smart contracts

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Mastering Ethereum: Building Smart Contracts and DApps by Andreas M. Antonopoulos, Gavin Wood Ph. D.

Amazon Web Services, bitcoin, blockchain, continuous integration, cryptocurrency, Debian, domain-specific language, don't repeat yourself, Edward Snowden, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, Firefox, Google Chrome, intangible asset, Internet of things, litecoin, move fast and break things, move fast and break things, node package manager, peer-to-peer, Ponzi scheme, prediction markets, pull request, QR code, Ruby on Rails, Satoshi Nakamoto, sealed-bid auction, sharing economy, side project, smart contracts, transaction costs, Turing complete, Turing machine, Vickrey auction, web application, WebSocket

Next, we will look at smart contract security in more detail. Some of the nuances of Vyper design may become more apparent once you read about all the possible security problems that can arise in smart contracts. Chapter 9. Smart Contract Security Security is one of the most important considerations when writing smart contracts. In the field of smart contract programming, mistakes are costly and easily exploited. In this chapter we will look at security best practices and design patterns, as well as “security antipatterns,” which are practices and patterns that can introduce vulnerabilities in our smart contracts. As with other programs, a smart contract will execute exactly what is written, which is not always what the programmer intended. Furthermore, all smart contracts are public, and any user can interact with them simply by creating a transaction.

(The Vyper compiler outputs LLL rather than EVM bytecode; this simplifies the development of Vyper itself.) Reading and Writing Data While it is costly to store, read, and modify data, these storage operations are a necessary component of most smart contracts. Smart contracts can write data to two places: Global state The state variables in a given smart contract are stored in Ethereum’s global state trie; a smart contract can only store, read, and modify data in relation to that particular contract’s address (i.e., smart contracts cannot read or write to other smart contracts). Logs A smart contract can also write to Ethereum’s chain data through log events. While Vyper initially employed the __log__ syntax for declaring these events, an update has been made that brings its event declaration more in line with Solidity’s original syntax.

It is therefore important to identify which aspects of the application need a trusted and decentralized execution platform. Ethereum smart contracts allow you to build architectures in which a network of smart contracts call and pass data between each other, reading and writing their own state variables as they go, with their complexity restricted only by the block gas limit. After you deploy your smart contract, your business logic could well be used by many other developers in the future. One major consideration of smart contract architecture design is the inability to change the code of a smart contract once it is deployed. It can be deleted if it is programmed with an accessible SELFDESTRUCT opcode, but other than complete removal, the code cannot be changed in any way. The second major consideration of smart contract architecture design is DApp size. A really large monolithic smart contract may cost a lot of gas to deploy and use.


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

The following concepts are worth discussion in the context of decentralization. Smart contracts A smart contract is a decentralized program. Smart contracts do not necessarily need a blockchain to run; however, due to the security benefits that blockchain technology provides, blockchain has become a standard decentralized execution platform for smart contracts. A smart contract usually contains some business logic and a limited amount of data. The business logic is executed if specific criteria are met. Actors or participants in the blockchain use these smart contracts, or they run autonomously on behalf of the network participants. More information on smart contracts will be provided in Chapter 9, Smart Contracts. Decentralized Organizations DOs are software programs that run on a blockchain and are based on the idea of actual organizations with people and protocols.

This can also be considered a basic form of smart contract. Various other blockchain platforms support smart contracts such as Monax, Lisk, Counterparty, Stellar, Hyperledger fabric, corda, and Axoni core. Smart contracts can be developed in various languages. The critical requirement, however, is determinism, which is very important because it is vital that regardless of where the smart contract code executes, it produces the same result every time and everywhere. This requirement of deterministic nature of smart contracts also implies that smart contract code is absolutely bug-free. Validation and verification of smart contracts is an active area of research and detailed discussion of this topic will be presented in Chapter 18, Scalability and Other Challenges. Various languages have been developed to build smart contracts such as Solidity, which runs on Ethereum Virtual Machine (EVM).

Moreover, regulatory and compliance requirements is another topic that needs to be addressed before smart contracts can be used as efficiently as traditional legal documents. Even though smart contracts are named smart, they in fact only do what they have been programmed to do, and that is fine because this very property of smart contracts ensures that smart contracts produce same output every time they are executed. This deterministic nature of smart contracts is highly desirable in blockchain platforms due to consistent consensus requirements. This means that smart contracts are not really smart, they are simply doing what they are programmed to do. Now this gives rise to a problem whereby a large gap between real world and blockchain world emerges. In this situation, natural language is not understandable by the smart contract, and similarly, the code is not comprehensible to the natural world.


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

Here’s a list of some of the DeFi smart contracts that can be covered by Nexus Mutual: Nexus Mutual Supported DeFi Smart Contracts (Feb 2020) No. DeFi Smart Contract No. DeFi Smart Contract 1 MakerDAO 10 Set Protocol 2 Moloch DAO 11 Fulcrum 3 Nuo 12 Aave 4 Gnosis 13 Compound 5 0x 14 Edgeware 6 Tornado Cash 15 IDEX 7 Uniswap 16 Instadapp 8 Argent 17 DDEX 9 dYdX 18 Pool Together ~ What event is covered by Nexus Mutual? Currently, Nexus Mutual offers coverage against smart contract failures, which protects against potential bugs in smart contract code. The coverage may result in protection against financial losses that may be incurred due to hacks or exploits in the smart contract code. Note that smart contract cover only protects against “unintended uses” of smart contracts, so security events such as the loss of private keys or centralized exchange hacks are not covered

The Cover Amount is the amount that you would like to purchase cover for and will be the amount that will be paid out in case there are smart contract failures. Upon a smart contract failure incident, a Claims Assessment process will take place that will be evaluated by Claims Assessors. Once it has been approved, the Cover Amount will be paid to you. ~ How is the coverage priced? While all smart contracts can be covered by Nexus Mutual, the price of Smart Contract Cover is based on several criteria such as: The characteristics of the smart contract that requires coverage. Examples include value held in contract, transactions processed etc. Cover Amount Cover Period Value staked by Risk Assessors against the smart contract A smart contract that does not have sufficient value staked against it or has not been battle-tested enough will return a quote which is un-coverable, meaning that the smart contract cannot be covered at the time.

For example, if Alice wants to set up a trust fund to pay Bob $100 at the start of each month for the next 12 months, she can program a smart contract to: Check the current date At the start of each month, send Bob $100 automatically Repeat until the fund in the smart contract is exhausted Using a smart contract, Alice has bypassed the need to have a trusted third-party intermediary (lawyers, escrow agents etc) to send the trust fund to Bob and made the process transparent to all involved parties. Smart contracts work on the “if this, then that” principle. Whenever a certain condition is fulfilled, the smart contract will carry out the operation as programmed. Multiple smart contracts are combined to operate with each other, which would be known as decentralized application (Dapp) in order to fulfill more complex processes and computation


pages: 271 words: 52,814

Blockchain: Blueprint for a New Economy by Melanie Swan

23andMe, Airbnb, altcoin, Amazon Web Services, asset allocation, banking crisis, basic income, bioinformatics, bitcoin, blockchain, capital controls, cellular automata, central bank independence, clean water, cloud computing, collaborative editing, Conway's Game of Life, crowdsourcing, cryptocurrency, disintermediation, Edward Snowden, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, financial innovation, Firefox, friendly AI, Hernando de Soto, intangible asset, Internet Archive, Internet of things, Khan Academy, Kickstarter, lifelogging, litecoin, Lyft, M-Pesa, microbiome, Network effects, new economy, peer-to-peer, peer-to-peer lending, peer-to-peer model, personalized medicine, post scarcity, prediction markets, QR code, ride hailing / ride sharing, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, SETI@home, sharing economy, Skype, smart cities, smart contracts, smart grid, software as a service, technological singularity, Turing complete, uber lyft, unbanked and underbanked, underbanked, web application, WikiLeaks

-M2M/IoT Bitcoin Payment Network to Enable the Machine Economy and consensus models, Blockchain AI: Consensus as the Mechanism to Foster “Friendly” AI-Blockchain Consensus Increases the Information Resolution of the Universe extensibility of, Extensibility of Blockchain Technology Concepts for facilitating big data predictive task automation, Blockchain Layer Could Facilitate Big Data’s Predictive Task Automation future applications, Blockchain AI: Consensus as the Mechanism to Foster “Friendly” AI-Blockchain Consensus Increases the Information Resolution of the Universe limitations of (see limitations) organizational capabilities, Blockchain Technology Is a New and Highly Effective Model for Organizing Activity tracking capabilities, Fundamental Economic Principles: Discovery, Value Attribution, and Exchange-Fundamental Economic Principles: Discovery, Value Attribution, and Exchange blockchain-recorded marriage, Decentralized Governance Services BlockCypher, Blockchain Development Platforms and APIs BOINC, DAOs and DACs bond deposit postings, Technical Challenges Brin, David, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel BTCjam, Financial Services business model challenges, Business Model Challenges Buttercoin, Financial Services Byrne, Patrick, Financial Services C Campus Cryptocurrency Network, Campuscoin Campuscoin, Campuscoin-Campuscoin censorship, Internet (see decentralized DNS system) Chain, Blockchain Development Platforms and APIs challenges (see see limitations) charity donations, Charity Donations and the Blockchain—Sean’s Outpost China, Relation to Fiat Currency ChromaWallet, Wallet Development Projects Chronobit, Virtual Notary, Bitnotar, and Chronobit Circle Internet Financial, eWallet Services and Personal Cryptosecurity Codius, Financial Services coin drops, Coin Drops as a Strategy for Public Adoption coin mixing, eWallet Services and Personal Cryptosecurity coin, defining, Terminology and Concepts, Currency, Token, Tokenizing Coinapult, Global Public Health: Bitcoin for Contagious Disease Relief Coinapult LOCKS, Relation to Fiat Currency Coinbase, Merchant Acceptance of Bitcoin, Financial Services CoinBeyond, Merchant Acceptance of Bitcoin Coinffeine, Financial Services Coinify, Merchant Acceptance of Bitcoin Coinprism, Wallet Development Projects Coinspace, Crowdfunding CoinSpark, Wallet Development Projects colored coins, Smart Property, Blockchain 2.0 Protocol Projects community supercomputing, Community Supercomputing Communitycoin, Currency, Token, Tokenizing-Communitycoin: Hayek’s Private Currencies Vie for Attention complementary currency systems, Demurrage Currencies: Potentially Incitory and Redistributable concepts, redefining, Terminology and Concepts-Terminology and Concepts consensus models, Blockchain AI: Consensus as the Mechanism to Foster “Friendly” AI-Blockchain Consensus Increases the Information Resolution of the Universe consensus-derived information, Blockchain Consensus Increases the Information Resolution of the Universe contagious disease relief, Global Public Health: Bitcoin for Contagious Disease Relief contracts, Blockchain 2.0: Contracts-The Blockchain as a Path to Artificial Intelligence (see also smart contracts) crowdfunding, Crowdfunding-Crowdfunding financial services, Financial Services-Financial Services marriage, Decentralized Governance Services prediction markets, Bitcoin Prediction Markets smart property, Smart Property-Smart Property wallet development projects, Wallet Development Projects copyright protection, Monegraph: Online Graphics Protection Counterparty, Blockchain 2.0 Protocol Projects, Counterparty Re-creates Ethereum’s Smart Contract Platform Counterparty currency (XCP), Currency, Token, Tokenizing Counterwallet, Wallet Development Projects crowdfunding, Crowdfunding-Crowdfunding cryptocurrencies benefits of, Currency, Token, Tokenizing cryptosecurity, eWallet Services and Personal Cryptosecurity eWallet services, eWallet Services and Personal Cryptosecurity mechanics of, How a Cryptocurrency Works-Merchant Acceptance of Bitcoin merchant acceptance, Merchant Acceptance of Bitcoin cryptosecurity challenges, eWallet Services and Personal Cryptosecurity cryptowallet, Blockchain Neutrality currency, Technology Stack: Blockchain, Protocol, Currency-Regulatory Status, Currency, Token, Tokenizing-Extensibility of Demurrage Concept and Features Campuscoin, Campuscoin-Campuscoin coin drops, Coin Drops as a Strategy for Public Adoption Communitycoin, Communitycoin: Hayek’s Private Currencies Vie for Attention-Communitycoin: Hayek’s Private Currencies Vie for Attention cryptocurrencies, How a Cryptocurrency Works-Merchant Acceptance of Bitcoin decentralizing, Communitycoin: Hayek’s Private Currencies Vie for Attention defining, Currency, Token, Tokenizing-Currency, Token, Tokenizing, Currency: New Meanings demurrage, Demurrage Currencies: Potentially Incitory and Redistributable-Extensibility of Demurrage Concept and Features double-spend problem, The Double-Spend and Byzantine Generals’ Computing Problems fiat currency, Relation to Fiat Currency-Relation to Fiat Currency monetary and nonmonetary, Currency Multiplicity: Monetary and Nonmonetary Currencies-Currency Multiplicity: Monetary and Nonmonetary Currencies new meanings, Currency: New Meanings technology stack, Technology Stack: Blockchain, Protocol, Currency-Technology Stack: Blockchain, Protocol, Currency currency mulitplicity, Currency Multiplicity: Monetary and Nonmonetary Currencies-Currency Multiplicity: Monetary and Nonmonetary Currencies D DAOs, DAOs and DACs-DAOs and DACs DAOs/DACs, DAOs and DACs-DAOs and DACs, Batched Notary Chains as a Class of Blockchain Infrastructure, Blockchain Government Dapps, Dapps-Dapps, Extensibility of Demurrage Concept and Features Dark Coin, eWallet Services and Personal Cryptosecurity dark pools, Technical Challenges Dark Wallet, eWallet Services and Personal Cryptosecurity DASs, DASs and Self-Bootstrapped Organizations DDP, Crowdfunding decentralization, Smart Contracts, Centralization-Decentralization Tension and Equilibrium decentralized applications (Dapps), Dapps-Dapps decentralized autonomous organization/corporation (DAO) (see DAOs/DACs) decentralized autonomous societies (DASs), DASs and Self-Bootstrapped Organizations decentralized autonomy, eWallet Services and Personal Cryptosecurity decentralized DNS, Namecoin: Decentralized Domain Name System-Decentralized DNS Functionality Beyond Free Speech: Digital Identity challenges of, Challenges and Other Decentralized DNS Services and digital identity, Decentralized DNS Functionality Beyond Free Speech: Digital Identity-Decentralized DNS Functionality Beyond Free Speech: Digital Identity DotP2P, Challenges and Other Decentralized DNS Services decentralized file storage, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation decentralized secure file serving, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation deeds, Decentralized Governance Services demurrage currencies, Demurrage Currencies: Potentially Incitory and Redistributable-Extensibility of Demurrage Concept and Features action-incitory features, Extensibility of Demurrage Concept and Features limitations of, Demurrage Currencies: Potentially Incitory and Redistributable digital art, Digital Art: Blockchain Attestation Services (Notary, Intellectual Property Protection)-Personal Thinking Blockchains (see also blockchain attestation services) hashing and timestamping, Hashing Plus Timestamping-Limitations online graphics protection, Monegraph: Online Graphics Protection digital cryptography, Ethereum: Turing-Complete Virtual Machine, Public/Private-Key Cryptography 101 digital divide, defining, Digital Divide of Bitcoin digital identity verification, Blockchain 2.0: Contracts, Smart Property, Wallet Development Projects, Digital Identity Verification-Digital Divide of Bitcoin, Limitations, Decentralized Governance Services, Liquid Democracy and Random-Sample Elections, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy, Privacy Challenges for Personal Records dispute resolution, PrecedentCoin: Blockchain Dispute Resolution DIYweathermodeling, Community Supercomputing DNAnexus, Genomecoin, GenomicResearchcoin Dogecoin, Technology Stack: Blockchain, Protocol, Currency, Currency Multiplicity: Monetary and Nonmonetary Currencies, Scandals and Public Perception DotP2P, Challenges and Other Decentralized DNS Services double-spend problem, The Double-Spend and Byzantine Generals’ Computing Problems DriveShare, DAOs and DACs dynamic redistribution of currency (see demurrage currency) E education (see learning and literacy) Electronic Freedom Foundation (EFF), Distributed Censorship-Resistant Organizational Models EMR (electronic medical record) system, EMRs on the Blockchain: Personal Health Record Storage Ethereum, Crowdfunding, Blockchain 2.0 Protocol Projects, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation, Ethereum: Turing-Complete Virtual Machine-Counterparty Re-creates Ethereum’s Smart Contract Platform eWallet services, eWallet Services and Personal Cryptosecurity ExperimentalResultscoin, Blockchain Academic Publishing: Journalcoin F Fairlay, Bitcoin Prediction Markets fiat currency, Relation to Fiat Currency-Relation to Fiat Currency file serving, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation, Ethereum: Turing-Complete Virtual Machine file storage, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation financial services, Regulatory Status, Financial Services-Financial Services, Blockchain Technology Is a New and Highly Effective Model for Organizing Activity, Government Regulation Fitbit, Personal Thinking Blockchains, Blockchain Health Research Commons, Extensibility of Demurrage Concept and Features Florincoin, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel Folding@Home, DAOs and DACs, Blockchain Science: Gridcoin, Foldingcoin, Community Supercomputing franculates, Blockchain Government freedom of speech, Namecoin: Decentralized Domain Name System, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel (see also decentralized DNS system) Freicoin, Demurrage Currencies: Potentially Incitory and Redistributable fundraising (see crowdfunding) futarchy, Futarchy: Two-Step Democracy with Voting + Prediction Markets-Futarchy: Two-Step Democracy with Voting + Prediction Markets G GBIcoin, Demurrage Currencies: Potentially Incitory and Redistributable GBIs (Guaranteed Basic Income initiatives), Demurrage Currencies: Potentially Incitory and Redistributable Gems, Blockchain Development Platforms and APIs, Dapps Genecoin, Blockchain Genomics Genomecoin, Genomecoin, GenomicResearchcoin Genomic Data Commons, Genomecoin, GenomicResearchcoin genomic sequencing, Blockchain Genomics 2.0: Industrialized All-Human-Scale Sequencing Solution-Genomecoin, GenomicResearchcoin GenomicResearchcoin, Genomecoin, GenomicResearchcoin genomics, consumer, Blockchain Genomics-Genomecoin, GenomicResearchcoin Git, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation GitHub, Blockchain Academic Publishing: Journalcoin, Currency Multiplicity: Monetary and Nonmonetary Currencies global public health, Global Public Health: Bitcoin for Contagious Disease Relief GoCoin, Financial Services GoToLunchcoin, Terminology and Concepts governance, Blockchain Government-Societal Maturity Impact of Blockchain Governance decentralized services, Decentralized Governance Services-Decentralized Governance Services dispute resolution, PrecedentCoin: Blockchain Dispute Resolution futarchy, Futarchy: Two-Step Democracy with Voting + Prediction Markets-Futarchy: Two-Step Democracy with Voting + Prediction Markets Liquid Democracy system, Liquid Democracy and Random-Sample Elections-Liquid Democracy and Random-Sample Elections personalized governance services, Blockchain Government random-sample elections, Random-Sample Elections societal maturity impact of blockchain governance, Societal Maturity Impact of Blockchain Governance government regulation, Regulatory Status, Government Regulation-Government Regulation Gridcoin, Blockchain Science: Gridcoin, Foldingcoin-Blockchain Science: Gridcoin, Foldingcoin H hashing, Hashing Plus Timestamping-Limitations, Batched Notary Chains as a Class of Blockchain Infrastructure, Technical Challenges Hayek, Friedrich, Communitycoin: Hayek’s Private Currencies Vie for Attention, Demurrage Currencies: Potentially Incitory and Redistributable, Conclusion, The Blockchain Is an Information Technology health, Blockchain Health-Virus Bank, Seed Vault Backup as demurrage currency, Extensibility of Demurrage Concept and Features doctor vendor RFP services, Doctor Vendor RFP Services and Assurance Contracts health notary services, Blockchain Health Notary health research commons , Blockchain Health Research Commons health spending, Healthcoin healthcare decision making and advocacy, Liquid Democracy and Random-Sample Elections personal health record storage, EMRs on the Blockchain: Personal Health Record Storage virus bank and seed vault backup, Virus Bank, Seed Vault Backup Healthcoin, Healthcoin, Demurrage Currencies: Potentially Incitory and Redistributable I identity authentication, eWallet Services and Personal Cryptosecurity, Blockchain 2.0: Contracts, Smart Property, Smart Property, Wallet Development Projects, Digital Identity Verification-Digital Divide of Bitcoin, Limitations, Decentralized Governance Services, Liquid Democracy and Random-Sample Elections, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy, Privacy Challenges for Personal Records Indiegogo, Crowdfunding, Dapps industry scandals, Scandals and Public Perception infrastructure needs and issues, Technical Challenges inheritance gifts, Smart Contracts intellectual property, Monegraph: Online Graphics Protection (see also digital art) Internet administration, Distributed Censorship-Resistant Organizational Models Internet Archive, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation, Personal Thinking Blockchains Internet censorship prevention (see Decentralized DNS system) Intuit Quickbooks, Merchant Acceptance of Bitcoin IP protection, Hashing Plus Timestamping IPFS project, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation J Johnston, David, Blockchain Technology Could Be Used in the Administration of All Quanta Journalcoin, Blockchain Academic Publishing: Journalcoin Judobaby, Crowdfunding justice applications for censorship-resistant organizational models, Distributed Censorship-Resistant Organizational Models-Distributed Censorship-Resistant Organizational Models digital art, Digital Art: Blockchain Attestation Services (Notary, Intellectual Property Protection)-Personal Thinking Blockchains (see also digital art, blockchain attestation services) digital identity verification, Blockchain 2.0: Contracts, Smart Property, Wallet Development Projects, Digital Identity Verification-Digital Divide of Bitcoin, Limitations, Decentralized Governance Services, Liquid Democracy and Random-Sample Elections, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy, Privacy Challenges for Personal Records freedom of speech/anti-censorship, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel governance, Blockchain Government-Societal Maturity Impact of Blockchain Governance (see also governance) Namecoin, Namecoin: Decentralized Domain Name System-Decentralized DNS Functionality Beyond Free Speech: Digital Identity, Monegraph: Online Graphics Protection (see also decentralized DNS) K Kickstarter, Crowdfunding, Community Supercomputing Kipochi, Blockchain Neutrality, Global Public Health: Bitcoin for Contagious Disease Relief, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy Koinify, Crowdfunding, Dapps Kraken, Financial Services L latency, Blockchain 2.0 Protocol Projects, Technical Challenges, Technical Challenges, Scandals and Public Perception LaZooz, Dapps, Campuscoin, Extensibility of Demurrage Concept and Features Learncoin, Learncoin learning and literacy, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy-Learning Contract Exchanges learning contract exchanges, Learning Contract Exchanges Ledra Capital, Blockchain 2.0: Contracts, Ledra Capital Mega Master Blockchain List legal implications crowdfunding, Crowdfunding smart contracts, Smart Contracts lending, trustless, Smart Property Lighthouse, Crowdfunding limitations, Limitations-Overall: Decentralization Trends Likely to Persist business model challenges, Business Model Challenges government regulation, Government Regulation-Government Regulation personal records privacy challenges, Privacy Challenges for Personal Records scandals and public perception, Scandals and Public Perception-Scandals and Public Perception technical challenges, Technical Challenges-Technical Challenges Liquid Democracy system, Liquid Democracy and Random-Sample Elections-Liquid Democracy and Random-Sample Elections Litecoin, Technology Stack: Blockchain, Protocol, Currency, Technology Stack: Blockchain, Protocol, Currency, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel, Currency Multiplicity: Monetary and Nonmonetary Currencies, Technical Challenges literacy (see learning and literacy) LTBcoin, Wallet Development Projects, Currency, Token, Tokenizing M M2M/IoT infrastructure, M2M/IoT Bitcoin Payment Network to Enable the Machine Economy, Blockchain Development Platforms and APIs, Blockchain Academic Publishing: Journalcoin-The Blockchain Is Not for Every Situation, The Blockchain Is an Information Technology Maidsafe, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation, Technical Challenges Manna, Crowdfunding marriage, blockchain recorded, Decentralized Governance Services Mastercoin, Blockchain 2.0 Protocol Projects mechanics of cryptocurrencies, How a Cryptocurrency Works Medici, Financial Services mega master blockchain list, Ledra Capital Mega Master Blockchain List-Ledra Capital Mega Master Blockchain List Melotic, Crowdfunding, Wallet Development Projects merchant acceptance, Merchant Acceptance of Bitcoin merchant payment fees, Summary: Blockchain 1.0 in Practical Use messaging, Ethereum: Turing-Complete Virtual Machine, Dapps, Challenges and Other Decentralized DNS Services, Technical Challenges MetaDisk, DAOs and DACs mindfiles, Personal Thinking Blockchains MIT Bitcoin Project, Campuscoin Monegraph, Monegraph: Online Graphics Protection money (see currency) MOOCs (massive open online courses), Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy Moroz, Tatiana, Communitycoin: Hayek’s Private Currencies Vie for Attention multicurrency systems, Demurrage Currencies: Potentially Incitory and Redistributable N Nakamoto, Satoshi, Blockchain 2.0: Contracts, Blockchain 2.0: Contracts Namecoin, Namecoin: Decentralized Domain Name System-Decentralized DNS Functionality Beyond Free Speech: Digital Identity, Monegraph: Online Graphics Protection Nationcoin, Coin Drops as a Strategy for Public Adoption, Demurrage Currencies: Potentially Incitory and Redistributable notary chains, Batched Notary Chains as a Class of Blockchain Infrastructure notary services, Hashing Plus Timestamping, Blockchain Health Notary NSA surveillance, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel NXT, Technology Stack: Blockchain, Protocol, Currency, Blockchain 2.0 Protocol Projects O offline wallets, Technical Challenges OneName, Digital Identity Verification-Digital Identity Verification OneWallet, Wallet Development Projects online graphics protection, Monegraph: Online Graphics Protection-Monegraph: Online Graphics Protection Open Assets, Blockchain 2.0 Protocol Projects Open Transactions, Blockchain 2.0 Protocol Projects OpenBazaar, Dapps, Government Regulation Ostel, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel P passports, Decentralized Governance Services PayPal, The Double-Spend and Byzantine Generals’ Computing Problems, Financial Services, Distributed Censorship-Resistant Organizational Models peer-to-peer lending, Financial Services Peercoin, Technology Stack: Blockchain, Protocol, Currency personal cryptosecurity, eWallet Services and Personal Cryptosecurity personal data rights, Blockchain Genomics personal mindfile blockchains, Personal Thinking Blockchains personal thinking chains, Personal Thinking Blockchains-Personal Thinking Blockchains physical asset keys, Blockchain 2.0: Contracts, Smart Property plagiarism detection/avoidance, Blockchain Academic Publishing: Journalcoin Precedent, PrecedentCoin: Blockchain Dispute Resolution, Terminology and Concepts prediction markets, Bitcoin Prediction Markets, DASs and Self-Bootstrapped Organizations, Decentralized Governance Services, Futarchy: Two-Step Democracy with Voting + Prediction Markets-Futarchy: Two-Step Democracy with Voting + Prediction Markets Predictious, Bitcoin Prediction Markets predictive task automation, Blockchain Layer Could Facilitate Big Data’s Predictive Task Automation privacy challenges, Privacy Challenges for Personal Records private key, eWallet Services and Personal Cryptosecurity Proof of Existence, Proof of Existence-Proof of Existence proof of stake, Blockchain 2.0 Protocol Projects, PrecedentCoin: Blockchain Dispute Resolution, Technical Challenges proof of work, PrecedentCoin: Blockchain Dispute Resolution, Technical Challenges-Technical Challenges property ownership, Smart Property property registration, Decentralized Governance Services public documents registries, Decentralized Governance Services public health, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation, Global Public Health: Bitcoin for Contagious Disease Relief public perception, Scandals and Public Perception-Scandals and Public Perception public/private key cryptography, Public/Private-Key Cryptography 101-Public/Private-Key Cryptography 101 publishing, academic, Blockchain Academic Publishing: Journalcoin-Blockchain Academic Publishing: Journalcoin pull technology, eWallet Services and Personal Cryptosecurity push technology, eWallet Services and Personal Cryptosecurity R random-sample elections, Random-Sample Elections Realcoin, Relation to Fiat Currency redistribution of currency (see demurrage currency) regulation, Government Regulation-Government Regulation regulatory status, Regulatory Status reputation vouching, Ethereum: Turing-Complete Virtual Machine Researchcoin, Blockchain Academic Publishing: Journalcoin REST APIs, Technical Challenges Ripple, Technology Stack: Blockchain, Protocol, Currency, Relation to Fiat Currency, Blockchain 2.0 Protocol Projects Ripple Labs, Financial Services Roadcoin, Blockchain Government S Saldo.mx, Blockchain Neutrality scandals, Scandals and Public Perception science, Blockchain Science: Gridcoin, Foldingcoin-Charity Donations and the Blockchain—Sean’s Outpost community supercomputing, Community Supercomputing global public health, Global Public Health: Bitcoin for Contagious Disease Relief Sean's Outpost, Charity Donations and the Blockchain—Sean’s Outpost secret messaging, Ethereum: Turing-Complete Virtual Machine security issues, Technical Challenges self-bootstrapped organizations, DASs and Self-Bootstrapped Organizations self-directing assets, Automatic Markets and Tradenets self-enforced code, Smart Property self-sufficiency, Smart Contracts SETI@home, Blockchain Science: Gridcoin, Foldingcoin, Community Supercomputing size and bandwidth, Technical Challenges smart contracts, Smart Contracts-Smart Contracts, Smart Contract Advocates on Behalf of Digital Intelligence automatic markets and tradenets, Automatic Markets and Tradenets Counterparty, Counterparty Re-creates Ethereum’s Smart Contract Platform DAOs/DACs, DAOs and DACs-DAOs and DACs Dapps, Dapps-Dapps DASs, DASs and Self-Bootstrapped Organizations Ethereum, Ethereum: Turing-Complete Virtual Machine increasingly autonomous, Dapps, DAOs, DACs, and DASs: Increasingly Autonomous Smart Contracts-Automatic Markets and Tradenets smart literacy contracts, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy-Learning Contract Exchanges smart property, Smart Property-Smart Property, Monegraph: Online Graphics Protection smartwatch, Extensibility of Demurrage Concept and Features Snowden, Edward, Distributed Censorship-Resistant Organizational Models social contracts, Smart Contracts social network currencies, Currency Multiplicity: Monetary and Nonmonetary Currencies Stellar, Blockchain Development Platforms and APIs stock market, Financial Services Storj, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation, Dapps, Technical Challenges Stripe, Blockchain Development Platforms and APIs supercomputing, Community Supercomputing Svalbard Global Seed Vault, Virus Bank, Seed Vault Backup Swancoin, Smart Property swaps exchange, Financial Services Swarm, Crowdfunding, Dapps Swarm (Ethereum), Ethereum: Turing-Complete Virtual Machine Swarmops, Crowdfunding T Tatianacoin, Communitycoin: Hayek’s Private Currencies Vie for Attention technical challenges, Technical Challenges-Technical Challenges Tendermint, Technical Challenges Tera Exchange, Financial Services terminology, Terminology and Concepts-Terminology and Concepts 37Coins, Global Public Health: Bitcoin for Contagious Disease Relief throughput, Technical Challenges timestamping, Hashing Plus Timestamping-Limitations titling, Decentralized Governance Services tradenets, Automatic Markets and Tradenets transaction fees, Summary: Blockchain 1.0 in Practical Use Tribecoin, Coin Drops as a Strategy for Public Adoption trustless lending, Smart Property Truthcoin, Futarchy: Two-Step Democracy with Voting + Prediction Markets Turing completeness, Ethereum: Turing-Complete Virtual Machine Twister, Dapps Twitter, Monegraph: Online Graphics Protection U Uber, Government Regulation unbanked/underbanked markets, Blockchain Neutrality usability issues, Technical Challenges V value chain composition, How a Cryptocurrency Works versioning issues, Technical Challenges Virtual Notary, Virtual Notary, Bitnotar, and Chronobit voting and prediction, Futarchy: Two-Step Democracy with Voting + Prediction Markets-Futarchy: Two-Step Democracy with Voting + Prediction Markets W wallet APIs, Blockchain Development Platforms and APIs wallet companies, Wallet Development Projects wallet software, How a Cryptocurrency Works wasted resources, Technical Challenges Wayback Machine, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation Wedbush Securities, Financial Services Whatevercoin, Terminology and Concepts WikiLeaks, Distributed Censorship-Resistant Organizational Models Wikinomics, Community Supercomputing World Citizen project, Decentralized Governance Services X Xapo, eWallet Services and Personal Cryptosecurity Z Zennet Supercomputer, Community Supercomputing Zooko's Triangle, Decentralized DNS Functionality Beyond Free Speech: Digital Identity About the Author Melanie Swan is the Founder of the Institute for Blockchain Studies and a Contemporary Philosophy MA candidate at Kingston University London and Université Paris VIII.

To set up the second condition, a program can be written that scans an online death registry database, prespecified online newspaper obituaries, or some other kind of information “oracle” to certify that the grandparent has died. When the smart contract confirms the death, it can automatically send the funds.58 The Daniel Suarez science-fiction book Daemon implements exactly these kinds of smart contracts that are effected upon a character’s death. Another use case for smart contracts is setting up automatic payments for betting (like limit orders in financial markets). A program or smart contract can be written that releases a payment when a specific value of a certain exchange good is triggered or when something transpires in the real world (e.g., a news event of some sort, or the winner of a sports match). Smart contracts could also be deployed in pledge systems like Kickstarter. Individuals make online pledges that are encoded in a blockchain, and if the entrepreneur’s fundraising goal is reached, only then will the Bitcoin funds be released from the investor wallets.

The transactions could be asset exchange, and also the conduct of various activities within communities, such as voting, tipping, and commenting in forums.55 Smart Contracts A general sense of blockchain-based smart contracts emerges from the smart property discussion. In the blockchain context, contracts or smart contracts mean blockchain transactions that go beyond simple buy/sell currency transactions, and may have more extensive instructions embedded into them. In a more formal definition, a contract is a method of using Bitcoin to form agreements with people via the blockchain. A contract in the traditional sense is an agreement between two or more parties to do or not do something in exchange for something else. Each party must trust the other party to fulfill its side of the obligation. Smart contracts feature the same kind of agreement to act or not act, but they remove the need for one type of trust between parties.


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

Ethereum Ethereum was proposed by Vitalik Buterin (an early Bitcoiner and a co-founder of Bitcoin Magazine) and developed by Buterin, Gavin Wood, Jeffrey Wilcke and others. Its key innovation is that you can run smart contracts on a blockchain: programs that are triggered to run automatically in a given circumstance. If Bitcoin is like an Excel spreadsheet, then Ethereum is like a spreadsheet with macros. This new idea was interesting enough to quickly make Ethereum the second most popular cryptocurrency. Transactions and smart contract programs (which they call “dapps,” short for “distributed applications”) require gas (a certain amount of the currency token, ether, abbreviated ETH), which is paid to the miner whose computer runs the transaction or smart contract. This also keeps smart contracts from running forever. Ethereum has its own home-brewed Proof of Work hash295 which is designed to be ASIC-resistant, to avoid mining centralisation – it requires a few gigabytes of fast memory on hand, so mining is presently GPU-based.

Dr. Strangelove is the best-known story of an unstoppable smart contract going wrong, immune to human intervention. The US has sent nuclear bombers to the Soviet Union that can only be recalled with a code that nobody has; if any bombs hit, these will trigger the Soviet Union’s deterrent, an unstoppable doomsday device that cannot be dismantled or disarmed, and will explode on any attempt to. The real-life version’s consequences are not as drastic, but the misguided thinking is the same. Fortunately, most of the worst real-world smart contract proposals are infeasible; what they’re actually used for is “honest Ponzis” and ICO tokens. So who wants smart contracts, anyway? There are five groups of people who want smart contracts: Computer programmers who don’t have an aptitude for social or legal conventions, but do have an aptitude for programming, so they’d like social and legal conventions to work a bit more like that.

Even Vitalik Buterin has acknowledged that for smart contracts to work as advertised, we would need to create a human-equivalent artificial intelligence to understand what people meant the contract to do334 – what people were thinking at the time is a key issue in resolving many a contractual dispute. “Intent is fundamentally complex.” The oracle problem: garbage in, garbage out In software testing, an oracle is any mechanism that determines if a test has passed or failed. The oracle problem is how to do this without costly human intervention. This usage was adopted for smart contracts, where the oracle problem is to determine whether a real-world condition in a smart contract has been met. Unless you just want to shuffle tokens inside your smart contract platform, at some point you’re going to need to interact with the outside world.


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

But there are more advanced implementations of smart contracts that use “oracles.” Oracles are data sources that send actionable information to smart contracts. 7. Smart contracts are not for developers only. The next generation of smart contracts will include user-friendly entry points, like a Web browser. That will allow any business user to configure smart contracts via a graphical user interface, or perhaps a text-based language input. 8. Smart contracts are safe. Even in the Ethereum implementation, smart contracts run as quasi-Turing complete programs. This means there is finality in their execution, and they do not risk looping infinitely. 9. Smart contract have a wide range of applications. Like HTML, the applications are limited by whoever writes them. Smart contracts are ideal for interacting with real-world assets, smart property, Internet of Things (IoT), and financial services instruments.

These can be fairly strict implementations, for example, if a car payment is not made on-time, the car gets digitally locked until the payment is received. 2. Smart contracts are not like Ricardian contracts. Ricardian contracts, popularized by Ian Grigg,3 are semantic representations that can track the liability of an actual agreement between parties. These can also be implemented on a blockchain, with or without a smart contract. Typically, multisignatures are part of a Ricardian contract’s execution. 3. Smart contracts are not law. Smart contracts, being computer programs, are just the enabling technology, but the consequence of their actions can be made part of a legal agreement, for example a smart contract could transfer shares ownerships from one party to another. As of 2016, the full legal ramifications around smart contracts were a work in progress. A smart contract outcome could be used as an audit trail to prove if terms of legal agreement were followed or not. 4.

A smart contract outcome could be used as an audit trail to prove if terms of legal agreement were followed or not. 4. Smart contracts do not include Artificial Intelligence. Smart contracts are software code representing business logic that runs a blockchain, and they are triggered by some external data that lets them modify some other data. They are closer to an event-driven construct, more than artificial intelligence. 5. Smart contracts are not the same as blockchain applications. Smart contracts are usually part of a decentralized (blockchain) application. There could be several contracts to a specific application. For example, if certain conditions in a smart contract are met, then the program is allowed to update a database. 6. Smart contracts are fairly easy to program. Writing a simple contract is easy, especially if you are using a specific smart contract language (e.g., Ethereum’s Solidity), which lets you write complex processes in a few lines of code.


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

And so, for more complex transactions involving bundles of rights and multiple parties, we now have the smart contract, a piece of special purpose code that executes a complex set of instructions on the blockchain. “That intersection of legal descriptions and software is fundamental, and the smart contracts are the first step in that direction,” said Steve Omohundro, president of think tank Self-Aware Systems. “Once the principles of how you codify law digitally become more understood, then I think every country will start doing it. . . . Each jurisdiction would encode its laws, precisely and digitally, and there would be translation programs between them. . . . Getting rid of the friction of all legal stuff is going to be a huge economic gain.”42 A smart contract provides a means for assigning usage rights to another party, as a composer might assign a completed song to a music publisher.

For example, if the composer’s account received less than a quarter of a bitcoin in a consecutive thirty-day period, then all rights would automatically revert to the composer, and the publisher would no longer have access to the composer’s work registered on the blockchain. To set this smart contract in motion, both the composer and the publisher—and perhaps representatives of the publisher’s finance and legal teams—would sign using their private keys. A smart contract also provides a means for owners of assets to pool their resources and create a corporation on the blockchain, where the articles of incorporation are coded into the contract, clearly spelling out and enforcing the rights of those owners. Associated agency-employment contracts could define the decision rights of managers by coding what they could and couldn’t do with corporate resources without ownership permission. Smart contracts are unprecedented methods of ensuring contractual compliance, including social contracts.

In any case, it’s nothing more than people and contracts all the way down.”18 That’s why the blockchain, by reducing contracting costs, enables firms to open up and develop new relationships outside their boundaries. ConsenSys, for example, can architect complex relationships with a diverse set of members, some inside its boundaries, some outside, and some straddling walls, because smart contracts govern these relationships rather than traditional managers. Members self-assign to projects, define agreed-upon deliverables, and get paid when they deliver—all on the blockchain. Smart Contracts The rate of change is increasingly setting the stage for smart contracts. More people are developing not only computer literacy, but also fluency. As far as evidencing transactions goes, this new digital medium has significantly different properties from its paper predecessors. As cryptographer Nick Szabo highlighted, not only can they capture a greater array of information (such as nonlinguistic sensory data) but they are dynamic: they can transmit information and execute certain kinds of decisions.


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

Fundraising was just one of many potential uses for these new cryptocurrencies issued on top of the Bitcoin network. The Mastercoin software would allow users to create so-called smart contracts within the Bitcoin ecosystem. Smart contracts consist of code that self-executes when a set of predefined rules are met. Nick Szabo, the cryptographer who in 1998 invented the digital currency “Bit Gold,” coined the term “smart contract” in the early 1990s. In a 1997 paper, he said smart contracts “combine protocols with user interfaces to formalize and secure relationships over computer networks.” The system eliminates the need to pay for and trust third parties like auditors, accountants, lawyers, and notary publics, as the agreements are executed through a computer program. The humble vending machine is a primitive precursor to smart contracts, Szabo wrote in the paper.5 Bitcoin also uses this technology, as it transfers value from one person to another when certain conditions are met.

The attacks also proved that, like Ethereum critics pointed out in the early days, having a Turing-complete computer and the ability to run smart contracts increases flexibility but compromises on security. Adding complexity makes the network more vulnerable to attackers wanting to exploit any flaws in the code. More broadly, Ethereans learned that they can program computers, but they can’t program humans, whose greed, ambition, and ingenuity can be strong enough to find their way around those programs. Code can be made to run in a specific way, but that will always clash with humans, who don’t necessarily act predictably. Ethereum was growing up. Developers learned the world can’t be crammed into smart contracts, and that smart contracts will only be as smart as the people who wrote them—and those who tried to break them for nefarious or hubristic reasons.

When he was finished, he reviewed the twelve-page paper once more and drafted an email intended for a select group of people he thought were in the best position to give him thoughtful feedback. It was Wednesday, November 27, 2013, at 10:49 a.m., and the subject was “Introducing Ethereum: a generalized smart contract/DAC platform.” Hey all, I would like to introduce the first draft of a whitepaper for a project that I have been working on quietly these last two weeks. The project is called Ethereum; the idea is for it to serve as an all-purpose computational platform for smart contracts and decentralized autonomous corporations, and to essentially generalize the functions of Namecoin, Mastercoin, colored coins and other such projects that I’m calling “cryptocurrency 2.0.” Here is the whitepaper: http://vbuterin.com/ethereum.html Essentially, it generalizes all financial contracts and agents into an entity called a “contract” which can automatically send and receive transactions, maintain an arbitrarily large internal state and has internal script code in assembly language that it runs every time it receives a transaction.


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

Ethereum’s internal programming language is described as being “Turing complete”—which essentially means it has great versatility, allowing people to write an unlimited variety of programs. The key breakthrough was that this structure, beyond its easy-to-use programming language, would enable smart contracts. As they were first raised in the pre-Bitcoin era by crypto-systems theorist Nick Szabo, smart contracts are a way to express, in a piece of computing code, instructions for executing transactions according to previously agreed contractual conditions. Lawyers often bristle at the use of the word “contract” in this context; contracts, after all, refer to legally binding agreements between humans. Machines can only execute the clauses outlined in those agreements. Still, the “smart contracts” misnomer shouldn’t distract from the idea that trustfully executed agreements could be extremely useful. Here’s a simple example: Two parties enter into a “contract for difference,” an agreement that’s a bit like a stock option.

The Ethereum Foundation’s $18.4 million fund-raise was handled this way; other early blockchain projects did the same. But it took a new tool, developed by a team of Ethereum developers led by Berlin-based Fabian Vogelsteller, to make the concept take off in the second half of 2016: an easy-to-follow smart contract system for tokens known as ERC20. This standardized set of smart contract instructions meant that tokens could retain a common, consistent format for both the ICO and post-ICO trading. The tokens did not need their own blockchain and mining community to maintain them. Instead, ERC20 tokens traded on top of Ethereum. They were generated by an Ethereum-validated smart contract that kept track of the issuance and exchanges by token holders. These tokens, like bitcoin and all cryptocurrencies, still needed the immutable ledger of a blockchain truth machine to maintain their provable status as non-replicable digital assets.

Potentially even more transformative are the radical proposals of a group calling itself the Economic Space Agency, or ECSA. It takes some of its inspiration from cryptotokens, decentralized trust systems, and smart contracts, but its approach to decentralizing the economy and re-empowering individuals is very different from Bitcoin’s and Ethereum’s. Rather than having every single transaction or smart contract instruction processed by the entire network of a single blockchain, ECSA has a bottom-up approach to decentralization. ECSA has a toolkit of programs called Gravity that builds on the decades-old “object capabilities” computer security work of Cypherpunk Mark S. Miller. Gravity allows computers in a local network to safely enter into smart contracts together. ECSA also emphasizes that communities should be able to autonomously set their own governance models. The idea, supported by an eclectic team of technologists, economists, political scientists, and anthropologists, is to empower people to build new “economic spaces” in which their communities can issue and trade cryptotokens in support of collaboration and cooperation.


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

While the traditional Apps available on a Google Play Store or Apple App Store are useful for certain operations, Smart Contracts function as Apps that perform value exchange operations when they receive a certain input. Just as the blockchain is a digitally native protocol that is designed for value exchange, Smart Contracts are native to the Blockchain and perform value exchange operations based on the input signals that they receive from the Blockchain. This is currently one of the explosive areas of innovation and protocols developed by platforms like Ethereum are allowing the large scale deployment of Smart Contracts. Whereas a traditional legal contract defines the rules regarding an agreement between multiple counter-parties, Smart Contracts go further and actually administer those rules by controlling the transfer of money or assets under precise conditions. Using Smart Contracts, an asset or currency is transferred into a program “and the program runs this code and at some point it automatically validates a condition and it automatically determines whether the asset should go to one person or back to the other person, or whether it should be immediately refunded to the person who sent it or some combination thereof,” (Buterin, 2016).

The transparency of the Blockchain would also allow for better audit trails, which in turn would help in credit risk assessment and fraud prevention, thus creating a more level playing field for all exporters and importers. The automation provided by smart contracts will also help in reducing the number of intermediaries in the trade process. As transactions and documents get exchanged on the Blockchain, the transfer of ownership can be used as a trigger to execute the next leg of the trade process. As one party initiates a payment, the smart contract can be used to change the ownership of the goods to the other counterparty. The ability to link smart contracts to black/sanction lists and embargos will ensure that trade occurs within the norms of regulation and policy. As the shipping industry turns a technological corner and adds tracking chips to containers, the Blockchain will allow another level of IoT integration in the trade finance process. As smart contracts allow for immediate triggering effects, funds can be released sooner, thus enabling more granular payments.

The recent R3 partnership (composed of 46 financial institutions as of June 2016), showcases the extent to which large institutions are seriously dwelling on the use of blockchains. Smart Contracts One of the most dynamic occurrences in the past few years has been the development of Apps. An App functions in very simple way: it is a piece of code that reacts to a certain input to provide the user with a certain output. Press this button on the screen and you are taken to a website or you can call an Uber to come pick you up where you stand. Apps use the information that is being exchanged on the protocol on which they run to perform these activities and deliver these outputs. A smart contract, according to Ethereum’s founder, Vitalik Buterin, “is a computer program that directly controls some digital asset.” Smart Contracts are essentially the same as Apps, except they perform a different kind of automation.


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

This is the core of an idea that had been floating around cryptological, fintech and libertarian circles for more than two decades, but had lacked any practical enabling infrastructure until Buterin came along with his programmable blockchain: the so-called “smart contract.” First proposed by the pioneering cryptographer Nick Szabo in the mid-1990s, a smart contract not merely records the terms of an agreement between parties in an autonomous chunk of code, but enacts it as well.5 What gives a smart contract its teeth is that its compliance mechanism is woven into the network itself; enforcement of its terms is direct, intrinsic and incontestable. A scenario Szabo offered a 2001 conference for hardcore technolibertarians is illustrative in this regard: smart contracts would solve “the problem of trust by being self-executing. For example, the key to a car sold on credit might only operate if the monthly payments have been made.”6 In 2001, this could still plausibly be dismissed as a rather unpleasant thought experiment, but by 2014 all the pieces to accomplish it had been assembled.

By contrast, what makes a smart contract is not simply that its obligations are recorded on the blockchain for all to see, but that they are exacted in Ether (or, more generically, whatever cryptocurrency is used by the environment in which the smart contract is running). Just as Bitcoin lowers transaction overhead to the point that micropayments become practical, so too do smart contracts lower the cost of enacting binding agreements between two or more entities, whether they happen to be “machines, companies or people.” In fact, because the overhead imposed is so minimal, it becomes feasible to deploy contracts in contexts where they wouldn’t have been remotely economic before. And just as the form of a Bitcoin transaction is identical with its content, the terms of a smart contract are articulated unambiguously, in the same code that governs its execution.

Depending on the limitations of the various databases involved, there will likely be some slippage involved in this act of translation, things that don’t quite make it across the divide intact. And this in turn means that the material performance of the contract will from time to time be at variance with what it actually calls for—occasionally, actionably so. As implemented on Ethereum, the smart contract addresses all of these formal limitations. Just as the blockchain eliminates the need for a trusted intermediary in transactions of value, so the smart contract eliminates the need for one in enforcement of a promise to perform. Consider Buterin’s working definition of a smart contract: “a mechanism involving digital assets and two or more parties, where some or all of the parties put assets in and assets are automatically redistributed among those parties according to a formula based on certain data that is not known at the time the contract is initiated.”


pages: 472 words: 117,093

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

In 1996, smart-contract pioneer Nick Szabo wrote, A broad statement of the key idea of smart contracts, then, is to say that contracts should be embedded in the world. The mechanisms of the world should be structured in such a way as to make the contracts (a) robust against naive vandalism, and (b) robust against sophisticated, incentive compatible (rational) breach. 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.”

.††† Advocates of smart contracts would look at this situation very differently. They would note that, instead of trusting Norton to accurately report book sales to us, we could instead rely on third parties like Nielsen BookScan. We could then write a program that would access the web, BookScan, and Norton’s bank account and our bank accounts, and would have the following logic: Present a web page to the authors and the editor, asking each to click on a button to certify that the manuscript has been submitted. Once all parties have clicked this button, transfer funds from Norton’s bank account to the authors. Begin monitoring hardcover book sales using BookScan. If hardcover sales pass a certain number, increase the royalty rate in all future payments to authors. Any actual smart contract between us would obviously be more formal and complicated than this, but it wouldn’t need any esoteric data or code.

We’d probably want to include the ability to renegotiate this smart contract by using our digital signatures to open it back up or delete it, but outside of this possibility, the proven integrity of the blockchain would ensure the integrity of our contract. A major advantage of this kind of contract is that it removes the need for many kinds of trust. We don’t need to trust that Norton will count our sales accurately, since the contract relies on BookScan data for that. Or that the publisher will actually raise our royalty rate if we meet the hardcover sales target, since that increase is part of the immutable code.‡‡‡ We don’t even need to trust that the courts in our area will be competent, impartial, and expedient, since the smart contract doesn’t rely on them to enforce its terms or verify its legitimacy.


pages: 416 words: 106,532

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

THE IDEA BEHIND ETHEREUM’S WORLD COMPUTER The founding team of Ethereum and its native asset, ether, weren’t the first to dream of globally distributed computer programs, or what are commonly referred to as smart contracts. For example, Nick Szabo, who was also one of Chaum’s disciples at DigiCash (Chapter 4), had been talking about smart contracts and digital property since the early 1990s. In 1996, he published an article in the magazine Extropy on the topic entitled “Smart Contracts.”1 Smart contracts are critical to understand but have a misleading name. The first thing people think of when they hear smart contracts is legal documents that think for themselves, which misses the mark by a wide margin. We believe smart contracts are better thought of as conditional transactions because they refer to logic written in code that has “IF this, THEN that” conditions. For example, it can easily be programmed in a smart contract that “IF Jack misses his flight and IF it was the airline’s fault, THEN the airline pays him the cost of the flight.”

For example, it can easily be programmed in a smart contract that “IF Jack misses his flight and IF it was the airline’s fault, THEN the airline pays him the cost of the flight.” A vending machine is another commonly used example of a smart contract: “IF the user puts in enough money and IF the user types in the right code, THEN the user gets Doritos.” These conditions can become much more complex, creating conditional waterfalls depending on the process being programmed and the variables that need to be met. While Szabo had the early vision for smart contracts, the Ethereum team would be the first to create a mainstream and attention-grabbing platform to execute smart contracts in a decentralized manner. At the core of the team is Vitalik Buterin, who many regard as Ethereum’s Satoshi. Buterin was born in Russia but grew up in Canada. He had the good fortune of a freethinking father,2 who in February 2011 introduced 17-year-old Buterin to Satoshi’s work and Bitcoin.3 Bitcoin had only been functioning for two years at that point, and no major alternative was in existence.

There are several regulatory authorities that need to recognize that transfer for this example to become an everyday reality, but the point is to show how all kinds of value can be transmitted through Bitcoin’s blockchain. COUNTERPARTY: SMART CONTRACTS ON BITCOIN Counterparty is a cryptocommodity that runs atop Bitcoin, and was launched in January 2014 with a similar intent as Ethereum. It has a fixed supply of 2.6 million units of its native asset, XCP, which were all created upon launch. As described on Counterparty’s website, “Counterparty enables anyone to write specific digital agreements, or programs known as Smart Contracts, and execute them on the Bitcoin blockchain.”7 Since Bitcoin allows for small amounts of data to be transmitted in transactions and stored on Bitcoin’s blockchain, it becomes the system of record for Counterparty’s more flexible functionality.


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

(A precursor to a smart contract is the method implemented in the digital rights management system of a media store and player like iTunes, where a movie you rent is automatically deactivated after 24 hours.) How does a “smart contract” manage to accomplish this? As Primavera De Fillipi explained in her influential 2014 talk at Harvard University’s Berkman Center, the risks associated with peer-to-peer contracting can be reduced by the introduction of three new provisions: autonomy, self-sufficiency, and decentralization.12 Smart contracts are autonomous if after they are finalized, the initiating agents theoretically never need to have contact again. Smart contracts are also self-sufficient to the extent that they are able to marshal their own resources. Finally, smart contracts are decentralized; they are distributed across network nodes rather than residing in a centralized location, and are self-executing. This means that smart contracts will be applicable across jurisdictions or, in a sense, will be borderless.

It’s a little different from what’s used in a centralized marketplace, and is not completely immune to manipulation.10 There is a more sophisticated class of contracts (called smart contracts) emerging for blockchain-based transactions. In Blockchain: Blueprint for a New Economy, Melanie Swan explains that while a traditional contract is an agreement between two or more parties to do something, in the case of a smart contract, the same terms exist, but with one exception—trust that comes from having a third-party is less important.11 This is because the smart contract protocol can specify, as computer code, terms under which certain obligations are fulfilled, and can execute actions like sending a payment or deactivating a file once there is evidence of the contract’s terms being fulfilled. (A precursor to a smart contract is the method implemented in the digital rights management system of a media store and player like iTunes, where a movie you rent is automatically deactivated after 24 hours.)

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. At the 2015 Consumer Electronic Show, IBM and Samsung demonstrated a blockchain- and smart-contract-based system that allowed an autonomous washing machine to order detergent when it ran low, and make a smart-contract-based payment when it sensed that the detergent had been replaced. A simple task, no doubt, but something that points to the promise of blockchain-based marketplaces for an Internet of (Autonomous) Things. However, many challenges remain before we can reliably conclude that the blockchain and other distributed peer-to-peer technologies can take on significant fractions of the world’s economic activity.


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

They contain all of the necessary information to make a transfer of ownership happen. That insight led to the development of smart contracts that are executed by the blockchain. Similar to transaction data, smart contracts are machine-readable descriptions of the will of the involved parties. But unlike simple transaction data, smart contracts are much more flexible regarding the objects, subjects, actions, and conditions that can be used to describe the desired transfer of ownership. From a technical point of view, smart contracts are self-contained computer programs written in a blockchain-specific programming language. In order to accommodate smart contracts, the blockchain technology has been extended by the capability to execute programming code. This extension has transformed the blockchain from a distributed system that mainly focuses on storing transaction data into a distributed system of virtual machines that executes smart contracts.15 11King, Sunny, and Scott Nadal.

Blockchain Basics 241 The ability to run program code has opened up the possibilities for application development on the blockchain instead of just maintaining simple transaction data. When talking about smart contracts, we need to be careful; although the term initially implied a contract between counterparties, it is now used to refer to a piece of code that is managed and executed in an appropriated blockchain. However, there are moves from the legal profession to develop something more akin to that initial idea based on the idea of Ricardian contracts. 16 Due to their flexibility, smart contracts can be used to describe a wide range of real-world contracts such as paying rent on a regular basis, taking out a loan, repaying a loan, placing and settling complex bets, and issuing insurance payments on the occurrence of damages or complex events. As a result, the smart contract is the most important and promising development of the blockchain in the past few years.

This extension has transformed the blockchain from a distributed system that mainly focuses on storing transaction data into a distributed system of virtual machines that executes smart contracts.15 11King, Sunny, and Scott Nadal. Ppcoin: Peer-to-peer crypto-currency with proof-of-stake. Self-published paper. August 19, 2012. 12Ren, Larry. Proof of stake velocity: Building the social currency of the digital age. Self-published white paper. 2014. 13Lamport, Leslie. The part-time parliament. ACM Transactions on Computer Systems (TOCS) 16.2 (1998): 133–169. 14Ongaro, Diego, and John Ousterhout. In search of an understandable consensus algorithm. In Proceeding of 2014 USENIX Annual Technical Conference (USENIX ATC 14). 2014. 15Buterin, Vitalik. A next-generation smart contract and decentralized application platform. White paper. 2014. Blockchain Basics 241 The ability to run program code has opened up the possibilities for application development on the blockchain instead of just maintaining simple transaction data.


pages: 316 words: 117,228

The Code of Capital: How the Law Creates Wealth and Inequality by Katharina Pistor

"Robert Solow", Andrei Shleifer, Asian financial crisis, asset-backed security, barriers to entry, Bernie Madoff, bilateral investment treaty, bitcoin, blockchain, Bretton Woods, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, colonial rule, conceptual framework, Corn Laws, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, Donald Trump, double helix, Edward Glaeser, Ethereum, ethereum blockchain, facts on the ground, financial innovation, financial intermediation, fixed income, Francis Fukuyama: the end of history, full employment, global reserve currency, Hernando de Soto, income inequality, intangible asset, investor state dispute settlement, invisible hand, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, land reform, land tenure, London Interbank Offered Rate, Long Term Capital Management, means of production, money market fund, moral hazard, offshore financial centre, phenotype, Ponzi scheme, price mechanism, price stability, profit maximization, railway mania, regulatory arbitrage, reserve currency, Ronald Coase, Satoshi Nakamoto, secular stagnation, self-driving car, shareholder value, Silicon Valley, smart contracts, software patent, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, trade route, transaction costs, Wolfgang Streeck

A blockchain is a tamper-proof ledger that contains a complete history of all state changes in transactions that take place on it.2 Smart contracts are pieces of code set to execute on the blockchain. Since every action on the blockchain is recorded automatically, blockchain-based smart contracts create an unprecedented level of granularity, completeness, and trustworthiness in the data gathered. A blockchain typically can only be written onto; it cannot be modified. Because they do not allow parties to back out from existing commitments, smart contracts that are written on blockchain create even more binding commitments than do legal contracts. By transacting through blockchain-based smart contracts, participants agree to a set of coded rules that are enforced by deterministic computers. As a result, there will no longer be any need for state power or state law and the world may at long last become as flat as many economists have long imagined it to be.

Most legal systems have even formalized such opt-outs, by creating doctrinal or even statutory opt-outs from binding contracts.13 For smart contracts to match legal contracts on this front, they would have to acquire the capacity to adapt to future change. Some digital coders are already on the task, including for blockchain-based smart contracts. In an attempt to square the circle between immutability and the need to respond to unforeseeable change, they have re-invented a problem solver from our archaic past, the oracle. Before humans mastered medicine and science, they would address an oracle— often depicted as an agent of a god—to find answers to which they themselves had none. Similarly, some digital codes include references to an external agent, an oracle, whose input is needed for the code to run its course for the remainder of a transaction. Oracles can feed a smart contract with benchmark prices, 190 c h a P te r 8 such as interest or exchange rates and price developments, but they can also request a decision from an external arbiter.

They are negotiating with state regulators and they are employing intellectual property law to enclose the digital space to their advantage. The race has not been decided yet; but if I had to place a bet, I would put it on an elite group among the “incumbents”; they will do everything to enclose the digital code in law and leave little space to the digital utopists. a n e w co d e ? 187 Smart Contracts A smart contract is a contract written in digits; in its simplest form it is a generic computer program that codes legal contracts in digits. Blockchain technology, however, makes it possible to go a step further yet and bears the promise that we can do without the apparatus of law and law enforcement. A contract that is placed on a blockchain, that is, a tamper-proof digital ledger, is not just a commitment device; it is the commitment.5 The digital code will execute the commitment without either party being able to interfere.


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

What can be clearly seen is that blockchain payment applications will have to be with the blockchain's own decentralized currency, and not with centrally controlled currencies. Contracts Currently, contracts are drafted by lawyers, judged by courts, and enforced by the police. Smart contract cryptographic systems such as Ethereum encode contracts into a blockchain to make them self‐executing, with no possibility for appeal or reversal and beyond the reach of courts and police. “Code is law” is a motto used by smart contract programmers. The problem with this concept is that the language lawyers use to draft contracts is understood by far more people than the code language used by smart contract drafters. There are probably only a few hundred people worldwide with the technical expertise to fully understand the implications of a smart contract, and even they could miss glaring software bugs. Even as more people become proficient in the programming languages necessary to operate these contracts, the few people who are most proficient at it will by definition continue to have an advantage over the rest.

This problem is more pronounced for digital currencies that begin with an Initial Coin Offering, which creates a highly visible group of developers communicating publicly with investors, making the entire project effectively a centralized project. The trials and tribulations of Ethereum, the largest coin in terms of market value after Bitcoin, illustrate this point vividly. The Decentralized Autonomous Organization (DAO) was the first implementation of smart contracts on the Ethereum network. After more than $150 million was invested in this smart contract, an attacker was able to execute the code in a way that diverted around one‐third of all the DAO's assets to his own account. It would be arguably inaccurate to describe this attack as a theft, because all the depositors had accepted that their money will be controlled by the code and nothing else, and the attacker had done nothing but execute the code as it was accepted by the depositors.

Even as more people become proficient in the programming languages necessary to operate these contracts, the few people who are most proficient at it will by definition continue to have an advantage over the rest. Code competence will always offer a strategic advantage to the most proficient over everyone else. This all became apparent with the first implementation of smart contracts on the Ethereum network, the Decentralized Autonomous Organization (DAO). After more than $150 million was invested in this smart contract, an attacker was able to execute the code in a way that diverted around a third of all the DAO's assets to his own account. It would be arguably inaccurate to describe this attack as a theft, because all the depositors had accepted that their money would be controlled by the code and nothing else, and the attacker had done nothing but execute the code as it was accepted by the depositors.


pages: 233 words: 66,446

Bitcoin: The Future of Money? by Dominic Frisby

3D printing, altcoin, bank run, banking crisis, banks create money, barriers to entry, bitcoin, blockchain, capital controls, Chelsea Manning, cloud computing, computer age, cryptocurrency, disintermediation, Ethereum, ethereum blockchain, fiat currency, fixed income, friendly fire, game design, Isaac Newton, Julian Assange, land value tax, litecoin, M-Pesa, mobile money, money: store of value / unit of account / medium of exchange, Occupy movement, Peter Thiel, Ponzi scheme, prediction markets, price stability, QR code, quantitative easing, railway mania, Ronald Reagan, Ross Ulbricht, Satoshi Nakamoto, Silicon Valley, Skype, slashdot, smart contracts, Snapchat, Stephen Hawking, Steve Jobs, Ted Nelson, too big to fail, transaction costs, Turing complete, War on Poverty, web application, WikiLeaks

The array of papers and essays he has written on his blog, Unenumerated, and on his website (szabo.best.vwh.net) is breathtaking. Here are just some of the subjects he covered: ecommerce, commodity speculation, internet security, mining the ocean beds, the hourglass, micropayments, insurance, smart contracts, law, distributed systems, financial engineering, software architecture, technology product management, algorithmic information theory, intrapolynomial cryptography, gold, politics, even the United States Constitution. But the subjects that he returns to most are money, money systems and smart contracts. In this area, his knowledge is deeper than almost anyone’s. His 2002 paper, Shelling Out: The Origins of Money,141 is, as he himself says, ‘almost essential reading’ if you want to understand Bitcoin. Central to Szabo’s theory on money is that it emerged from collectibles (valuable jewellery and so on), which have a cost of production to them.

Money is a subject that has found more interest in the last few years with the emergence of Bitcoin, the bull market in gold, the financial crisis and the growth of libertarianism, but, even so, it does not have broad appeal. In 2007–8, books and academic papers on the subject were few and far between. How many of those who cared actually had the ability to design a system like this? It is one thing declaring what needs to be done; it is another putting it into practice. Satoshi must have had expertise in computer coding, mathematics, databases, accounting, peer-to-peer systems, digital ownership, law, smart contracts, cryptography and monetary history. He had to have had experience in academia. The act of submitting a white paper, its presentation, the impeccable referencing – it all denotes academia, even government. It’s also easy to infer from the way Bitcoin was launched that Satoshi had experience in open-source tech start-ups. The resilience of the code suggests he had computer hacking experience.

This takes us back to 2007, when Szabo had just completed his law degree. There was room in his life for another big project. Indeed, in spring 2008, Szabo was actively looking for work. He wrote on his blog, ‘I am now publicly offering my consulting services. Besides topics I regularly blog about, my expertise includes technology product management (especially for e-commerce and wireless products and services), smart contracts, financial engineering, software architecture and engineering, and computer/network security. I can travel just about anywhere.’154 All of these, incidentally, are areas of expertise Bitcoin’s inventor would have needed. The circumstantial evidence continues. In April 2008, Szabo wrote on his blog about bit gold, ‘I suspect this is all obscure enough that (a) it may require most people to sit down and work it out for themselves carefully before it can be well understood, and (b) it would greatly benefit from a demonstration, an experimental market (with e.g. a trusted third party substituted for the complex security that would be needed for a real system)’.


pages: 457 words: 128,838

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

Airbnb, altcoin, bank run, banking crisis, bitcoin, blockchain, Bretton Woods, buy and hold, California gold rush, capital controls, carbon footprint, clean water, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cryptocurrency, David Graeber, disintermediation, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, financial innovation, Firefox, Flash crash, Fractional reserve banking, hacker house, Hernando de Soto, high net worth, informal economy, intangible asset, Internet of things, inventory management, Joi Ito, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, money: store of value / unit of account / medium of exchange, Nelson Mandela, Network effects, new economy, new new economy, Nixon shock, offshore financial centre, payday loans, Pearl River Delta, peer-to-peer, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, profit motive, QR code, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, underbanked, WikiLeaks, Y Combinator, Y2K, zero-sum game, Zimmermann PGP

We know that bankruptcy, for instance, a time-honored institution for encouraging renewal and for offering second chances, has helped the U.S. economy recover more successfully from crises than places that are less kind to debtors. People might balk at giving up these options; they might feel uncomfortable with the finality of an automated smart contract. Yet the efficiencies of blockchain-based solutions promise to dramatically cut prices if they can become entrenched. So, perhaps there’s a need for hybrid models, with a judicial avenue attached to a blockchain smart contract, or some other means of off-line arbitration. * * * Hybrids, compromises, pragmatic solutions. There must be room for this kind of thinking if Blockchain 2.0 ideas are to break out of the hypothetical realm and into the real world. Some of the rigid ideological positions will have to be tempered.

Whereas judicial corruption means that low-income people in a developing country can’t rely on watertight contracts to shore up their businesses and unlock de Soto’s mystery of capital, subjecting such agreements to the infallibility of the blockchain could end all that. Jonathan Mohan, who works at Ethereum, the new Bitcoin 2.0 platform that’s seeking to disrupt all sorts of legal and contractual arrangements, offers a compelling explanation for how these “smart contracts,” each designed to be executed on the blockchain via an automated piece of software, would benefit the informal economy. “As long as you render collateral for a contract and the blockchain recognizes the contract, then you know there’s no fraud and you know there’s no need to have to trust a third party,” he said at an Inside Bitcoins conference in New York. “So the contract is simple and all these other things sort themselves out.

If many of these Blockchain 2.0 ideas come to fruition, they’re not the only people who will worry about obsolescence—lawyers, investment bankers, stockbrokers, and a host of other “trust-based” services could be in lesser demand in a blockchain-run world. Later, in chapter 11, we’ll explore how society may have to handle the painful process this entails. But for now we’ll just delve into the mechanics of the technology itself and explore the many disruptive ways in which its inventors see it changing our economy. * * * Assurance contracts are just one form of one of the most prevalent Blockchain 2.0 ideas: “smart contracts,” an idea first floated by Nick Szabo, who some researchers believe to be Satoshi Nakamoto. At its crux, this idea contends that the blockchain can replace the legal system, the ultimate trusted third party. Instead of having a law firm draft a written agreement to be enforced by a judge, if one party fails to meet its obligations—with all the costs and uncertainty that go along with those institutions’ involvement—the execution of those obligations is automated by software, with the criteria for doing so verified by the decentralized blockchain.


pages: 296 words: 86,610

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

While BTCJam is a middleman, cutting out the credit card and money-transferring middlemen enable it to operate while only taking a one to five percent fee from the borrowers. This removal of friction enables more investments and more payments. Another service cryptocurrencies can theoretically provide is the role of arbitrator in any transaction. BitHalo, the Bitcoin half of BlackHalo, was the first instance of workable smart contracts, which are regulated by computer code rather than legal force. Smart contracts enable the sale of physical goods without either party needing to trust the other. BlackHalo was designed for Blackcoin, an alternative cryptocurrency that I will discuss in Chapter 21. BitHalo has the same functionality but works with Bitcoin. It enables quick transfers between the two currencies. More importantly, BitHalo allows for a decentralized marketplace without the need for a third-party arbitrator like eBay or PayPal.

You won’t have to worry about currency conversion fees or bank fees or if their country allows commerce with your country. Despite these gains, there are some issues with working for Bitcoin that are still being ironed out. Issues with Working for Bitcoin Smart contracts—computer protocols that ensure a contract is followed—have been developed for Bitcoin and other cryptocurrencies and are getting more powerful all the time. Escrow is very useful because it gives the worker a third party to depend on to fulfill a contract if the employer decides not to do so. This situation isn’t always ideal, and the balance of power between customer and client can swing wildly depending on a variety of factors. The ultimate goal behind smart contracts is to eliminate the need for trust. They aren’t quite there yet. And although escrow can be programmed, it still ultimately relies on the parties in the contract to act honestly.

The God Protocol was a proposal to replace a third-party central server with an automated virtual third party. It used early concepts of cloud computing and, had it been implemented, would have likely become a proto-version of today’s autonomous corporation—a digital corporation that can function with little or no human input—which many people imagine is next in Bitcoin. The God Protocol was intended as a solution for smart contracts—another concept later revived by Bitcoin. Szabo writes in his blog: [Network security theorists] have developed protocols that create virtual machines between two or more parties. Multi-party secure computation allows any number of parties to share a computation, each learning only what can be inferred from their own input and the output of the computation. These virtual machines have the exciting property that each party’s input is held in strict confidence from the other parties.


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

These rules are implemented as publicly auditable open source software distributed across the computers of their stakeholders’” (Duivestein 2015). At some level this appears reasonable, but it turns out to be anything but clear exactly what DACs or DAOs are supposed to be or do. One of the simplest illustrations has to do with what advocates call “smart contracts”: “A smart contract is the simplest form of decentralized automation, and is most easily and accurately defined as follows: a smart contract is a mechanism involving digital assets and two or more parties, where some or all of the parties put assets in and assets are automatically redistributed among those parties according to a formula based on certain data that is not known at the time the contract is initiated” (Buterin 2014). The point is that the contract, once agreed to by both parties, fulfills itself when the conditions have been met, without the parties needing to take additional action.

Advocates for DAOs, DACs and their offshoots spend a great deal of time, unsurprisingly, on describing the technology that might allow these structures to come into being. But as with Bitcoin itself, it is hard not to see—that is, if one is looking for it—the extremist assumptions on which the notions of DAOs and DACs and their ilk are built. One of the main proponents of DAOs and DACs is Vitalik Buterin, author of the passage about “smart contracts” above, “a Canadian college dropout and Bitcoin enthusiast” (Schneider 2014), cofounder of Bitcoin Magazine, and a recipient of one of the US$100,000 Thiel Fellowships funded by the eponymous right-wing technology entrepreneur and PayPal founder Peter Thiel (Rizzo 2014a)—fellowships that specifically promote the rejection of higher education, in a manner harmonious with the rejection by Thiel and others on the right wing of public goods (Lind 2014).


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

The computer systems that comprise the Machines at Acme are basically trust engines. They hum along at all hours demanding adherence to corporate rules for workplace behavior, expense reports, travel guidelines, salary increases, and a million other things. These reports provide trust to managers to verify that their departments are creating economic value, as promised. Ethereum’s killer app is the smart contract, an unalterable, ironclad agreement between two or more parties that is validated by the blockchain. If something happens at point X, the blockchain enforces the contracted action at point Y. The people whose computers are “mining blocks” (anyone who wants to) are rewarded with a small amount of ETH for validating these transactions on the blockchain. This is the engine that keeps Ethereum running without any central control or funding.

Techcrunch summed up the revolutionary potential of Ethereum in the article “Business in the Age of Ethereum”: “Blockchain technology provides a platform for people to work together with the persistence and stability of an organization but without the hierarchy.” In an article titled “Disrupting the Trust Business,” The Economist placed this invention in its historical context: “If double-entry bookkeeping freed accounting from the merchant’s head, the blockchain frees it from the confines of an organisation.” Eventually, over time, as The Economist asserts, “Some companies could be no more than a bundle of smart contracts, forming true virtual firms that live only on a blockchain.” Chapter Seven Taking the Edge Off It was clear that this job was more difficult than I’d imagined it would be. I was determined to make it work. The stakes were obviously high, considering the three souls Eileen and I were raising. So I was happy to blow off steam when I could. On the drinking front, thankfully, our peer group at this time—friends from school and the neighborhood—were enjoying heavy alcohol consumption.

I also met with the folks at Dfinity Labs. They were getting ready to launch a new blockchain that was complementary and somewhat competitive to Ethereum. These guys were the real deal, with serious computer science and crypto credentials. Especially Dominic Williams, who was in the Vitalik-echelon of original blockchain thinkers and made sure I knew it. While I believed Ethereum would dominate the smart contract space, I also believed there was room for other breakthroughs, and if anyone was going to pull it off, these guys were contenders. I met them at a house in Palo Alto that they were using as an office. We talked for an hour, half in the kitchen while coffee was being made, half on bean bags in the living room. An assistant took detailed notes as I talked, which was flattering but a little unnerving, because I didn’t want them to steal my approach and do it themselves.


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

But as with the criminal law, force generally only follows the breach. A digitally enabled ‘smart contract’ operates in a different way. Rather than a written instrument, it is a piece of code embodying the terms of an agreement, possibly solemnized on a blockchain to ensure that its terms cannot be changed or tampered with (chapter two). The code itself executes the bargain between the parties. Say, for instance, that you buy a car using third-party financing. After you pay your final loan instalment to the lender, a smart contract would automatically transfer title of the vehicle from the lender to you. There would be no need for further human intervention, and no chance that the lender would renege on its side of the deal.17 Smart contracts differ from normal OUP CORRECTED PROOF – FINAL, 26/05/18, SPi РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Force 107 contracts in that they are based on code rather than on the trustworthiness or prudence of the parties.

OUP CORRECTED PROOF – FINAL, 28/05/18, SPi РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Increasingly Integrated Technology 47 it’s plausible to imagine ‘smart’ assets managing themselves by combining AI and blockchain: ‘Spare bedrooms, empty apartments, or vacant conference rooms could rent themselves out . . . autonomous agents could manage our homes and office buildings . . . ’26 Blockchain also offers a potential means of regulating more complex legal and social relations beyond simple rights of property or usage. A ‘smart contract’, for instance, is a piece of blockchain software that executes itself automatically under pre-agreed circumstances— like a purchase agreement which automatically transfers the ownership title of a car to a customer once all loan payments have been made.27 There are early ‘Decentralised Autonomous Organisations’ (DAOs) that seek to solve problems of collective action without a centralized power structure.28 Imagine services like Uber or Airbnb, but without any formal organization at the centre pulling the strings.29 The developers of the Ethereum blockchain, among ­others, have said they want to use DAOs to replace the state altogether.

There would be no need for further human intervention, and no chance that the lender would renege on its side of the deal.17 Smart contracts differ from normal OUP CORRECTED PROOF – FINAL, 26/05/18, SPi РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Force 107 contracts in that they are based on code rather than on the trustworthiness or prudence of the parties. For this reason they are much harder to breach. As time goes on, more transactions may be administered through ironclad agreements enforced in code. Governments are already exploring the idea of administering welfare benefit payments using smart contracts to reduce fraud, error, and delay.18 Adaptive Law We don’t normally expect laws to change without some kind of formal process, like the passage of new legislation or the intervention of the courts. In the digital lifeworld, however, it will be possible to implement adaptive laws capable of responding quickly and precisely to changing circumstances.19 Imagine that instead of a static speed limit on the freeway, limits were set in real time depending on traffic and weather conditions as monitored by digital systems.20 At quieter times or in better weather conditions your car (autonomous or not) would be permitted to go faster.


pages: 501 words: 114,888

The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives by Peter H. Diamandis, Steven Kotler

Ada Lovelace, additive manufacturing, Airbnb, Albert Einstein, Amazon Mechanical Turk, augmented reality, autonomous vehicles, barriers to entry, bitcoin, blockchain, blood diamonds, Burning Man, call centre, cashless society, Charles Lindbergh, Clayton Christensen, clean water, cloud computing, Colonization of Mars, computer vision, creative destruction, crowdsourcing, cryptocurrency, Dean Kamen, delayed gratification, dematerialisation, digital twin, disruptive innovation, Edward Glaeser, Edward Lloyd's coffeehouse, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Ethereum, ethereum blockchain, experimental economics, food miles, game design, Geoffrey West, Santa Fe Institute, gig economy, Google X / Alphabet X, gravity well, hive mind, housing crisis, Hyperloop, indoor plumbing, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the telegraph, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joseph Schumpeter, Kevin Kelly, Kickstarter, late fees, Law of Accelerating Returns, life extension, lifelogging, loss aversion, Lyft, M-Pesa, Mary Lou Jepsen, mass immigration, megacity, meta analysis, meta-analysis, microbiome, mobile money, multiplanetary species, Narrative Science, natural language processing, Network effects, new economy, New Urbanism, Oculus Rift, out of africa, packet switching, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, Peter Thiel, QR code, RAND corporation, Ray Kurzweil, RFID, Richard Feynman, Richard Florida, ride hailing / ride sharing, risk tolerance, Satoshi Nakamoto, Second Machine Age, self-driving car, Silicon Valley, Skype, smart cities, smart contracts, smart grid, Snapchat, sovereign wealth fund, special economic zone, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Pinker, Stewart Brand, supercomputer in your pocket, supply-chain management, technoutopianism, Tesla Model S, Tim Cook: Apple, transaction costs, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, urban planning, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, X Prize

A blockchain land registry could record every transaction ever, so land titles could always be backtracked, sale by sale, to the original owner. A land registry also gets us to one of blockchain’s other advantages—it has a smart contracts layer built in. Sports betting is one example. Right now, internet gambling requires a “trusted third party,” a gambling site, who guarantees the bet will be paid. But if two gamblers can decide in advance what source to trust as an arbiter of results—say, the sports page of the New York Times—then they can build a blockchain contract that allows them to bet with one another, have the system settle the bet via the pages of the Times, then automatically move the money. It’s a smart contract because it executes itself, without need for human involvement. And it’s for all of these reasons that the tech is exploding. As of 2018, major financial firms like J.P.

A few decades later, trains reduced that to roughly four days. Airplanes shrunk it to four hours. But a few years hence, the Hyperloop will be doing that trip in under an hour, and virtual reality and avatars have the potential to take that to zero. Sensors add intelligence to our appliances, but they also add hours to our lives. Consider that soon, when you run out of coffee, your refrigerator will notice and order more. A blockchain smart contract will place that order and an Amazon drone will bring it to your house. The only time you notice you’re out of coffee is when you’re moving the bag from your outside delivery box to your kitchen cabinet. Of course, pretty soon your very own butler-bot will do the coffee moving for you. Where the biggest advantages will start to accumulate is in our working lives. In fields ranging from material science to medical research, by allowing us to test new compounds inside a computer rather than a laboratory, AI collapses discovery times from years to weeks.

The collector is then paid for the “trash” in anything from cash to WiFi time, while the plastic bank sorts the material and sells it to the appropriate recycler—thus closing an open loop in the life cycle of plastic. Decentralized Autonomous Organizations: At the convergence of blockchain and AI sits a radically new kind of company—one with no employees, no bosses, and nonstop production. A set of preprogrammed rules determines how the company operates, and computers do the rest. A fleet of autonomous taxis, for example, with a blockchain-backed smart contracts layer, could run itself 24-7, including driving to the repair shop for maintenance, without any human involvement. Multiple World Models: We no longer live in only one place. We have real-world personae and online personae, and this delocalized existence is only going to expand. With the rise of augmented reality and virtual reality, we’re introducing more layers to this equation. You’ll have avatars for work and avatars for play, and all of these versions of ourselves are opportunities for new businesses.


pages: 326 words: 91,559

Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy by Nathan Schneider

1960s counterculture, Affordable Care Act / Obamacare, Airbnb, altcoin, Amazon Mechanical Turk, back-to-the-land, basic income, Berlin Wall, Bernie Sanders, bitcoin, blockchain, Brewster Kahle, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, Clayton Christensen, collaborative economy, collective bargaining, Community Supported Agriculture, corporate governance, creative destruction, crowdsourcing, cryptocurrency, Debian, disruptive innovation, do-ocracy, Donald Knuth, Donald Trump, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, Food sovereignty, four colour theorem, future of work, gig economy, Google bus, hydraulic fracturing, Internet Archive, Jeff Bezos, jimmy wales, joint-stock company, Joseph Schumpeter, Julian Assange, Kickstarter, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, mass immigration, means of production, multi-sided market, new economy, offshore financial centre, old-boy network, Peter H. Diamandis: Planetary Resources, post-work, precariat, premature optimization, pre–internet, profit motive, race to the bottom, Richard Florida, Richard Stallman, ride hailing / ride sharing, Sam Altman, Satoshi Nakamoto, self-driving car, shareholder value, sharing economy, Silicon Valley, Slavoj Žižek, smart contracts, Steve Jobs, Steve Wozniak, Stewart Brand, transaction costs, Turing test, Uber and Lyft, uber lyft, underbanked, undersea cable, universal basic income, Upton Sinclair, Vanguard fund, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, working poor, Y Combinator, Y2K, Zipcar

Before long, coders were sketching out prototypes for what they called decentralized autonomous organizations, or DAOs—entities made up of Ethereum “smart contracts.” One might code a constitution for a nongeographic country that people can choose to join, pay taxes to, receive benefits from, and cast votes in—and whose rules they would then have to obey. One could design a transnational microlending program or a new kind of credit score. In an online video, Dietz and a friend demonstrated how to code a simple marriage contract. The world’s next social contracts, the successors to the Declaration of the Rights of Man and the US Constitution, could be written on Ethereum’s protocol. The cooperatives of the future, too, might be built with smart contracts, inscribing co-ownership and co-governance for vast networks with a freer hand than local laws allow.

Waldman said he hoped to see DAOs that are “designed as strategic actors.” By collecting dues and holding members responsible to contracts, a DAO could be a means of organizing new kinds of labor unions or fostering disciplined consumer activism, which had failed to appear in online social media so far. What if, rather than just indicating on Facebook that you plan to participate in a protest, you joined a group of people contractually bound to do so? Could smart contracts bring back solidarity? It was a statement of digital possibilities but also, intentionally or not, a testament to what the digital world had lost. Waldman cited such pre-internet curiosities as in-person meetings, distinctive clothing, even religious belief—“a powerful engineering tool, and we should take it seriously.” He talked about orders such as the Freemasons and Elks in the past tense, as sources of inspiration for the DAOs to come.

He later interrupted the discussions on technical feasibility and implementation with stories of real-life good deeds done through his lodge, offline. Ethereum went live in 2015. Its underlying currency, ether, soon became second only to bitcoin on the crypto-markets, with a total value in the billions of dollars. Walmart is using Ethereum to manage supply chains, and J. P. Morgan is writing smart contracts to automate transactions. A coalition of US credit unions is building a “CU Ledger” to manage member identities. Some people are trying to craft the perfect co-ops or other sorts of egalitarian DAOs, but they’re not making money like the ones concocting blockchain ledgers for big, old banks.10 A year into Ethereum’s life, the system hit trouble. A glitch in the code enabled a hacker to siphon millions of dollars’ worth of ether from a flagship DAO known simply as “the DAO.”


pages: 302 words: 95,965

How to Be the Startup Hero: A Guide and Textbook for Entrepreneurs and Aspiring Entrepreneurs by Tim Draper

3D printing, Airbnb, Apple's 1984 Super Bowl advert, augmented reality, autonomous vehicles, basic income, Berlin Wall, bitcoin, blockchain, Buckminster Fuller, business climate, carried interest, connected car, crowdsourcing, cryptocurrency, Deng Xiaoping, discounted cash flows, disintermediation, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, family office, fiat currency, frictionless, frictionless market, high net worth, hiring and firing, Jeff Bezos, Kickstarter, low earth orbit, Lyft, Mahatma Gandhi, Mark Zuckerberg, Menlo Park, Metcalfe's law, Metcalfe’s law, Mikhail Gorbachev, Minecraft, Moneyball by Michael Lewis explains big data, Nelson Mandela, Network effects, peer-to-peer, Peter Thiel, pez dispenser, Ralph Waldo Emerson, risk tolerance, Robert Metcalfe, Ronald Reagan, Rosa Parks, Sand Hill Road, school choice, school vouchers, self-driving car, sharing economy, short selling, Silicon Valley, Skype, smart contracts, Snapchat, sovereign wealth fund, stealth mode startup, stem cell, Steve Jobs, Tesla Model S, Uber for X, uber lyft, universal basic income, women in the workforce, Y Combinator, zero-sum game

I recently completed a financing with Kaidi Ruusalep of Funderbeam, a company that provides liquidity to private companies in Estonia. We sealed the deal with a remote smart contract electronically signed on the Estonian blockchain. This process freed us from having to be on site or even from having lawyers physically present for the signing. The contract is permanent and easily accessible for each of us to see. Other countries are following Estonia’s lead. Singapore’s government has been working on its own form of e-governing, since it has historically led the way with digitizing and automating government services. The British Parliament has begun to automate and encourage crowdfunding and Bitcoin. And both Singapore and Switzerland have innovated by leading the world with legal systems for smart contracts and blockchain initial coin offerings (ICOs). I will discuss more on that later.

A Bitcoin wallet can be used as an escrow for a contract in transition, as a redistribution of an estate, or as a transfer agent to distribute payments, dividends or shares of stock. And we are only scratching the surface. The technology behind Bitcoin is called the blockchain. The blockchain also has some amazing potential. It can be thought of as a giant ledger, keeping track of money, data, inventory, contracts, etc. “Smart” contracts can be designed such that they anticipate eventualities and automatically distribute appropriately. And corporations can use the blockchain to automatically pay employees their wages and benefits, pay shareholders their dividends, and pay noteholders their interest and principal payments, all with precise accuracy and automated accounting. Furthermore, companies can use the blockchain to pay their suppliers and receive money from their customers, handling lay away payment plans and warranties without friction or human influence.

A government’s physical location or land base might become a lesser part of governance, and virtual governance might be where governments compete for us, whether we live in their geographic territory or not. The long-term vision for Bitcoin is to give the world economic emancipation. Banks will have to adapt their services as the need for trusted third parties and financial middlemen are eclipsed by a trusted crowd of blockchain monitors. The blockchain, being a perfect ledger, may change the accountant’s role to one of advisor, and smart contracts may change what it means to be a corporate lawyer. People will not need to hoard gold or hard currency since Bitcoin is a far more convenient source for stored value. Governments may recognize that their fiat currencies are inferior to virtual currencies and will have to allow more financial freedom to their citizens or risk losing those citizens. Taxing authorities and welfare service providers may be replaced by blockchain tax redistribution engines and welfare insurance wallets.


pages: 561 words: 157,589

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

4chan, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, blockchain, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, corporate governance, corporate raider, creative destruction, crowdsourcing, Danny Hillis, data acquisition, deskilling, DevOps, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Firefox, Flash crash, full employment, future of work, George Akerlof, gig economy, glass ceiling, Google Glasses, Gordon Gekko, gravity well, greed is good, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Khan Academy, Kickstarter, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, move fast and break things, Network effects, new economy, Nicholas Carr, obamacare, Oculus Rift, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, strong AI, TaskRabbit, telepresence, the built environment, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

See also http://www.davidbrin.com/transparentsociety.html. 177 “is generally bad”: Bruce Schneier, “The Myth of the ‘Transparent Society,’” Bruce Schneier on Security, March 6, 2008, https://www.schneier.com/essays/archives/2008/03/the_myth_of_the _tran.html. 178 “we all know where the creep factor comes in”: Alexis Madrigal, “Get Ready to Roboshop,” Atlantic, March 2014, https://www.theatlantic.com/magazine/archive/2014/03/get-ready-to-roboshop/357569/. 178 steering Mac users to higher-priced hotels: Dana Mattioli, “On Orbitz, Mac Users Steered to Pricier Hotels,” Wall Street Journal, August 23, 2012, https://www.wsj.com/articles/SB10001424052702304458604577488822667325882. 180 express their intent clearly and simply: “Share Your Work,” Creative Commons, retrieved March 31, 2017, https://crea tivecommons.org/share-your-work/. 180 “Smart Disclosure”: “Smart Disclosure Policy Resources,” data.gov, retrieved March 31, 2017, https://www.data.gov/consumer/smart-disclosure-policy-resources. 180 “smart contracts”: Josh Stark, “Making Sense of Blockchain Smart Contracts,” June 4, 2016, http://www.coindesk.com/making-sense-smart-contracts/. 181 a requirement for interpretability: Tal Zarsky, “Transparency in Data Mining: From Theory to Practice,” in Discrimination and Privacy in the Information Society, ed. Bart Custers, Toon Calders, Bart Schermer, and Tal Zarsky (New York: Springer, 2012), 306. 182 a perfect marketplace: Adam Cohen, “‘The Perfect Store,’” New York Times, June 16, 2002, http://www.nytimes.com/2002/06/16/books/chapters/the-perfect-store.html. 182 nothing was known about the sellers: Paul Resnick and Richard Zeckhauser, “Trust Among Strangers in Internet Transactions: Empirical Analysis of eBay’s Reputation System,” draft of February 5, 2001, version for review by NBER workshop participants, http://www.presnick. people.si.umich.edu/papers/ebay NBER/RZNBERBodegaBay.pdf. 183 “the apps and algorithms provide a filter”: David Lang, “The Life-Changing Magic of Small Amounts of Money,” Medium, unpublished post retrieved April 5, 2017, https://medium.com/@davidtlang/cacb7277ee9f. 184 “the multitude and promiscuous use of coaches”: Steven Hill, “Our Streets as a Public Utility: How UBER Could Be Part of the Solution,” Medium, September 2, 2015, https://medium.com/the-wtf-economy/our-streets-as-a-public-utility-how-uber-could-be-part-of-the-solution-65772bdf5dcf. 184 “cried out for public control over the taxi industry”: Steven Hill, “Rethinking the Uber vs.

An equivalent framework for privacy would be very helpful. During the Obama administration, there was a concerted effort toward what is called “Smart Disclosure,” defined as “the timely release of complex information and data in standardized, machine readable formats in ways that enable consumers to make informed decisions.” New technology like the blockchain can also encode contracts and rules, creating new kinds of “smart contracts.” A smart contracts approach to data privacy could be very powerful. Rather than using brute force “Do Not Track” tools in their browser, users could provide nuanced limits to the use of their data. Unlike paper disclosures, digital privacy contracts could be enforceable and trackable. As we face increasingly automated systems for enforcing rules, though, it is essential that it be possible to understand the criteria for a decision.

technology, 322–23 Shakespeare, 171 shareholder capitalism, 240–41, 245–51, 256, 263–68, 292 Shareholder Value Myth, The (Stout), 292 Shirky, Clay, 27, 91 Sidecar, 54–55, 77 Silicon Valley. See economy and Silicon Valley Simon, George, 20 Site Reliability Engineering (SRE), 123, 146–47 Skynet moment, 241. See also financial markets Slaughter, Anne-Marie, 309 Sloan Management Review, MIT, 153 Sloss, Benjamin Treynor, 123 Smart Disclosure and smart contracts, 180 smartphones, xiii, 76, 128 Android operating system, 52 difficulty doing repairs, 338 iPhone, xiii, 32, 101, 128, 136 navigation/location tracking, 83–84 and sensors, 40, 41, 85 thick marketplace for, 133 Smith, Adam, 262 Smith, Jeff, 349 SNAP (Supplemental Nutrition Assistance Program), 140–42, 266 social capital, 345–50 social infrastructure AI as part of, 353–54 business intent to make money vs., 240–41 corporate control of media content vs., 226–28 fighting fake news with, 218–20 Ponzi scheme elements, 355–56 tools for building, 220–24 social media, 96–97, 207.


pages: 387 words: 112,868

Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money by Nathaniel Popper

4chan, Airbnb, Apple's 1984 Super Bowl advert, banking crisis, Ben Horowitz, bitcoin, blockchain, Burning Man, buy and hold, capital controls, Colonization of Mars, crowdsourcing, cryptocurrency, David Graeber, Edward Snowden, Elon Musk, Extropian, fiat currency, Fractional reserve banking, Jeff Bezos, Julian Assange, Kickstarter, life extension, litecoin, lone genius, M-Pesa, Marc Andreessen, Mark Zuckerberg, Occupy movement, peer-to-peer, peer-to-peer lending, Peter Thiel, Ponzi scheme, price stability, QR code, Ross Ulbricht, Satoshi Nakamoto, Silicon Valley, Simon Singh, Skype, slashdot, smart contracts, Startup school, stealth mode startup, the payments system, transaction costs, tulip mania, WikiLeaks

But none of this distracted the programmers from their vision of what the Bitcoin software could do in the future. Some programmers were focused on the idea of micropayments, tiny online payments that are not possible with credit cards because of the minimum fees necessary for a credit card transaction. Others were interested in the idea of immigrants sending money across international borders without using Western Union. Some imagined the sorts of smart contracts that Satoshi had described, which would allow people to sell a house without using expensive mortgage title companies and escrow services. Yet others had a more abstract idea of a future universal currency, as science fiction had promised. IN ADDITION TO the coders, Bitcoin had kept its hold on many of the believers who were more interested in the ideals behind the virtual currency than the price.

Just a few months before Bitcoin was released, in April 2008, Nick had posted on his blog an item in which he talked about creating a trial model of bit gold and asked if anyone wanted to help him “code one up.” In August of that year, at the same time that Satoshi was privately e-mailing Adam Back about Bitcoin for the first time, Nick offered on his blog to sell some old collectible private banknotes, to help deal with “personal cash flow needs.” At about the same time, he wrote a burst of blog posts about the history of money, smart contracts, and bit gold, and said that if he could make bit gold work it would be the “first online currency based on highly distributed trust and unforgeable costliness rather than trust in a single entity and traditional accounting controls.” When Satoshi’s white paper came out publicly three months later, it cited two other obvious forerunners of Bitcoin—b-money and hashcash—but did not cite Nick’s work.

Nick showed up at Morehead’s private gathering because a few months earlier he had quietly joined a cryptocurrency startup that was operating in stealth mode. The startup, Vaurum, was based a few blocks from Wences’s office in Palo Alto and focused on the task of matching up big holders of Bitcoin wanting to buy and sell. Nick, though, had joined Vaurum to do more sophisticated work on so-called smart contracts, which would allow people to record their ownership of a house or car into the blockchain, and transfer that ownership with the use of a private key, something Nick had been thinking about for over a decade. This was the kind of thing that Satoshi was writing about at the beginning, but Satoshi had believed that these more advanced uses of the blockchain would take off only after Bitcoin caught on as a currency.


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

A system that misses all but a fraction of a percent of criminal financial flows is almost guaranteed to miss terrorism finance in particular, which involves very small sums. There might be a better way In a blockchain world, instead of using AML rules that impose costs and a high entry barrier (which is nothing more than a mild inconvenience to criminals but a serious charge on the poor and a barrier to innovation), the flow of value would be policed by apps and smart contracts. Merging compliance and auditing into real-time monitoring would transform the nature of AML activities. Many levels of bureaucracy might be rendered obsolete both in banks and at regulators because of the ambient accountability******** that comes with the blockchain. Regulatory requirements in the case of cash are designed bearing in mind its ‘invisibility’ and intractability, while in the case of a blockchain the opposite is true.

Barclays, Visa, MasterCard, Amex, Simple, Loop, Amazon – they all know what I bought yesterday, where I bought it, when I bought it, how often I have bought it and so on. But they don’t know why I bought it or who I bought it with. With integration with the social networks, however, they soon will. And they might not be happy! This suggests to me that we will have multiple monies that embody different values, and in a world of shared ledgers and ‘smart contracts’ it might well mean a type of money that won’t allow you to use it unless you have a track record of upholding its values! If you think that this is a radical view of the future of money, I have to tell you that it is only the starting point. We can think about this smart money as a vehicle for Szabo-style synthetic currencies (Szabo 1997) that could go even further and be used directly in contracts to substitute for a medium of exchange.

Here comes the smarter money The money created by the communities of the future will be very different from the money of today because it will be smart money. Economist Kenneth Rogoff put this nicely in his The Curse of Cash, noting that digital currencies offer the capacity for more complex kinds of transactions because they enable so much more information, including a history of transactions. While early experiments with Bitcoin and smart contracts give us a sense of the direction of travel, it is hardly wild speculation to assume that as new technologies connect with these basic building blocks of smart money, a new smarter money will emerge in the fusion of reputation, authentication, identification, machine learning and artificial intelligence. These new perspectives – money that is ‘local’, money that is ‘transparent’, money that is ‘smart’ – integrate to form a plausible description of the money of the future: money that serves the future economy better than the money of today.


pages: 170 words: 49,193

The People vs Tech: How the Internet Is Killing Democracy (And How We Save It) by Jamie Bartlett

Ada Lovelace, Airbnb, Amazon Mechanical Turk, Andrew Keen, autonomous vehicles, barriers to entry, basic income, Bernie Sanders, bitcoin, blockchain, Boris Johnson, central bank independence, Chelsea Manning, cloud computing, computer vision, creative destruction, cryptocurrency, Daniel Kahneman / Amos Tversky, Dominic Cummings, Donald Trump, Edward Snowden, Elon Musk, Filter Bubble, future of work, gig economy, global village, Google bus, hive mind, Howard Rheingold, information retrieval, Internet of things, Jeff Bezos, job automation, John Maynard Keynes: technological unemployment, Julian Assange, manufacturing employment, Mark Zuckerberg, Marshall McLuhan, Menlo Park, meta analysis, meta-analysis, mittelstand, move fast and break things, move fast and break things, Network effects, Nicholas Carr, off grid, Panopticon Jeremy Bentham, payday loans, Peter Thiel, prediction markets, QR code, ransomware, Ray Kurzweil, recommendation engine, Renaissance Technologies, ride hailing / ride sharing, Robert Mercer, Ross Ulbricht, Sam Altman, Satoshi Nakamoto, Second Machine Age, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, smart cities, smart contracts, smart meter, Snapchat, Stanford prison experiment, Steve Jobs, Steven Levy, strong AI, TaskRabbit, technological singularity, technoutopianism, Ted Kaczynski, the medium is the message, the scientific method, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, too big to fail, ultimatum game, universal basic income, WikiLeaks, World Values Survey, Y Combinator

All sorts of blockchain applications have recently been released: OpenBazaar, a peer-to-peer marketplace that is impossible to shut down, decentralised file storage, a distributed web domain name system, land ownership records in India to combat fraud and prediction markets. Several are working on social media applications that are impossible to censor or control because they’re hosted on a decentralised blockchain. Perhaps the most important functionality of the new wave of blockchains is the way they allow ‘smart contracts’, lines of code that execute instructions automatically. They were first proposed by Nick Szabo (yet another cypherpunk who was on the original mailing list) way back in 1994.4 It works like this: you set up a contract in the form of a programme that is triggered when a condition is met – for example, a payment when an invoice is filed, and which cannot be interfered with once it’s deployed.

It might even provide a secure digital payment option for the millions who are still excluded from the formal banking system. These are not trivial benefits. The economic boon of blockchain is potentially staggering – especially if twinned with the internet of things. Imagine a bridge with embedded sensors which could detect minor faults and necessary repairs. It could also track which vehicles have used it. Once a threshold of faults is reached, a smart contract could be automatically initiated, with every user charged immediately proportionate to their use. This could even have big benefits for how government works. The British Government hopes these immutable databases will create opportunities for a ‘greater transparency of transactions between government agencies and citizens’. Estonia, meanwhile, is charging full steam ahead. Citizens there can already log into their own health records stored on a blockchain using a digital identity to see if any medical professionals have looked at their data – and if they have, they can demand to know why.


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

201 EVELYN RUPPERT 16 Beyond quantification: a role for citizen science and community science in a smart city 213 MORDECHAI (MUKI) HAKLAY Index 225 Figures 3.1 3.2 3.3 3.4 3.5 3.6 4.1 4.2 9.1 9.2 9.3 10.1 10.2 10.3 10.4 10.5 11.1 11.2 Total two-way trips: a) the zoning system, b) all trips plotted, c) trips associated with Westminster (the centre), d) trips associated with Hillingdon (Heathrow) Total two-way trips: a) the fine-scale zoning system, b) trips associated with an inner-city ward, c) trips associated with Heathrow airport Predicted against observed data: a) origin employments, b) destination working populations, c) trips from work to home The density of the scatter: different patterns at different scales Visualizing big data in tens of millions or more of transport flows Visualizations of the flows on the rail segments during a working day Urban control rooms: (a) Rio de Janeiro, (b) Dublin A data assemblage City dashboards: (a) Dublin (an analytical dashboard), (b) London (a city at a glance dashboard) Mapping the same data at three different administrative scales Boston City Score Part of OGC Web Services framework (OWS) Operations of WFS Operations of WMS Operations of WPS (synchronous mode) Organizational Service Layer in an organization Smartphone screenshot of the GeoCoins software featuring bags of coins, and red and green GPS hotspots Screenshot taken from smartphone displaying the Civic Blocks software in use 35 36 37 37 38 41 47 50 112 119 121 131 132 133 134 137 149 151 xvi Figures 11.3 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 16.1 Still from the Handfastr video developed by participants to describe how their prototype software allows people to form temporary smart contracts for shared banking and spending Translation and transduction of data and the city Basic schematic of the OSi data model From Ireland in maps to databased Ireland Selection of polygon based topological relations in the Prime2 model Basic schematic of the OSi data model with object titles Kitchin’s socio-technological assemblage A draft genealogy of the OSi Prime2 data model Modified dynamic nominalism and making of spaces framework Public Lab map archive 152 171 172 175 176 176 180 181 182 220 Tables 4.1 6.1 10.1 10.2 10.3 Movement and location tracking The ‘more than’ requirements for a data-encounter model of urban data provenance Service orientation principles Potential users and client applications for various service types in a city Details about various binding types 53 80 128 137 138 Contributors Pouria Amirian, Ordnance Survey, Southampton, UK.

Through the technical support of Hadi, the team were able to design a fully working prototype that allowed workshop attendees to spend their votes on social projects in the local area (see Figure 11.2). The team also produced a short video explaining the principles of the platform: https://vimeo.com/163760240. HandFastr (Project Team: Corina Angheloiu, Max Dovey, James Stewart) The second group became very interested in the potential for the blockchain to record smart contracts that could reconfigure social pledges and transform spending powers. Adopting marriage as a social contract, the team designed a mechanism to support social economic bonds in the form of temporary mobile agreements using smartphones. As explained by Max Dovey, a member of the team: Marriage, with all its connotations, can be whittled down to one of the oldest forms of contract that binds two people from two families to create financial security.

Arranged marriages, short-term fixed marriages or visa weddings all utilize the contract to secure wealth, security or freedom between different parties. We adapted the practical and functional aspects of marriage into the GeoCoin platform to enable impromptu financial commitments between people in public space. Figure 11.3 S till from the Handfastr video developed by participants to describe how their prototype software allows people to form temporary smart contracts for shared banking and spending. Blockchain city 153 Through negotiation with Hadi, a platform was developed that placed geofences in the vicinity of the workshop that when consenting participants agreed to ‘get married’, the software would transfer Bitcoins that were previously held in separate wallets, into a conjoined wallet. As long as the partners (can be any number) remained married, they could only spend the currency when they were in the same GPS location.


pages: 390 words: 109,870

Radicals Chasing Utopia: Inside the Rogue Movements Trying to Change the World by Jamie Bartlett

Andrew Keen, back-to-the-land, Bernie Sanders, bitcoin, blockchain, blue-collar work, Boris Johnson, brain emulation, centre right, clean water, cryptocurrency, Donald Trump, drone strike, Elon Musk, energy security, Ethereum, ethereum blockchain, failed state, gig economy, hydraulic fracturing, income inequality, Intergovernmental Panel on Climate Change (IPCC), Jaron Lanier, job automation, John Markoff, Joseph Schumpeter, Kickstarter, life extension, Occupy movement, off grid, Peter Thiel, post-industrial society, postnationalism / post nation state, precariat, QR code, Ray Kurzweil, RFID, Rosa Parks, Ross Ulbricht, Satoshi Nakamoto, self-driving car, Silicon Valley, Silicon Valley startup, Skype, smart contracts, stem cell, Stephen Hawking, Steve Jobs, Steven Pinker, technoutopianism

There’s Open Bazaar, a peer-to-peer marketplace that is impossible to shut down, hoping to out-compete Amazon with its cuts and its secretive algorithms, a decentralised Uber, decentralised file storage, a decentralised Web domain-name system. The most interesting of all is what technologists are doing with ‘smart contracts’.19 These are basically lines of code on a blockchain that execute instructions. The German company slock.it sells locks that are programmed to rent themselves out. When someone books a room, they pay for it in bitcoin (for example), and automatically receive a code that allows entry. When they check out, the lock can automatically order a cleaner, transfer payment to the cleaner and send leftover funds to the room owner. It’s a whole, functioning company that doesn’t exist, except as a computer programme. Blockchains and smart contracts create problems as well as efficiencies. What if you forget your password code, or think you deserve a refund because the room wasn’t as big as promised?

A peace agreement included autonomy for the south and an independence referendum. Ninety-nine per cent voted in favour, and the UN unanimously recognised the new country. * Bitcoins can be divided into eight decimal places. The smallest non-divisible unit is known as a ‘Satoshi’. * In 2015 a company called the DAO (decentralised autonomous organisation) was founded as an investor-directed capital fund, which exists only virtually, as a series of public smart contracts. Investors can buy shares in the DAO using Ethereum’s (another blockchain) currency, which gives votes on investments. Anyone anywhere in the world can invest, it’s all transparent, there is no board or employees at all, and shareholders receive any profits directly. One month after it was launched to great fanfare, hackers and/or investors managed to exploit a vulnerability by inserting some code that redirected shares into their personal wallets, allowing them to walk off with millions of dollars of investors’ money.


pages: 395 words: 116,675

The Evolution of Everything: How New Ideas Emerge by Matt Ridley

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, Albert Einstein, Alfred Russel Wallace, AltaVista, altcoin, anthropic principle, anti-communist, bank run, banking crisis, barriers to entry, bitcoin, blockchain, Boris Johnson, British Empire, Broken windows theory, Columbian Exchange, computer age, Corn Laws, cosmological constant, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, cryptocurrency, David Ricardo: comparative advantage, demographic transition, Deng Xiaoping, discovery of DNA, Donald Davies, double helix, Downton Abbey, Edward Glaeser, Edward Lorenz: Chaos theory, Edward Snowden, endogenous growth, epigenetics, Ethereum, ethereum blockchain, facts on the ground, falling living standards, Ferguson, Missouri, financial deregulation, financial innovation, Frederick Winslow Taylor, Geoffrey West, Santa Fe Institute, George Gilder, George Santayana, Gunnar Myrdal, Henri Poincaré, hydraulic fracturing, imperial preference, income per capita, indoor plumbing, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jane Jacobs, Jeff Bezos, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Khan Academy, knowledge economy, land reform, Lao Tzu, long peace, Lyft, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, meta analysis, meta-analysis, mobile money, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, moral hazard, Necker cube, obamacare, out of africa, packet switching, peer-to-peer, phenotype, Pierre-Simon Laplace, price mechanism, profit motive, RAND corporation, random walk, Ray Kurzweil, rent-seeking, reserve currency, Richard Feynman, rising living standards, road to serfdom, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, sharing economy, smart contracts, South Sea Bubble, Steve Jobs, Steven Pinker, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, twin studies, uber lyft, women in the workforce

FCC to Congress: U.N.’s ITU Internet plans ‘must be stopped’. zdnet.com 5 February 2013. On net censorship, MacKinnon, Rebecca 2012. Consent of the Networked. Basic Books. On blockchains, Frisby, Dominic 2014. Bitcoin: The Future of Money?. Unbound. On Nick Szabo’s ‘shelling out’, nakamotoinstitute.org/shelling-out/. On Ethereum’s white paper, A Next-Generation Smart Contract and Decentralized Application Platform. https://github.com/ethereum. On private money, Dowd, K. 2014. New Private Monies. IEA. On smart contracts, De Filippi, P. 2014. Ethereum: freenet or skynet?. At cyber.law.harvard.edu/events 14 April 2014. On digital politics, Carswell, Douglas 2014. iDemocracy will change Westminster for the Better. Govknow.com 20 April 2014. And Carswell, Douglas 2012. The End of Politics and the Birth of iDemocracy. Biteback. Also Mair, Peter 2013.

Then there is Namecoin, which aims to issue internet names in a decentralised, peer-to-peer fashion; Storj, which plans to allow cloud storage of files hidden inside blockchains; and Ethereum, which is a decentralised peer-to-peer network ‘designed to replace absolutely anything that can be described in code’, as Matthew Sparkes puts it. The digital expert Primavera De Filippi sees Ethereum and its ilk coming up with smart contracts, allowing ‘distributed autonomous organisations’ that, once they have been deployed on the blockchain, ‘no longer need (nor heed) their creators’. In other words, not just driverless cars, but ownerless firms. Imagine in the future summoning a taxi that not only has no driver, but that belongs to a computer network, not to a human being. That network has raised funds, signed contracts and taken delivery of vehicles, even though its ‘headquarters’ is distributed all over the net.


pages: 481 words: 125,946

What to Think About Machines That Think: Today's Leading Thinkers on the Age of Machine Intelligence by John Brockman

agricultural Revolution, AI winter, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, algorithmic trading, artificial general intelligence, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, clean water, cognitive dissonance, Colonization of Mars, complexity theory, computer age, computer vision, constrained optimization, corporate personhood, cosmological principle, cryptocurrency, cuban missile crisis, Danny Hillis, dark matter, discrete time, Douglas Engelbart, Elon Musk, Emanuel Derman, endowment effect, epigenetics, Ernest Rutherford, experimental economics, Flash crash, friendly AI, functional fixedness, global pandemic, Google Glasses, hive mind, income inequality, information trail, Internet of things, invention of writing, iterative process, Jaron Lanier, job automation, Johannes Kepler, John Markoff, John von Neumann, Kevin Kelly, knowledge worker, loose coupling, microbiome, Moneyball by Michael Lewis explains big data, natural language processing, Network effects, Norbert Wiener, pattern recognition, Peter Singer: altruism, phenotype, planetary scale, Ray Kurzweil, recommendation engine, Republic of Letters, RFID, Richard Thaler, Rory Sutherland, Satyajit Das, Search for Extraterrestrial Intelligence, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, social intelligence, speech recognition, statistical model, stem cell, Stephen Hawking, Steve Jobs, Steven Pinker, Stewart Brand, strong AI, Stuxnet, superintelligent machines, supervolcano, the scientific method, The Wisdom of Crowds, theory of mind, Thorstein Veblen, too big to fail, Turing machine, Turing test, Von Neumann architecture, Watson beat the top human players on Jeopardy!, Y2K

This is not true. These systems must obey the laws of physics and of mathematics. Seth Lloyd’s analysis of the computational power of the universe shows that even the entire universe, acting as a giant quantum computer, could not discover a 500-bit hard cryptographic key in the time since the Big Bang.1 The new technologies of postquantum cryptography, indistinguishability obfuscation, and blockchain smart contracts are promising components for creating an infrastructure secure against even the most powerful AIs. But recent hacks and cyberattacks show that our current computational infrastructure is woefully inadequate to the task. We need to develop a software infrastructure that’s mathematically provably correct and secure. There have been at least twenty-seven different species of hominids, of which we’re the only survivors.

These examples show that machine culture, values, operation, and modes of existence are already different, and this emphasizes the need for ways to interact that facilitate and extend the existence of both parties. The potential future world of intelligence multiplicity means accommodating plurality and building trust. Blockchain technology—a decentralized, distributed, global, permanent, code-based ledger of interaction transactions and smart contracts—is one example of a trust-building system. The system can be used between human parties or interspecies parties, exactly because it’s not necessary to know, trust, or understand the other entity, just the code (the language of machines). Over time, trust can grow through reputation. Blockchain technology could be used to enforce friendly AI and mutually beneficial interspecies interaction.

While perhaps not a full answer to the problem of enforcing friendly AI, decentralized smart networks like blockchains are a system of checks and balances helping to provide a more robust solution to situations of future uncertainty. Trust-building models for interspecies digital intelligence interaction could include both game-theoretic checks-and-balances systems like blockchains and also, at the higher level, frameworks that put entities on the same plane of shared objectives. This is of higher order than smart contracts and treaties that attempt to enforce morality; a mind-set shift is required. The problem frame of machine and human intelligence should not be one that characterizes relations as friendly or unfriendly but, rather, one that treats all entities equally, putting them on the same ground and value system for the most important shared parameters, like growth. What’s most important about thinking for humans and machines is that thinking leads to ideation, progress, and growth.


pages: 416 words: 112,268

Human Compatible: Artificial Intelligence and the Problem of Control by Stuart Russell

3D printing, Ada Lovelace, AI winter, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Alfred Russel Wallace, Andrew Wiles, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, augmented reality, autonomous vehicles, basic income, blockchain, brain emulation, Cass Sunstein, Claude Shannon: information theory, complexity theory, computer vision, connected car, crowdsourcing, Daniel Kahneman / Amos Tversky, delayed gratification, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Ernest Rutherford, Flash crash, full employment, future of work, Gerolamo Cardano, ImageNet competition, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the wheel, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Nash: game theory, John von Neumann, Kenneth Arrow, Kevin Kelly, Law of Accelerating Returns, Mark Zuckerberg, Nash equilibrium, Norbert Wiener, NP-complete, openstreetmap, P = NP, Pareto efficiency, Paul Samuelson, Pierre-Simon Laplace, positional goods, probability theory / Blaise Pascal / Pierre de Fermat, profit maximization, RAND corporation, random walk, Ray Kurzweil, recommendation engine, RFID, Richard Thaler, ride hailing / ride sharing, Robert Shiller, Robert Shiller, Rodney Brooks, Second Machine Age, self-driving car, Shoshana Zuboff, Silicon Valley, smart cities, smart contracts, social intelligence, speech recognition, Stephen Hawking, Steven Pinker, superintelligent machines, Thales of Miletus, The Future of Employment, Thomas Bayes, Thorstein Veblen, transport as a service, Turing machine, Turing test, universal basic income, uranium enrichment, Von Neumann architecture, Wall-E, Watson beat the top human players on Jeopardy!, web application, zero-sum game

And it will do that not because it wants to stay alive but because it is pursuing whatever objective we gave it and knows that it will fail if it is switched off. There are some systems being contemplated that really cannot be switched off without ripping out a lot of the plumbing of our civilization. These are systems implemented as so-called smart contracts in the blockchain. The blockchain is a highly distributed form of computing and record keeping based on encryption; it is specifically designed so that no datum can be deleted and no smart contract can be interrupted without essentially taking control of a very large number of machines and undoing the chain, which might in turn destroy a large part of the Internet and/or the financial system. It is debatable whether this incredible robustness is a feature or a bug. It’s certainly a tool that a superintelligent AI system could use to protect itself. . . . put it in a box?


pages: 421 words: 110,406

Platform Revolution: How Networked Markets Are Transforming the Economy--And How to Make Them Work for You by Sangeet Paul Choudary, Marshall W. van Alstyne, Geoffrey G. Parker

3D printing, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, Amazon Mechanical Turk, Amazon Web Services, Andrei Shleifer, Apple's 1984 Super Bowl advert, autonomous vehicles, barriers to entry, big data - Walmart - Pop Tarts, bitcoin, blockchain, business cycle, business process, buy low sell high, chief data officer, Chuck Templeton: OpenTable:, clean water, cloud computing, connected car, corporate governance, crowdsourcing, data acquisition, data is the new oil, digital map, discounted cash flows, disintermediation, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, financial innovation, Haber-Bosch Process, High speed trading, information asymmetry, Internet of things, inventory management, invisible hand, Jean Tirole, Jeff Bezos, jimmy wales, John Markoff, Khan Academy, Kickstarter, Lean Startup, Lyft, Marc Andreessen, market design, Metcalfe’s law, multi-sided market, Network effects, new economy, payday loans, peer-to-peer lending, Peter Thiel, pets.com, pre–internet, price mechanism, recommendation engine, RFID, Richard Stallman, ride hailing / ride sharing, Robert Metcalfe, Ronald Coase, Satoshi Nakamoto, self-driving car, shareholder value, sharing economy, side project, Silicon Valley, Skype, smart contracts, smart grid, Snapchat, software is eating the world, Steve Jobs, TaskRabbit, The Chicago School, the payments system, Tim Cook: Apple, transaction costs, Travis Kalanick, two-sided market, Uber and Lyft, Uber for X, uber lyft, winner-take-all economy, zero-sum game, Zipcar

Normally, when you sign a contract, you must either trust the other party to honor the terms or rely on a central authority such as the state, or on an escrow service like eBay, to enforce the deal. Public blockchain ownership empowers us to write self-enforcing smart contracts that automatically reassign ownership once contract terms are triggered. Neither party can back out because the code, running in a decentralized public fashion, is not under anyone’s control. It simply executes. These smart, autonomous contracts can even pay people for the output of their work—in effect, machines hiring people, not the other way around. For example, imagine a smart contract between a wedding photographer and a couple planning their nuptials. The blockchain-stored contract could specify that payment of the final installment of the photographer’s fee will be made promptly when the edited photo files are delivered electronically to the newlyweds.


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

Positive impacts – Increased financial inclusion in emerging markets, as financial services on the blockchain gain critical mass – Disintermediation of financial institutions, as new services and value exchanges are created directly on the blockchain – An explosion in tradable assets, as all kinds of value exchange can be hosted on the blockchain – Better property records in emerging markets, and the ability to make everything a tradable asset – Contacts and legal services increasingly tied to code linked to the blockchain, to be used as unbreakable escrow or programmatically designed smart contracts – Increased transparency, as the blockchain is essentially a global ledger storing all transactions The shift in action Smartcontracts.com provides programmable contracts that do payouts between two parties once certain criteria have been met, without involving a middleman. These contracts are secured in the blockchain as “self-executing contractual states”, which eliminate the risk of relying on others to follow through on their commitments.


pages: 188 words: 40,950

The Case for Universal Basic Income by Louise Haagh

back-to-the-land, basic income, battle of ideas, Bertrand Russell: In Praise of Idleness, bitcoin, blockchain, cryptocurrency, delayed gratification, Diane Coyle, full employment, future of work, housing crisis, income inequality, job-hopping, land reform, low skilled workers, Mark Zuckerberg, mini-job, moral hazard, new economy, offshore financial centre, precariat, race to the bottom, rent control, road to serfdom, Silicon Valley, Skype, smart contracts, trickle-down economics, universal basic income

Conversations with leading members of the campaign group MeinGrundincommen, at the websummit in Lisbon on 6 November 2017. 39. Conversations with a backer of the new cryptocurrency EOS, which formally launched in June 2018. EOS is a third-generation cryptocurrency (CC), following Bitcoin, which was created in 2008, and Etherium, which was released in 2013. EOS, like the previous CCs, is based on computer algorithms. Investors buy currency tokens at a set value. Etherium set up smart contracts to regulate transaction relationships. EOS is seeking to generate formal arbitration boards. 40. According to one estimate, the value of Etherium grew more than 11-fold between April 2017, when its value stood at around $50 per token, and the end of the year, when it had risen to $730. https://globalcoinreport.com/current-eos-consistency-might-be-the-start-of-something-extraordinary/ 41. A debate is ongoing within EOS about governance: should votes be based on the size of investments, or one-wallet (or account) one-vote, as currently?


pages: 200 words: 47,378

The Internet of Money by Andreas M. Antonopoulos

AltaVista, altcoin, bitcoin, blockchain, clean water, cognitive dissonance, cryptocurrency, disruptive innovation, Ethereum, ethereum blockchain, financial exclusion, global reserve currency, litecoin, London Interbank Offered Rate, Marc Andreessen, Oculus Rift, packet switching, peer-to-peer lending, Ponzi scheme, QR code, ransomware, reserve currency, Satoshi Nakamoto, self-driving car, Skype, smart contracts, the medium is the message, trade route, underbanked, WikiLeaks, zero-sum game

The dumb network will transport their data because it doesn’t know the difference and it doesn’t care. 5.1.3. Bitcoin’s Dumb Network Bitcoin is a dumb network supporting really smart devices, and that is an incredibly powerful concept because bitcoin pushes all of the intelligence to the edge. It doesn’t care if the bitcoin address is the address of a multimillionaire, the address of a central bank, the address of a smart contract, the address of a device, or the address of a human. It doesn’t know. It doesn’t care if the transaction is carrying lots of money or not much money at all. It doesn’t care if the address is in Kuala Lumpur or downtown New York. It doesn’t know, it doesn’t care. It moves money from one address to another based on a simple locking script. And that means that if you want to build a new application on top of bitcoin, you can upgrade the devices and you can build an application.


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

Due to the ‘untimely passing of the founder, the payment of the MMM dividends cannot be made’, the site announced. The MMM Global ‘investors’ – if that is what they were – were left holding exactly what they bought, the virtual mavros. It appears that they will hold those till eternity.2 THE FINTECH SECTOR Fintech is a technology-anchored universe that involves, among other things, cryptocurrencies, blockchain, data mining, peer-to-peer lending, crowdfunding, money transfer services and smart contracts. Many of the innovations extend beyond financial services, where they have facilitated a range of new fundraising and investment opportunities on various platforms in cyberspace. The evolution of fintech has been both rapid and diverse, and it is clear that it can develop in any imaginable and, as yet, unimaginable direction. Broadly, fintech is seen as a positive development. Mark Carney, the governor of the Bank of England, recognized fintech’s ‘huge potential for making the financial system more inclusive, efficient, effective and resilient’.3 In March 2018 the European Commission adopted an action plan on fintech to foster a more competitive and innovative European financial sector.4 The Fed is embracing fintech, too, although with some apprehension.


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

In effect, the system would enable the efficient organization of decentralized solar grids, together with a “green currency” that could serve as a medium of exchange within solar microgrids or networks, helping to propel adoption of solar panels. The blockchain amounts to a network-based architecture for enabling commons-based governance. SMART TRANSACTIONS This field of experimentation may yield another breakthrough tool for forging digital commons: smart contracts. These are dynamic software modules operating in an architecture of shared protocols (much like TCP/IP or HTTP) that could enable new types of group governance, decision-making, and rules-enforcement on open network platforms. We are already familiar with rudimentary—and corporate-oriented versions—of this idea, such as digital rights management, a system that gives companies the ability to constrain how users may use their legally purchased technologies, from movies on DVD to ebooks.


Bulletproof Problem Solving by Charles Conn, Robert McLean

active transport: walking or cycling, Airbnb, Amazon Mechanical Turk, asset allocation, availability heuristic, Bayesian statistics, Black Swan, blockchain, business process, call centre, carbon footprint, cloud computing, correlation does not imply causation, Credit Default Swap, crowdsourcing, David Brooks, Donald Trump, Elon Musk, endowment effect, future of work, Hyperloop, Innovator's Dilemma, inventory management, iterative process, loss aversion, meta analysis, meta-analysis, Nate Silver, nudge unit, Occam's razor, pattern recognition, pets.com, prediction markets, principal–agent problem, RAND corporation, randomized controlled trial, risk tolerance, Silicon Valley, smart contracts, stem cell, the rule of 72, the scientific method, The Signal and the Noise by Nate Silver, time value of money, transfer pricing, Vilfredo Pareto, walkable city, WikiLeaks

How can you avoid the Walkman problem (not seeing something that didn't exist before)? Make a forecast of something you're interested in. It could be the economy, fashion, sports, or entertainment. Set out what you have to believe for the forecast to be true. Then ask whether it's likely to happen. Check out fivethirtyeight.com, where they do this for a living. The blockchain is now 10 years old and a promising technology for smart contracts and governance. Draw out the diffusion curve for blockchain and explain how you validated your assumptions. Take a business plan in a tech venture or social enterprise you have seen and do a knock‐out analysis, followed by a set of questions to the entrepreneur about what you have to believe for success. What are the three questions that will help you decide whether to buy an electric car in the next two years?


pages: 254 words: 76,064

Whiplash: How to Survive Our Faster Future by Joi Ito, Jeff Howe

3D printing, Albert Michelson, Amazon Web Services, artificial general intelligence, basic income, Bernie Sanders, bitcoin, Black Swan, blockchain, Burning Man, buy low sell high, Claude Shannon: information theory, cloud computing, Computer Numeric Control, conceptual framework, crowdsourcing, cryptocurrency, data acquisition, disruptive innovation, Donald Trump, double helix, Edward Snowden, Elon Musk, Ferguson, Missouri, fiat currency, financial innovation, Flash crash, frictionless, game design, Gerolamo Cardano, informal economy, interchangeable parts, Internet Archive, Internet of things, Isaac Newton, Jeff Bezos, John Harrison: Longitude, Joi Ito, Khan Academy, Kickstarter, Mark Zuckerberg, microbiome, Nate Silver, Network effects, neurotypical, Oculus Rift, pattern recognition, peer-to-peer, pirate software, pre–internet, prisoner's dilemma, Productivity paradox, race to the bottom, RAND corporation, random walk, Ray Kurzweil, Ronald Coase, Ross Ulbricht, Satoshi Nakamoto, self-driving car, SETI@home, side project, Silicon Valley, Silicon Valley startup, Simon Singh, Singularitarianism, Skype, slashdot, smart contracts, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, Stuxnet, supply-chain management, technological singularity, technoutopianism, The Nature of the Firm, the scientific method, The Signal and the Noise by Nate Silver, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas Kuhn: the structure of scientific revolutions, universal basic income, unpaid internship, uranium enrichment, urban planning, WikiLeaks

The game ended in 2011, a year after Hill left the company.44 In late 2013, Hill reconnected with Adam Back, who had been part of the original team at Zero-Knowledge Systems. Dr. Back, whom Reid Hoffman describes as “second only to Satoshi in bitcoin,” recruited him for his new start-up, Blockstream.45 By building side chains and other innovations onto the core Bitcoin blockchain, Blockstream promises to transform Bitcoin technology into a platform for stock trades, self-executing smart contracts, and other Bitcoin 2.0 applications that would normally require a trusted middleman to mediate between the parties. It will also enable developers with innovative ideas to build their applications directly onto Bitcoin, without touching the core Bitcoin code or forking over their own cryptocurrencies. Blockstream’s potential attracted interest—and funding—from Google chairman Eric Schmidt’s Innovation Endeavors, Yahoo!


pages: 309 words: 81,975

Brave New Work: Are You Ready to Reinvent Your Organization? by Aaron Dignan

"side hustle", activist fund / activist shareholder / activist investor, Airbnb, Albert Einstein, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, bitcoin, Black Swan, blockchain, Buckminster Fuller, Burning Man, butterfly effect, cashless society, Clayton Christensen, clean water, cognitive bias, cognitive dissonance, corporate governance, corporate social responsibility, correlation does not imply causation, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, David Heinemeier Hansson, deliberate practice, DevOps, disruptive innovation, don't be evil, Elon Musk, endowment effect, Ethereum, ethereum blockchain, Frederick Winslow Taylor, future of work, gender pay gap, Geoffrey West, Santa Fe Institute, gig economy, Google X / Alphabet X, hiring and firing, hive mind, income inequality, information asymmetry, Internet of things, Jeff Bezos, job satisfaction, Kevin Kelly, Kickstarter, Lean Startup, loose coupling, loss aversion, Lyft, Marc Andreessen, Mark Zuckerberg, minimum viable product, new economy, Paul Graham, race to the bottom, remote working, Richard Thaler, shareholder value, Silicon Valley, six sigma, smart contracts, Social Responsibility of Business Is to Increase Its Profits, software is eating the world, source of truth, Stanford marshmallow experiment, Steve Jobs, TaskRabbit, the High Line, too big to fail, Toyota Production System, uber lyft, universal basic income, Y Combinator, zero-sum game

Moreover, as you put money into that machine, you and its other users have a say in what snacks it will order and how often it should be cleaned. It has no managers, all of those processes were pre-written into code.” Developers, leveraging what they have learned in creating cryptocurrencies such as Bitcoin and Ethereum, are pioneering a new generation of decentralized applications that allow organizations to operate like that magical vending machine. Through a series of rules called smart contracts, founders can create, fund, and operate an entire organization independent of hierarchical management. Everything, from paying contributors for their work to making decisions about investment, is managed in a distributed way. Looking for the CEO? Headquarters? You won’t find them. It’s early days for this technology and the jury is still out on issues of security, how decisions are made, and the legal liability of contributors.


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

Open sourcing patents Just like Tesla did with its electric car patents, open sourcing IP will enable the creation of a much larger innovation ecosystem in which, by default, your organization will be the center. It pre-empts competition and insources innovation. Reduced IP relevance In an accelerating world, by the time you file a patent, it’s out of date. Rise of IP insurance Formalized structures to protect against IP infringement. Smart contracts Legal clauses embedded as code; instant activation of consequences and outcomes; personalized legal systems. Fluid legal contracts Flexible and real-time legal contracts, constantly adapting to new data, stats and insights (e.g., current SCRUM contracts but more advanced). Dangerous regulatory structures As technology outpaces our ability to regulate, regulatory agencies become irrelevant; even worse, they become neo-Luddites.


pages: 304 words: 91,566

Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption by Ben Mezrich

"side hustle", airport security, Albert Einstein, bank run, Ben Horowitz, bitcoin, blockchain, Burning Man, buttonwood tree, cryptocurrency, East Village, El Camino Real, Elon Musk, family office, fault tolerance, fiat currency, financial innovation, game design, Isaac Newton, Marc Andreessen, Mark Zuckerberg, Menlo Park, Metcalfe’s law, new economy, offshore financial centre, paypal mafia, peer-to-peer, Peter Thiel, Ponzi scheme, QR code, Ronald Reagan, Ross Ulbricht, Sand Hill Road, Satoshi Nakamoto, Schrödinger's Cat, self-driving car, side project, Silicon Valley, Skype, smart contracts, South of Market, San Francisco, Steve Jobs, transaction costs, zero-sum game

And the final phase is the phase of programmable money—when money can move via a programmable infrastructure.” Programmable money. The phrase sounded space age, sci-fi, to Cameron, but he knew it was truly the next step in the nearly instant economy that Bitcoin allowed; basically, it referred to programmed transactions between banks or individuals that could be self-validating and perfectly efficient; smart contracts that could be set in place to occur automatically, without any middlemen or oversight. For instance, self-driving cars and autonomous agents of the future would exchange value back and forth, perhaps while changing lanes in real time, paying for faster rates of travel—but they wouldn’t be doing it via wires, ACH, or credits cards, which were too slow and costly; they would have to use crypto.


pages: 499 words: 144,278

Coders: The Making of a New Tribe and the Remaking of the World by Clive Thompson

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 4chan, 8-hour work day, Ada Lovelace, AI winter, Airbnb, Amazon Web Services, Asperger Syndrome, augmented reality, Ayatollah Khomeini, barriers to entry, basic income, Bernie Sanders, bitcoin, blockchain, blue-collar work, Brewster Kahle, Brian Krebs, Broken windows theory, call centre, cellular automata, Chelsea Manning, clean water, cloud computing, cognitive dissonance, computer vision, Conway's Game of Life, crowdsourcing, cryptocurrency, Danny Hillis, David Heinemeier Hansson, don't be evil, don't repeat yourself, Donald Trump, dumpster diving, Edward Snowden, Elon Musk, Erik Brynjolfsson, Ernest Rutherford, Ethereum, ethereum blockchain, Firefox, Frederick Winslow Taylor, game design, glass ceiling, Golden Gate Park, Google Hangouts, Google X / Alphabet X, Grace Hopper, Guido van Rossum, Hacker Ethic, HyperCard, illegal immigration, ImageNet competition, Internet Archive, Internet of things, Jane Jacobs, John Markoff, Jony Ive, Julian Assange, Kickstarter, Larry Wall, lone genius, Lyft, Marc Andreessen, Mark Shuttleworth, Mark Zuckerberg, Menlo Park, microservices, Minecraft, move fast and break things, move fast and break things, Nate Silver, Network effects, neurotypical, Nicholas Carr, Oculus Rift, PageRank, pattern recognition, Paul Graham, paypal mafia, Peter Thiel, pink-collar, planetary scale, profit motive, ransomware, recommendation engine, Richard Stallman, ride hailing / ride sharing, Rubik’s Cube, Ruby on Rails, Sam Altman, Satoshi Nakamoto, Saturday Night Live, self-driving car, side project, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, single-payer health, Skype, smart contracts, Snapchat, social software, software is eating the world, sorting algorithm, South of Market, San Francisco, speech recognition, Steve Wozniak, Steven Levy, TaskRabbit, the High Line, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, universal basic income, urban planning, Wall-E, Watson beat the top human players on Jeopardy!, WikiLeaks, women in the workforce, Y Combinator, Zimmermann PGP, éminence grise

It took the slow-moving, long-term patience of a government to produce the core inventions that make it possible for us to hold a phone and order one of Kalanick’s Uber cars. Nonetheless, the libertarian protestations of a certain set of coders continues apace. In recent years, blockchain technology has been the latest site of tech’s anti-government fervor. That ranges from Bitcoin—a currency specifically designed to create money that couldn’t be controlled by dough-printing central banks—to Ethereum, a way of creating “smart contracts” that, its adherents hope, would allow commerce so frictionless and decentralized that even lawyers wouldn’t be necessary: The instant someone performed the service you’d contracted them to do for you, the digital cash would arrive in their digital wallet. One survey of people in the cryptocurrency community found that fully 27 percent called themselves libertarian, more than double the rate Pew Research Center found in the general population.


pages: 589 words: 147,053

The Age of Em: Work, Love and Life When Robots Rule the Earth by Robin Hanson

8-hour work day, artificial general intelligence, augmented reality, Berlin Wall, bitcoin, blockchain, brain emulation, business cycle, business process, Clayton Christensen, cloud computing, correlation does not imply causation, creative destruction, demographic transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, experimental subject, fault tolerance, financial intermediation, Flynn Effect, hindsight bias, information asymmetry, job automation, job satisfaction, John Markoff, Just-in-time delivery, lone genius, Machinery of Freedom by David Friedman, market design, meta analysis, meta-analysis, Nash equilibrium, new economy, prediction markets, rent control, rent-seeking, reversible computing, risk tolerance, Silicon Valley, smart contracts, statistical model, stem cell, Thomas Malthus, trade route, Turing test, Vernor Vinge

“Not Working at Work: Loafing, Unemployment and Labor Productivity.” NBER Working Paper No. 21923, January. Bureau of Labor Statistics. 2013. “Time Spent in Primary Activities and Percent of the Civilian Population Engaging in Each Activity, Averages per Day by Sex, 2012 Annual Averages.” Bureau of Labor Statistics Economic News Release. June 20. http://www.bls.gov/news.release/atus.t01.htm. Buterin, Vitalik. 2014. “White Paper: A Next-Generation Smart Contract and Decentralized Application Platform.” April. https://www.ethereum.org/pdfs/EthereumWhitePaper.pdf. Caplan, Bryan. 2008. “The Totalitarian Threat.” In Global Catastrophic Risks, edited by Nick Bostrom and Milan Ćirković, 504–519. Oxford University Press, July 17. Caplan, Bryan, and Stephen Miller. 2010. “Intelligence Makes People Think Like Economists: Evidence from the General Social Survey.”


pages: 579 words: 183,063

Tribe of Mentors: Short Life Advice From the Best in the World by Timothy Ferriss

23andMe, A Pattern Language, agricultural Revolution, Airbnb, Albert Einstein, Bayesian statistics, bitcoin, Black Swan, blockchain, Brownian motion, Buckminster Fuller, Clayton Christensen, cloud computing, cognitive dissonance, Colonization of Mars, corporate social responsibility, cryptocurrency, David Heinemeier Hansson, dematerialisation, don't be evil, double helix, effective altruism, Elon Musk, Ethereum, ethereum blockchain, family office, fear of failure, Gary Taubes, Geoffrey West, Santa Fe Institute, Google Hangouts, Gödel, Escher, Bach, haute couture, helicopter parent, high net worth, In Cold Blood by Truman Capote, income inequality, index fund, Jeff Bezos, job satisfaction, Johann Wolfgang von Goethe, Kevin Kelly, Lao Tzu, Law of Accelerating Returns, Lyft, Mahatma Gandhi, Marc Andreessen, Marshall McLuhan, Mikhail Gorbachev, minimum viable product, move fast and break things, move fast and break things, Naomi Klein, non-fiction novel, Peter Thiel, profit motive, Ralph Waldo Emerson, Ray Kurzweil, Saturday Night Live, side project, Silicon Valley, Skype, smart cities, smart contracts, Snapchat, Steve Jobs, Steven Pinker, Stewart Brand, TaskRabbit, Tesla Model S, too big to fail, Turing machine, uber lyft, web application, Whole Earth Catalog, Y Combinator

I sit and desire ideas. “Trusted third parties are security holes.” Nick Szabo TW: @NickSzabo4 unenumerated.blogspot.com NICK SZABO is a polymath. The breadth and depth of his interests and knowledge are truly astounding. He’s a computer scientist, legal scholar, and cryptographer best known for his pioneering research in digital contracts and cryptocurrency. The phrase and concept of “smart contracts” were developed by Nick with the goal of bringing what he calls the “highly evolved” practices of contract law and practice to the design of electronic commerce protocols between strangers on the Internet. Nick also designed Bit Gold, which many consider the precursor to Bitcoin. * * * What is the book (or books) you’ve given most as a gift, and why? Or what are one to three books that have greatly influenced your life?