distributed ledger

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description: a type of database that is spread across multiple sites and participants, commonly associated with blockchain technology

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Mastering Blockchain, Second Edition
by Imran Bashir
Published 28 Mar 2018

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

Both Swarm and Whisper are envisaged to be enabling technologies for Web 3.0. Distributed ledgers The concept of permissioned distributed ledgers is fundamentally different to a public blockchain. The key idea behind distributed ledgers is that they are permissioned as opposed to an open public blockchain. DLTs do not perform any mining as all the participants are already vetted and known to the network and there is no requirement for mining to secure the network. There is also no concept of digital currency on private permissioned distributed ledgers because the aim of the permissioned blockchain is different from a public blockchain.

PacktPub.com Contributors About the author About the reviewer Packt is searching for authors like you Preface Who this book is for What this book covers To get the most out of this book Download the example code files Download the color images Conventions used Get in touch Reviews Blockchain 101 The growth of blockchain technology Distributed systems The history of blockchain and Bitcoin Electronic cash Blockchain Blockchain defined Peer-to-peer Distributed ledger Cryptographically-secure Append-only Updateable via consensus Generic elements of a blockchain How blockchain works How blockchain accumulates blocks Benefits and limitations of blockchain Tiers of blockchain technology Features of a blockchain Types of blockchain Distributed ledgers Distributed Ledger Technology Public blockchains Private blockchains Semiprivate blockchains Sidechains Permissioned ledger Shared ledger Fully private and proprietary blockchains Tokenized blockchains Tokenless blockchains Consensus Consensus mechanism Types of consensus mechanisms Consensus in blockchain CAP theorem and blockchain Summary Decentralization Decentralization using blockchain Methods of decentralization Disintermediation Contest-driven decentralization Routes to decentralization How to decentralize The decentralization framework example Blockchain and full ecosystem decentralization Storage Communication Computing power and decentralization Smart contracts Decentralized Organizations Decentralized Autonomous Organizations Decentralized Autonomous Corporations Decentralized Autonomous Societies Decentralized Applications (DApps) Requirements of a Decentralized Application Operations of a DApp DApp examples KYC-Chain OpenBazaar Lazooz Platforms for decentralization Ethereum MaidSafe Lisk Summary Symmetric Cryptography Working with the OpenSSL command line Introduction Mathematics Set Group Field A finite field Order An abelian group Prime fields Ring A cyclic group Modular arithmetic Cryptography Confidentiality Integrity Authentication Entity authentication Data origin authentication Non-repudiation Accountability Cryptographic primitives Symmetric cryptography Stream ciphers Block ciphers Block encryption mode Electronic Code Book Cipher Block Chaining Counter mode Keystream generation mode Message authentication mode Cryptographic hash mode Data Encryption Standard Advanced Encryption Standard How AES works Summary Public Key Cryptography Asymmetric cryptography Integer factorization Discrete logarithm Elliptic curves Public and private keys RSA Encryption and decryption using RSA Elliptic Curve Cryptography Mathematics behind ECC Point addition Point doubling Discrete logarithm problem in ECC RSA using OpenSSL RSA public and private key pair Private key Public key Exploring the public key Encryption and decryption Encryption Decryption ECC using OpenSSL ECC private and public key pair Private key Private key generation Hash functions Compression of arbitrary messages into fixed-length digest Easy to compute Preimage resistance Second preimage resistance Collision resistance Message Digest Secure Hash Algorithms Design of Secure Hash Algorithms Design of SHA-256 Design of SHA-3 (Keccak) OpenSSL example of hash functions Message Authentication Codes MACs using block ciphers Hash-based MACs Merkle trees Patricia trees Distributed Hash Tables Digital signatures RSA digital signature algorithm Sign then encrypt Encrypt then sign Elliptic Curve Digital Signature Algorithm How to generate a digital signature using OpenSSL ECDSA using OpenSSL Homomorphic encryption Signcryption Zero-Knowledge Proofs Blind signatures Encoding schemes Financial markets and trading Trading Exchanges Orders and order properties Order management and routing systems Components of a trade The underlying instrument General attributes Economics Sales Counterparty Trade life cycle Order anticipators Market manipulation Summary Introducing Bitcoin Bitcoin Bitcoin definition Bitcoin – a bird's-eye view Sending a payment to someone Digital keys and addresses Private keys in Bitcoin Public keys in Bitcoin Addresses in Bitcoin Base58Check encoding Vanity addresses Multisignature addresses Transactions The transaction life cycle Transaction fee Transaction pools The transaction data structure Metadata Inputs Outputs Verification The script language Commonly used opcodes Types of transactions Coinbase transactions Contracts Transaction verification Transaction malleability Blockchain The structure of a block The structure of a block header The genesis block Mining Tasks of the miners Mining rewards Proof of Work (PoW) The mining algorithm The hash rate Mining systems CPU GPU FPGA ASICs Mining pools Summary Bitcoin Network and Payments The Bitcoin network Wallets Non-deterministic wallets Deterministic wallets Hierarchical Deterministic wallets Brain wallets Paper wallets Hardware wallets Online wallets Mobile wallets Bitcoin payments Innovation in Bitcoin Bitcoin Improvement Proposals (BIPs) Advanced protocols Segregated Witness (SegWit) Bitcoin Cash Bitcoin Unlimited Bitcoin Gold Bitcoin investment and buying and selling bitcoins Summary Bitcoin Clients and APIs Bitcoin installation Types of Bitcoin Core clients Bitcoind Bitcoin-cli Bitcoin-qt Setting up a Bitcoin node Setting up the source code Setting up bitcoin.conf Starting up a node in testnet Starting up a node in regtest Experimenting with Bitcoin-cli Bitcoin programming and the command-line interface Summary Alternative Coins Theoretical foundations Alternatives to Proof of Work Proof of Storage Proof of Stake (PoS) Various stake types Proof of coinage Proof of Deposit (PoD) Proof of Burn Proof of Activity (PoA) Nonoutsourceable puzzles Difficulty adjustment and retargeting algorithms Kimoto Gravity Well Dark Gravity Wave DigiShield MIDAS Bitcoin limitations Privacy and anonymity Mixing protocols Third-party mixing protocols Inherent anonymity Extended protocols on top of Bitcoin Colored coins Counterparty Development of altcoins Consensus algorithms Hashing algorithms Difficulty adjustment algorithms Inter-block time Block rewards Reward halving rate Block size and transaction size Interest rate Coinage Total supply of coins Namecoin Trading Namecoins Obtaining Namecoins Generating Namecoin records Litecoin Primecoin Trading Primecoin Mining guide Zcash Trading Zcash Mining guide Address generation GPU mining Downloading and compiling nheqminer Initial Coin Offerings (ICOs) ERC20 tokens Summary Smart Contracts History Definition Ricardian contracts Smart contract templates Oracles Smart Oracles Deploying smart contracts on a blockchain The DAO Summary Ethereum 101 Introduction The yellow paper Useful mathematical symbols Ethereum blockchain Ethereum – bird's eye view The Ethereum network Mainnet Testnet Private net Components of the Ethereum ecosystem Keys and addresses Accounts Types of accounts Transactions and messages Contract creation transaction Message call transaction Messages Calls Transaction validation and execution The transaction substate State storage in the Ethereum blockchain The world state The account state Transaction receipts Ether cryptocurrency / tokens (ETC and ETH) The Ethereum Virtual Machine (EVM) Execution environment Machine state The iterator function Smart contracts Native contracts Summary Further Ethereum Programming languages Runtime bytecode Opcodes and their meaning Arithmetic operations Logical operations Cryptographic operations Environmental information Block information Stack, memory, storage, and flow operations Push operations Duplication operations Exchange operations Logging operations System operations Blocks and blockchain The genesis block The block validation mechanism Block finalization Block difficulty Gas Fee schedule Forks in the blockchain Nodes and miners The consensus mechanism Ethash CPU mining GPU mining Benchmarking Mining rigs Mining pools Wallets and client software Geth Eth Pyethapp Parity Light clients Installation Eth installation Mist browser Geth The geth console Funding the account with bitcoin Parity installation Creating accounts using the parity command line APIs, tools, and DApps Applications (DApps and DAOs) developed on Ethereum Tools Supporting protocols Whisper Swarm Scalability, security, and other challenges Trading and investment Summary Ethereum Development Environment Test networks Setting up a private net Network ID The genesis file Data directory Flags and their meaning Static nodes Starting up the private network Running Mist on private net Deploying contracts using Mist Block explorer for private net / local Ethereum block explorer Summary Development Tools and Frameworks Languages Compilers Solidity compiler (solc) Installation on Linux Installation on macOS Integrated Development Environments (IDEs) Remix Tools and libraries Node version 7 EthereumJS Ganache MetaMask Truffle Installation Contract development and deployment Writing Testing Solidity language Types Value types Boolean Integers Address Literals Integer literals String literals Hexadecimal literals Enums Function types Internal functions External functions Reference types Arrays Structs Data location Mappings Global variables Control structures Events  Inheritance Libraries Functions Layout of a Solidity source code file Version pragma Import Comments Summary Introducing Web3 Web3 Contract deployment POST requests The HTML and JavaScript frontend Installing web3.js Example Creating a web3 object Checking availability by calling any web3 method Contract functions Development frameworks Truffle Initializing Truffle Interaction with the contract Another example An example project – Proof of Idea Oracles Deployment on decentralized storage using IPFS Installing IPFS Distributed ledgers Summary Hyperledger Projects under Hyperledger Fabric Sawtooth Lake Iroha Burrow Indy Explorer Cello Composer Quilt Hyperledger as a protocol The reference architecture Requirements and design goals of Hyperledger Fabric The modular approach Privacy and confidentiality Scalability Deterministic transactions Identity Auditability Interoperability Portability Rich data queries Fabric Hyperledger Fabric Membership services Blockchain services Consensus services Distributed ledger The peer to peer protocol Ledger storage Chaincode services Components of the fabric Peers Orderer nodes Clients Channels World state database Transactions Membership Service Provider (MSP) Smart contracts Crypto service provider Applications on blockchain Chaincode implementation The application model Consensus in Hyperledger Fabric The transaction life cycle in Hyperledger Fabric Sawtooth Lake PoET Transaction families Consensus in Sawtooth The development environment – Sawtooth Lake Corda Architecture State objects Transactions Consensus Flows Components Nodes The permissioning service Network map service Notary service Oracle service Transactions Vaults CorDapp The development environment – Corda Summary Alternative Blockchains Blockchains Kadena Ripple Transactions Payments related Order related Account and security-related Interledger Application layer Transport layer Interledger layer Ledger layer Stellar Rootstock Sidechain Drivechain Quorum Transaction manager Crypto Enclave QuorumChain Network manager Tezos Storj MaidSafe BigchainDB MultiChain Tendermint Tendermint Core Tendermint Socket Protocol (TMSP) Platforms and frameworks Eris Summary Blockchain – Outside of Currencies Internet of Things Physical object layer Device layer Network layer Management layer Application layer IoT blockchain experiment First node setup Raspberry Pi node setup Installing Node.js Circuit Government Border control Voting Citizen identification (ID cards) Miscellaneous Health Finance Insurance Post-trade settlement Financial crime prevention Media Summary Scalability and Other Challenges Scalability Network plane Consensus plane Storage plane View plane Block size increase Block interval reduction Invertible Bloom Lookup Tables Sharding State channels Private blockchain Proof of Stake Sidechains Subchains Tree chains (trees) Block propagation Bitcoin-NG Plasma Privacy Indistinguishability Obfuscation Homomorphic encryption Zero-Knowledge Proofs State channels Secure multiparty computation Usage of hardware to provide confidentiality CoinJoin Confidential transactions MimbleWimble Security Smart contract security Formal verification and analysis Oyente tool Summary Current Landscape and What's Next Emerging trends Application-specific blockchains (ASBCs) Enterprise-grade blockchains Private blockchains Start-ups Strong research interest Standardization Enhancements Real-world implementations Consortia Answers to technical challenges Convergence Education of blockchain technology Employment Cryptoeconomics Research in cryptography New programming languages Hardware research and development Research in formal methods and security Alternatives to blockchains Interoperability efforts Blockchain as a Service Efforts to reduce electricity consumption Other challenges Regulation Dark side Blockchain research Smart contracts Centralization issues Limitations in cryptographic functions Consensus algorithms Scalability Code obfuscation Notable projects Zcash on Ethereum CollCo Cello Qtum Bitcoin-NG Solidus Hawk Town-Crier SETLCoin TEEChan Falcon Bletchley Casper Miscellaneous tools Solidity extension for Microsoft Visual Studio MetaMask Stratis Embark DAPPLE Meteor uPort INFURA Convergence with other industries Future Summary Another Book You May Enjoy Leave a review – let other readers know what you think Preface This book has one goal, to introduce theoretical and practical aspects of the blockchain technology.

pages: 348 words: 97,277

The Truth Machine: The Blockchain and the Future of Everything
by Paul Vigna and Michael J. Casey
Published 27 Feb 2018

* Addressing an inconsistency in popular parlance, we generally employ three distinct usages of the word “blockchain”: “The blockchain,” which refers to Bitcoin’s original distributed ledger; “a blockchain”—or, pluralized, “blockchains”—to cover a variety of more recent distributed ledgers that share Bitcoin’s chain-of-blocks structure; and “blockchain technology,” referring to the overall field. We also use “distributed ledger technology” to encompass both blockchain and non-blockchain distributed ledgers. We mostly avoid the popular construct of “blockchain” as a non-countable noun. We view a blockchain, like any ledger, as a distinct, identifiable thing, not a process.

R3 CEV, a New York–based technology developer, for one, raised $107 million from more than a hundred of the world’s biggest financial institutions and tech companies to develop a proprietary distributed ledger technology. Inspired by blockchains but eschewing that label, R3’s Corda platform is built to comply with banks’ business and regulatory models while streamlining trillions of dollars in daily interbank securities transfers. The non-finance corporate world is also getting engaged. Hyperledger is a distributed ledger/blockchain-design consortium looking to develop standardized, open-source versions of the technology for businesses to use in areas such as supply-chain management.

In some respects, a blockchain represents the automation of the abstract system, so as to arrive at a more searchable model of the Torrens system. But building a distributed ledger that way requires the accumulation of sales events to build up the record, which could take generations before it’s meaningful. The easier thing to do, then, for a reform-minded government, is to hire a startup that’s willing to go through the process of converting all of an existing registry, if one exists, into a digital format that can be recorded in a blockchain. Either way, obviously, there’s a lot of legwork involved.The impact of a distributed ledger for ownership records would be immense. The title insurance business, by which firms provide guarantees to homeowners that they’ll cover their losses if something faulty is later found with their property rights, would wither and die.

pages: 309 words: 54,839

Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts
by David Gerard
Published 23 Jul 2017

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

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

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

pages: 161 words: 44,488

The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology
by William Mougayar
Published 25 Apr 2016

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

With Satoshi’s abstract still in your mind, let us dive deeper with three different but complementary definitions of the blockchain: a technical, business, and legal one. Technically, the blockchain is a back-end database that maintains a distributed ledger that can be inspected openly. Business-wise, the blockchain is an exchange network for moving transactions, value, assets between peers, without the assistance of intermediaries. Legally speaking, the blockchain validates transactions, replacing previously trusted entities. TECHNICAL Back-end database that maintains a distributed ledger, openly. BUSINESS Exchange network for moving value between peers. LEGAL A transaction validation mechanism, not requiring intermediary assistance.

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

pages: 515 words: 126,820

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World
by Don Tapscott and Alex Tapscott
Published 9 May 2016

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

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

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

Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies
by Nik Bhatia
Published 18 Jan 2021

Blocks become chained together during this process to leave an accounting record, the Bitcoin blockchain, for all peers to witness. The term blockchain has grown in popularity, but distributed ledger technology is a simpler way to describe a network structure whereby all peers keep a ledger, or a record of transactions. For this reason, the term Distributed Ledger Technology (DLT) has been adopted by central banking research departments to describe software that mimics Bitcoin’s original distributed ledger design. How much BTC does a miner earn when successfully mining a block, and who determined the supply of BTC? The next component of Satoshi’s elaborate design lies in Bitcoin’s monetary policy, or the rules around the supply of BTC and how it comes into existence.

Atomic Swaps Understanding the atomic swap and its role in the future of money requires the amalgamation of three elements discussed in this book: Lightning Network, Hashed TimeLock Contracts (HTLCs), and Distributed Ledger Technology (DLT). We’ll quickly review the key aspects of each, and then show how they all fit together. Lightning Network is a network of BTC users that can transact instantly with each other instead of having to wait ten minutes for the next block to be mined. This is possible thanks to smart contracts called HTLCs. Separately, Distributed Ledger Technology (DLT) is a term that mainstream academia and central bank research departments use to describe Bitcoin-inspired software.

“A Primer on the GCF Repo® Service,” Federal Reserve Bank of New York Staff Reports, no. 671, April 2014, revised May 2014. https://www.newyorkfed.org/medialibrary/media/research/ staff_reports/sr671.pdf Bagehot, Walter. Lombard Street: A Description of the Money Market. New York: Scribner, Armstrong & Co, 1873. Bank of Canada and Monetary Authority of Singapore. Jasper–Ubin Design Paper, “Enabling Cross-Border High Value Transfer Using Distributed Ledger Technologies,” 2019. https://www.accenture.com/_acnmedia/PDF-99/Accenture-Cross-Border-Distributed-Ledger-Technologies.pdf Bank of International Settlements. “Central bank digital currencies: foundational principles and core features, Bank of Canada, European Central Bank, Bank of Japan, Sveriges Riksbank, Swiss National Bank, Bank of England.”

pages: 492 words: 118,882

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory
by Kariappa Bheemaiah
Published 26 Feb 2017

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

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

One where large banks exist alongside new entrants who compete across the value chain.” The speech goes on to describe five steps that will be put in place simultaneously over the course of the year to enable the FinTech transformation of banking. These steps include the testing of new proofs of concept, the use of a distributed ledger, and the launch of a FinTech accelerator which will help boost the partnership between the Bank and selected FinTech companies. The point of displaying excerpts of Carney’s speech is not just to show his forward thinking mentality or his vision of the future of finance. It is to show that the fragmentation of banking is already underway in the more subtle and decorous guise of technological change.

pages: 661 words: 185,701

The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance
by Eswar S. Prasad
Published 27 Sep 2021

Third, their proofs (the mechanics by which an individual transaction selected from a large group can be verified using only a sparse amount of information) and management require only small amounts of information to be transmitted across networks. The third aspect constitutes the distinctive benefit of Merkle trees since the first two could be accomplished simply by concatenating a set of transactions and hashing them sequentially. Distributed Ledger Technology Another technology that predates Bitcoin but has been reshaped by it is distributed ledger technology (DLT), which does not involve cryptography. DLT takes the form of electronic databases that are maintained simultaneously and synchronized across a number of nodes (computers) on a network. The network, which is composed of many nodes, has no central point of authority.

See also venture capital Proof of Stake protocol, 152–155, 197 Proof of Work protocol, 120–122, 124–125, 128, 129, 134, 135, 138–142, 152–155 QR code-based payment technology, 84, 85f, 88 quantitative easing, 108, 313 real-time gross settlement system (RTGS), 46–47, 48, 195, 269–270, 271, 283, 351 regulations: blind spots in, 327–329; cash acceptance, 232, 239, 241–245; cash undermining adherence to, 230–231; central bank implementation of, 317–318, 326–342; cryptocurrency, 151, 156–157, 165, 168, 170–171, 175–182, 185–186, 257, 405–406n; in developing economies, 15–16, 17, 78–79, 88, 352; digital lending, 78–79; financial system oversight and, 6–7, 45, 49, 102–103, 185–186, 318, 326–342, 352; Libra, 170, 171; microinsurance, 82; payment and settlement system, 15–16, 88, 89, 327–329, 331–332, 334–335; regulatory sandboxes of, 336–342, 352, 448–449n; risk-innovation balance with, 335–342; securities, 165, 168, 179, 257, 289, 368n; shadow finance, 49–50, 52–53, 368n; technology effects on, 332–335 remittances, 16, 67–68, 91–92, 174, 311, 343, 371n Ripple or XRP, 90–91, 135 risk: CBDC benefits weighed against, 235–238, 349–353; central banks balancing innovation with, 14, 335–342, 352; counterparty, 9, 199, 328; credit default, 271; default, 70, 75, 183; diversification mitigating, 36–37; financial system, 6–7, 35–38, 42–44, 184–186, 355; Fintech benefit trade-offs with, 17, 56–57, 78–79, 100–105, 335, 355; insurance assessing, 36, 80; interest rates reflecting, 56; Libra benefit trade-offs with, 174–175; at macro level, 37–38; of mobile money, 67–68; of peer-to-peer lending, 70–71, 78–79; settlement, 271, 273; in shadow financial system, 53; SWIFT, 281–282 Russia: cash in, 31, 32f–33f, 33, 218; cryptocurrencies in, 140–142, 141f, 257–258; economic reliance on oil, 37, 282; global distribution of money, 30f; payment systems in, 281, 282, 284–285, 298, 309; US sanctions on, 257, 258, 282, 284, 309 Saudi Arabia, 37–38, 272–273, 298 savings: deposit insurance for, 18, 100, 227–228; deposits into, 26, 28, 52; Fintech changes to, 8, 16; global capital markets and, 6, 287–288; interest rates on, 35, 202, 204, 206, 322–323; maturity transformation of, 39, 98; in shadow financial institutions, 52; transformation into investments, 34–35 securitization, 43–44, 367n Security Token Offerings (STOs), 167–168 seed capital, 50–52, 368–369n, 400n seigniorage, 219–220, 222, 414n SHA-256 hash function, 113, 115, 121, 386n shadow economy, 214–217, 347, 412–413n shadow finance, 49–53, 326, 367n, 368–369n Singapore, 11, 164, 195, 265–268, 270–272, 283, 336–337, 341, 350, 449n smart contracts, 159–162, 161f, 173, 182–187, 253, 398n smart money, 223–224, 238 Somalia, 67–68, 371n South Africa, 54 South Korea, 30f–31f, 177, 341 Spain, 91, 92, 93–94, 215, 295 Special Drawing Rights (SDRs), 304–307, 308, 441n stablecoins, 10, 155–157, 169, 173, 201, 287, 296, 300–301, 311–312, 351 Sweden: cash in, 3, 4f, 11, 31, 32f–33f, 46, 210–211, 218, 221f, 233, 244, 254–255; CBDCs in, 4, 12–13, 196, 198–199, 216–217, 229, 243, 246, 254–257, 321, 350; finance changes in, 5; interest rates in, 320–321; legal tender in, 242–243, 244; monetary policy in, 320–321; payment systems in, 46 SWIFT (Society for Worldwide Interbank Financial Telecommunication), 48, 280–285, 308, 433n, 435n Switzerland, 30, 30f–31f, 164, 239–240 synthetic hegemonic currency (SHC), 301–302 System for Transfer of Financial Messages (SPFS), 284 Taiwan, 31f Tanzania, 78 taxes: cash to evade, 13, 214–217, 230, 345, 412–413n; CBDCs and, 198, 216–217, 262; cryptocurrencies and, 175, 178, 180, 262; in developing economies, 345, 346, 348; fiat currencies for, 25 technology: blockchain (see blockchain technology); distributed ledger (see distributed ledger technology); environmental effects of, 138–142; financial (see Fintech); historical revolutions of, 61–62; international monetary system effects of, 279–280; network effects of, 21, 64, 102, 311, 335, 354–355; neutrality and interoperability of, 252, 283; payment system, 48–49, 280–285; regulatory effects of, 332–335; SWIFT, 283 Tether, 155–157, 175, 351 text messages, 65, 83 Thailand, 273, 283 traveler’s checks, 28–29 trust and confidence: in banks and financial institutions, 18, 40, 56, 97, 106, 108, 227–228, 324, 327; in Bitcoin, 20, 56, 107, 112, 119–120, 127–129, 136; in cash, 19, 127–128, 320; in CBDCs, 228, 246–247, 271–272, 320; in central banks, 11, 17–18, 19, 347, 348, 356; in cryptocurrencies, 20, 56, 173, 358–359; in fiat currencies, 25, 227; in financial system, 17–21, 55–56, 108; in inside money, 27; in Libra, 173; in payment and settlement systems, 11, 18–21, 46–47, 56, 84, 86–87, 88, 107, 112, 119–120, 127–129, 136, 271–272, 324, 358–359; without trusted authority, 19–21, 55–56, 106–107, 119–120, 271 Tunisia, 245 Turkey, 284 Ukraine, 245 unemployment, 13, 37, 202–203, 313, 316–317 Unified Payments Interface (UPI), 87–88, 335, 380n United Arab Emirates, 272–273 United Kingdom: cash in, 32f–33f, 218–219, 222; CBDCs in, 14, 266, 270, 350; cryptocurrencies in, 162, 164, 264–265; digital banks in, 69; global distribution of money, 30, 30f–31f; legal tender in, 241–242; payment systems in, 91–92, 270, 285; peer-to-peer lending in, 71; pound as vehicle currency, 286; regulatory sandbox in, 336–337, 341, 449n; smart contract legislation in, 162; trade deficit of, 7 United States: banks and financial institutions in, 45, 62, 69, 97, 100, 330–331, 384n; cash in, 12, 32, 32f–33f, 219, 221f, 222, 223, 225, 231–234, 239, 241, 412n, 414n; CBDCs in, 14, 222, 274; credit and debit cards in, 86; crisis management in, 330–331; crowdfunding in, 72–73; cryptocurrencies in, 156–157, 162–165, 168, 170, 173, 176–182, 405–406n; deposit insurance in, 100, 227–228; dollar as vehicle currency, 286–287; dollar dominance and challenges in international monetary system, 277–280, 296–311, 312, 357, 440n, 442n; dollar valuation in, 131; finance changes in, 5; financial inclusion in, 54, 236, 416–417n; financial system regulation in, 102, 338–340; Food Stamp Program in, 223; global distribution of money, 29–30, 30f–31f; gold standard in, 25, 193; insurance in, 80–82; interest rates in, 13, 17, 108, 202, 278, 291, 323, 330, 410n; legal tender in, 241; loans / lending systems in, 69–73, 78, 377n; monetary aggregates in, 28–29; monetary policy in, 13, 16–17, 108, 202, 278–279, 291, 313, 316, 323, 410n; payment systems in, 47, 83–84, 88–89, 92–94, 103–104, 351, 379n; regulatory sandboxes in, 338–340, 448n; sanctions by, 257, 258, 260, 262, 279, 282–285, 295, 296–297, 309, 433n; SDR opposition by, 306–307; shadow economy in, 215, 216; shadow financial system in, 326; smart contract legislation in, 162; spillover effects from, 278–279, 291, 343; SWIFT influence of, 281–285, 433n; trade deficit of, 7, 279, 303 Uruguay: cash in, 244–245; CBDCs in, 4, 12, 200, 245, 247–249, 344, 347, 351, 422–423n; dollarization of, 344; financial inclusion in, 200, 244; legal tender in, 244–245; payment systems in, 345, 422–423n vehicle currencies, 285–287 Venezuela, 257, 259–262, 309, 344, 345, 346 Venmo, 83–84, 103–104, 196, 217 venture capital, 50–52, 368–369n, 400n wealth management, 94–96, 103 WeChat Pay, 13, 84–87, 199, 251, 253 XRP or Ripple, 90–91, 135 Yemen, 16 Zcash, 158–159, 397n Zimbabwe, 17, 371n

The transparency and decentralized nature of DLTs are essential elements of the technology’s security. There is no central point of failure, making the network less vulnerable to certain types of cyberattacks; the loss of one or even a few nodes does not pose a threat to the network at large. Moreover, it would be difficult for a malicious agent to meddle with the distributed ledger since any changes to one copy of the ledger would be visible to the entire network. Transparency is also relevant for broader uses of DLT. Public knowledge of the status of an invoice or payment at a given moment—the point it has reached in the flow of information—makes it easier to enforce accountability for speed.

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Radical Technologies: The Design of Everyday Life
by Adam Greenfield
Published 29 May 2017

At the same conference, Szabo also apparently presented “an ambitious project in which all property is embedded with information about who owns it”; see the discussion of smart property that follows. 7.See the comments of Vili Lehdonvirta and Robleh Ali, Government Office for Science. “Distributed Ledger Technology: Beyond blockchain,” 2016, p. 41, gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf. 8.Michael Del Castillo, “Prenup Built in Ethereum Smart Contract Rethinks Marriage Obligations,” CoinDesk, June 1, 2016. 9.Chrystia Freeland, “When Labor Is Flexible, And Paid Less,” International Herald-Tribune, June 28, 2013. 10.Stafford Beer, “What Is Cybernetics?”

Separating Revolution from Evolution,” CoinDesk, May 17, 2016; see also Chris Skinner, “Will the Blockchain Replace SWIFT?,” American Banker, March 8, 2016. 19.Simon Taylor, “Chapter 1: Vision,” in Government Office for Science, “Distributed Ledger Technology: Beyond blockchain,” 2016, pp. 20–30, gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf. 20.Vitalik Buterin, “Bitcoin Multisig Wallet: The Future of Bitcoin,” Bitcoin Magazine, March 13, 2014. 21.Slock.it UG, “DAO,” undated, slock.it/dao.html. 22.At least, they intend to do so. The developers of the Eris DAO platform appear to regard this process as a mere formality, and therefore “incorporation and other legal matters will be dealt with at a later date”: Dennis McKinnon, Casey Kuhlman, Preston Byrne, “Eris—The Dawn of Distribute Autonomous Organizations and the Future of Governance,” hplusmagazine.com, June 17, 2014. 23.Aaron Wright and Primavera di Filippi.

And again, because every participant in the network holds their own local copy of the blockchain, at no point is there the slightest need for transactions to be checked against any central registry or clearinghouse. The entire network works to maintain and protect the blockchain: its shared, public, distributed ledger. Once a block has been confirmed by the network and added to the blockchain, all of the transactions bundled into it are considered to have been settled; from this point forward, they are a part of the permanent record. For very low-value transactions, this is where the story ends; a single-pass confirmation is sufficient to ensure that they probably won’t be overturned.

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Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives)
by David Birch
Published 14 Jun 2017

It made me think that in the great sweep of things the replacement of stuff of some kind by records of some kind goes back a lot further – to the grain banks of ancient Babylonia and to the marks made on cuneiform clay tablets – and extends right up to the present day, where there are fascinating discussions going on around the use of cryptography to manage distributed ledgers. Was paper money as big a technological breakthrough as the clay tablet was to ancient Babylon or the blockchain may be to the pervasive Internet? The interaction between money and the technology of money is more complex and less well understood than you might think, given just how long both have been around.

As a new technology, however, they soon began to exhibit some unforeseen characteristics (in the context of their record-keeping function). During the extended period of use of any technology, creative people come along and find new ways to use the technology in different times and in different cultural contexts. Tally sticks were a form of distributed ledger to record debt, and were soon being used as money. Tally-ho! By the time of the reign of Henry II (who died in France in 1189) the exchequer was already a sophisticated and organized department of the king’s court, with an elaborate staff of officers. The use of tallies to enable this operation had an interesting consequence.

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

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Machine, Platform, Crowd: Harnessing Our Digital Future
by Andrew McAfee and Erik Brynjolfsson
Published 26 Jun 2017

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

This volatility made the digital currency interesting for risk-tolerant investors†† but unsuitable as a mainstream means of exchange or store of value. While the debate about Bitcoin’s ability to ever be a true currency was unfolding, a small group of people began to make a different point: that the truly valuable innovation was not the new digital money, but instead the distributed ledger that it rested on. It was the blockchain that really mattered, not Bitcoins. Bitcoin’s tumultuous history was evidence that the blockchain could actually work. For years, it functioned as designed: as a completely decentralized, undirected, apparently immutable record of transactions.‡‡ The transactions it was originally intended to record were limited to the mining and exchange of Bitcoins, but why stop there?

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

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Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond
by Chris Burniske and Jack Tatar
Published 19 Oct 2017

Nimble cultures are key to succeeding in the early stages of a disruptive technology, and if the startup is tainted by corporate bureaucracy, then it will quickly lose its edge. Circle the Wagons Industry consortiums have been extremely popular among incumbents investigating how to apply distributed ledger technology to their industry. On one hand, a consortium makes perfect sense, as a distributed ledger needs to be shared among many parties for it to have any use. A collaborative consortium helps financial services companies—many of which have historically been competitors that keep their business processes close to their chest—learn how to share.

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

Remember that proof-of-work is a mechanism whereby all the computers building Bitcoin’s blockchain remain in sync on how to construct it. BLOCKCHAIN, NOT BITCOIN Articles like one from the Bank of England in the third quarter of 2014 argued, “The key innovation of digital currencies is the ‘distributed ledger,’ which allows a payment system to operate in an entirely decentralized way, without intermediaries such as banks.”11 In emphasizing the technology and not the native asset, the Bank of England left an open question whether the native asset was needed. At the Inside Bitcoins conference in April 2015,12 many longtime Bitcoiners commented on how many Wall Street suits were in attendance.

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Robot Rules: Regulating Artificial Intelligence
by Jacob Turner
Published 29 Oct 2018

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

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

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

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The Curse of Cash
by Kenneth S Rogoff
Published 29 Aug 2016

Because the technology is evolving so rapidly, I am hesitant to go into much more detail, beyond saying that phasing out paper currency does not really move the needle much on society’s vulnerability to cybercrime. Some of the present-day obstacles to improving security are really more political than economic. Some innovations in security, such as the potentially disruptive distributed-ledger technology embodied in cryptocurrencies like Bitcoin or Ethereum, may eventually lead to major improvements in financial security, at least at the core of the payment system, as discussed further in chapter 14. It is particularly hard to see in any of these arguments why large-denomination notes are important.

This is hardly a desirable state of global governance but is not an issue I aim to tackle here. CHAPTER 14 Digital Currencies and Gold When I suggest to people that there might be benefits to phasing out paper currency, they almost invariably assume I am advocating a cryptocurrency like Bitcoin and are a bit disappointed to find out otherwise.1 No doubt anyone who looks at distributed-ledger technologies has to be excited about their potential applications in financial services and record keeping in general. For the foreseeable future, however, the best system is one in which a government-issued currency is the unit of account, though of course it will eventually morph into a fully electronic one.

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

Data and the City
by Rob Kitchin,Tracey P. Lauriault,Gavin McArdle
Published 2 Aug 2017

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

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

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

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The Bitcoin Guidebook: How to Obtain, Invest, and Spend the World's First Decentralized Cryptocurrency
by Ian Demartino
Published 2 Feb 2016

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

Bitcoin is a useful tool and people will find uses for it, both good and bad. I suspect criminal activities surrounding digital currencies will only get more advanced in the future, but at the same time, so will legitimate investments and innovations. Bitcoin is many things. It is an online currency, a distributed ledger, and a decentralized network. And yet it may also become the fulfillment of the predictions, desires, and even fears of the early pioneers of the Internet. 1 “Statistics and Facts about Online Shopping.” Statista. June 2014. Accessed May 19, 2015. http://www.statista.com/topics/2477/online-shopping-behavior/. 2 Lewis, Peter H.

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

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The Levelling: What’s Next After Globalization
by Michael O’sullivan
Published 28 May 2019

The starting point in this challenge is for people, rather than their leaders, to decide what they want from politics. One of the best examples of how this can be done lies with the example of the Levellers. * Distributed ledger technology “allows simultaneous access, validation and record updating… across a network spread across multiple entities or locations. [It is] more commonly known as the blockchain technology.” “Distributed Ledger Technology,” Investopedia, https://www.investopedia.com/terms/d/distributed-ledger-technology-dlt.asp. * What I have in mind here is that some countries condone and accept practices in areas like genetic editing that are not commonly or legally accepted around the world.

For instance, the December 2017 spike in the price of bitcoin was accompanied by a raft of new research opinions on the cryptocurrency from new cryptocoin brokers and large banks. For what it is worth, my own view on cryptocurrencies is that the future will be characterized as “Blockchain everywhere, bitcoin nowhere”—that is, the distributed ledger technology behind bitcoin will become more pervasive across economic sectors, but bitcoin will fail to prove itself as a currency proper and will live out an existence as a lurid, speculative asset.* To return to the business of forecasting, I am also often struck by the number of times that bodies like the IMF and central banks follow up a crisis or market event with a downward adjustment to their GDP forecasts.

Many people might not be overly concerned if their Yahoo account was hacked but would be upset to find that their medical data had fallen into the wrong hands or was being used against them, by insurance companies, for instance. This suggests the need for tougher regulation of personal data, and it also points the way toward new technologies such as blockchain (i.e., distributed ledger technology) being deployed to protect data, and of the need to think about how fifth-generation telecommunications networks are protected. With blockchain, data is much more secure, and data owners can explicitly give permission for the use of their data (e.g., to doctors or pharmacists in the case of medicine).

Demystifying Smart Cities
by Anders Lisdorf

It is well suited to problems that have a network structure to them since it is optimized for identifying relationships between observations like social networks, criminal investigations, fraud detection, and so on. Block chain The block chain is actually also a way of storing data. It operates with a so-called distributed ledger, which means that everyone has the same ledger and operates on it. The same could in principle be done with a file that everyone shared, but the block chain has been optimized for synchronizing data between copies and doing it in a format that makes it impossible to alter afterward. This is called non-repudiation in technical terms and refers to the possibility of proving transactions.

If everybody works on the same shared data source, how can we determine which version is correct? This is a particularly prominent problem when it comes to transactions of property. This is being done today of course by banks, but it requires an elaborate system to clear that a transaction is correct and make it official. Once a transaction has been stored in the distributed ledger, it can no longer be disputed or reversed in any way, and it is free and open for anyone to see that it has been done. This is why block chain is good for problems where trust and validating data is an issue. As a general storage option, it has serious drawbacks because it is very slow. From the time a transaction is made until it is validated by the block chain, it can take minutes.

From the time a transaction is made until it is validated by the block chain, it can take minutes. For the original Bitcoin block chain, it was around 10 minutes. Other block chains have been developed that are faster, but it will never be able to compete with any other storage technology in terms of latency. It is also very costly in terms of processing, since all nodes in the distributed ledger need to process everything and generate new blocks. For an over view of pros and cons of different data storage technologies see table 4-1.Table 4-1Pros and cons for data storage options Technology Pro Con Ideal Use Object storage Cheap storage, simple, scalable Difficult to search and query Large unstructured files like pictures, video, and sound RDBMS Flexible, multipurpose, easy to query, quick to develop new solutions Not good for massive amounts of data; schemas need to be defined in advance Reporting, transactions, applications Document database Scalable, no schema definition needed, low latency Not good for analytical queries Storing messages Key value store Low latency even with very large amounts of data, highly scalable Not flexible, requires a lot of development work Transactions, measurements, managing online sessions Graph databases Good for discovery problems Addresses only limited set of use cases Discovery of relationships between entities Block chain Distributed and not centralized, not possible to tamper with recorded data Very high latency, not scalable, and limited in types of data Data that can be disputed Data access Data stored in a database is not very valuable if it is not being used.

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The Big Nine: How the Tech Titans and Their Thinking Machines Could Warp Humanity
by Amy Webb
Published 5 Mar 2019

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

See also names of specific companies Future and AI, optimistic scenario of, 151, 155–178, 233; architectural trends, 171–172; brain-to-machine interfaces, 176–177; business management, 166; China adoption of GAIA norms and standards, 172; computational pharmacists and pharmacies, 173; construction and building industries, 165; Contributing Team Member Test, 169, 171, 175; crime, 172, 175–176; cubesat networks, 168; Dartmouth inaugural intergovernmental forum, 157–158; dating, sex, and marriage, 164–165, 174; education, 167; face recognition payment options in stores, 162; Federal Smart Infrastructure Administration (FSIA), 176; filmmaking, 165–166; first artificial general intelligence system (AGI), 169–171; G-MAFIA actions against China’s nefarious AI use, 156; G-MAFIA addressing climate change, 171–172; G-MAFIA Coalition adoption of transparency as core value, 157; G-MAFIA Coalition formalization, 157; G-MAFIA privacy commitment, 168; G-MAFIA mixed reality products and services partnerships, 160–161, 165; G-MAFIA nudging toward healthier lifestyles, 162–163; GAIA (Global Alliance on Intelligence Augmentation) and, 158, 159, 176; GAIA decision and actions to prevent ASI creation, 177–178; GAIA regular meetings, 160; genome sequencing, 174; grocery shopping and delivery services, 161–162; health care systems, 163–164, 173–174; home AI systems and appliances, 161, 172–173; job displacement and AGI, 172; journalism, 167–168, 175; law enforcement, 176; meal-kit services linked to household PDR, 162; music, 174–175; new types of criminal activity and AGI, 172; PDR individual ownership 159; PDRs treated as distributed ledgers, 159; PDRs and privacy, 168; Project Hermione (AGI), 169–171; quick-service stores, 162; robotic pets, 162; sensory computation, 160; smart camera surveillance in retail stores, 162; smart city pilot programs, 168, 176; 2049, 169–177; 2069, 177–178; 2029, 159–169; U.S. government AI funding, 156; workforce preparation for computing’s third era, 157.

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

pages: 430 words: 68,225

Blockchain Basics: A Non-Technical Introduction in 25 Steps
by Daniel Drescher
Published 16 Mar 2017

Among others, Daniel holds a doctorate in econometrics from the Technical University of Berlin and an MSc in software engineering from the University of Oxford. About the Technical Reviewer Laurence Kirk who after a successful career writing low latency financial applications for the City of London, was captivated by the potential of distributed ledger technology. He moved to Oxford to study for his master’s degree and set up Extropy.io, a consultancy working with start- ups to develop applications on the Ethereum platform. Passionate about distributed technol- ogy, he now works as a developer, evangelist, and educator about Ethereum.

Review of the Tasks of Designing a Distributed Peer-to-Peer System for Managing Ownership Task Number Goal Step Number Major Concept 1 Describing Ownership 9 History of Transaction Data 2 Protecting Ownership 10–13 Digital Signature 3 Storing Transaction Data 10, 11, 14, 15 Blockchain-Data-Structure 4 Preparing Ledgers for 16 Immutability Being Distributed 5 Distributing Ledgers 17 Information Forwarding in Networks 6 Adding New Transactions 18 Blockchain-Algorithm 7 Deciding Which Ledger 19 Distributed Consensus Represents the Truth It is important to understand that these major concepts that make up the blockchain rely on other concepts and technologies.

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

pages: 434 words: 77,974

Mastering Blockchain: Unlocking the Power of Cryptocurrencies and Smart Contracts
by Lorne Lantz and Daniel Cawrey
Published 8 Dec 2020

However, some organizations don’t particularly see the benefit of this. Permissionless systems need accounts, payments, and cryptocurrencies to properly incentivize users, but that may not necessarily be the case for permissioned ledgers. In the permissioned world, providing infrastructure for payments and accounts is optional. Distributed ledger technology (DLT) is enterprise terminology that describes a more blockchain-type ledger database. Database structures generally follow specific schemas that allow developers to read, write, and query them. DLT brings a new schema to database infrastructure, enabling reading and querying to occur in real time (writing in a consensus-based system is not always done in real time, and akin to following a clock).

How a blockchain-issued bond by Santander is devised Central Bank Digital Currencies Central bank digital currencies (CBDCs) are digital forms of a country’s fiat currency. Instead of requiring intermediaries or third parties like banks, CBDCs could enable real-time payments directly between parties. While CBDCs may use existing databases for implementation, there is consideration of deploying blockchain or distributed ledger technologies. China, the US, Sweden, and the United Kingdom are among the countries considering or testing CDBC concepts. Legal The legal industry is by its nature adversarial. It involves opposing parties making claims while a neutral judiciary makes decisions. Blockchain, as an immutable technical innovation, can help to verify information during legal proceedings.

Byzantine agreement, Other Concepts for Consensus Byzantine fault-tolerant agreement, RippleHotStuff algorithm, Borrowing from Existing Blockchains C Cardano, Blockchains to Watch Casper algorithm (proof-of-stake), Ethereum Scaling CCXT (CryptoCurrency eXchange Trading Library), Open Source Trading Tech cell phone porting attacks, Security Fundamentals central bank digital currencies (CBDCs), Central Bank Digital Currencies centralizationcaused by proof-of-work consensus on Bitcoin, Ripple and Stellar decentralization versus, Decentralization Versus Centralization distributed versus centralized versus decentralized systems, Distributed Versus Centralized Versus Decentralized-Bitcoin Predecessors Libra's centralization challenge, Novi centralized exchanges, Decentralized Exchange Contracts, The Role of Exchanges, Jurisdictiondecentralized exchanges versus, Decentralized Versus Centralized Exchanges-Scalabilitycustody and counterparty risk, Custody and counterparty risk exchange rate, Exchange rate infrastructure, Infrastructure Know Your Customer (KYC) rules, Know your customer scalability, Scalability token listing, Token listing infrastructure differences from decentralized exchanges, Decentralized Exchange Contracts CFTC (Commodity Futures Trading Commission), FinCEN Guidance and the Beginning of Regulation Chainalysis, Analytics channels (Lightning), Lightning Chaum, David, DigiCash Chia, Alternative methods Chicago Mercantile Exchange (CME), partnership with Royal Mint, The Royal Mint China, central bank cryptocurrency, China Coburn, Zachary, Skirting the Laws Coin ATM Radar website, Evolution of the Price of Bitcoin Coinbase, Wallet Types: Custodial Versus Noncustodial, Custody Coinbase Pro, ExchangesAPI example, BTC/USD ticker call, Exchange APIs and Trading Bots arbitrage trading on, Arbitrage Trading-Float Configuration 3 custody solutions, robust, Counterparty Risk example order book, Slippage coinbase transaction, Storing Data in a Chain of Blocks, The Coinbase TransactionBitcoin Genesis block, Achieving Consensus Coincheck, Coincheck CoinDesk, Information coins, DigiCash Coinye, More Altcoin Experiments cold storage wallets, Counterparty Risk cold wallets, Wallet Type Variations collisions, cryptographic hashes and, Hashes colored coins, NXT, Colored Coins and Tokens Commodity Exchange Act (CEA), Wash Trading Commodity Futures Trading Commission (CFTC), FinCEN Guidance and the Beginning of Regulation conferences on blockchain industry, Information confidential assets, Liquid confirmations, Confirmations confirmed transactions, Transactionsconfirmed by miner, Transaction life cycle confirmed by network on Bitcoin, Transaction life cycle consensus, Consensus-Alternative methodsAvalanche mechanism, Avalanche in Bitcoin network, Compelling Components-Generating transactions Corda, Corda consensus in decentralized systems, Distributed Versus Centralized Versus Decentralized Libra mechanism for, Borrowing from Existing Blockchains, How the Libra Protocol Works other concepts for, Other Concepts for Consensus proof-of-stake, Proof-of-Stake-Proof-of-Stake proof-of-work, Proof-of-Work-Confirmationsblock discovery, Block discovery confirmations by miners of block to include in blockchain, Confirmations mining process on Bitcoin, The mining process transaction life cycle, Transaction life cycle SCP protocol, Stellar XRP Consensus Protocol, Ripple ConsenSys, ConsenSysTruffle Suite tools for smart contracts, Authoring a smart contract contentious hard forks, Understanding Forks-Replay attacksreplay attacks vulnerability, Replay attacks Corda, Corda-Corda languageconsensus, Corda consensus how it works, How Corda works ledger, Corda ledger network, The Corda network programming language, Corda language Counterparty blockchain, Counterparty counterparty risk, Counterparty Riskon centralized versus decentralized exchanges, Custody and counterparty risk reduced, on decentralized exchanges, Decentralized Exchange Contracts cross-shard communication complexity, Other Altchain Solutions crypto laundering, The Evolution of Crypto Laundering-The Evolution of Crypto Launderinghow funds are laundered, The Evolution of Crypto Laundering cryptocurrencies, Cryptocurrency Fundamentals-Summaryadditional, Mastercoin introducing notion of, Mastercoin and Smart Contracts backing DAI multi-collateral token, DAI and blockchain, leading to new platforms for the web, Web 3.0 blockchain systems and unit of account, Storing Data in a Chain of Blocks consensus, Consensus-Alternative methodsother concepts for, Other Concepts for Consensus proof-of-stake, Proof-of-Stake-Proof-of-Stake proof-of-work, Proof-of-Work-Confirmations cryptographic hashes, Hashes-Custody: Who Holds the Keys custody, Custody: Who Holds the Keys-Security Fundamentals ICOs or fundraising for projects, Use Cases: ICOs illegal uses of, Catch Me If You Can methods of buying and selling, Evolution of the Price of Bitcoin mining, Mining-Block Generation privacy-focused, Privacy-Focused Cryptocurrencies public and private keys in systems, Public and Private Keys in Cryptocurrency Systems-Public and Private Keys in Cryptocurrency Systems regulatory bodies in the US, FinCEN Guidance and the Beginning of Regulation security, Security Fundamentals-Recovery Seed stablecoins based on, Crypto-Based Stablecoins-Tether stakeholders in ecosystem, Stakeholders-Informationanalytics services, Analytics brokerages, Brokerages custody solutions, Custody exchanges, Exchanges information services, Information theft from ownersexchange hacks, Exchange Hacks-NiceHash other hacks, Other Hacks-Summary transactions in, Transactions-Bitcoin Transaction Security UTXO model for Bitcoin transactions, The UTXO Model-The UTXO Model cryptocurrency ATMs, Evolution of the Price of Bitcoin CryptoCurrency eXchange Trading Library (CCXT), Open Source Trading Tech cryptographyBitcoin's use on transactions, Introducing the Timestamp Server cryptographic hashes, Hashes-Custody: Who Holds the Keys ECDSA encryption, signing and verifying transactions, Signing and Validating Transactions enabling proof-of-work on Hashcash, Hashcash public/private key, Bitcoin's use of, Public/private key cryptography-Generating keys use by DigiCash, DigiCash CryptoKitties, ERC-721-ERC-777causing scaling problems on Ethereum, Challenges in Developing Dapps digital cats as nonfungible tokens, Fungible and Nonfungible Tokens CryptoLocker and ransomware, CryptoLocker and Ransomware CryptoNote protocol, Monero currencies, exchanges for, Exchanges(see also exchanges) custodial wallets, Wallet Types: Custodial Versus Noncustodial(see also wallets) custody, Custody: Who Holds the Keys-Security Fundamentalscounterparty risk with exchanges, Counterparty Risk, Custody and counterparty risk crypto custody solutions, Custody custody providers, Counterparty Risk cyberbucks, DigiCash D DAGs (directed acyclic graphs), DAGs DAI stablecoin, DAIsavings rates for, Savings Dai, Wei, B-Money DAML, DAML DAOs (decentralized autonomous organizations), Decentralized Autonomous Organizations-Other Ethereum forks, Important DefinitionsThe DAO project on Ethereum, Initial Coin Offerings dapps (see decentralized applications) Dash, Dash database management systems (DBMSs), Databases and Ledgers databasesbackend/database differences between centralized exchanges and Uniswap, Infrastructure and ledgers, Databases and Ledgers decentralizationversus centralization, Decentralization Versus Centralization decentralizing the web, Web 3.0 distributed versus centralized versus decentralized systems, Distributed Versus Centralized Versus Decentralized-Bitcoin Predecessors decentralized applications (dapps), Ether and Gas, Decentralized Applications (Dapps)-Challenges in Developing Dappsbuilding decentralized web frameworks, Web 3.0 challenges in developing, Challenges in Developing Dapps Corda, Corda language running on top of a blockchain, Deploying and Executing Smart Contracts in Ethereum use cases, Use Cases decentralized autonomous organizations (DAOs), Decentralized Autonomous Organizations-Other Ethereum forks, Important DefinitionsThe DAO project on Ethereum, Initial Coin Offerings decentralized exchange contracts, Decentralized Exchange Contracts-Summary decentralized exchanges, The Role of Exchanges, Decentralized Exchanges-Scalabilityversus centralized exchanges, Decentralized Versus Centralized Exchanges-Scalabilitycustody and counterparty risk, Custody and counterparty risk exchange rate, Exchange rate infrastructure, Infrastructure Know Your Customer (KYC) rules, Know your customer scalability, Scalability token listing, Token listing decentralized finance (DeFi), Decentralizing Finance and the Web-Derivativesflash loans, Flash Loans-The Fulcrum Exploitcreating the flash loan smart contract, Creating a Flash Loan Contract-Deploying the Contract deploying the contract, Deploying the Contract executing a loan, Executing a Flash Loan-Executing a Flash Loan Fulcrum attack, The Fulcrum Exploit important definitions, Important Definitions privacy and information security, Privacy-Ring Signaturesring signatures, Ring Signatures Zcash, Zcash zero-knowledge proof, Zero-Knowledge Proof zk-SNARKs, zk-SNARKs redistribution of trust, Redistribution of Trust-Naming Servicesidentity and dangers of hacking, Identity and the Dangers of Hacking naming services, Naming Services services, DeFi Services-Derivativesderivatives, Derivatives lending, Lending savings, Savings stablecoins, Stablecoins-KYC and pseudonymity traditional versus decentralized financial system, Decentralizing Finance DeFI Pulse website, DeFi Services delegated proof-of-stake, Alternative methods deposit contracts, Ethereum Scaling depth charts, Depth Chartssell wall on, Whales derivatives, Derivativesin decentralized finance, Derivatives derivatives exchanges, The Role of Exchanges desktop wallets, Wallet Type Variations DEXes (see decentralized exchanges; exchanges) dictionary attacks on passwords, Zero-Knowledge Proof difficulty of discovering valid block hash, Block discovery DigiCash, DigiCash digital bonds, Banking digital money, Bitcoin Predecessors(see also cryptocurrencies) creation of, in B-Money, B-Money use of hashing to limit double spend, Hashcash digital signaturesmultisignature system, Hash Time Locked Contracts, Lightning Schnorr algorithm, Privacy signing transactions, Signing and Validating Transactions Digix, Digix directed acyclic graphs (DAGs), DAGs disintermediation, Identity and the Dangers of Hacking distributed ledger technology (DLT), Databases and Ledgers distributed systems, Decentralized Applications (Dapps)Bitcoin, Compelling Components distributed versus centralized versus decentralized systems, Distributed Versus Centralized Versus Decentralized-Bitcoin Predecessors Dogecoin, More Altcoin Experiments Domain Name System (DNS), decentralized version of, Altcoins dot-com crash, Tulip Mania or the internet?

pages: 304 words: 80,143

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines
by William Davidow and Michael Malone
Published 18 Feb 2020

Bitcoin has proved that extremely secure, anonymous, inexpensive, and fast payment systems can be implemented using distributed ledgers, a system in which multiple copies of the same ledger are stored on geographically dispersed systems. The ledgers are virtually impossible to hack, because there are so many of them—thousands in Bitcoin’s case. If a hacker penetrated one of them to steal something, he would also have to figure out how to alter the records on the thousands of other systems. By comparison, the single-copy ledgers that banks use to keep track of bank accounts and credit card transactions are much less secure. In payment systems based on distributed ledgers, only the source of a payment is identified; no account information is ever revealed to the payee.

In payment systems based on distributed ledgers, only the source of a payment is identified; no account information is ever revealed to the payee. This makes it virtually impossible to acquire information from a payee, such as Arby’s, to access money from a payer’s account. Transactions using blockchain technology (a form of distributed ledger technology in which data can only be added to databases and not altered or deleted) can also be made very secure and anonymous. In the case of Bitcoin, a cryptographic algorithm is used to ensure that Bitcoins are transferred from the correct payer’s wallet to the correct recipient’s wallet.32 In the credit card world, the typical fee for transferring money is about 2 percent of the size of the transaction, and a merchant will typically have to wait one to three days before money is deposited in its account.

pages: 308 words: 85,850

Cloudmoney: Cash, Cards, Crypto, and the War for Our Wallets
by Brett Scott
Published 4 Jul 2022

This is what led to the explosion of interest in ‘private blockchains’, ‘enterprise blockchains’ and ‘consortium blockchains’. Creating these systems entailed dropping various features of open blockchain systems that were unnecessary or undesirable in the corporate realm, and starting to call these watered-down systems by the more generic name of ‘distributed ledger technology’ (DLT). This became a buzzword in the mainstream fintech world. We’ve already seen how customer-facing staff are being automated away with apps, and how behind-the-scenes financial professionals are being replaced (or augmented) with AI. The new frontier involves using DLT to automate the activities of back-office interbank co-ordination staff, who cost financial institutions a lot without being overt profit-generators.

Aadhar system, 44, 97, 169 abacuses, 159 ‘Abracadabra’, 50 accelerators, 17 active choice, 125 Acxiom, 109 Adventures of a Banknote, The (Bridges), 65 Aesop, 45–6 AirBnB, 150 Alameda, California, 102 alcohol, 102, 118, 170 Alexa, 147, 150 Alibaba, 2, 7, 114, 150, 178 Alipay, 114 Alphabet, see Google alt-coins, 13, 217–18 Althusser, Louis, 86 Amazon, 1, 2, 7, 133, 147, 149, 150, 174, 177, 249–50 Alexa, 147, 150 anti-cash lobbying, 41–2, 254 CBDCs and, 243, 244 Coin, 236 Pay, 150 Amazon region, 130, 176, 247, 249 American Revolutionary War (1775–83), 60 Ames Research Center, 153 Amnesty International, 222 Amsterdam, Netherlands, 128–9 Amy, 147 anarchism, 7, 14, 106, 183, 191, 193, 215 anarcho-capitalism, 14, 184 Andes, 96, 129 anthropology, 124 anti-feminism, 226 anti-Semitism, 225, 262 anti-statism, 42, 184, 215–16 antidotes, 52–4 Apollo 11 mission (1969), 153 Apple, 7, 125 apps and, 141 Card, 150 data, 108 Pay, 78, 125, 130 Super Bowl advert (1984), 8 apps, 1, 2, 7, 17, 27, 40, 125, 139–51, 232 data collection, 165–6 interfaces, 139–51 ArcelorMittal, 24 Aria, 169 Armer, Paul, 105–6 Art of Not Being Governed, The (Scott), 228 artificial intelligence (AI), 8, 11, 17, 108, 114, 147, 153–72, 175, 252 biases, 167 credit-scoring, 17, 160, 162–3, 167, 168, 170 data analysis, 108, 153–72 interfaces, 146–8 Asimov, Isaac, 161, 170 Assange, Julian, 183 Assemblage, New York City, 226 Astana, Kazakhstan, 227–9 Athens, Greece, 131 ATMs (automatic teller machines), 32, 34, 35, 36, 39, 48, 61, 62, 248 CIT industry, 62 closure of, 32, 39, 48, 83, 84, 85, 132 crises and, 36, 244 note denominations, 62 profitability, 39 Atwood, Margaret, 117 austerity, 193 Australia, 118 Austria, 7, 109 authoritarianism, 111, 118, 168 automatic payments, 149 automation, 9, 10, 33, 41–2, 99, 123, 126, 133, 137, 142–3, 232 apps, 139–51, 232 artificial intelligence, 153–72 automation of, 153–4 surveillance, 112, 114, 153–72 aviaries, 171 Azure cloud, 233 Back to the Future (1985 film), 198 Baidu, 7, 178 Bangladesh, 32 Bank for International Settlements, 79 Bank Identification Codes (BIC), 76 Bank of America, 38, 75, 147 Bank of England, 40, 242, 243 banking sector, 38–9, 65–82 accounts, 31, 35, 46, 66, 132, 205–6 artificial intelligence, 153–72 ATMs, see ATMs bailouts, 113 centralisation of power, 15, 180–83 closures of ATMs/branches, 32, 39, 48, 83, 84, 85, 132 cloudmoney, 64, 66–82 data, 108–9, 156–7 deposits, 66–7, 69 electronic trading platforms, 158 exiting, 39, 48, 61, 63, 68, 83 federated frontline, 136–8, 147 high-street banks, 39–40, 158 interbank markets, 138, 231 interfaces, 138–51 international transfers, 74–6, 108, 179 Internet banking, 76–7, 139 investment banks, 6, 17, 22–3, 26, 113, 157–8 loans, 70–71, 107, 159 money creation, 59–63, 67–72, 202 operating system, 141–2 secondary system, 50, 63–4 sub-currencies, 72–3 transfers, 72–8 banknotes, 59–63 cash-in-transit companies, 62 counterfeiting of, 60–61 denominations, 62 polymer, 65 Bannon, Steve, 225, 234 Barclays, 38, 72–3, 116 base money, 69 beggars, 115 Better Than Cash Alliance, 34–5, 37, 45, 93, 96, 131 biases, 167 bicycles, 89, 90 Big Bouncers, 114, 170 Big Brother, 113–15 Big Butlers, 114, 170–71 Bill & Melinda Gates Foundation, 44–5 biometrics, 44, 150, 169 biotechnology, 10, 11 Bitcoin, 13–15, 16, 184–5, 187–210, 211–18 blockchain technology, 13–15, 185, 189–90, 195, 197–202 Cash fork (2017), 214, 217 climate change and, 226 as commodity, 206–10, 213–14, 217, 246, 256 countertradability, 209–10, 213, 256–7 decentralisation, 14, 15, 189–94, 196, 258 fixed supply, 191–3, 206 gold comparison, 192–3, 207, 214 millenarianism and, 212, 213 mining, 203–4, 212–13 politics and, 191–3, 211–12, 215–17 proof-of-work, 203–4 public addresses, 194–5 speculation on, 213 syncing, 195–7, 200–202, 231 techno-clerks, 194–5, 196–7, 202–4, 212–13 wallets, 194–5 White Paper (2008), 13, 184–5, 187, 191 Bitcoin Cash, 214–15, 217, 226 Bitcoin Gospel, The (2015 film), 211 Blade Runner 2049 (2017 film), 10 blockchain, 13–15, 185, 189–90, 195, 197–202, 219–26, 258–60 decentralisation, 14, 15, 189–94, 196, 230, 234, 255, 258–60 distributed ledger technology (DLT), 229–46, 258 mutual credit systems and, 260 blood diamonds, 222 Bloomberg, 109 Body of Glass (Piercy), 150 BP, 24, 26, 28 bread-making machine, 164 Bridges, Thomas, 65 British Airways, 29–30 British Bankers Association, 83 Brixton Market, London, 177 Bulgaria, 13 Bundesbank, 35, 47 bureaucracy, 179 Burning Man, 101 busking, 90–91 Buterin, Vitalik, 221, 223 California Ideology, 180 Camberwell, London, 128 Cambridge Symposium on Economic Crime, 111 Cambridge University, 97 Canada, 35 Canary Wharf, London, 17–18, 20, 41, 62, 211 cannabis, 101–3 capitalism, 2, 10, 47, 65, 98–9, 173–4 blockchain and, 15–16, 231–46, 256, 258 charging up, 22–5 core vs. periphery, 28, 248 giant parable, 54–5, 63–4, 188 growth, 123, 126–7, 249 surveillance, 33, 114, 180, 250 carbon credits, 222 CARE, 131 cargo cults, 255–6 Caritas, 131 carnivals, 257 cars, 87–90 cash, 22, 29–48 banking sector and, see banking sector banknotes, 59–63 central banks and, 42–5, 254 crime and, 36, 42–3, 45, 81, 112 crises and, 36, 61 cycle, 63, 68 demonetisations, 43 fintech industry and, 41–2 hoarding, 36 issuance of, 59–63 libertarians and, 215 payments companies and, 39–41 refusal of, 29–30, 40, 41, 43, 84, 128, 133 social class and, 91–9 tax evasion and, 42, 43, 45, 46 thresholds, 42 transactional usage, 36 cash-in-transit companies, 62 ‘cash or card?’

, 49, 72 ‘Cashfree and Proud’, 40 Cashless Catalyst, 127–8 Cashless Challenge, 40 cashless society, 2, 5, 10, 15, 38, 64, 81, 83, 84, 251 inevitability, 10–12, 121–33, 260–61 Cashless Way, 37 casinos, 66–9, 70–71, 83, 236 categorisation, 109, 113–14, 162, 167 Catholicism, 131, 212 Cayman Islands, 111 censorship, 33, 116–18, 250 central banks, 36, 42–5, 51, 84, 254 data surveillance, 115 digital currencies (CBDC), 242–5, 254, 255 international transfers, 79 transfers, 73–4 centralisation of power, 15, 180–83 centralised–decentralised model, 136 Chama, 130 charging up, 22–5 chatbots, 146–8 Chaum, David, 106–7, 117, 183 cheques, 89 Chicago Mercantile Exchange, 158 China, 2, 7, 18, 33, 74–5, 79, 114–15, 254 CBDC plans, 245, 254–5 facial recognition in, 150 leviathan complex, 178 People’s Bank of China, 79, 242 Social Credit System, 115, 245 choice, 124–6, 251 Christianity, 154, 175–6, 212 Christl, Wolfie, 109 cigarettes, 181 Circles, 260 Citigroup, 1, 37, 109, 132, 150, 227 City of London, 6, 135 class, see social class Cleo, 146 climate change, 226 cloakrooms, 66–9, 70–71 cloud, 30 cloudmoney, 82 Coca-Cola, 31, 131 cocaine, 98 code is law, 223, 224 Coinbase, 233 collateralised debt obligations, 26 colonialism, 55, 97, 175–6, 178, 239 Commerzbank Tower, Frankfurt, 18–20, 143, 156 computer boys, 158 conductivity, 179, 249 ConsenSys, 229 conservatism, 7, 131, 155, 184, 192–3, 211 see also right-wing politics consortium blockchains, 231, 233 conspiracy theories, 261–2 constitutional monarchies, 56 consumers, 25 contactless payments, 13, 31, 37–8, 91, 125, 127 core, 28 corporate personhood, 147 Corruption Perceptions Index, 43 counterfeiting, 60–61 countertradability, 209–10, 213, 256–7 Covid-19 pandemic, 2, 10, 16, 34, 36, 181, 249, 254 ATM use, 36 cash and, 2, 34, 40–41, 249, 261 conspiracy theories, 261 Cracked Labs, 109 credit cards, 39, 91, 109 credit creation of bank-money, 70, 72 credit default swap market, 232 credit expansion, 168–9 credit ratings, 17, 114, 160, 162–3, 167, 168, 170 crime cash and, 36, 42–3, 45, 81, 112 cybercrime, 32 financial crime, 111–12 marijuana industry, 102 trust and, 93 Crypto Sex Toys, 13 crypto-anarchists, 183 Cryptocannabis Salon, 101–2 cryptocurrencies, 13–15, 16, 101–2, 103, 184–5, 187–246, 254–60 alt-coins, 217–18 as commodity, 206–10, 213–14, 217, 246, 256 countertradability, 209–10, 213, 256–7 decentralisation and, 14, 15, 189–94, 196, 230, 234, 255, 258 forks, 214, 217 millenarianism and, 212, 213 mutual credit systems and, 260 oligopolies and, 229–33, 246 politics and, 191–3, 211–12, 215–17, 225–6 smart contracts, 220–24, 258 stablecoins, 233–41, 245–6, 255 Currency Conference (2017), 60 Curse of Cash, The (Rogoff), 93 Cyber Monday, 86 cyberattacks, 32, 48 cybercrime, 34 cyberpunk genre, 10 cypherpunk movement, 106, 183–5, 216–17 Dahabshiil, 116 DAI, 235 dark market, 216–17, 259 Dark Wallet, 216 data, 2, 8, 10, 33, 39, 104–19, 156–72 AI analysis, 108, 153–72 banking sector and, 108–9 Big Brother and, 113–15 categorisation, 109, 113–14, 162 panopticon effect and, 118–19, 172 payments censorship and, 116–18 predictive systems and, 105 states and, 110–12, 114–15 Data Bank Society, The (Warner), 106 data centres, 3, 4, 5, 30, 32, 34, 35, 47, 73, 76–7, 149 Davos, Switzerland, 11 debit cards, 39 Decathlon, 40–41 decentralisation, 14, 15, 189–94, 196, 230, 234, 255, 258–60 decentralised autonomous organisations (DAOs), 221–4, 258 DECODE, 236 DeepMind, 8 DeFi (decentralised finance), 258 Delft University of Technology, 31 demand, 29 demonetisations, 43, 44, 93 deposits, 66–7, 69 derivatives, 6, 18, 21, 26, 27, 160 Desparte, Dante, 238 Diamond, Robert ‘Bob’, 38 Diem, 241, 244 DigiCash, 106, 183 digital footprint, 169 disruption, 8, 9, 14, 32, 140–43 distributed ledger technology (DLT), 229–46, 258 Dogecoin, 13, 218 dollar system, 80, 182, 210, 233–6, 239, 240 double spending, 182, 194 doublethink, 143 Dow Chemical, 24 Drakensberg Mountains, 3–4 Dridex, 32 drones, 11 drug dealers, 96 Dubai, United Arab Emirates, 248 Dylan, Robert ‘Bob’, 90 e-commerce, 40, 77 East India Company, 178 eBay, 109, 113 ecological activism, 7 economic syncretism, 175–6 Ecuador, 240 Egypt, 116 El Salvador, 98, 208 elderly people, 126 electricity, 247 Elwartowski, Chad, 216 Emili, Geronimo, 37 employees, 25 enclosure, 86 Enlightenment (c. 1637–1789), 252 enterprise blockchains, 231 Enterprise Ethereum Alliance, 233 entrepreneurs, 1, 15, 129, 155 equivocation fallacies, 85 Erica, 147 Ethereum, 219–24, 257–8 Ethereum Classic, 224 European Union, 14, 37, 42, 254 Central Bank, 51, 74, 79, 242 DECODE project, 236 Eurozone, 51, 74, 79 Evans, Mel, 144 exiting, 39, 48, 61, 63, 68, 83 Experian, 163 F-16 fighter jets, 153 Facebook, 7, 38, 105, 150, 166, 198, 255, 262 Libra, 236–41, 245 Messenger, 237 facial recognition, 10, 138, 150, 181, 245 far-left politics, 7, 215 far-right politics, 7, 14, 215, 225–6, 261–2 fascism, 7, 14, 226 Federal Bureau of Investigation (FBI), 111 Federal Reserve, 32, 35, 36, 234, 242 federated frontline, 136–8, 147 fees, 39, 57, 91, 94 feminism, 226 fiat money, 51–2, 56, 192, 193 Fidor, 142 Financial Crimes Enforcement Network, 111 financial crisis (2008), 6, 8, 17–18, 26–7, 96, 184, 232, 248 financial inclusion, 37, 39, 93–9, 130–32, 167, 238, 262 fingerprints, 150 Fink, Stanley, 38 fintech, 8, 41–2, 140–43 first-world problems, 154 fitness centres, 17 fixed money supplies, 191–3 Floored (2009 film), 158 Florentine Republic (1115–1569), 135, 159 Follow the Money, 112 Fourth Industrial Revolution, 11 fractional reserve banking, 70 France cashless payments strategy, 43 Frankfurt, Germany, 18–20, 143, 156, 248 frogs, slow-boiling, 104 futurism, 1, 12, 86, 122–3, 250, 252 gambling, 105 game theory, 220 Gap, 131 Gates, William ‘Bill’, 44–5, 261–2 GCHQ, 112 Generation Z, 86, 140 gentrification, 128–33 Germany, 7, 18 Bundesbank, 35, 47 cash thresholds, 42–3 Corruption Perceptions Index, 43 Frankfurt, 18–20, 143, 156 honesty boxes in, 91 get-rich-quick investments, 26 Getty Images, 80 giant parable, 52–6, 63–4, 188 global matrix, 12 Gmail, 203 gold, 192–3, 207, 214 Goldman Sachs, 38, 150, 157, 158, 230 Golumbia, David, 225 Google, 2, 5, 7, 262 Cashe, 150 data, 105, 108 DeepMind, 8 Gmail, 203 Maps, 4 Mastercard deal, 109 Pay, 1, 78, 125 Singularity University, 153–6, 252–3 Trends, 84 USAID and, 128, 178 Grassroots Economics, 260 Greece, 42, 43, 62, 131 Green Dot, 150 Greenpeace, 116 growth, 123, 126–7, 249 hackers, 6–7, 101, 184 Hacktivist Village, 101 Halkbank, 131 Handmaid’s Tale, The (Atwood), 117 Hansen, Tyler, 101–2 Harvard University, 47, 93 hawala systems, 179 ‘Here Today.

Bit by Bit: How P2P Is Freeing the World
by Jeffrey Tucker
Published 7 Jan 2015

The paper's circulation was limited; novices who read it were mystified. But the lack of interest didn’t stop history from moving forward. Two months later, those who were paying attention saw the emergence of the “Genesis Block,” the first group of bitcoins generated through Nakamoto’s concept of a distributed ledger that lived on any computer node in the world that wanted to host it. Here we are six years later and a single bitcoin trades at $400 and has been as high as $1,200 per coin. The currency is accepted by many thousands of institutions, both online and offline. Its payment system is very popular in poor countries without vast banking infrastructures but also in developed countries.

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

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Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy
by George Gilder
Published 16 Jul 2018

In bitcoin, Satoshi made possible a digital asset that cannot be copied without lots of work, which he called “proof of work.” The proof of work is provided by miners laboriously checking out all the transactions and compiling them into blocks. Thus Satoshi enabled the creation of money on the Net and used the money to pay “miners” to validate its transactions. Recorded in a public distributed ledger, the transactions are mathematically “hashed” into chains of blocks that form an immutable database published across the Internet. Unchangeable records of transactions constitute a form of money. But governments do not like private money creation. So Satoshi carefully preserved his anonymity.

But Ali and his team were determined to restore a distributed Internet first and develop financial devices only after trust was restored. In this campaign, Ali and Shea and their software chief Nelson are part of a throng of hundreds of new companies raising billions of dollars to launch new capabilities for a reformed Internet based on the blockchain-distributed ledger innovations of Satoshi. Ethereum, its ether valued at $60 billion as I write, is obviously the current leader in providing a global distributed platform for new Internet-like functionality. But Blockstack enjoys strategic advantages. The Blockstack movement is founded on seven key principles: Distributed cadastre: It assures security through logical centralization (maintaining only a single transparent and immutable view of its “state” of time-stamped records) while being organizationally decentralized (distributing control and replicating ledger accounts across all the nodes of the network).

Craig Wright, “Future of Bitcoin Talk,” Arnhem, The Netherlands, Youtube, https://www.youtube.com/watch?v=JdJexAYjrDw. 3. http://gavinandresen.ninja/satoshi (May 2, 2016). 4. Swirlds is a platform for distributed applications based on the “hashgraph” consensus algorithm. https://www.swirlds.com/. IOTA is an open-source distributed ledger that does not use a blockchain. Its quantum-proof protocol is known as the “Tangle.” https://blog.iota.org/the-tangle-an-illustrated-introduction-4d5eae6fe8d4. 5. Saifedean Ammous, The Bitcoin Standard (New York: Wiley, 2018). 6. Chris Burniske and Jack Tatar, Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond (New York: McGraw-Hill, 2018), 178–79.

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The Infinite Machine: How an Army of Crypto-Hackers Is Building the Next Internet With Ethereum
by Camila Russo
Published 13 Jul 2020

“Build unstoppable applications,” the Ethereum.org website would later say. Not only that, but many believed anything was better if it was decentralized. The thinking was, if you picked any business idea and somehow added blockchain technology, it would be an instant success. It didn’t matter if a distributed ledger was actually needed. Decentralization was hailed as a goal in itself, rather than a tool. The purpose of Rune’s stable cryptocurrency was that people would be able to interact with Ethereum applications without having to worry about the crazy volatility of ether. It would be pegged to the dollar in value, meaning 1 eDollar would be worth 1 US dollar.

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

Some two years after JPMorgan’s CEO Jamie Dimon labeled Bitcoin a “fraud,” the US bank launched its own cryptocurrency created on Quorum, an enterprise-focused version of Ethereum. Microsoft and Amazon use Ethereum for their blockchain-as-a-service platforms, which aims to help users implement distributed ledger technology. Accounting firm EY built tools to allow companies to privately create, trade, and destroy tokens on top of Ethereum, in a project called Nightfall. By the time New York blockchain week came around in mid-2019, there were no Lambos or Aston Martins, no parties at strip clubs making headlines.

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Augmented: Life in the Smart Lane
by Brett King
Published 5 May 2016

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

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

It has much higher redundancy than exiting banking systems, and works to reinforce itself constantly. There is no such thing as a bitcoin, of course, at least not in the physical sense. The blockchain simply keeps track of an ever-expanding list of addresses, and how many units of bitcoin are at each of those addresses. Figure 9.5: At the heart of Bitcoin is a distributed ledger system that is far more efficient for digital transactions than the existing banking system. If you own bitcoin, what you actually own is the private cryptographic key to unlock a specific address with a value stored in it—it just so happens that value corresponds to the number of bitcoins you hold.

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The Currency Cold War: Cash and Cryptography, Hash Rates and Hegemony
by David G. W. Birch
Published 14 Apr 2020

As CNBC reported at the time, the announcement seemed to herald new forms of business. Umar Farooq, the head of JPMC’s blockchain projects, set out the vision clearly, saying the applications of this innovative use of new transaction technologies were ‘frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions [could] use this’ (see Son 2019). Many people took a look at the initiative and pointed out that it was simply JPMC deposits by another name. Some uncharitable persons (of whom I was not one) dismissed it as a marketing gimmick. But it was more interesting than a marketing gimmick, and I think it is helpful to explore why in order to give the issues of cryptocurrency and tokens some context in the IMFS.

FBI says blockchain expert aided North Korea. Financial Times, 30 November. URL: https://on.ft.com/39oXvA9. Stacey, K., and C. Binham. 2019. Global regulators deal blow to Facebook’s Libra currency plan. Financial Times, 25 June. Swanson, T. 2015a. Consensus-as-a-service: a brief report on the emergence of permissioned, distributed ledger systems. R3 CEV, 6 April. Swanson, T. 2015b. Learning from the past to build an improved future of fintech. Great Wall of Numbers, 9 July. URL: http://bit.ly/2SmcoM1. Talley, I., and I. Coles. 2020. US warns Iraq it risks losing access to key bank account if troops told to leave. Wall Street Journal, 11 January.

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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 and Nathan Schneider
Published 14 Aug 2017

This distributed database can be used for applications other than monetary transactions. With the rise of what some are calling “blockchain 2.0,” the accounting technology underpinning Bitcoin is now taking on non-monetary applications as diverse as electronic voting, file tracking, property title management, and the organization of worker cooperatives. Very quickly, it seems, distributed ledger technologies have made their way into any project broadly related to social or political transformation for the left—“put a blockchain on it!”—until its mention, sooner or later, looks like the basis for a dangerous drinking game. On the other side of things, poking fun at blockchain evangelism is now a nerdy pastime, more enjoyable even than ridiculing handlebar moustaches and fixie bicycles.

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

pages: 583 words: 182,990

The Ministry for the Future: A Novel
by Kim Stanley Robinson
Published 5 Oct 2020

Publicize it, make it easy, set a date, be ready to handle the influx, boom.” “How many do you think will shift?” “Maybe half. After a few years, everybody.” “So, the decapitation of Facebook.” “And all the rest like it.” “Replaced by a system owned by its users, in effect.” “Yes. Open source. A distributed ledger. The Global Internet Cooperative Union. GICU.” “Is that a good name?” “Is Facebook a good name?” “Better than GICU.” “Okay, think of a better one. Then if it works, it will serve as the operating platform for ICU.” “Which means,” Mary prompted, playing along. “International Credit Union.

This won’t be quite like a credit union, because it would be an open network of people who make a distributed issuance of credit, issuing carbon coin fractions to each other on proof of good action on carbon. People deposit their savings and create new value in a customer- and employee-owned distributed ledger. Their bank, as one function of their YourLock account. It invests mindfully as a group mind, a kind of planetary mind, that has to always be funding biosphere-friendly activities. Also, a place to go if everyone removes their deposits from current private banks at the same time. Those banks are so over-leveraged that they will immediately crash.

Indeed the internet’s earlier rapid colonization and capitalization of the mental life of so many people had occurred in a similarly invisible fashion, so Mary wasn’t sure people even knew what they were wishing for when they postulated an internet revolution. But her team knew— or they were imagining it. Now everyone who signed up for YourLock and started using it was also helping to sustain it, by hosting their part of a blockchained record of its history from its beginning. A distributed ledger: it was only by way of work given for free (meaning not just the labor but the electricity), by many millions of people, that this new organization could function at the level of the computing required. Even if that worked, Mary wasn’t sure it was going to represent a net gain in terms of a sustainable civilization.

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The Rise of Carry: The Dangerous Consequences of Volatility Suppression and the New Financial Order of Decaying Growth and Recurring Crisis
by Tim Lee , Jamie Lee and Kevin Coldiron
Published 13 Dec 2019

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

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

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Limitless: The Federal Reserve Takes on a New Age of Crisis
by Jeanna Smialek
Published 27 Feb 2023

Bitcoin had roared onto the financial scene in 2008, and for years it was treated as something of a joke by the financial cognoscenti and by economists in academia and within the Fed system. In the years leading up to 2020, though, it had become clear that people were investing in it as an asset class, at a minimum, and that the technology behind it—distributed ledger—had security characteristics that might have broader uses. The global attention to cryptocurrencies suggested that people saw a benefit in them that they were not finding elsewhere, whether that was privacy, ease of transfer and convertibility, fad appeal, potential for illicit use and tax evasion, or something else entirely.

Facing strong backlash, the tech firm had slowed and ultimately changed the project,[17] but the experience had forced central bankers to realize how quickly they could find themselves competing with a private currency issuer with a huge platform. Brainard had given a speech in August 2020—just weeks before Powell’s Jackson Hole appearance—discussing the Fed’s newly invigorated research into a digital dollar.[18] She outlined research into distributed ledger technology happening across the system, as well as a collaboration between the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology to examine technological options. One goal was to “give us hands-on experience to understand the opportunities and limitations of possible technologies for digital forms of central bank money,” Brainard said.

“Lael Brainard, Nominee for Under Secretary for International Affairs Opening Statement as Prepared for Delivery U.S. Senate Committee on Finance.” U.S. Department of the Treasury, Press Center, November 20. https://www.treasury.gov/​press-center/​press-releases/​Pages/​20091120956403728.aspx. ——— . 2016. “The Use of Distributed Ledger Technologies in Payment, Clearing, and Settlement.” Board of Governors of the Federal Reserve System, April 14. https://www.federalreserve.gov/​newsevents/​speech/​brainard20160414a.htm. ——— . 2018. “Read the Commencement Address by Dr. Lael Brainard.” Claremont McKenna College, April 13. https://www.cmc.edu/​news/​read-the-commencement-address-by-dr-lael-brainard. ——— . 2019.

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The Politics of Bitcoin: Software as Right-Wing Extremism
by David Golumbia
Published 25 Sep 2016

The Future of Bitcoin and the Blockchain BITCOIN IS NOT SO MUCH a single software program as it is software written using a model called the blockchain that is can be used to build other very similar programs (related cryptocurrencies like Litecoin, Dogecoin, and so on), but also less similar ones. The cryptographically enabled distributed ledger, and the blockchain used to implement it, advocates insist, have wide application outside of their current uses.[1] We hear (not infrequently) that the blockchain is as revolutionary today as were “personal computers in 1975, the internet in 1993” (Andreessen 2014). Networks built on such technologies are formally decentralized, we are told, in a way that the current internet is not, and thus allow a new range of services and opacity to oversight (and therefore legal as well as unlawful surveillance).

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The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism
by Arun Sundararajan
Published 12 May 2016

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

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

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Green Swans: The Coming Boom in Regenerative Capitalism
by John Elkington
Published 6 Apr 2020

And in an increasingly interconnected world where “electric grids, public infrastructure, vehicles, homes and workplaces are capable of being accessed and controlled remotely, the vulnerability to cyber-attacks and the potential for these security breaches to cause serious harm are unprecedented.” •Blockchain and Distributed Ledger Technology: This one is now shuddering down from the Peak of Inflated Expectations. This set of technologies has caused intense excitement because it potentially enables the decentralized and secure storage and transfer of information. As WEF notes, it “has already proven itself to be a powerful tracking and transaction tool.

See business leaders, working with D Dalio, Ray, 5 data, role in economy, 190, 192 Davies, Sally, 104–105 Davis, Chris, 227 debris, space, 111–116 democracy activism in, 227–228 Anthropocenic route, taking, 230–234 with Green Swan characteristics, 208–213 interplay with capitalism and sustainability, 4–5 unintended consequences of technology for, 168–170 Democracy and Prosperity (Soskice and Iversen), 212 Denmark, 3 destination, importance of clear, 159–161 diabetes, 101, 156–157 Diamandis, Peter, 37, 170 Diamond, Jared, 195 “Dieselgate” scandal, 130 diet, modern, 98–102 different thinking, need for, 23–27, 205–208 digital trade, 179 Dimon, Jamie, 14 disclosure system, CDP, 133 discounted cash flow (DCF), 205–206 discounting future, 85 Disillusionment, in Gartner Hype Cycle, 174 disruptive market forces, 150 disruptive technologies, 175–182 distributed ledger technology, 177–178 The Divine Right of Capital (Kelly), 205 Dorsey, Jack, 168–169 Doteveryone, 185–186 Doughnut Economics, 205 Dow Jones Sustainability Indexes, 31 Drawdown Project, 141, 232 drones, 178–179 Dumitriu, Anna, 107 E Eccles, Robert G., 207–208 e-commerce, 179 economic growth rate, 56 economics, 80, 85, 202–205, 224 The Economist (magazine), 30–31, 86–87, 88, 95, 97 economy.

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How to DeFi
by Coingecko , Darren Lau , Sze Jin Teh , Kristian Kho , Erina Azmi , Tm Lee and Bobby Ong
Published 22 Mar 2020

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

Designing Data-Intensive Applications: The Big Ideas Behind Reliable, Scalable, and Maintainable Systems
by Martin Kleppmann
Published 17 Apr 2017

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

Outside of the hype of cryptocurrencies, certif‐ icate transparency is a security technology that relies on Merkle trees to check the val‐ idity of TLS/SSL certificates [75, 76]. 532 | Chapter 12: The Future of Data Systems I could imagine integrity-checking and auditing algorithms, like those of certificate transparency and distributed ledgers, becoming more widely used in data systems in general. Some work will be needed to make them equally scalable as systems without cryptographic auditing, and to keep the performance penalty as low as possible. But I think this is an interesting area to watch in the future. Doing the Right Thing In the final section of this book, I would like to take a step back.

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

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The Bitcoin Standard: The Decentralized Alternative to Central Banking
by Saifedean Ammous
Published 23 Mar 2018

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

For implementing contracts dealing with real‐world businesses under legal jurisdictions, there will still be legal oversight relating to the real‐world implementation of these contracts that can override the network consensus, making the extra cost of decentralization pointless. The same applies for decentralizing databases of financial institutions that will remain as trusted third parties in their own operations with one another or with their clients. Second, the initial process itself needs to be simple enough to ensure the ability to run the distributed ledger on many nodes, without the blockchain becoming too heavy to be distributed. As the process continues to repeat over time, the size of the blockchain will grow and become more and more unmanageable for distributed nodes to hold a full copy of the blockchain, ensuring that only a few large computers can operate the blockchain and rendering decentralization obsolete.

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The Fourth Industrial Revolution
by Klaus Schwab
Published 11 Jan 2016

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

pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by Fredrik Erixon and Bjorn Weigel
Published 3 Oct 2016

It is very difficult to change merchant behavior.”16 No one knows how this market will evolve, but markets, competition, and consumer behavior – not only the technology itself – will determine its future success. The same is true for another promising technology that can be applied to the payments market: blockchain, or mutual distributed ledger technology (like bitcoin). The market clearly sees a big potential in blockchain technology. It could reduce the costs and risks in transactions, and create a far better system for sharing information in financial markets. Some have billed it as a greater technological leap than the internet for capital markets.

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

pages: 193 words: 51,445

On the Future: Prospects for Humanity
by Martin J. Rees
Published 14 Oct 2018

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

pages: 1,237 words: 227,370

Designing Data-Intensive Applications: The Big Ideas Behind Reliable, Scalable, and Maintainable Systems
by Martin Kleppmann
Published 16 Mar 2017

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

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

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

pages: 181 words: 52,147

The Driver in the Driverless Car: How Our Technology Choices Will Create the Future
by Vivek Wadhwa and Alex Salkever
Published 2 Apr 2017

Change has always been the norm and the one constant; but we have never experienced change like this, at such a pace, or on so many fronts: in energy sources’ move to renewables; in health care’s move to digital health records and designer drugs; in banking, in which a technology called the blockchain distributed ledger system threatens to antiquate financial systems’ opaque procedures.* It is noteworthy that, Moore’s Law having turned fifty, we are reaching the limits of how much you can shrink a transistor. After all, nothing can be smaller than an atom. But Intel and IBM have both said that they can adhere to the Moore’s Law targets for another five to ten years.

pages: 182 words: 53,802

The Production of Money: How to Break the Power of Banks
by Ann Pettifor
Published 27 Mar 2017

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

pages: 180 words: 55,805

The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future
by Jeff Booth
Published 14 Jan 2020

Governments can change or manipulate this natural dynamic by increasing supply—printing more money, which lowers the value of their currency relative to others. Bitcoin attempts to change that dynamic by forever fixing supply at twenty-one million Bitcoins. In addition to that, it creates a peer-to-peer ledger without any central control: the blockchain. As an open, distributed ledger, it offers security and trust by verifying transactions with consensus instead of through a central authority. Although the blockchain that Bitcoin sits on has never been hacked, transactions are difficult, which has slowed widespread adoption as a payment alternative. In addition to that, storage of Bitcoins or other cryptocurrencies (wallets) has been prone to cyberattack or loss, creating a different form of risk.

pages: 506 words: 151,753

The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze
by Laura Shin
Published 22 Feb 2022

A lot of lawyers, Bitcoiners, and others in crypto with a legal or business background were specifically looking at the Securities and Exchange Commission. While the SEC had performed a handful of enforcement actions involving cryptocurrency, in 2016 there was only one and in 2017 only one regarding a Bitcoin fraud.14 The agency had, however, dropped hints. At the Consensus conference in May, the head of the SEC’s Distributed Ledger Technology Working Group, Valerie Szczepanik, stating that her views were her own, said, “Whether or not you are regulated by the SEC, you still have fiduciary duties to your investors. If you want this industry to flourish, protection of investors should be at the forefront.”15 While some players in the space initially said regulators were aiming for a light touch so as to not hamper innovation, by this point, things were getting out of hand.

The UET ICO transparently offers investors no value, so there will be no expectation of gains.”18) In this environment the SEC finally dropped its first salvo in what would become the regulators versus “blockchain is alegal” battle. On July 25, the SEC published a report of investigation into DAO tokens, stating they were securities. It said, “Issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies.” (Translation: ICOs were securities offerings, which, according to the SEC, “requires the company to file a registration statement containing information about itself, the securities it is offering, and the offering,” unless the ICO could claim an exemption.)

pages: 218 words: 62,889

Sabotage: The Financial System's Nasty Business
by Anastasia Nesvetailova and Ronen Palan
Published 28 Jan 2020

The emergence of data as the most valuable asset in the digital capitalism of the twenty-first century, as well as tighter regulation of the traditional financial sector, is paving the way for a new means of doing the business of finance. Many of these innovations are celebrated in the market and beyond. Blockchain – a distributed ledger technology underpinning the drive – is heralded as the radically new way to connect people across various sectors and walks of life. It is rapidly transforming the way business is conducted and services are delivered, from the energy sector to adult entertainers, as well as public services such as insurance and healthcare.

pages: 533

Future Politics: Living Together in a World Transformed by Tech
by Jamie Susskind
Published 3 Sep 2018

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

pages: 218 words: 68,648

Confessions of a Crypto Millionaire: My Unlikely Escape From Corporate America
by Dan Conway
Published 8 Sep 2019

They said Ethereum was the world computer, with the potential to do to corporations what Bitcoin could do to banks—knock the shit out of them. That caught my attention. Institutions in the real world seemed to be already grappling with the implications. I came across a blockchain report by the European Parliament that described how momentum could shift toward decentralization at a granular level: “Each time we use a distributed ledger we participate in a shift of power from central authorities to non-hierarchical and peer-to-peer structures.” Wow. As I sat on the curb on Burlingame Avenue one Saturday eating ice cream while the kids finished their piano lessons, I cycled through memories of the various ways I’d screwed up my career.

J.K. Lasser's Your Income Tax 2022: For Preparing Your 2021 Tax Return
by J. K. Lasser Institute
Published 21 Dec 2021

A hard fork occurs when a cryptocurrency undergoes a protocol change resulting in a permanent diversion from the legacy distributed ledger. This may result in the creation of a new cryptocurrency on a new distributed ledger in addition to the legacy cryptocurrency on the legacy distributed ledger. If your cryptocurrency went through a hard fork, but you did not receive any new cryptocurrency, whether through an airdrop (a distribution of cryptocurrency to multiple taxpayers’ distributed ledger addresses) or some other kind of transfer, you don’t have taxable income. Filing Tip Classifying Cryptocurrency Income If you mine for virtual currency, this is not investment income.

., when the transaction is recorded on the distributed ledger), provided you have dominion and control over the cryptocurrency so that you can transfer, sell, exchange, or otherwise dispose of the cryptocurrency. If you receive cryptocurrency in a transaction facilitated by a cryptocurrency exchange, the value of the cryptocurrency is the amount that is recorded by the cryptocurrency exchange for that transaction in U.S. dollars. If the transaction is facilitated by a centralized or decentralized cryptocurrency exchange but is not recorded on a distributed ledger or is otherwise an off-chain transaction, then the fair market value is the amount the cryptocurrency was trading for on the exchange at the date and time the transaction would have been recorded on the ledger if it had been an on-chain transaction.

If the transaction is facilitated by a centralized or decentralized cryptocurrency exchange but is not recorded on a distributed ledger or is otherwise an off-chain transaction, then the fair market value is the amount the cryptocurrency was trading for on the exchange at the date and time the transaction would have been recorded on the ledger if it had been an on-chain transaction. Soft fork. A soft fork occurs when a distributed ledger undergoes a protocol change that does not result in a diversion of the ledger and thus does not result in the creation of a new cryptocurrency. Because soft forks do not result in you receiving new cryptocurrency, you are in the same position you were in prior to the soft fork, meaning that the soft fork does not result in any income to you.

pages: 993 words: 318,161

Fall; Or, Dodge in Hell
by Neal Stephenson
Published 3 Jun 2019

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

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

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

pages: 293 words: 78,439

Dual Transformation: How to Reposition Today's Business While Creating the Future
by Scott D. Anthony and Mark W. Johnson
Published 27 Mar 2017

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

pages: 286 words: 79,305

99%: Mass Impoverishment and How We Can End It
by Mark Thomas
Published 7 Aug 2019

There are numerous examples of good technology being used badly and little reason to think gene drives would be an exception.8 NEW COMPUTING APPROACHES The world of computing is highly innovative, and there are many emerging technologies that may prove influential over the next thirty-five years. These range from distributed ledger technology (block chain) as used by Bitcoin and other digital currencies, through virtual reality and the Internet of Things to cerebral interfaces. Two areas which may prove to be fundamental are quantum computing and the development of AI: first narrow AI – the use of artificial intelligence to solve tightly defined problems such as image recognition – and, ultimately, full AI.

pages: 240 words: 78,436

Open for Business Harnessing the Power of Platform Ecosystems
by Lauren Turner Claire , Laure Claire Reillier and Benoit Reillier
Published 14 Oct 2017

Technology underpinning platform businesses is improving everyday Current platform business models are powered by technologies such as relational databases, instant Internet-based communications and matching algorithms. To start with, all of these technologies benefit from regular hardware performance improvements.15 But more fundamental innovations in these areas, such as blockchains, which are effectively distributed ledgers, also contribute to the development of key building blocks able to further unlock the potential of platforms as business models. By lowering the friction for securely registering time-stamped transactions, blockchain technology can provide a global, scalable, low-cost registrar for contracts and commitments between platform agents.

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 and Yuri van Geest
Published 17 Oct 2014

Virtual/augmented reality Description: Avatar-quality VR available on desktop in 2-3 years. Oculus Rift, High Fidelity and Google Glass drive new applications. Implications: Remote viewing; centrally located experts serving more areas; new practice areas; remote medicine. Bitcoin and block chain Description: Trustless, ultra-low-cost secure transactions enabled by distributed ledgers that log everything. Implications: The blockchain becomes a trust engine; most third-party validation functions become automated (e.g., multi-signatory contracts, voting systems, audit practices). Micro-transactions and new payment systems become ubiquitous. Neuro-feedback Description: Use of feedback loops to bring the brain to a high level of precision.

pages: 328 words: 84,682

The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power
by Michael A. Cusumano , Annabelle Gawer and David B. Yoffie
Published 6 May 2019

We can foresee a time when digital platforms and associated ecosystems will be the way we organize new information technologies such as artificial intelligence, virtual and augmented reality, the Internet of things, health care information, and even quantum computing. We can also see peer-to-peer transaction platforms replacing or competing with traditional businesses, especially as the “sharing” or “gig” economy expands and new technologies diffuse. Use of blockchains (distributed ledger technology that is extremely secure though not unbreakable) and cryptocurrencies (digital money, usually independent of banks and governments) may greatly reduce the need for many different services, from traditional banks to supply-chain contracts and monitoring. Yet another hot topic as we write this book is increasing demand for governments to rethink data-privacy laws, antitrust laws, and other regulations that could rein in the most powerful platform businesses.

pages: 337 words: 96,666

Practical Doomsday: A User's Guide to the End of the World
by Michal Zalewski
Published 11 Jan 2022

As long as the majority of market participants acted in good faith, the integrity of the blockchain was assured without the need for any central authority to keep track of transactions and accounts. The consensus-operated blockchain is widely seen as Bitcoin’s most revolutionary feature, and it contributed to the currency’s image as a renegade financial instrument that has given back control of the financial system to the common folk. That said, the practical importance of the distributed ledger has decreased over time. With the influx of non-tech-savvy investors, most users of popular cryptocurrencies opted for centralized cloud-based services to store and manipulate the balances in their digital wallets, rather than trying to tinker with cryptography on their own computers. This emergent ecosystem is operated by a handful of large corporations, some with thousands of employees and valuations measured in the billions of dollars.

pages: 329 words: 99,504

Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud
by Ben McKenzie and Jacob Silverman
Published 17 Jul 2023

Cryptography, computer science, and finance are not my forte, but I can recognize when they’re being used to conjure—to sell—a narrative that might not be true. I’m a storyteller, too. So let me tell you one. ° ° ° In the fall of 2020, the market for so-called cryptocurrencies—cryptographically secured bits of code, transactions for which are often recorded on distributed ledgers known as blockchains—exploded. A few thousand cryptos in 2020 grew to 20,000 two years later, and their purported value swelled in tandem, from some $300 billion in the summer of 2020 to $3 trillion by November 2021. An estimated forty million Americans and hundreds of millions worldwide—disproportionately young and male—were drawn into the speculative frenzy.

pages: 354 words: 105,322

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis
by James Rickards
Published 15 Nov 2016

Regulators will want to suppress twenty-first-century digital curb exchanges to prevent price discovery and maintain the myth of pre-panic prices. Curb exchanges could be conducted online in an eBay-style format with settlement by bitcoin or cash delivered face-to-face. Title to shares can be recorded in a distributed ledger using a blockchain. Eliminating cash helps the suppression of alternative markets, although bitcoin presents new challenges to elite power. The second reason for eliminating cash is to impose negative interest rates. Central banks are in a losing battle against deflationary trends. One way to defeat deflation is to promote inflation with negative real interest rates.

pages: 364 words: 99,897

The Industries of the Future
by Alec Ross
Published 2 Feb 2016

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

pages: 543 words: 153,550

Model Thinker: What You Need to Know to Make Data Work for You
by Scott E. Page
Published 27 Nov 2018

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

pages: 829 words: 187,394

The Price of Time: The Real Story of Interest
by Edward Chancellor
Published 15 Aug 2022

During an outbreak of ‘marijuana madness’ in September 2018, a Canadian cannabis producer was briefly valued at more than American Airlines.21 CRYPTO BUBBLES As the world’s financial system imploded in the summer of 2008, an anonymous software engineer circulated a paper containing a cure for all monetary ills. Commercial banks had shown they couldn’t be trusted with money. Central banks were oiling their printing presses, ready to debase their currencies. The solution was to use the internet to create ‘a new electronic cash system that’s fully peer-to-peer’. Once the distributed ledger, or blockchain, was in place financial trust would be restored and monetary crises come to an end.22 Things didn’t turn out quite as Bitcoin’s mystery creator, Satoshi Nakamoto, envisaged. What he had unleashed was not so much a new type of money, but rather the most perfect object of speculation the world had ever seen.