovation (i), (ii) capital accumulation, and capitalism (i) capital expenditure (capex) (i), (ii), (iii), (iv)n39 capital markets (external) (i), (ii), (iii), (iv), (v) capitalism and agency (i) and asset bubbles (i) and bureaucracy (i), (ii) and capital accumulation (i) “complex by design” capitalism (i) criticism of Western capitalism (i) crony capitalism (i) death of capitalism utopia and socialism (i) decline of Western capitalism (i) and digital age (i) and dissent (i), (ii), (iii) and eccentricity (i), (ii), (iii), (iv), (v) and economic dynamism (i), (ii), (iii) and Enlightenment (i), (ii) and entrepreneurship (i), (ii) financial capitalism (i), (ii), (iii), (iv) free-market capitalism (i) and individual freedom (i), (ii), (iii) and innovation (i), (ii), (iii), (iv), (v) joint-stock capitalism (i), (ii) and labor vs. work (i) vs. the market (i), (ii) Marxist monopolistic theory of (i) “middle-aged” capitalism (i), (ii), (iii) “money manager capitalism” (Hyman Minsky) (i) and organization (i) and planning machines (i) rentier capitalism (i), (ii), (iii), (iv), (v), (vi) and Swedish hybrid economy (i) and technology (i) see also capitalist ownership; corporate managerialism; entrepreneurs; entrepreneurship; the future (and how to prevent it); globalization; gray capitalism; regulation; rich people capitalist ownership and corporate globalism (i) and diversification (i) and gray capitalism: case of Harley-Davidson Motor Company (HD) (i); decline/obituary of capitalist ownership (i); dispersed ownership (i); gray ownership (i), (ii), (iii), (iv), (v), (vi); severing gray capital–corporate ownership link (i) ownership structure reforms (i) and pensions (i) and principal–agent problem (i) and uncertainty (i) car industry car sales and regulation (i) driverless vehicles (i), (ii), (iii), (iv) German car production and value chains (i) lean production (i) US environment-related regulations (i) Carew, Diana G.


pages: 193 words: 51,445

On the Future: Prospects for Humanity by Martin J. Rees

23andMe, 3D printing, air freight, Alfred Russel Wallace, Asilomar, autonomous vehicles, Benoit Mandelbrot, blockchain, cryptocurrency, cuban missile crisis, dark matter, decarbonisation, demographic transition, distributed ledger, double helix, effective altruism, Elon Musk, en.wikipedia.org, global village, Hyperloop, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jeff Bezos, job automation, Johannes Kepler, John Conway, life extension, mandelbrot fractal, mass immigration, megacity, nuclear winter, pattern recognition, quantitative hedge fund, Ray Kurzweil, Rodney Brooks, Search for Extraterrestrial Intelligence, sharing economy, Silicon Valley, smart grid, speech recognition, Stanford marshmallow experiment, Stanislav Petrov, stem cell, Stephen Hawking, Steven Pinker, Stuxnet, supervolcano, technological singularity, the scientific method, Tunguska event, uranium enrichment, Walter Mischel, Yogi Berra

Two trends are reducing interpersonal trust: firstly, the remoteness and globalisation of those we routinely have to deal with; and secondly, the rising vulnerability of modern life to disruption—the realisation that ‘hackers’ or dissidents can trigger incidents that cascade globally. Such trends necessitate burgeoning security measures. These are already irritants in our everyday life—security guards, knotty passwords, airport searches, and so forth—but they are likely to become ever more vexatious. Innovations like blockchain, the publicly distributed ledger that combines open access with security, could offer protocols that render the entire internet more secure. But their current applications—allowing an economy based on crypto-currencies to function independently of traditional financial institutions—seem damaging rather than benign. It’s both salutary and depressing to realise how much of the economy is dedicated to activities and products that would be superfluous if we felt we could trust each other.


pages: 1,237 words: 227,370

Designing Data-Intensive Applications: The Big Ideas Behind Reliable, Scalable, and Maintainable Systems by Martin Kleppmann

active measures, Amazon Web Services, bitcoin, blockchain, business intelligence, business process, c2.com, cloud computing, collaborative editing, commoditize, conceptual framework, cryptocurrency, database schema, DevOps, distributed ledger, Donald Knuth, Edward Snowden, Ethereum, ethereum blockchain, fault tolerance, finite state, Flash crash, full text search, general-purpose programming language, informal economy, information retrieval, Infrastructure as a Service, Internet of things, iterative process, John von Neumann, Kubernetes, loose coupling, Marc Andreessen, microservices, natural language processing, Network effects, packet switching, peer-to-peer, performance metric, place-making, premature optimization, recommendation engine, Richard Feynman, self-driving car, semantic web, Shoshana Zuboff, social graph, social web, software as a service, software is eating the world, sorting algorithm, source of truth, SPARQL, speech recognition, statistical model, undersea cable, web application, WebSocket, wikimedia commons

A transaction log can be made tamper-proof by periodically signing it with a hardware security module, but that does not guarantee that the right transactions went into the log in the first place. It would be interesting to use cryptographic tools to prove the integrity of a system in a way that is robust to a wide range of hardware and software issues, and even potentially malicious actions. Cryptocurrencies, blockchains, and distributed ledger technologies such as Bitcoin, Ethereum, Ripple, Stellar, and various others [71, 72, 73] have sprung up to explore this area. I am not qualified to comment on the merits of these technologies as currencies or mechanisms for agreeing contracts. However, from a data systems point of view they contain some interesting ideas. Essentially, they are distributed databases, with a data model and transaction mechanism, in which different replicas can be hosted by mutually untrusting organizations.

Cryptographic auditing and integrity checking often relies on Merkle trees [74], which are trees of hashes that can be used to efficiently prove that a record appears in some dataset (and a few other things). Outside of the hype of cryptocurrencies, certificate transparency is a security technology that relies on Merkle trees to check the validity of TLS/SSL certificates [75, 76]. I could imagine integrity-checking and auditing algorithms, like those of certificate transparency and distributed ledgers, becoming more widely used in data systems in general. Some work will be needed to make them equally scalable as systems without cryptographic auditing, and to keep the performance penalty as low as possible. But I think this is an interesting area to watch in the future. Doing the Right Thing In the final section of this book, I would like to take a step back. Throughout this book we have examined a wide range of different architectures for data systems, evaluated their pros and cons, and explored techniques for building reliable, scalable, and maintainable applications.

[68] Jay Kreps: “Getting Real About Distributed System Reliability,” blog.empathybox.com, March 19, 2012. [69] Martin Fowler: “The LMAX Architecture,” martinfowler.com, July 12, 2011. [70] Sam Stokes: “Move Fast with Confidence,” blog.samstokes.co.uk, July 11, 2016. [71] “Sawtooth Lake Documentation,” Intel Corporation, intelledger.github.io, 2016. [72] Richard Gendal Brown: “Introducing R3 Corda™: A Distributed Ledger Designed for Financial Services,” gendal.me, April 5, 2016. [73] Trent McConaghy, Rodolphe Marques, Andreas Müller, et al.: “BigchainDB: A Scalable Blockchain Database,” bigchaindb.com, June 8, 2016. [74] Ralph C. Merkle: “A Digital Signature Based on a Conventional Encryption Function,” at CRYPTO ’87, August 1987. doi:10.1007/3-540-48184-2_32 [75] Ben Laurie: “Certificate Transparency,” ACM Queue, volume 12, number 8, pages 10-19, August 2014. doi:10.1145/2668152.2668154 [76] Mark D.


pages: 181 words: 52,147

The Driver in the Driverless Car: How Our Technology Choices Will Create the Future by Vivek Wadhwa, Alex Salkever

23andMe, 3D printing, Airbnb, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, Bernie Sanders, bitcoin, blockchain, clean water, correlation does not imply causation, distributed ledger, Donald Trump, double helix, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Google bus, Hyperloop, income inequality, Internet of things, job automation, Kevin Kelly, Khan Academy, Kickstarter, Law of Accelerating Returns, license plate recognition, life extension, longitudinal study, Lyft, M-Pesa, Menlo Park, microbiome, mobile money, new economy, personalized medicine, phenotype, precision agriculture, RAND corporation, Ray Kurzweil, recommendation engine, Ronald Reagan, Second Machine Age, self-driving car, Silicon Valley, Skype, smart grid, stem cell, Stephen Hawking, Steve Wozniak, Stuxnet, supercomputer in your pocket, Tesla Model S, The Future of Employment, Thomas Davenport, Travis Kalanick, Turing test, Uber and Lyft, Uber for X, uber lyft, uranium enrichment, Watson beat the top human players on Jeopardy!, zero day

But now Moore’s Law applies, as we have described above, not just to smartphones and PCs but to everything. Change has always been the norm and the one constant; but we have never experienced change like this, at such a pace, or on so many fronts: in energy sources’ move to renewables; in health care’s move to digital health records and designer drugs; in banking, in which a technology called the blockchain distributed ledger system threatens to antiquate financial systems’ opaque procedures.* It is noteworthy that, Moore’s Law having turned fifty, we are reaching the limits of how much you can shrink a transistor. After all, nothing can be smaller than an atom. But Intel and IBM have both said that they can adhere to the Moore’s Law targets for another five to ten years. So the silicon-based computer chips in our laptops will surely match the power of a human brain in the early 2020s, but Moore’s Law may fizzle out after that.


pages: 182 words: 53,802

The Production of Money: How to Break the Power of Banks by Ann Pettifor

Ben Bernanke: helicopter money, Bernie Madoff, Bernie Sanders, bitcoin, blockchain, borderless world, Bretton Woods, capital controls, Carmen Reinhart, central bank independence, clean water, credit crunch, Credit Default Swap, cryptocurrency, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, distributed ledger, Donald Trump, eurozone crisis, fiat currency, financial deregulation, financial innovation, financial intermediation, financial repression, fixed income, Fractional reserve banking, full employment, Hyman Minsky, inflation targeting, interest rate derivative, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, light touch regulation, London Interbank Offered Rate, market fundamentalism, Martin Wolf, mobile money, Naomi Klein, neoliberal agenda, offshore financial centre, Paul Samuelson, Ponzi scheme, pushing on a string, quantitative easing, rent-seeking, Satyajit Das, savings glut, secular stagnation, The Chicago School, the market place, Thomas Malthus, Tobin tax, too big to fail

But Radiohead (blockchain) was adopted too quickly by those who then compromised the likeability of the entire Indy genre (cryptocurrency). It was time consequently to turn to drum and bass (private blockchains). But drum and bass was being cross-polluted by Indy rock enthusiasts (cryptocurrency enthusiasts) so it became time to embrace something totally radical and segregated, i.e. go backwards to an ironic appreciation of Barry Manilow abandoning all refs to modern musical phenomena (Distributed Ledger Technology). Which puts us roughly at the point where cheesy revivalism should be turning into a general love of the all time provable greats (old school centralised ledger technology, but you know, digitally remastered). Suffice to say, there is some commentary emerging to suggest we are indeed in a phase transition and what’s cool isn’t the blockchain anymore but rather the defiant acknowledgement that the old operating system – for all its flaws – is built on the right regulatory, legal and trusted foundations after all and just needs some basic tweaking.27 In 2016, $70 million worth of bitcoin was stolen from customer accounts held at Bitfinex.


pages: 218 words: 62,889

Sabotage: The Financial System's Nasty Business by Anastasia Nesvetailova, Ronen Palan

algorithmic trading, bank run, banking crisis, barriers to entry, Basel III, Bernie Sanders, big-box store, bitcoin, Black-Scholes formula, blockchain, Blythe Masters, bonus culture, Bretton Woods, business process, collateralized debt obligation, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, distributed ledger, diversification, Double Irish / Dutch Sandwich, en.wikipedia.org, Eugene Fama: efficient market hypothesis, financial innovation, financial intermediation, financial repression, fixed income, gig economy, Gordon Gekko, high net worth, Hyman Minsky, information asymmetry, interest rate derivative, interest rate swap, Joseph Schumpeter, Kenneth Arrow, litecoin, London Interbank Offered Rate, London Whale, Long Term Capital Management, margin call, market fundamentalism, mortgage debt, new economy, Northern Rock, offshore financial centre, Paul Samuelson, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, price mechanism, regulatory arbitrage, rent-seeking, reserve currency, Ross Ulbricht, shareholder value, short selling, smart contracts, sovereign wealth fund, Thorstein Veblen, too big to fail

As this book goes to press, economies around the world are gripped by the advance of artificial intelligence (AI) and a spate of new financial technologies. The emergence of data as the most valuable asset in the digital capitalism of the twenty-first century, as well as tighter regulation of the traditional financial sector, is paving the way for a new means of doing the business of finance. Many of these innovations are celebrated in the market and beyond. Blockchain – a distributed ledger technology underpinning the drive – is heralded as the radically new way to connect people across various sectors and walks of life. It is rapidly transforming the way business is conducted and services are delivered, from the energy sector to adult entertainers, as well as public services such as insurance and healthcare. Blockchain is probably best compared to the financial equivalent of the invention of email, a seemingly isolated revolution in communication which back in the mid-1990s would herald the rise of a new type of economic organization.


pages: 533

Future Politics: Living Together in a World Transformed by Tech by Jamie Susskind

3D printing, additive manufacturing, affirmative action, agricultural Revolution, Airbnb, airport security, Andrew Keen, artificial general intelligence, augmented reality, automated trading system, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, bitcoin, blockchain, brain emulation, British Empire, business process, Capital in the Twenty-First Century by Thomas Piketty, cashless society, Cass Sunstein, cellular automata, cloud computing, computer age, computer vision, continuation of politics by other means, correlation does not imply causation, crowdsourcing, cryptocurrency, digital map, distributed ledger, Donald Trump, easy for humans, difficult for computers, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Ethereum, ethereum blockchain, Filter Bubble, future of work, Google bus, Google X / Alphabet X, Googley, industrial robot, informal economy, intangible asset, Internet of things, invention of the printing press, invention of writing, Isaac Newton, Jaron Lanier, John Markoff, Joseph Schumpeter, Kevin Kelly, knowledge economy, lifelogging, Metcalfe’s law, mittelstand, more computing power than Apollo, move fast and break things, move fast and break things, natural language processing, Network effects, new economy, night-watchman state, Oculus Rift, Panopticon Jeremy Bentham, pattern recognition, payday loans, price discrimination, price mechanism, RAND corporation, ransomware, Ray Kurzweil, Richard Stallman, ride hailing / ride sharing, road to serfdom, Robert Mercer, Satoshi Nakamoto, Second Machine Age, selection bias, self-driving car, sexual politics, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, smart contracts, Snapchat, speech recognition, Steve Jobs, Steve Wozniak, Steven Levy, technological singularity, the built environment, The Structural Transformation of the Public Sphere, The Wisdom of Crowds, Thomas L Friedman, universal basic income, urban planning, Watson beat the top human players on Jeopardy!, working-age population

Twitter and Tear Gas: The Power and Fragility of Networked Protest. New Haven: Yale University Press, 2017. Tutt, Andrew. ‘An FDA for Algorithms’. Administrative Law Review 69, no.1 (2017): 83–123. Twitter.com. <https://about.twitter.com/company> (accessed 30 Nov. 2017). UK Government Chief Scientific Advisor.‘Distributed Ledger Technology: Beyond Block Chain.’ Crown Copyright, 2016. <https://www.gov.uk/ government/uploads/system/uploads/attachment_data/file/492972/ gs-16-1-distributed-ledger-technology.pdf> (accessed 5 Dec. 2017). Useem, Jeremy. ‘How Online Shopping Makes Suckers of Us All’. Atlantic, May 2017 <https://www.theatlantic.com/magazine/archive/2017/05/ how-online-shopping-makes-suckers-of-us-all/521448/?utm_ source=nextdraft&utm_medium=email> (accessed 1 Dec. 2017). Valentino-DeVries, Jennifer, Jeremy Singer-Vine, and Ashkan Soltani.


pages: 218 words: 68,648

Confessions of a Crypto Millionaire: My Unlikely Escape From Corporate America by Dan Conway

Affordable Care Act / Obamacare, Airbnb, bank run, basic income, bitcoin, blockchain, buy and hold, cloud computing, cognitive dissonance, corporate governance, crowdsourcing, cryptocurrency, disruptive innovation, distributed ledger, double entry bookkeeping, Ethereum, ethereum blockchain, fault tolerance, financial independence, gig economy, Gordon Gekko, Haight Ashbury, high net worth, job satisfaction, litecoin, Marc Andreessen, Mitch Kapor, obamacare, offshore financial centre, Ponzi scheme, prediction markets, rent control, reserve currency, Ronald Coase, Satoshi Nakamoto, Silicon Valley, smart contracts, Steve Jobs, supercomputer in your pocket, Turing complete, Uber for X, universal basic income, upwardly mobile

They said Ethereum was the world computer, with the potential to do to corporations what Bitcoin could do to banks—knock the shit out of them. That caught my attention. Institutions in the real world seemed to be already grappling with the implications. I came across a blockchain report by the European Parliament that described how momentum could shift toward decentralization at a granular level: “Each time we use a distributed ledger we participate in a shift of power from central authorities to non-hierarchical and peer-to-peer structures.” Wow. As I sat on the curb on Burlingame Avenue one Saturday eating ice cream while the kids finished their piano lessons, I cycled through memories of the various ways I’d screwed up my career. Flip Side had diminished my value by flubbing something in my various workplaces. There was no doubt that I had major flaws, but the corporate environment magnified them.


pages: 993 words: 318,161

Fall; Or, Dodge in Hell by Neal Stephenson

Ada Lovelace, augmented reality, autonomous vehicles, back-to-the-land, bitcoin, blockchain, cloud computing, coherent worldview, computer vision, crossover SUV, cryptocurrency, defense in depth, demographic transition, distributed ledger, drone strike, easy for humans, difficult for computers, game design, index fund, Jaron Lanier, life extension, microbiome, Network effects, off grid, offshore financial centre, pattern recognition, planetary scale, ride hailing / ride sharing, sensible shoes, short selling, Silicon Valley, telepresence, telepresence robot, telerobotics, The Hackers Conference, Turing test, Works Progress Administration

“And just like a holograph doesn’t need the author’s name on the title page—” “Anonymous Holography,” Pluto reminded him, with a satisfied nod. “Run the whole thing by me again?” “Personal Unseverable Registered Designator for Anonymous Holography.” “It’s just an anonymous ID,” Corvallis said, “dressed up with a fancy name.” “Well, yes and no. Anonymous IDs aren’t registered anywhere. PURDAHs are registered using a distributed ledger, so their veracity can be checked anytime, by anyone. ‘Unseverable’ means that no one can take it away from you, as long as you take reasonable precautions.” “And Personal?” “Just there to make the acronym work out, I guess,” Pluto said. “But each PURDAH is linked to a ‘person’ in the legal sense of that term, meaning a human being, or a legal person like a corporation.” “So anyway,” Corvallis guessed, “all of the people involved in this Ethical Network Sabotage Undertaking are talking to each other and posting documents using some kind of PURDAH system.”

“And by ‘secure’ you mean—” “It means that the processes—millions of separate executables running on god knows how many different real or virtual machines—don’t have to trust each other. They don’t have to know each other. When they have to communicate, they do it—” Sophia closed her eyes momentarily, maybe to conceal an eye-roll. “They do it the way all communication happens nowadays, which is through distributed-ledger-type stuff.” “Blockchain?” Zula asked. Actively suppressing another eye-roll, Sophia answered, “Way, way more efficient algorithms that do what blockchain was supposed to do twenty years ago. But still requiring a lot of fast computation.” “So, if we think of it”—and here Zula held out a hand as if to deflect any objections—“if we imagine, just for the sake of argument, that we have one process, what we used to call a computer program, that does one thing only, which is to simulate the workings of one single neuron in a brain.

Top-drawer brains had been nominated by Solly Pesador, who to his credit had reached outside of his own department and invited some who could be counted among his rivals. The roster had struck Zula as a little weak when it came to currently active members of the underlying industries. So, once she’d made certain that Corvallis and Maeve could attend, she’d spent her remaining invitations on CEOs and CTOs of companies working on things like quantum computers and distributed ledgers. The guest list now comprised twenty-seven humans, one robot, and one monster. As far as she knew the word “monster” had not been uttered until this moment, but she was relieved, in a way, that it had now broken the surface. The afternoon sessions had all been introductory in nature. They went over the ground rules: everything here was off the record, private, not to be photographed or posted.


pages: 293 words: 78,439

Dual Transformation: How to Reposition Today's Business While Creating the Future by Scott D. Anthony, Mark W. Johnson

activist fund / activist shareholder / activist investor, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, Amazon Web Services, autonomous vehicles, barriers to entry, Ben Horowitz, blockchain, business process, business process outsourcing, call centre, Clayton Christensen, cloud computing, commoditize, corporate governance, creative destruction, crowdsourcing, death of newspapers, disintermediation, disruptive innovation, distributed ledger, diversified portfolio, Internet of things, invention of hypertext, inventory management, Jeff Bezos, job automation, job satisfaction, Joseph Schumpeter, Kickstarter, late fees, Lean Startup, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Minecraft, obamacare, Parag Khanna, Paul Graham, peer-to-peer lending, pez dispenser, recommendation engine, self-driving car, shareholder value, side project, Silicon Valley, Skype, software as a service, software is eating the world, Steve Jobs, the market place, the scientific method, Thomas Kuhn: the structure of scientific revolutions, transfer pricing, uber lyft, Watson beat the top human players on Jeopardy!, Y Combinator, Zipcar

Now, however, the cornerstone of many local towns risks being ripped apart by a range of seemingly disruptive developments. Peer-to-peer payments such as PayPal, now almost twenty years old, have started to change the conception of what banking looks like. The rise of the smart phone and the increasing ubiquity of always-on high-speed networks mean that a generation is used to swiping, tapping, waving, or just leaving a car (in the case of Uber) to consummate a payment. Distributed ledger solutions, such as ones that use a technology called blockchain as their backbones, create decentralized transaction registers that are impervious to fraud or manipulation, albeit with legitimate questions about scalability and usability. In the future, will people need to have a central repository that holds their savings, or will what we conceive of as banks increasingly be companies such as Starbucks (whose prepaid cards held more than $1 billion in assets as of mid-2016), Apple, Samsung, and more?


pages: 286 words: 79,305

99%: Mass Impoverishment and How We Can End It by Mark Thomas

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, additive manufacturing, Albert Einstein, anti-communist, autonomous vehicles, bank run, banks create money, bitcoin, business cycle, call centre, central bank independence, complexity theory, conceptual framework, creative destruction, credit crunch, declining real wages, distributed ledger, Donald Trump, Erik Brynjolfsson, eurozone crisis, fiat currency, Filter Bubble, full employment, future of work, Gini coefficient, gravity well, income inequality, inflation targeting, Internet of things, invisible hand, Jeff Bezos, jimmy wales, job automation, Kickstarter, labour market flexibility, laissez-faire capitalism, light touch regulation, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, money: store of value / unit of account / medium of exchange, Nelson Mandela, North Sea oil, Occupy movement, offshore financial centre, Own Your Own Home, Peter Thiel, Piper Alpha, plutocrats, Plutocrats, profit maximization, quantitative easing, rent-seeking, Ronald Reagan, Second Machine Age, self-driving car, Silicon Valley, smart cities, Steve Jobs, The Great Moderation, The Wealth of Nations by Adam Smith, wealth creators, working-age population

This is especially worrisome when it comes to ‘dual-use concerns’ – essentially the possibility that gene drives could be used for both peaceful and military purposes, such as driving a harmful gene through a country’s food crops. There are numerous examples of good technology being used badly and little reason to think gene drives would be an exception.8 NEW COMPUTING APPROACHES The world of computing is highly innovative, and there are many emerging technologies that may prove influential over the next thirty-five years. These range from distributed ledger technology (block chain) as used by Bitcoin and other digital currencies, through virtual reality and the Internet of Things to cerebral interfaces. Two areas which may prove to be fundamental are quantum computing and the development of AI: first narrow AI – the use of artificial intelligence to solve tightly defined problems such as image recognition – and, ultimately, full AI. Quantum computing Whereas conventional computing is based on the idea of a ‘bit’ (short for ‘binary digit’) that takes either the value 0 or the value 1 at any time, quantum computing takes advantage of the fact that, according to quantum mechanics, particles can be in multiple, superimposed states at the same time.


pages: 292 words: 85,151

Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours (And What to Do About It) by Salim Ismail, Yuri van Geest

23andMe, 3D printing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, Baxter: Rethink Robotics, Ben Horowitz, bioinformatics, bitcoin, Black Swan, blockchain, Burning Man, business intelligence, business process, call centre, chief data officer, Chris Wanstrath, Clayton Christensen, clean water, cloud computing, cognitive bias, collaborative consumption, collaborative economy, commoditize, corporate social responsibility, cross-subsidies, crowdsourcing, cryptocurrency, dark matter, Dean Kamen, dematerialisation, discounted cash flows, disruptive innovation, distributed ledger, Edward Snowden, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, game design, Google Glasses, Google Hangouts, Google X / Alphabet X, gravity well, hiring and firing, Hyperloop, industrial robot, Innovator's Dilemma, intangible asset, Internet of things, Iridium satellite, Isaac Newton, Jeff Bezos, Joi Ito, Kevin Kelly, Kickstarter, knowledge worker, Kodak vs Instagram, Law of Accelerating Returns, Lean Startup, life extension, lifelogging, loose coupling, loss aversion, low earth orbit, Lyft, Marc Andreessen, Mark Zuckerberg, market design, means of production, minimum viable product, natural language processing, Netflix Prize, NetJets, Network effects, new economy, Oculus Rift, offshore financial centre, PageRank, pattern recognition, Paul Graham, paypal mafia, peer-to-peer, peer-to-peer model, Peter H. Diamandis: Planetary Resources, Peter Thiel, prediction markets, profit motive, publish or perish, Ray Kurzweil, recommendation engine, RFID, ride hailing / ride sharing, risk tolerance, Ronald Coase, Second Machine Age, self-driving car, sharing economy, Silicon Valley, skunkworks, Skype, smart contracts, Snapchat, social software, software is eating the world, speech recognition, stealth mode startup, Stephen Hawking, Steve Jobs, subscription business, supply-chain management, TaskRabbit, telepresence, telepresence robot, Tony Hsieh, transaction costs, Travis Kalanick, Tyler Cowen: Great Stagnation, uber lyft, urban planning, WikiLeaks, winner-take-all economy, X Prize, Y Combinator, zero-sum game

Implications: Algorithms driving more and more business decisions; AIs replacing a large percentage of knowledge workers; AIs looking for patterns in organizational data; algorithms embedded into products. Virtual/augmented reality Description: Avatar-quality VR available on desktop in 2-3 years. Oculus Rift, High Fidelity and Google Glass drive new applications. Implications: Remote viewing; centrally located experts serving more areas; new practice areas; remote medicine. Bitcoin and block chain Description: Trustless, ultra-low-cost secure transactions enabled by distributed ledgers that log everything. Implications: The blockchain becomes a trust engine; most third-party validation functions become automated (e.g., multi-signatory contracts, voting systems, audit practices). Micro-transactions and new payment systems become ubiquitous. Neuro-feedback Description: Use of feedback loops to bring the brain to a high level of precision. Implications: Capacity to test and deploy entirely new classes of applications (e.g., focus@will); group creativity apps; flow hacking; therapeutic aids, stress reduction and sleep improvement.


pages: 364 words: 99,897

The Industries of the Future by Alec Ross

23andMe, 3D printing, Airbnb, algorithmic trading, AltaVista, Anne Wojcicki, autonomous vehicles, banking crisis, barriers to entry, Bernie Madoff, bioinformatics, bitcoin, blockchain, Brian Krebs, British Empire, business intelligence, call centre, carbon footprint, cloud computing, collaborative consumption, connected car, corporate governance, Credit Default Swap, cryptocurrency, David Brooks, disintermediation, Dissolution of the Soviet Union, distributed ledger, Edward Glaeser, Edward Snowden, en.wikipedia.org, Erik Brynjolfsson, fiat currency, future of work, global supply chain, Google X / Alphabet X, industrial robot, Internet of things, invention of the printing press, Jaron Lanier, Jeff Bezos, job automation, John Markoff, Joi Ito, Kickstarter, knowledge economy, knowledge worker, lifelogging, litecoin, M-Pesa, Marc Andreessen, Mark Zuckerberg, Mikhail Gorbachev, mobile money, money: store of value / unit of account / medium of exchange, Nelson Mandela, new economy, offshore financial centre, open economy, Parag Khanna, paypal mafia, peer-to-peer, peer-to-peer lending, personalized medicine, Peter Thiel, precision agriculture, pre–internet, RAND corporation, Ray Kurzweil, recommendation engine, ride hailing / ride sharing, Rubik’s Cube, Satoshi Nakamoto, selective serotonin reuptake inhibitor (SSRI), self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, social graph, software as a service, special economic zone, supply-chain management, supply-chain management software, technoutopianism, The Future of Employment, Travis Kalanick, underbanked, Vernor Vinge, Watson beat the top human players on Jeopardy!, women in the workforce, Y Combinator, young professional

Fraud is further diminished by the fact that every bitcoin carries its history with it; to try to counterfeit a coin would require counterfeiting a false lineage going back all the way to the beginning of Bitcoin. It would never be accepted by the system, since the millions of copies of the ledger that reside throughout the rest of the Bitcoin network would not have any record of this counterfeit coin or its invented history. A widely distributed ledger lets everyone know who has what and prevents any individual from barging in with counterfeited property. The major headache that Satoshi Nakamoto conquered, and that every previous cryptocurrency had failed to manage, was the question of how to update that decentralized ledger: How could you make sure that the millions of copies of the master ledger, which are located far and wide throughout the Bitcoin network, are all the same, all accurate, all up to date, without anyone cheating?


pages: 354 words: 105,322

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis by James Rickards

"Robert Solow", Affordable Care Act / Obamacare, Albert Einstein, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, Bayesian statistics, Ben Bernanke: helicopter money, Benoit Mandelbrot, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Black Swan, blockchain, Bonfire of the Vanities, Bretton Woods, British Empire, business cycle, butterfly effect, buy and hold, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, cellular automata, cognitive bias, cognitive dissonance, complexity theory, Corn Laws, corporate governance, creative destruction, Credit Default Swap, cuban missile crisis, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, disintermediation, distributed ledger, diversification, diversified portfolio, Edward Lorenz: Chaos theory, Eugene Fama: efficient market hypothesis, failed state, Fall of the Berlin Wall, fiat currency, financial repression, fixed income, Flash crash, floating exchange rates, forward guidance, Fractional reserve banking, G4S, George Akerlof, global reserve currency, high net worth, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Isaac Newton, jitney, John Meriwether, John von Neumann, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, money market fund, mutually assured destruction, Myron Scholes, Naomi Klein, nuclear winter, obamacare, offshore financial centre, Paul Samuelson, Peace of Westphalia, Pierre-Simon Laplace, plutocrats, Plutocrats, prediction markets, price anchoring, price stability, quantitative easing, RAND corporation, random walk, reserve currency, RFID, risk-adjusted returns, Ronald Reagan, Silicon Valley, sovereign wealth fund, special drawing rights, stocks for the long run, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transfer pricing, value at risk, Washington Consensus, Westphalian system

Historically, market closures were circumvented by the emergence of cash-and-carry “curb exchanges” where buyers and sellers met in the street to trade paper shares for cash. Regulators will want to suppress twenty-first-century digital curb exchanges to prevent price discovery and maintain the myth of pre-panic prices. Curb exchanges could be conducted online in an eBay-style format with settlement by bitcoin or cash delivered face-to-face. Title to shares can be recorded in a distributed ledger using a blockchain. Eliminating cash helps the suppression of alternative markets, although bitcoin presents new challenges to elite power. The second reason for eliminating cash is to impose negative interest rates. Central banks are in a losing battle against deflationary trends. One way to defeat deflation is to promote inflation with negative real interest rates. A negative real rate occurs when the inflation rate is higher than the nominal interest rate on borrowings.


pages: 543 words: 153,550

Model Thinker: What You Need to Know to Make Data Work for You by Scott E. Page

"Robert Solow", Airbnb, Albert Einstein, Alfred Russel Wallace, algorithmic trading, Alvin Roth, assortative mating, Bernie Madoff, bitcoin, Black Swan, blockchain, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Checklist Manifesto, computer age, corporate governance, correlation does not imply causation, cuban missile crisis, deliberate practice, discrete time, distributed ledger, en.wikipedia.org, Estimating the Reproducibility of Psychological Science, Everything should be made as simple as possible, experimental economics, first-price auction, Flash crash, Geoffrey West, Santa Fe Institute, germ theory of disease, Gini coefficient, High speed trading, impulse control, income inequality, Isaac Newton, John von Neumann, Kenneth Rogoff, knowledge economy, knowledge worker, Long Term Capital Management, loss aversion, low skilled workers, Mark Zuckerberg, market design, meta analysis, meta-analysis, money market fund, Nash equilibrium, natural language processing, Network effects, p-value, Pareto efficiency, pattern recognition, Paul Erdős, Paul Samuelson, phenotype, pre–internet, prisoner's dilemma, race to the bottom, random walk, randomized controlled trial, Richard Feynman, Richard Thaler, school choice, sealed-bid auction, second-price auction, selection bias, six sigma, social graph, spectrum auction, statistical model, Stephen Hawking, Supply of New York City Cabdrivers, The Bell Curve by Richard Herrnstein and Charles Murray, The Great Moderation, The Rise and Fall of American Growth, the rule of 72, the scientific method, The Spirit Level, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, urban sprawl, value at risk, web application, winner-take-all economy, zero-sum game

Shapley Values and the Alternative Uses Test We now apply Shapley values to a cooperative game based on the alternative uses test. In the test, each person must come up with novel uses of a common object, such as a brick. The test measures a person’s creativity based on the number of uses or categories of uses that she generates. When we calculate Shapley values, we find that they produce an intuitive scoring rule. Imagine three players, Arun, Betty, and Carlos, who each think up alternative uses for blockchain, a distributed ledger technology, shown in figure 9.1. Arun and Carlos each think of six ideas, giving each a creativity score of 6, and Betty thinks of seven, making her score 7. The group’s total creativity equals 9, as there are nine unique ideas. To compute the Shapley values, we could write down all six possible orders in which the group could form, give individuals credit only for unique ideas added to the group, and then average over all six cases.