Blockchain morphology: an historical perspective on the affaire between money and networks
Renewable Futures Conference – Economia

Eindhoven
28-30 April 2017


Pablo R. Velasco González

Centre for Interdisciplinary Methodologies
University of Warwick

pablov.me / @xpablov

What is Bitcoin?

an electronic payment system based on cryptographic proof
(Nakamoto, 2008)

a purist and egalitarian creation by nature of its architecture and implementation
(Boase, 2013)

a computer software that implements a 'traditional' electronic currency and a security protocol that secures anonymous trading of it
(Karlstrøm, 2014)

a currency living in the world of computer code
(Newsweek, 2014)

a kind of Money-like Informational Commodity
(Bergstra & Weijland, 2014)

'gold without gold, money without state, credit without debt'(Bjerg, 2016)

Blockchain > Cryptocurrency > Bitcoin

  • Designed
    (scarcity)

  • Distributed
    (non-territorial)

  • Anonymous
    (pseudonimous)

  • Cryptographic ledger

Disruption

http://occupywallstreet.net/story/disruption-time Disruption (2014)

Disruption, disruption

http://furtherfield.org/projects/blockchain

Disruption, disruption, disruption

https://newrepublic.com/article/114125/disruption-silicon-valleys-worst-buzzword Silicon Valley (2014- )

Disruptive Innovation

Rules “that managers can use to judge when the widely accepted principles of good management should be followed and when alternative principles are appropiate”
(C. Christensen, The Innovators Dilemma, 1997, 10)

Disruptive vs Sustaining technologies:

  • lower margins, lower profits
  • emerging or insignificant markets
  • profitable costumers don’t have use for them (at first)

Creative Destruction

"The essential point to grasp is that in dealing with Capitalism we are dealing with an evolutionary process"
(J. Schumpeter, Capitalism, Socialism & Democracy, 1943, 82)

not (only) because:

  • its social and natural environmental changes
  • increases in population, capital or monetary systems

but because capitalism creates new:

  • goods
  • methods of production
  • methods of transportation
  • markets
  • forms of industrial organization

Zachary Karabell, The Leading Indicators, 2014

"place"

https://www.reddit.com/r/place/

A brief pre-history

  • Era of insecure comms (70's - 90's)

    • Asymmetric cryptography Diffie and Hellman - 1976 (implemented in 1978 in RSA algorithm)
    • Ralph Merkle hash trees - 1979
    • Phil Zimmerman PGP - 1991

  • Era of manifestos (90's)

    • A specter is haunting the modern world, the specter of crypto anarchy
      (Crypto Anarchist Manifesto, 1992)
    • We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence. It is to their advantage to speak of us, and we should expect that they will speak
      (Cypherpunks Manifesto, 1993)
    • Declaration of the Independence of Cyberspace (Barlow, 1996)

    "[John Gilmore] expected a guarantee -with physics and mathematics, not with laws- that we can give ourselves real privacy of personal communications"(Levi, 1996)

  • Era of crypto-money (90's ~2010)

    • David Chaum - digicash -1990
    • Adam Back - hashcash PoW - 1997
    • Wei Dai - B-money - 1998
    • Nick Szabo - bit gold 1998-2005 (1990 concept)
    • Hal Finney - RPOW - 1998
    • Satoshi Nakamoto - bitcoin - 2008

"Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years. Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own"
(Satoshi Nakamoto, to the comment "You will not find a solution to political problems in cryptography")

Blockchain organism
4 characteristics:

  • tokens
    • units
    • currency
  • hemodynamics
    • transactions
    • Schumpeter's methods of transportation
  • ontogenies
    • emergence
    • Schumpeter's method of production
  • DNA
    • ledger
    • Blockchain




Flattened system: Schumpeter's forms of industrial organization

Blockchain animals
4 unfoldings:

  • mutation
    • partially-competitive species
  • anagenesis
    • non-competitive new species
  • speciation
    • competitive changes within the same species
  • extintion
    • failure
    • collapse




fork

Heads & tails

BLOCK A

  • Zcash
  • Golem
  • IBM Blockchain (Hyperledger)
  • Numerai

BLOCK B

  • Swarm
  • Faircoin (D-CENT)
  • Steemit
  • *Civic Blocks






"...the question of whether Bitcoin can be harnessed to empower marginalized communities and build new means of solidarity-based finance remains unanswered"
(B. Scott, How can cryptocurrency and blockchain technology play a role in building social and solidarity finance?, 2016 [working paper February])

Thank you


Pablo R. Velasco González

Centre for Interdisciplinary Methodologies
University of Warwick

pablov.me // @xpablov