David Chaum describes the ethos of blockchain as about empowering individuals with the keys to control their digital future.
He describes another way which is about totally decentralizing the security and privacy mechanisms that are needed in the digital world to create a new version of the internet or the web. It’s the next generation of digital infrastructure, which would include decentralized security and privacy mechanisms that allow individuals to control their digital future.
Chaum is the CEO and founder of the Elixxir blockchain. He is a serial entrepreneur who first created blockchain technology in 1982 while a graduate student at the University of California Berkeley.
Chaum is also recognized as the inventor of digital cash, is a renowned expert in cryptography and secure election systems, and is a leading proponent of blockchain technology.
Chaum also founded the International Association for Cryptologic Research, the cryptography group at the Center for Mathematics and Computer Science in Amsterdam, DigiCash (issuer of eCash cyberbucks and fiat-backed digital currencies in the 90’s), and the Voting Systems Institute.
The implications of the changes expressed in the last video are many. But the first is that we are now no longer dependent upon centralized organizations to define value within society.
Because the maintenance of these databases, where value is recorded, has shifted to information networks, it is increasingly becoming possible for anyone or any group of people to set up one of these networks. It means that individuals and groups can define what they value, instead of that being defined for them. And who gets to define value within society is of critical importance.
Previously, only large centralized institutions got to define units of value. The largest of those institutions, the nation-state, got to define widely accepted currencies. But those tokens were always relative to a centralized entity. They only really defined what that centralized entity valued. A Starbucks gift card is a form of token, the RMB is a form of token, a share in Microsoft is a form of token, but all of those units of value are defined, created and managed by centralized entities according to their interest and needs.
What is changing now is that anyone, any group, can now define any form of value through the creation of a digital token on a blockchain.
That token doesn’t have to have value for some external centralized entity, it can simply represent the inherent value within a network of peers.
Tokens are generic units of value that can be used to quantify any form of valued resource. But more importantly, they can be used to define specific and distinct forms of value. This is why in a blockchain economy we have so many tokens: energy tokens, food tokens, transport tokens, social tokens and the list is ever expanding.
In such a way the token economy offers the potential to incorporate more and different kinds of value, thus giving value representation to what was previously excluded from being defined as economic activity.
The potential of this is that we may for the first time start to move towards an economic system based upon full cost accounting.
In recent years with the environmental sustainability crisis unfolding the idea of a full cost accounting economy has been presented as a solution. But to date the complexity of realizing that has been overwhelming and the tools for implementing it have remained limited.
Rapid advances in big data, complex analytics, and blockchain technology are starting to provide the technical infrastructure for an economy that may, in fact, incorporate all relevant event information and value sources, thus bring many areas of social and economic organization into token markets of change.
Tokenizing is the process of converting some asset into a token unit that is recorded on a blockchain. Anything of economic value can be tokenized and thus brought into the blockchain economy.
Today we are starting on a long journey of migrating our entire global economy to blockchain networks: real estate, commodities, supply chains, energy markets, accounting, mortgages, loans, insurance, special purpose vehicles and all kinds of derivatives are all going to migrate, one block at a time, into this new information-based economy.
As the venture capitalist Bradley Rotter Rivetz notes “everything that can be tokenized will be tokenized. The Empire State Building will someday be tokenized. I’ll buy 1% of the Empire State Building. I’ll get every day credited to my wallet 1% of the rents minus expenses. I can borrow against my Empire State Building holding. And if I want to sell the Empire State Building, I hit a button and I instantly have the money.”
With this new technology not only existing forms of valued assets will get tokenized but with advances in information technology we are quantifying and assigning value units to more and more aspects of our world and our social interactions. Token economics will be used to support these new forms of economies, whether we are talking about the emerging natural capital economy or social capital. It will be a number of years before we really have the underlining blockchain technology to do that on a large scale, but it is coming and the implications are enormous.
The point is blockchains aren’t simply extensions of existing financial and monetary systems but something truly different.
They allow us to define, quantify and exchange, new sets of values that emerge in a post-industrial economy. In so doing they allow us to expand market systems and economies as distributed management systems to coordinate more and more spheres of human activity in a decentralized fashion through peer-to-peer exchanges within digital token markets.
Blockchain is set to have a transformative effect on the very foundations of how our economies function. The study of this new form of distributed economy may be called token economics (also crypto-economics).
The primary factor to appreciate in understanding the significance of token economics is this: the most basic way in which economic data is recorded is changing.
With blockchain, the information layer upon which economies are built is changing. Therefore everything upwards of that layer will change, which is essentially everything we know about how our economies work.
Economics is, before anything, based on information. It is based on records of ownership that define who owns what and what is exchanged – what we call ledgers. Everything that exists within an advanced economy exists because it is in a ledger.
That ledger is currently maintained by those things we trust the most, which is the government and legal system.
The legal system determines who gets to make entries into those databases. It grants that power to various institutions that prove their trustworthiness to the legal system, as well as to the banks, insurance companies, hospitals, enterprises, institutional investors, etc.
These centralized authorities manage this complex set of records or databases and thus control how value is represented and flows within the economy – which is, of course, the foundation of their power and influence within society.
This centralized approach can have many advantages in terms of simplicity, speed, and efficiency. But it also means that we have to trust those institutions and we have to continuously work to constrain their powers.
Throughout the latter half of the 20th century, we converted that information into a digital format. But the structure of the system remained unchanged.
Today everything that we turned into digital data we can now move onto blockchain records, which can be understood as a form of distributed database. With this system, people can now connect to the database directly and we can automate the maintenance and updating of that data.
The trust required to maintain societies’ records of value is thus displaced from formal centralized institutions and now placed in the mathematics of cryptography, computer code and the design of networks. This means that at least theoretically, we do not need these centralized institutions to manage the data in the way that we did in the past.
The profound implication of this is that society and its economy no longer needs to be architectured around centralized institutions.
The consequences of redirecting all of these flows of information, value, and power within society, away from centralized channels and into distributed networks, are almost unimaginable. Their ramifications are so profound that none could predict the outcomes.
The surprising thing though is that this is not the dream of some radical anarchist group, but simply the consequences of a revolution in information technology.
Such an extraordinary transformation happens very rarely in human civilization as it signals the true coming of age of the information age.
The blockchain is unlike other new technologies because it taps into a deep structural transformation brought about with the move into the information age. That is to say, the rise of distributed networks as a new organizational paradigm for society, economy, and technology infrastructure.
The blockchain is not magic – as it might appear – but simply builds upon existing information and communication technologies that are enabling this deep restructuring process.
Economic forces are everywhere. They shape and structure our everyday lives. It’s how we organize people, resources, and technology to create and exchange value within society.
During the modern era those forces came to be channeled and structured within a particular set of centralized bureaucratic institutions based around the nation-state and the enterprise.
But today the proliferation of information networks is unleashing constrained economic forces.
Through ledgers and blockchain technology, the most fundamental rules governing our society are now open for redefinition, as was prior to the industrial age.
As advanced economies move out of industrial production and into a new form of global services and information economy, the economic model of the industrial age is becoming eroded.
This emerging global information and services economy will be coordinated through the internet running on an updated set of protocols that provides the secure distributed infrastructure for this emerging global token economy.
This transition builds upon major trends that began in the late 20th century which are today converging in powerful new ways. Privatization and globalization, financialization and the rise of online platforms are all converging as blockchain networks merge economics and information technology to take us into a new economic paradigm.
Privatization opened up more spheres of activity to markets.
Globalization expanded those market around the world.
Financialization connected up our real economy into an integrated information-based financial system.
The platform economy created new forms of user-generated networks.
Blockchain brings these trends together in synergistic, powerful new ways.
Hence, a new economic system is being established; one that is truly global, that reflects the underlying logic of services. This will be an economic model that is for the first time in harmony with its underlying technology of information.
These emerging token networks offer the potential to unleash a massive wave of creativity and innovation.
With trillions of dollars set to migrate to this global cloud computing and blockchain infrastructure in the coming decades, the stakes are high.
Financial and economic sovereignty appear to be slipping out of the fingers of nation states.
And the tensions are mounting.
Are we moving into a lawless chaos? Or are we moving to a historically new level of economic organization?
That will be decided by our capacity to understand this new economic paradigm coupled with our ability to design and develop new token networks of synergistic incentives.
Rethinking how we organize economic production and exchange is one of the major challenges and opportunities. Token economics is an opportunity to revisit the foundations of economic organization.
It’s an opportunity to reconstruct a new form of economy that is different from the industrial model that we know so well.
It’s an exercise that is of critical importance to the development of a sustainable model to economic development in the age of information, globalization and billions of people wishing to join a worldwide economic system, which is already showing major signs of stress.
This is no longer about politics, policies or protesting, the technology is reaching a maturity. We now stand at a point where we can design economic systems from the ground up. The success or failure of such systems does not rest with the actors in the network, but squarely with the design of the system.
Possibly for the first time ever, if we don’t like the prevailing economic system, we now have the option to design a better one.
What is so powerful about this revolution is that it is not really driven by idealism or politics but rather economic incentives. The global economy will switch to being based upon distributed blockchain networks with each actor seeing it as in their economic interest to do so.
This revolution does not require large-scale political coordination. It bypasses it. Instead, it employs a highly modular and granular transition.
Specific parts of the existing economic institutions can be upgraded and integrated into a new economic model.
Yet, this will be a profoundly disruptive transformation.
Enterprises will be automated. Whole industries will be upended by powerful new blockchain ecosystems. National governments will face mounting pressures from a global information services architecture.
This new economic paradigm promises the potential to build new forms of economic organization to deliver what people value.
It promises a more open and inclusive model that harnesses the efforts of the many instead of the few.
This video is an overview of a course on token economics, or crypto-economics, which is the study and design of economics based on blockchain technology.
The course touches upon distributed ledger technology and triple-entry accounting as well as the two primary categories of tokens: utility tokens and security tokens.
The course also addresses decentralized organizations, game theory and the design of incentive structures to align the interests of the individuals of the whole organization within user-generate networks.
As a result, token networks can be used to remove the centralized management structure of organizations while better aligning the incentive structures of producers and end users.
The course also addresses the formation of large-scale blockchain networks that span across organizations and industries to create powerful new ecosystems. Inn other words, blockchain as an infrastructure for a global-services economy.
Finally, the course addresses token networks as a way to fund their own establishment and guide their future development.
The Blockchain Art Exchange, based in London, is seeking to establish a “more democratic art market.”
The idea is that when a digital artist sells work on the Blockchain Art Exchange they will receive Blockchain Art Exchange (BAE) tokens.
Holders of BAE will receive royalty payments from every artwork sale that happens on the BAE exchange. Hence, the more sales an individual accrues, the larger the share of royalties received. In theory, emerging artists will be supported by royalties from the sales of more established artists.
The sequence is as follows:
1) Submit digital artwork for analysis.
2) The digital work is graded and given an “objective price.”
3) The digital work is uniquely identified with a blockchain certificate to prove authenticity.
4) The digital work can be exchanged instantly on the BAE platform.
Can such an idea be executed for traditional (non-digital) art forms?
This video represent a list of top 5 challenges that are common to many in the machine learning and data science community.
Scarcity of Data
The more data that can be used for modeling and predictions, the better.
This isn’t a problem for big companies, such as Facebook and Google. However, for many others, lack of sufficient data can limit their results rendering machine learning less productive.
Vague questions will not result in substantive results. Data science is about recognizing patterns. So, clear questions are fundamental to defining what types of patterns to analyze.
Unclear Representation of Data
For a data scientist, the resulting work needs to be represented to the end user in meaningful ways. There is more room for libraries to make life easier to better represent data.
Computing millions of lines of code over and over can be expensive. But it should get less expensive in the future.
Machine learning Algorithm selection
Currently, the biggest challenge in data science is the selection of the right algorithms. It’s important to understand the algorithms as well as possible to determine which ones will most benefit your project.
Artificial General Intelligence (AGI) is in the process of rewriting what it means to live on planet earth.
AGI refers to the intelligence of a machine that could successfully perform any intellectual task that a human being can.
AGI is a goal of some artificial intelligence research, as well as a science fiction topic.
Kimera Systems, Inc. offers artificial intelligence technology to observe user behavior, context, and derive a common sense set of actions to apply under specific circumstances.
Mounir Shita, Co-Founder and CEO of Kimera Systems, speaks about AGI and a vision of how to develop an economic model that benefits people rather than a handful of powerful organizations or governments.
In this brief video he discusses using token economics and blockchain to pay individuals via the devices they use, which hold data. He says it’s about financially rewarding people for living their lives.