The future of Blockchain: it’s more and more be seen as an incentive machine.

keysa (62)in #blockchain • 6 years ago

Capitalism is still seen as the ultimate way for people to work together. But there are other interesting forms, and one of them is the collaborative commons.

Commons usually refers to resources accessible to all members of a certain group. In the classical form of the commons, this concerns sharing, for example, food or agricultural land, and how you ensure that the commons are properly managed and not been exhausted, the so-called 'tragedy of the commons'.

To quote Wikipedia:

The tragedy of the commons is a term used in social science to describe a situation in a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting or spoiling that resource through their collective action.

The term first appeared in an essay written in 1833 by the British economist William Forster Lloyd. Today you can see the commons re-emerge in open-source code, in data sharing or in sharing cars and bicycles.

What does that have to do with blockchain?

By making incentives people can act in their own interests, but at the same time defend the common interest. Blockchain is really useful in this as you can reward people with tokens. Because you can make your own coins with specific characteristics, you are therefore in a position to reward people if they display behavior that is in the general interest of your system. In this way you ensure that the individual interest and the collective interest are aligned.

Those incentives are the most important part of blockchain, not the smart contracts or the fact that they make trust superfluous.

Jon Berkeley

In a famous article from The Economist blockchain was labeled as a 'trust machine', in the sense that blockchain records transactions without a central actor. According to the traditional vision, this can obviate the need of central actors and allow cooperation between actors who do not trust each other.

However, blockchains are rather slow and log and trust and integrity can be solved perfectly with cryptography, you do not always need blockchain for that. The most important blockchain innovation is thus that you can design incentives through tokens, not that you can solve trust issues.

You could say that blockchain is increasingly be seen as an 'incentive machine'.

For the time being, blockchain cannot replace existing systems

The fierce price corrections of the past few months creates an externally boring phase in the crypto market. The hype seems over. The prices of crypto coins are still falling, and research firm Forrester Research recently stated that many companies are discarding their blockchain experiments. In the Netherlands, chocolate producer Tony Chocolonely, for example, stopped a blockchain project to trace chocolate through their chain, for the simple reason that ordinary technology works better for that.

You notice that blockchain is still a very young market. For the time being, there are few systems in the blockchain world that are mature enough to replace an existing system. Blockchain is experimental and often you do not need a blockchain but simply cryptography. What blockchain does do is create new types of economies, such as the CryptoKitties. But those are curiosities, and that certainly does not go to enterprise level.

Collaborative commons

For the time being we have seen almost all hypes. Five years ago we thought Bitcoin would change the world, afterwards the crypto coins had to make way for blockchains, and then consortia, and then smart contracts, and now we look at incentives. The volatility of this shows how experimental it still is. But ultimately, blockchain has to come out on a collaborative commons, build platforms on which people can work together.

We already see these burgeoning commons in the way the blockchain community works together. Codes, ideas and notes are shared. Perhaps the open-source and blockchain community is already the beginning of a sort of commons. There are no patents nor trade secrets. That open source method shows that change is on the way.

References:

#steemit #trust #incentive #crypto

6 years ago in #blockchain by keysa (62)

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The future of Blockchain: it’s more and more be seen as an incentive machine.

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