blockchain smartnetworks

Amsterdam NL, 12 Sep 2016Slides: http://slideshare.net/LaBlogga

Melanie SwanPhilosophy & Economic Theory

New School for Social Research, NY [email protected]

Blockchain SmartnetworksThe Future of Finance and the Automation Economy

Part of a Series on Cryptophilosophycryptophilosophy

12 Sep 2016Blockchain Smartnetworks 2

Melanie Swan, Blockchain Futurist Philosophy and Economic Theory, New School

for Social Research, New York NY Founder, Institute for Blockchain Studies Singularity University Instructor; Institute for Ethics and

Emerging Technology Affiliate Scholar; EDGE Essayist; FQXi Advisor

Traditional Markets BackgroundEconomics and Financial

Theory Leadership

New Economies research group

Source: http://www.melanieswan.com, http://blockchainstudies.org/NSNE.pdf, http://blockchainstudies.org/Metaphilosophy_CFP.pdf

https://www.facebook.com/groups/NewEconomies

12 Sep 2016Blockchain Smartnetworks

Blockchain

3Source: http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491


Thesis StatementBlockchain: a Singularity-class technology No other technology has the power to…1. …uplift 2 billion people out of poverty

overnight intermediary-free international remittance

2. …produce a safe and orderly transition to the automation economy humans and machines in collaboration,

friendly artificial intelligence enacted

3. …fundamentally transform the only remaining sectors not yet re-engineered for the Internet era: economics and politics

4Source: Blockchain Singularities :http://www.slideshare.net/lablogga/blockchain-singularities-65443340


Agenda

I. Blockchain technology: What is it? Automation economy

II. Singularity-class applications Farther-future

Friendly AI Bio-cryptoeconomy Nanotech/Synbio Blockchains in Space

Nearer-term Financial services, Energy, Logistics IOT, Health, Economic Development

III. Conclusion: our Singularity futures

5


Blockchain Technology: What is it?

6

Blockchain technology is the secure distributed ledger software that underlies cryptocurrencies like Bitcoin “Internet of Money” leapfrog technology; Skype is an app

allowing phone calls via Internet without POTS; Bitcoin is an app allowing money transfer via Internet without banks; ‘decentralized Paypal’

Internet(decentralized network)

Blockchain

Bitcoin

Source: http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491

ApplicationLayer

Protocol Layer

InfrastructureLayer

SMTP

Email

VoIP

Phone calls

OSI Protocol Stack:


Blockchain (not Bitcoin) is the revolution

7

Internet phase transitions

Phase I: transfer information Modernize publishing, books, music,

news, information Phase 2: transfer value (money,

property) Modernize of economics and finance Providing the digital payments layer the

Internet never had Instantiating the qualitative good of

trust in the infrastructure



Smartnetwork visionPushing more complexity through the Internet pipes

8

Information

Source: http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491Sci-fi inspiration: Accelerando, Lady of Mazes, Blindsight, The Golden Age, Glasshouse

Confirmation of Automated Distribution of

Transfer of

Growing classes of activities for smartnetwork execution I: Information; II: Money, finance, economics; energy; supply chain, logistics,

transportation; health; IOT; III: identity, preference, intangible resources

Value Identity Preference

Registration of

20161990 2025e 2050e 2075e

Automated Propagation of

VotingPolicy

OpinionParticipation

GBIEnergyTrust

AutonomyRecognition

Economics Politics

IdeasHealth

Collaboration opportunitiesInstantiation

Upload integrity

Smart-resources

Smart-currencies

2090e

Internet Smartnetwork

12 Sep 2016Blockchain Smartnetworks 9

Currency


Property: Assets

InventorySecurities: stocks, bonds, government issue, futures and

options, FX contracts

Hard assets: cars, houses, global supply chain, medical inventories; Intangible assets: IP

Money, digital payments, remittanceProgrammable smartmoney

Fundamental enabling infrastructure

Economics

Governance& Legal Services

Global-scale projects

Politics

Singularity

All contractual arrangements

Blockchain’s vast reach beyond currency

Financial instruments: mortgage, loans

Million-person genome banks, supply chain management, autonomous driving fleets

Voting, identity, citizenship, civic servicesLegal documents, contracts, wills, agreements


Why is it called blockchain?Blockchain: a chain of transaction blocks Every 10 minutes, the latest

block of submitted transactions is validated (by cryptographic mining) and posted to a single distributed ledger

Each new block of transactions calls the last block, so that the transactions are chained together sequentially, hence the word blockchain

10Source: https://blockexplorer.com


Blockchain crucial for the Singularity-class project: Financial Inclusion Just as the Printing Press and

the Internet flattened access to communicating information...

…blockchains are giving the power of the printing press to banking, credit, and money Access to economic and financial

systems (credit) as a basic human right (4 billion under-banked)

Long-tail economics: any two parties can transact on the network (eBay of money)



Issue: hierarchy is not scalable

12Sources: What is Decentralization? http://futurememes.blogspot.com/search?q=datt.co, http://blog.midem.com/2016/04/blockchain-broken-music-industry/

Blockchains are a form of trust-making technology A system of checks and balances that is universal and

planetary-scale (Kardashev-level) New tiers of scalability are needed

Million-genome repositories (largest is 3700 currently), connectome databases to reveal brain structure


Smartnetwork theme: design Optimality Optimal mix of centralized and

decentralized models Rethinking Coase’s firm size

Manufacturing reorganization per electricity; industries rethought per decentralized networks Tighter supply chain integration Complexity design principles

Decentralization here to stay Proven decentralized scalability

paradigm: Internet Bitcoin, blockchain, decentralization

13Sources: Coase, RH, The Nature of The Firm, 1937, http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf

Decentralization

Blockchain

Bitcoin


Smartnetwork intelligence (technical) Network math

Nodes, vertices, graph theory Information theory

Discrete and continuous, syntactic and semantic Physics math

Statistical dynamics, turbulence, >Schrödinger equation Machine-learning/deep-learning

Recurrent neural nets, structural equation modeling, causal graphical models

Complexity math Power laws, fractals, nearest neighbor, fat tails, power laws, high

coefficients, degrees of correlation, fractal behavior

14Source: Blocktime: Blockchain Temporality http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491


Smartnetwork intelligence (conceptual) Simultaneously global-local (crypto-synecdoche)

Arbitrarily-many levels of detail drill-up/down (fiat currency: 20) Smoothest part of the curve (optimization)

Where is a function most differentiable, integrable? Probability over causality

Structural equation modeling, causal graphical models Fabrics, topologies, lattices, ecologies over point values

Convexity, randomness, and fragility Markets, weather systems mostly behave normally But long-tail black swans are part of their nature

Systems are evolving and dynamical

15Source: http://futurememes.blogspot.com/2016/09/defining-blockchain-economy-what-is.html


Economic Principles: not just for Economics

16

Economic and Financial Principles

Traditional Deployment Buy/sell transactions Financial markets

Blockchain Deployment Any interaction is a discovery

and exchange process Decentralized models

supplement hierarchy Demurrage: incitatory potential

and resource redistribution across network nodes

Reciprocal mining communities (smarthome IOT, brain BCI)

Blockchain technology is prompting a rethinking of economic principles

and concepts (resources, exchange, tokens, allocation,

pricing, distribution, markets) to apply in non-monetary contexts


Blockchain Economics and FinanceApparatus for constituting the present and the future

17

Bitcoin, Crypto-currencies Smart Contracts

Economics Finance

Spot, Cash Market Futures, Options Market

Present Future

Source: http://www.slideshare.net/lablogga/blockchain-payment-systems, http://www.slideshare.net/lablogga/blockchain-financial-networks, http://www.slideshare.net/lablogga/blockchain-temporality-smart-contract-timespecifiability-with-blocktime

Real-time payments Utility Settlement Coin (USC) (8/24/16)

Temporality Regime


Decentralized Economics and FinanceCurrent mode is one kind of system for organizing access to resources

18

The organizing assumption of economic systems has been scarcity; an orientation to the

production and distribution of scarce material goods. This no longer holds in an era of digital services, non-rival

goods, and complementarity

Mindset Shifts: 1. Scarcity to Abundance

2. Labor to Fulfillment3. Hierarchy to Decentralization

The organizing assumption of financial systems has been the control or at least prediction of the future value of assets and

liabilities; finance = credit (credit is really about trust). Also no

longer holding.

Mindset Shifts: 1. Access instead of Ownership2. Topological Ranges instead

of Point Values3. Assurity instead of

Insufficiency

Sources: http://futurememes.blogspot.com/2016/09/defining-blockchain-economy-what-is.html and New Economies and Finance at the New School: http://blockchainstudies.org/NSNE.pdf

Economics Finance

Present FutureTemporality Regime


Abundance Philosophy of Economics Realization of decentralized economics and finance

19Source: Swan, M. "Automation Economy: An Abundance Philosophy of Economics" In Emerging Technology and Unemployment. Palgrave Macmillan. Forthcoming.

Phase I: transition to Automation Economy Phase II: transition to Actualization Economy

A

B

C

Trust, Autonomy, Recognition


Technological Unemployment Key singularity-class challenge: orderly transition to the

Automation Economy Half (47%) of employment is at risk of automation in the next

two decades – Carl Frey, Oxford, 2015 Why are there still so many jobs in a world that could be

automating more quickly? – David Autor, MIT, 2015

20Source: Swan, M. "Automation Economy: An Abundance Philosophy of Economics" In Emerging Technology and Unemployment. Palgrave Macmillan. Forthcoming.


Agenda






21


Singularity-class Problems (Kardashev-scale; impact 1 billion people within 10 years)

22

Artificial Intelligence and deep learning Friendly AI and “What is consciousness?” Multi-species intelligence BCI cloudmind collaborations (>1 thinking)

Virtual reality Integrating virtual and physical reality

Nanotechnology and synthetic biology Space settlement Automation economy

Autonomous driving Medical nanorobotics Manufacturing and social robotics

Source: Blockchain Singularities :http://www.slideshare.net/lablogga/blockchain-singularities-65443340 BCI: brain computer interface


Argument: Blockchain can help all Singularity-class Problems


Any significant future operation running on digital smartnetworks, needing coordination

Blockchain properties Secure, trackable, automated coordination of

large-scale projects with many items Automated system of checks and balances; all

transactions must confirm via smartnetwork Moves any sort of quantized/unitized packets on

the smartnetwork: energy, cars, synapse firings Fleet management

Autonomous vehicles, IOT sensors, social robotics, synaptic connections, deep-learners, medical nanorobots, planet terraformers, synbio agents, environmental cleanup bots


Blockchain AI AppsEnact Friendly AI (Artificial Intelligence)

24

Digital intelligences running on consensus-managed smartnetworks Not in isolation

Good reputational standing required to conduct operations Transactions to access resources

(like fund-raising), provide services, enter into contracts, retire

Smartnetwork consensus only validates and records bonafide transactions from ‘good’ agents

Sources: http://cointelegraph.com/news/113368/blockchain-ai-5-top-reasons-the-blockchain-will-deliver-friendly-ai, http://ieet.org/index.php/IEET/more/swan20141117


Basic ApplicationDeep-thinkers Registry Register deep learners with

blockchains Tracking Security Remuneration

Examples Autonomous lab robots

On-chain IP discovery tracking Roving agricultural bots Manufacturing bots Intelligent gaming

Go-playing algorithms

25Source: Swan, M. Blockchain Thinking: The Brain as a DAC. Neural Turing Machines: https://arxiv.org/abs/1410.5401.IPFS (Benet): https://medium.com/@ConsenSys/an-introduction-to-ipfs-9bba4860abd0#.bgig18cgp


Advanced ApplicationBCI Cloudminds and Chainbrains Cloudmind: cloud-based thinking

entity, comprised of >1 brains Problem: Safe collaboration of minds

Joining a cloudmind collaboration, blockchains (cryptographic ledgers) to administer cloudminds Line-item tracking and credit-

assignation (like Github, or SVN/CVS for brainstorming)

Privacy, security, remuneration Protect against personal identity loss

and absorption into a groupmind

26Source: http://www.slideshare.net/lablogga/blockchain-cloudminds-humanmachine-pooledmind-dacs; Mind’ is generally denoting an entity with some capacity for processing, not the volitionary action and free will of a consciousness agent


Nanotech Grey Goo and runaway Synbio


Worry: Grey Goo (unchecked nanotech proliferation), DNA-printed synthetic bio-plague Science fiction examples: Blood

Music, Prey Solution: signing logged to

blockchains As physical-world engineers sign

the bridges they build, likewise synbio engineers sign DNA and nanotech designs

Unavoidable “signing” per detectable origins


Medical nanorobotics as the coming-onboard repair platform for the human body Vision: a nanorobot in every cell

Bio-Nano Repair DACs DAC: Decentralized Autonomous

Corporation (packages of smart contracts) Bio-cryptoeconomic principles

High number of agents and “transactions” Secure automation is obvious requirement Bio-Nano Repair DACs for secure,

trackable automation and coordination of medical nanorobotics for cellular repair

28Sources: Bio-Cryptoeconomy: Nanorobotic DACs for Cell Repair and Enhancement http://futurememes.blogspot.com/2016/08/bio-cryptoeconomy-nanorobotic-dacs-for.html

Bio-cryptoeconomy Medical nanorobotic DACs to coordinate cell repair


Spacechains: Blockchains in Space


Advances in space Launch: microsats, small rockets, commercial

launch (reusability, rocket design), regular Mars launches planned each 26 months with large-cargo drops, communications networks,

Light sail and optical propulsion Asteroid mining, space settlement, transport Exoplanet discovery in habitable zones (Alpha

Centauri, TRAPPIST-1) Singularity-class blockchain functionality

Secure, trackable, automated coordination of high numericity and dimensionality at scale

Autonomous entities, Bitsat backup network


Blockchains and Singularity-class Problems Argument: smartnetworks thesis that

complex future operations will involve automated coordination via smartnetworks, using some kind of technology like blockchains

Blockchain smartnetwork properties: Asset registry and fleet coordination of

items (registry, ownership and transfer of “quantized” units)

Security Trackability Automation Coordination



Crypto-Enlightenment

31

“One ought to think autonomously, free of the

dictates of external authority”

- Immanuel Kant

Kant, I. "Answering the Question: What Is Enlightenment?" (German: Beantwortung der Frage: Was ist Aufklärung?). 1784.


Level 1: the new literacy: digital literacy Manage private key access

Back-up your money Manage digital identity, EMR health wallet

Level 2: self-authority taking Designing personalized long-tail economic,

political, and social systems Civic project participations (P2P micropolis),

provide peergrid resources

Digital Cryptocitizen Sensibility

32Source: Swan, M. Crypto Enlightenment: A Social Theory of Blockchains http://www.slideshare.net/lablogga/the-crypto-enlightenment-social-theory-of-blockchains; EMR: electronic medical record; P2P: peer-to-peer

Sense of duty in serving the republic

Civic Duty Civic CollaborationGreek Statesman Cryptocitizen

Sense of meaning in sustaining community


Agenda






33


Financial Services Distributed ledger

Instant transaction validation Settlement, clearing, audit Simpler, more secure, less

expensive financial services Use case applications

Industry-wide collaboration Securities asset registries Value chain efficiency:

custody, titling, insurance Financial-inclusion

addressable market Digital identity, banking

34Source: https://www.cbinsights.com/blog/financial-services-corporate-blockchain-investments


Energy grid smartnetworks Concept: the power grid of every

continent is an energy Internet “Quantized units” are energy:

kWh/kWm Use case applications

Automatic markets: off-hour and lowest cost demand fulfillment

Smart grid management Energy price and trade validation Resource self-pricing Source fungibility: wind, solar power P2P microgrid infrastructure

35Sources: Rifkin, J. The Zero Marginal Cost Society; https://www.newscientist.com/article/2079334-blockchain-based-microgrid-gives-power-to-consumers-in-new-york/

Cryptosustainability Micropolis Example:Peer-to-peer Microgrids


Supply chain & logistics grid smartnetworks Tamper-proof record-keeping

Register assets and inventory Assure provenance, custody Track quantity and transfer of assets

(pallets, trailers, containers) moving through supply chain nodes

Track purchase orders, change orders, receipts, shipment notifications

Assign and verify custody and product certification

Link physical goods to serial numbers, bar codes, RFID tags

Virtual reality rapid simulation and event-history keeping (>transactions)

36


Autonomous Driving Fleet coordination of “quantized

units” of km/miles and vehicles Autonomous passenger cars

Singapore self-driving taxis - 8/24/16 Uber’s first self-driving fleet arrives in

Pittsburgh – Aug 2016 Commercial trucking

“Autonomous Driving Long-Distance Trucks within Ten Years” - 2014

37Source: https://www.theguardian.com/technology/2016/aug/25/hail-progress-singapore-launches-worlds-first-self-driving-taxi-service, http://truckyeah.jalopnik.com/autonomous-driving-long-distance-trucks-will-be-a-reali-1603746933http://www.bloomberg.com/news/features/2016-08-18/uber-s-first-self-driving-fleet-arrives-in-pittsburgh-this-month-is06r7on


Blockchain IOT

38Sources: http://www.zdnet.com/article/internet-of-things-market-to-hit-7-1-trillion-by-2020-idc/, http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491

Blockchain-based IOT connected objects M2M/IOT Bitcoin payment network to

enable the machine economy IOT 2020: 26 bn devices in a $7 tn market

The economic layer the web never had Smarthome IOT networks

Self-mining ecologies Privacy orchestration: devices, robotics, digital

personal health assistants Blockchains: economic principle-driven

large-scale resource allocation and coordination mechanism Smartcity Connected

Car Coordination

Smarthome IOT and Personal Robotics

Coordination


Blockchain Social Robotics Personal voice assistants, social

robotics Implication: voice interfaces, all apps

become voice-activated and interactive; “My Dad, the App”

Requirements: security, financial transactability, liability tracking

Cross-cloud interconnection (IOT smarthome, connected car, smartcity)

Fleet coordination functionality Automated, secure, tracking/logging,

remuneration, transaction coordination, apps/processes (smart contracts), coordination (updates), audit log

39Source: Swan, M. Philosophy of Social Robotics: Abundance Economics. Sociorobotics, 2016. http://www.melanieswan.com/documents/SocialRobotics.pdf.


1. EMRs (electronic medical records) Personal health record access and administration Users key-permission doctors into records

2. Health insurance billing chains Blockchain-based health insurance claims processing:

automated proof of identity and insurance; claims payment Enable ahead of time service price-quoting

3. Digital health wallet Private key identity + EMR (medications) + health insurance info

+ payment data + basic income health plan administration Doctor vendor RFP services; preventive longevity treatments

4. Health Data Research Commons Biobanks, QS (DNA.bits), genome and connectome files

40Source: http://futurememes.blogspot.fr/2014/09/blockchain-health-remunerative-health.html

Blockchain Health


Bitcoin MOOCsLong-tail of learning

Blockchain-based “Kiva for literacy” Long-tail peer-to-peer learning contracts Literacy beyond reading

Technical, agricultural, vocational literacy Blockchain-based personal development

contracts QS-biometric utility function imputation and tracking Maslow chains, subjectivation and actualization chains

Development Economics 2.0: CoinDrops Literacy contracts, remittances, blockchain-tracked

aid, microcredit, decentralized credit bureaus Open-source FICO scores Peer-vouched reputation

41


Politics: Legal services and Governance

42

High impact, low current activity Local government RFPs for title registries

Legal services: IP, contract registry, attestation Register contracts, agreements, wills, IP

Functionality: hash + timestamp + blockchain record

Voting: electronic ballot, identity confirmation Futarchy, delegative democracy, random sample

elections Opt-in personalized governance services

Composting vs education; digital identity system, voting, dispute resolution, basic income distribution, public document registry

Blockchain weddings (Bitcoin, Ethereum)

Sources: http://merkle.com/papers/DAOdemocracyDraft.pdf, http://www.proofofexistence.com/, https://bitnation.co/ , World’s First Blockchain Marriage: David Mondrus and Joyce Bayo, 10/5/14, ConsenSys wedding : Kim Jackson and Zach LeBeau, 11/2/15


Agenda






43


Blockchain downside and risks?ISSUE

44

Satoshi Roundtable #3: Scaling Bitcoin Milan Oct 8-9, 2016

Hacking ScandalsMt Gox, Ethereum DAO, Bitfinex

Silk Road, drug dealers, terrorists, criminals

Scalability, evolution Block size, sidechains

Mining Centralization

RESPONSE

Centralization temporary; wide-spread at higher-scale; move to 16 nm, solar/hydro-powered chips

Building resilient system constantly under open attack 24/7 (remember early Internet DNS attacks)

Blockchains are a universal technology available to all; non-criminal activity predominates

Early Internet: “this will never scale, insecure, not resilient;” Yahoo, AltaVista down for days due to DNS attacksSource: http://www.coindesk.com/bitcoin-scaling-conference-italy

Technology Risk

Perception Risk

Regulatory Risk, Economic Risk

National government regulation, bans

Governments modernizing economic infrastructure with blockchains too; licensing, open dialogue


Blockchain StrategiesLeadership Edge Blockchain is not a separate industry as

much as a new underlying technology with applications in every industry New kind of more sophisticated Internet

technology for transferring value Multiple blockchains by industry with different

classes of encryption and mining paradigms Money and financial assets Energy, health, IOT, transportation fleets

Developing a blockchain strategy Learn, including via industry user groups Engage with consulting firms Prototype, test, launch applications



Blockchain StrategiesLeading with New Applications Re-invent value chain, identify…

Digital value transfer opportunities Network intermediaries and coupling points Automation possibilities and new markets

Example: banks targeting larger customer base through blockchain-based eWallet solutions

1. Revenue-generating, customer-facing Offer blockchain-based services to clients Lead industry-wide blockchain initiatives: “Better EDI,”

single-ledger, supply chain inventory management Digital billing customer interface, tokenized interaction

2. Internal cost-savings, efficiency-improvement Quality assurance, test, audit, compliance, sales RFQ Finance, treasury, accounting, expense management



Conclusion

47

Beyond digitalizing money, payments, economics, and finance, and governance,

blockchains are a singularity-class technology that enables the secure, trackable, automated

coordination of planetary-scale projects The implications could be an orderly transition

to the automation economy and trust-rich human-machine collaboration in the digital

smartnetwork societies of the future


Thesis StatementBlockchain: a Singularity-class technology No other technology has the power to…1. …uplift 2 billion people out of poverty

overnight intermediary-free international remittances

2. …produce a safe and orderly transition to the automation economy humans and machines in collaboration,

friendly artificial intelligence enacted

3. …fundamentally transform the only remaining sectors not yet re-engineered for the Internet era: economics and politics



Decentralized Economics and Finance

Blockchain academic collaboration New Economies and Finance at the New School

Mission statement: http://blockchainstudies.org/NSNE.pdf Join: https://www.facebook.com/groups/NewEconomies

CFPs: books, special journal issues, conferences Decentralized Blockchain Economics and Finance

http://futurememes.blogspot.com/2016/09/defining-blockchain-economy-what-is.html

“Blockchain Philosophy” 4,000 words, Wiley and Sons, Metaphilosophy

http://blockchainstudies.org/Metaphilosophy_CFP.pdf Events: NY and CA

Rethink/ECONOMICS, Thursday, September 15, 7-9 pm http://www.meetup.com/NYC_Ethereum/events/233643675/

49Sources: http://blockchainstudies.org and http://blockchainstudies.org/NSNE.pdf

http://blockchainstudies.org/NSNE.pdff

http://blockchainstudies.org/NSNE.pdff






http://blockchainstudies.org/Metaphilosophy_CFP.pdf



http://www.meetup.com/NYC_Ethereum/events/233643675/




Spinoza and Crypto-Conatus

50

Conatus: perseverance as our “vital [life] force” in interacting with the environment

we encounter, our “actual essence,” where as individuals, we strive to sustain and increase our power of acting in the

world, to “affect and be affected by”

Source: Spinoza, The Collected Works of Spinoza, vol. 1, 1985, Ethics, IVP18S, IVP35c2

Spinoza, Dutch Philosopher1632-1677

Amsterdam NL, 12 Sep 2016Slides: http://slideshare.net/LaBlogga

Melanie SwanPhilosophy & Economic Theory

New School for Social Research, NY [email protected]

Blockchain SmartnetworksBlockchain 101: the Automation Economy and the Future of Money

Part of a Series on Cryptophilosophycryptophilosophy

Thank You! Questions?