My friend Sean Flynn is the author of Economics for Dummies 2nd edition, and co author of the leading College Econ textbookSo I asked him to respond to Philip Browning's question
On Monday, May 9, 2016, Philip Browning < ');" target="_blank"> > wrote:Jason,
My question; which goes to the heart of my own curiosity about blockchain…and for which I am ill equipped to answer…but I do have a hunch…
Is the economic/institutional innovation that blockchain represents the possibility that capital and labour which might have been previously competing and binary choices no longer need to be..aka a kind of emerging self-organising/self-funding platform cooperativism as a new institutional arrangement?
P
Sean Flynn:
Now, as for the blockchain, I do think it could be a force for new economic arrangements that would help harness both capital and labor in a more productive and likely fairer way.
What I have in mind is thinking back to Mesopotamia. The only ones who could use cuneiform writing were the priests. Since only they could keep records, they soon became very powerful. In particular, the temples became banks, extending commercial and other credit. Only the priests could keep the records of who owed what to whom. Same for real estate titles.
That gave them huge power. Same for our governments today, which keep track of property titles at the county level and bond certificates (which have unique serial numbers) and stock certificates (which have unique serial numbers) and Federal Reserve notes (which also have unique serial numbers) at the federal level. All these property rights have to go through the government.
Governments now also want to get rid of cash so as to be able to have an electronic record of every financial transaction on the planet.
This is an extreme concentration of power, one that makes a personal economic sphere either impossible or impoverished.
That government-imposed lack of personal spheres extends to group efforts. If the government keeps all the records, anybody who does not want to follow the government's rules will find their costs of running businesses or even making consumer purchases much higher than if they were to kowtow to the government's records-based system.
The blockchain offers a solution as it is a fully decentralized record keeping system. It can be started by anyone and joined by anyone and does not rely on the government as a certifier or approver. The blockchain offers a personal sphere of economic activity again. And I think that sort of decentralization would indeed allow capital and labor to be combined in many new, voluntary ways that would bring big benefits to the world.
Some will ask: What benefits, exactly? I would tell them that freedom is like evolution: you don't know where it is going but it ends up making many beautiful, efficient species that can coexist in an ecosystem despite being individually so very different. The blockchain will allow for innovation to bloom spontaneously and organically--quite the opposite of centralized government systems.
So that's my two cents. I hope it's helpful.
From: Jason Wong [mailto: ]
Sent: Monday, 9 May 2016 9:42 AM
To: Doc Searls < >
Cc: James Pasquale < >; Dan Miller < >; ProjectVRM list < >
Subject: Re: [projectvrm] The Scale of IBM's Blockchain offering for Finance is mind-blowing
In the blockchain economics paper from Berkman-
Entrepreneur-driven technological competition is often met with political response (Stigler 1971, Olson 1982). So we should expect that while centralized ledgers may not always be able to compete on cost, they can still compete through co- option of force, through enacting legislation or regulation to artificially drive up the cost of decentralized technologies—including by rendering them illegal (Hendrickson et al 2015, Lessig 2015). This suggests Chicago-style political economy approach based on technological competition in the context of regulatory responses (Thierer 2014).
I'm not sure those are the only options. The libeterian (or objectivist) point of view, which is the ethos of the historical core Cryptocurrency development community, is that Chicago-style political economy is crony capitalism. That is not true market competitive forces. That is why we have negative interest rates, central banks purchasing our economy- and why Bitcoin or ethereum is proving to be a hedge of this very problem of a supercycle deleveraging the global economy is experiencing.
On Friday, May 6, 2016, Doc Searls < > wrote:Good one!
Love this line: “..providing an immutable, non-reputable version of each transaction, cutting across data silos, we improve many key operational parameters, capital settlement time, number of disputes, time to resolve the dispute.” What I love is that I actually know wtf he’s saying.
Also, “Strong privacy guarantees, inherent in IBM blockchain, provide a safe way to share data while providing control over who has access to it. Decentralization makes it easy to set this up and grow as the number of participants grow.” Cool.
One thing I also get is that the blockchain in this case is not a ledger, but a journal of transaction records tied to data. This is a double-entry bookkeeping distinction that may or may not be relevant. Not sure.
Now here are four questions from a conversation last night:
1) Can we have personal blockchains? Or is that oxymoronic? (As was “personal computer” for about 40 years.)
2) If so, is a standard personal blockchain a way to bring harmony to the long list of developers working on PIMS?
3) How? Examples?
4) Anybody interested in making that happen, if it can be done? Anybody doing it already? Willing to share?
Doc
As Joyce recent articulate, sounds a lot like double entry bookkeeping
And for those of us needing a refresher course… as Doc would say a bonus link: http://www.dummies.com/how-to/content/mechanics-of-doubleentry-bookkeeping.html
Someone at Analyst Relations at IBM sent me this link to a short preso by IBM Research. It's less than 5 minutes long and the delivery style is sort of monotonous, perhaps grammatically challenged, but it is a use case for blockchain that 'splains a lot.
https://youtu.be/F0P7NM7d-ps-Dan
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