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Kindle Notes & Highlights
by
Don Tapscott
Read between
March 25 - April 13, 2018
Members self-assign to projects, define agreed-upon deliverables, and get paid when they deliver—all on the blockchain.
Bitcoin and the blockchain changed all that. Now parties can make agreements and automatically exchange bitcoin when they meet the terms of the agreement.
If partners spend more time up front determining the terms of an agreement, the monitoring, enforcement, and settlement costs drop significantly, perhaps to zero.
She could, however, indicate that his public key was not to be trusted, thus lowering his reputation score as a coder.
In a multisig transaction, parties agree on the total number of keys generated (N) and how many will be required to complete a transaction (M).
The two parties would then look to the arbitrator, holder of the third key, to help them resolve their disagreement. The intervention of such arbitrators is called for only in cases of disputes like these, and at no point do they themselves have access to the funds—a mechanism enabling the rise of “smart contracts.”
markets allocate resources via the price mechanism, but firms allocate resources via authoritative direction.
“What’s exciting to me about blockchain technology is that it can enable people to function together with the persistence and stability of an organization, but without the hierarchy.”27
somebody from Nigeria wants to buy something that I’m selling, I’m going to be very skeptical, I’m not going to accept a credit card or a check from Nigeria. With the new platform, I know I can trust it and I don’t have to incur the costs of establishing trust. So it enables transactions which simply couldn’t happen otherwise.”
So Wall Street banks don’t have to splice integrity into their DNA and behavior; the founders of blockchains have coded it into their software protocols and deployed it across the network—enabling a new utility for the financial services industry.
Companies can program relationships with radical transparency so everyone has a better understanding about what each party has signed up to do.
Competitive advantage comes from the entire system of activities; while any individual activity within the system may be copied, competitors cannot produce the same benefit unless they manage to duplicate the entire system.35
This is ConsenSys’s strategy: build a network of collaborators around the Ethereum platform, grow the platform and ecosystem, and increase the probability of success for all components.
Remember, people with good reputations can use the same persona across multiple DApps and benefit from continuity as a good person.
You’ll have a detailed searchable record of previous transactions—not just how various companies were rated but precisely how they honored their commitments.
Any human employees or partner organizations would perform under smart contracts. When they do the job as specified, they are instantly paid—perhaps not biweekly but daily, hourly, or in microseconds.
In theory at least, we could design a corporation without executives, only shareholders, money, and software. Code and algorithms could replace a layer of representatives (i.e., the executive board), with shareholders exerting control over that code.
Reputation in these communities is typically very informal, and there is no economic incentive for good behavior.
To discourage bad behavior, members could ante up a small amount of money that either increases or decreases based on contribution.
Sponsors could fund, or all editors could contribute money to, an escrow account. Each editor could have a reputation linked to the value of her account.
Trust does not rest with the organization, but rather within the functionality, security, and auditability of the underlying code and the mass collaboration of the countless people securing the blockchain.
“The blockchain for identity is the core for the Internet of Things. We create a unique path for each device.
devices are empowered to autonomously execute digital contracts such as agreements, payments and barters with peer devices by searching for their own software updates, verifying trustworthiness with peers, and paying for and exchanging resources and services. This allows them to function as self-maintaining, self-servicing devices.
The provider runs no risk of nonpayment. You can’t do these things with traditional payment networks because the fees are too high for sending fractions of a penny off your credit card.”
Spare bedrooms, empty apartments, or vacant conference rooms could rent themselves out.
“We are moving into another world where the trust is delegated at the object level. An object that is not trusted will be rejected by the other objects automatically without having to check with a central authority,”
animation of the physical world.
Items on the shelves will notify store managers when they’ve passed their “sell by” date. Store managers might even program these items to lower their own price as the sell-by date approaches.
“People will do the things they’ll do to minimize their own discomfort, leading to silos and concentration and centralization. What’s a short-term gain for those particular people is a long-term loss for everyone else.”
Finally, firms can crowdsource, collaborate, and optimize with business partners in real time through digitally integrated value chains.
fishermen and farmers is the story of most unbanked people, around two billion adults in the world today.7 What they lack—a store of value that won’t get mad cow disease or die of old age, or a payment mechanism that extends beyond the village—we take for granted.
If we do this right, blockchain technology could unleash the biggest untapped pool of human capital in history, bringing billions of engaged, prospering entrepreneurs into the global economy.
Today, the global 1 percent owns half the world’s wealth while 3.5 billion people earn fewer than two dollars a day.
In Brazil, an entrepreneur has to wait almost 103 days to incorporate his company versus 4 days in the United States and half a day in New Zealand.
If you bounce a business check in many Arab countries, you go straight to jail—“do not pass go” or any other institutions of due process on the way.
growing inequality posed the single biggest risk globally, beating out global warming, war, disease, and other calamities.
By lowering barriers to financial inclusion and enabling new models of entrepreneurship, the tonic of the market could be brought to bear on the dreams and ideas of billions of the unbanked.
For centuries, banks have relied on network effects. Each successive customer, branch, product, dollar in, and dollar out increases the value of the bank’s network. However, building these networks has come at a cost.
banks don’t serve most of the world and have no existing plans to serve them.
It’s not interested in knowing you as a well-rounded person. It’s interested in knowing you as a set of checked boxes.
“What if we could create a credit score for women based on their household history?”
This is not redistribution of wealth but a wider distribution of opportunity.
Persistent Identity: You can use and port identity into different networks to establish reputation in a financial transaction or to plug into different social networks.
Sales become a function of accessing anyone with a connected device. Buyers don’t need a credit card, local currency, or bank account.
Enter into a licensing agreement where every time they use your data to make an actuarial calculation and price a new product, you get a micropayment.
video calling consumes 500 kilobits per second.43 Sending one bitcoin takes about 500 bits, or roughly one one-thousandth the data consumption of one second of video Skype!
Foreign aid is perhaps the clearest example of the ineptitude of many governments and the rent-seeking behavior of unethical intermediaries, and is thus excellent grounds to explore blockchain solutions.
Through smart contracts, funds can be donated into escrow accounts, accessible only by women, say, for accessing food, feminine products, health care, and other essentials.
The men can’t take it out of their hands to buy cigarettes or booze, or to gamble,
record the government’s land titles on the blockchain ledger.
