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Blockchains as a Granular Universal Transaction System
Melanie Swan   Feb 17, 2015   Broader Perspective  

Blockchain technology is a new concept in large-scale coordination due to a number of key features. First, a blockchain is an open universal transaction system. Every transaction worldwide is processed the same way and posted and made available for viewing on the blockchain. The transaction ledger is publicly-inspectable on-demand at any future moment.

Second, blockchains are trustless in the sense of not having to find or trust any of the other parties in the transaction; it is just necessary to trust the system. This suggests that orders-of-magnitude more transactions may be possible in trustless systems since the architecture is a mechanism allowing anyone to transact with anyone anywhere; geographical proximity, personal knowledge, and the search problem are all reduced or resolved.

This is conceptually a next step in the progression of how Amazon (a global system) opens up trading in a way that Craigslist (geographically-local) does not.

Third, blockchains are a universal tracking system that might be able to accommodate infinitely more granularity than has been feasible and cost-effective to monitor previously. The optimality of what level of transaction detail is best to post directly to the blockchain (thus invoking the expensive mining operation for their recording) is being sorted out in different ecosystem tiers.

The overall blockchain ecosystem is developing to avoid bloating the blockchain with too many micro-transactions by making use of special-purpose sidechains, decentralized off-chain storage (for example with MaidSafe, batched transactions (like batched notary sidechains to register large groups of legal documents), and Merkle trees (confirming and storing a whole corpus of data with one meta-hash).

Blockchains are a Supercomputer for Reality, a Mechanism for Orchestrating Quanta

The key idea of blockchains as a universal transaction system is that they are an automated computational mode, a seamless universal infrastructural element for the coordinated activity of granularity. Blockchains could be a universal transaction system on an order never before imagined that could possibly be used to coordinate the whole of human and machine activity.

In this sense, blockchain technology is a supercomputer for reality. Any and all phenomena that can be quantized (defined in discrete units or packages) can be denoted this way and encoded and transacted in an automated fashion on the blockchain. As big data seeks to perhaps eventually model and predict all phenomena, natural and otherwise, so too might blockchains accompany big data for the tracking and administration of all phenomena.

One summary and prognostication of this dynamic and the potential universal applicability of blockchains is that anything that can be decentralized will be. This has an implied assumption about the inherent efficiency, benefit, and potential superiority in certain situations of the blockchain model. Decentralization is ‘where water goes’ (where water flows naturally, along the path of least resistance and least effort). The blockchain is an Occam’s razor, a natural efficiency process.

Blockchains are thus an intriguing model for coordinating the full transactional load of any large-scale system, whether the whole of different forms of human activity (social systems) or any other system too like a brain. In a brain there are quadrillions of transactions that could perhaps be handled in the universal transactional system architecture of a blockchain, like with Blockchain Thinking models.

Further, it is not just the transaction-handling capability of the blockchain as a universal coordination system but other properties that can also be applied through-out such as demurrage incitory stimulation for dynamic resource redistribution across the system. In Blockchain Thinking, this could be redistributing brain currencies like ideas and potentiation. Thus, it is not the mere orchestration features of universal blockchain systems but their enhancement possibilities that is perhaps the more interesting point. Not only can we better organize larger-scale existing activity with blockchains, but we can also possibly open up new classes of as-yet unimagined functionality and potentiality.

More information: Swan, M. (2015). Blockchain: Blueprint for a New Economy. O'Reilly Media.

Melanie Swan, MBA, is an Affiliate Scholar of the IEET. Ms. Swan, principal of the MS Futures Group, is a philosopher, science and technology futurist, and options trader.



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