Decentralization and the Future World Order – Part I: The Revolution Is On

Bitcoin-Decentralized-World

Source: Thought Infection

A technological revolution is underway. An array of technologies are being developed that aim to do nothing less than disrupt the deepest fabric of the current world order. In a world where trust is power, decentralization steals the power from the hands of centralized institutions like corporations, banks, and even governments and puts it into the hands of the network. The revolution is beginning with a race to build the next generation of decentralized technologies that may soon replace internet giants like Dropbox or Facebook, but this is only the beginning of a transition to a future world order of decentralized power.

Lets start with a simple question: What is decentralization?

Many people equate decentralization with cryptographic networks like Bitcoin, which combine cryptography with decentralization, but decentralized applications do not inherently require encryption. The prototypical example of a modern decentralized technology would be Bittorrent, a technology with no inherent requirement for encryption. At its base, decentralization is the simple process of taking information and distributing copies among some sort of network so as to enhance data accessibility, security, redundancy, and congruence (consistency between parties).

The idea of decentralization is actually as old as communication itself. Cavemen would share their knowledge of hunting techniques and weapon technology among their tribe in order to be sure that the loss of no single individual would mean the loss of vital information. As humans created increasingly elaborate systems of exchange, organizations learned that keeping two or more copies of important documents was essential to ensuring their security.

The central problem of decentralization is that it also greatly increases the likelihood that information could fall into the hands of untrusted individuals. Thus, balancing the need for privacy and security meant finding a balance between centralized and decentralized structures for information sharing. To solve the age-old problem of privacy in shared information, cryptographic encoding or information was developed. Since at least Medieval times, people have been using simple ciphers to encode messages which they wished to share with only specific individuals.

In the 20th century, cryptography advanced greatly particularly during the world wars, when warring nations needed to be able to move around large amounts of information while preventing it from falling into the hands of the enemy. This spurned great innovations in both encryption and decryption, with both sides pouring resources into figuring out what their enemy was planning. It is widely believed, that the breaking of the Enigma code by British code-breakers which included one of the greatest minds of the 20th century, Alan Turing, was key to winning the war.

With the help of the universal computers Alan Turing helped invent, increasingly secure encryption algorithms were developed over the last half of the 20th century. Using these modern encryption algorithms, we can hide information well enough to confidently exchange sensitive financial information over a network which is essentially open (the internet). Thus, cryptography means that anyone eavesdropping on your web communications with your bank would have no way to understand the messages.

The Bitcoin blockchain is a distributed, encrypted ledger which stores the holdings of users of the network in individually encrypted data. This way, those using the network can be sure to agree on what amount of Bitcoin each user has, while only allowing those with the keys to be able to unlock their data and send some amount of Bitcoin to another user (see more here). Using the encrypted blockchain, Bitcoin is able to seamlessly transfer a limited supply of units of value between individuals in a way which does not rely on backing from any one central authority to provide value to the currency.

The core advance of the blockchain is that it allows the distribution of highly secure and highly congruent information throughout a network with no need for a centralizing authority.

As a side-thought, I would like to point out that although the software instantiation of the blockchain which underlies Bitcoin is totally dependent on digital computation, I see no reason a similar system based on mechanical encryption could not also be possible. Even if we never had invented computers I think we eventually would have come up with a sort of steam punk Bitcoin through which we could distribute value or congruent information using a cryptographic ledger system. 

Bittorrent was the first application to show that sharing of encrypted information over a decentralized network could be used to transfer value securely and efficiently, but there is no reason that decentralized technology could not be used to share any kind of information in a trustless network.

The MaidSafe and Storj projects have the ambitious goal of allowing anyone to share anything securely and efficiently over a decentralized network, something that could have deep consequences for the way that the internet works. If anyone can use the distributed network to share a website, then this could eliminate the needs for centralized servers which currently serve up websites when you visit them. Under these protocols, the cost of storing and sharing data with other users of the network who donate some part of their bandwidth and hard-drive space in exchange for the right to use the network. While some might worry that such a network would be used primarily for content piracy (as has been the case for Bittorrent), the integration of the Safecoin cryptocurrency with the MaidSafe network may actually make it easier than ever for content producers to monetize their content.

According to the project leader, both Maidsafe and Storj could be used to develop alternative, distributed versions of popular services such as Dropbox, Facebook, or even Google. Distributed versions of these centralized services could offer advantages for security and failure resistance. MaidSafe could also dramatically lower the barriers to entry for new players trying to compete such internet institutions as Facebook. While I have doubts whether the massive data-crunching necessary for Google could be pulled off on a decentralized network, a decentralized social network seems an obvious applications for MaidSafe.

Whereas MaidSafe, Storj and Bitcoin are specific applications of distributed technology, the Ethereum project aims to go much further and create a general distributed computer language on top of which anyone could easily develop an application like MaidSafe or Bitcoin. They are essentially trying to create a sort of decentralization operating system on top of which it would be possible to build any sort of program. By allowing the secure sharing of computer programs, Ethereum could allow the creation of advanced smart contracts with defined limits on how and when their funds could be disperse, or potentially even much more complex entities such a corporations.

2014 was a bit of a down year for Bitcoin, with coins falling from a value as high as $1000 to around $230 today. While this might be taken as a sign that the future of Bitcoin is in some danger, it is absolutely clear that it does not reflect at all on the wider cryptocurrency ecosystem. The ability to distribute trust through a network through the use of a Blockchain is a world changing technology, and the value of one currency does nothing to change its utility as a method of exchange. Saying that a drop in the price of bitcoin makes it irrelevant is like saying that the drop in the price of computer chips makes them irrelevant. Bitcoin is just the first in a series of decentralized applications that are already beginning to compete with centralized services.

Decentralization is becoming the gold standard for when you truly need to trust something, and in a world where trust is power it seems inevitable that decentralized technologies are destined to become the new nexus of power. In my next post I will discuss the past present and future of trust and power, and how that has been reshaped by decentralization.

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I would like to make a recommendation for a subreddit and a podcast that I think that those stimulated by this article might enjoy following, /r/Rad_Decentralization and the Decentralize Podcast

It’s Time to Start Believing Again – Why Basic Income Could and Should be the Next Global Political Movement

Source: Thought Infection

Things change slowly and then all at once. 

If there is one great consistency about change in the 21st century, it is that things seem to change almost imperceptibly right up until they become inevitable. Many good examples of this effect can be found in the world of technology such as the rise of the internetthe fall of film-cameras, or the explosive growth of the green energy industry. In all of these cases the exponential nature of technological advances led many to discount major changes that eventually disrupted entire industries. While this effect is best understood in the world of technology I think this kind of change can also be seen in social and political spheres.

Political movements must by necessity start with only a minority of individuals working very hard for very many years to push forward on an issue. For a very long time it can appear that little or no progress is being made, but below the surface opinions and minds are slowly shifting. This slow progression continues in the background, almost imperceptibly until some sort of tipping point is reached and a sudden shift in the public and political sentiment can occur. A good example of this effect would be the momentous shift away from a deep and vitriolic hatred of gays only a few decades ago towards increasing acceptance today.

In addition to the energy provided by a small group of dedicated individuals, flashpoint social or political change also requires the maneuvering room in order for rapid revolutionary change to happen. The room for new ideas to maneuver can be created by a collapse of incumbent ideology, or in the case of the greatest shifts it often comes from a wider, systemic loss of faith in the system. When people become embittered with things as they are they will inevitably start looking to those offering alternative views.

A person without belief is a power vacuum. 

I think we are currently stand at time when conditions are set for the next global political movement to take hold. We are seeing clear symptoms of a systemic erosion of faith in the political and economic systems as they stand today.

Economic hardship and unemployment has become endemic across large parts of the developed world. Those who do work find themselves squeezed between longer working hours, higher on the job demands, increasing costs of living, and loss of both job security and benefits.

Times feel tough, and people are starting to ask why they are tough. Did we have some sort of disaster? Are our crops failing, or our industries falling apart? What happened that is making institutions like education and health too expensive to support?

Thomas Piketty, in his recent book provides strong evidence that the economic pathology of the current geopolitical situation may simply be the symptoms of a larger economic disease. When capital out-competes labour, it inevitably leads to increasing wealth disparity and the associated economic problems that we see today. People can see that the economic gains that our collective hard-work creates is going disproportionately into the hands of the wealthy. People can see that the game is rigged against them, and they don’t really want to play any more.

At the same time as economic realities are being thrust upon workers around the world, people are also increasingly detached from mainstream politics. Little real change has happened despite perpetual political promises to deliver such. Political detachment combined with economic hardship is a dangerous mix, and is credited with leading to the rise of extreme political groups like the Golden Dawn in Greece and other far-right parties in the UK and France. The rise of more extremist politics is also apparent in the increasingly polarized and broken political landscape of the United States.

The disengagement of the public from the political sphere is particularly strong for those who are also disproportionately affected by the economic slow-down, the youth. It is an unappreciated fact that there are actually more millenials in the United States than there are baby boomers. Whatever politician figures out how to engage the millenial generation politically is going to run the world.

From my perspective, there seems to be a clear build-up of political tension across the globe. While we can argue about specific economic and political maladies that have led us to this point, I think the simple fact is that people are losing faith in the system as a whole. As people lose faith, governments become more detached and fearful of their citizens, leading more people to lose faith in the system, and thus a vicious cycle of political breakdown is perpetuated.

So how do we stop this?

The answer is surprisingly simple – We need to believe again.

People need to believe that the world will be better for their children than it was for them. This is the magic that drives people to get up in the morning and go to school and work, to put in the long hours of hard work, to make discoveries, to invent new technologies, and improve the world. The economy will flourish only as long as people truly believe they can better their own life, and that of their children.

Without faith in the global economic and political system, we have nothing. 

Believe it or not, there just might be one simple medicine which (while it would not solve all of our problems) could go a long way to solving the twin problems of political and economic break down.

Basic income.

There is a long list of reasons that basic income makes for sensible economic policy, which I will not go through here. Suffice it to say that basic income would (1) give workers the leverage to demand more from work, (2) give individuals and innovators the means to do their thing, (3) give corporations more incentive to automate their production, and (4) generally support the consumption economy. (Some worry that such a basic income might lead to less incentive to work, but I say that if you need to use starvation as a threat to get people to work for you, then your business is not profitable enough.)

Perhaps most importantly, basic income would be the solution to restore the faith of the common individual in the current system of global capitalism. By institutionalizing the social contract in the form of a cash dividend for everyone, basic income would finally enshrine the promise that a rich and successful society must first deliver a minimal living standard to everyone.

Serious realistic types might rush to play down the importance of belief in the political system. Who cares whether the rabble believes in what the government and politicians do, as long as it is functional? But these people are completely missing the central truth of the matter here. Belief is the only power in the world that matters. My dollar is only worth what we collectively agree it to be worth, and the same goes for our societies. If we fail to create societies which inspire belief, then we are lost. If we do not find a way fill that vacuum left by eroding belief, then someone else will.

It is time for something that we can believe in, it is time for basic income. 

The Science (and Mystery) of Sleep

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Given the widespread use of technology and stresses caused by economic instability, it’s no surprise that more than one out of three adults in America today get less than seven hours of sleep a night and 38% reported unintentionally falling asleep during the day at least once in the past month according to a Centers for Disease Control’s Morbidity and Mortality Report. What may come as more of a surprise are results of studies which indicate just how important getting a healthy amount of sleep really is for our physical and mental well-being. According to a recent article by Dr. Joseph Mercola, risks associated with sleep deprivation include:

  1. Reaction Time Slows: When you’re sleep-deprived, you’re not going to react as quickly as you normally would, making driving or other potentially dangerous activities, like using power tools, risky. One study even found that sleepiness behind the wheel was nearly as dangerous as drinking and driving.2
  2. Your Cognition Suffers: Your ability to think clearly is also dampened by lack of sleep. If you’re sleep-deprived, you will have trouble retaining memories, processing information, and making decisions. This is why it’s so important to get a good night’s sleep prior to important events at work or home.
  3. Emotions Are Heightened: As your reaction time and cognition slows, your emotions will be kicked into high gear. This means that arguments with co-workers or your spouse are likely and you’re probably going to be at fault for blowing things out of proportion.

Meanwhile, previous research has found that sleep deprivation has the same effect on your immune system as physical stress or illness,3 which may help explain why lack of sleep is tied to an increased risk of numerous chronic diseases.

In addition, getting less than seven hours of sleep or having regular interrupted and/or impaired sleep can affect hormone levels and expression of genes which can:

  • Increase your risk of heart disease and cancer

  • Harm your brain by halting new neuron production. Sleep deprivation can increase levels of corticosterone (a stress hormone), resulting in fewer new brain cells being created in your hippocampus

  • Contribute to a pre-diabetic, insulin-resistant state, making you feel hungry even if you’ve already eaten, which can lead to weight gain

  • Contribute to premature aging by interfering with your growth hormone production, normally released by your pituitary gland during deep sleep (and during certain types of exercise, such as high-intensity interval training)

  • Increase your risk of dying from any cause

Read the full article here: http://articles.mercola.com/sites/articles/archive/2014/03/27/sleep-deprivation-risks.aspx

A recent post at Thought Infection also highlights the importance of sleep, speculating on how it could serve as a biological compression algorithm. From the article’s conclusion:

One might think about it like a similar process that happens when a computer is put to sleep. The energetically costly RAM is compressed and dumped to the much more efficient, but also much slower hard disk. Perhaps the brain might operate in a similar way, finding the most energetically efficient means to store new memories in synaptic circuits by connecting new memories to old ones.

Taking this a little further, I think this idea has given me a little bit of insight into how biological brains function. Unlike a computer which fills up the hard drive with new information stored with (more or less) perfect fidelity, organic brains have to have some pre-existing map to connect a novel sensation both in order to make sense of it and to store the memory of it.

An apple is only an apple after you know what an apple is.

The brain does not have an unlimited tape of memory onto which to record, or an infinite supply of energy to build synapses. The brain must make due with what resources it has, and that is the genius of it. Because brains must find ways that new ideas and memories connect to old ones, we are energetically required to find new ways of thinking about the world every night. Sleep reinvents us one night at a time.

Read the full article here: http://thoughtinfection.com/2014/04/12/is-sleep-a-biological-compression-algorithm/

While this theory may possibly explain an important neurological function of sleep, the subjective experience of the dream state remains as shrouded in mystery as ever.

Anecdotal evidence suggests that during sleep it sometimes is not just one’s direct experiences being processed but also future experiences and experiences of loved ones, ancestors, and those of people going through traumatic events as well. In other words, in rare cases it may also be an an interconnected and non-local state of consciousness.

The following two examples were recently featured in an article reposted at Red Ice Creations:

Scene 1. Mark Twain was famous for mocking every orthodoxy and convention, including, it turns out, the conventions of space and time. As he relates the events in his diaries, Twain and his brother Henry were working on the riverboat Pennsylvania in June 1858. While they were in port in St. Louis, the writer had a dream:


In the morning, when I awoke I had been dreaming, and the dream was so vivid, so like reality, that it deceived me, and I thought it was real. In the dream I had seen Henry a corpse. He lay in a metallic burial case. He was dressed in a suit of my clothing, and on his breast lay a great bouquet of flowers, mainly white roses, with a red rose in the centre.

Twain awoke, got dressed, and prepared to go view the casket. He was walking to the house where he thought the casket lay before he realized “that there was nothing real about this—it was only a dream.”

Alas, it was not. A few weeks later, Henry was badly burned in a boiler explosion and then accidentally killed when some young doctors gave him an overdose of opium for the pain. Normally the dead were buried in a simple pine coffin, but some women had raised $60 to put Henry in a metal one. Twain explains what happened next:

When I came back and entered the dead-room Henry lay in that open case, and he was dressed in a suit of my clothing. He had borrowed it without my knowledge during our last sojourn in St. Louis; and I recognized instantly that my dream of several weeks before was here exactly reproduced, so far as these details went—and I think I missed one detail; but that one was immediately supplied, for just then an elderly lady entered the place with a large bouquet consisting mainly of white roses, and in the center of it was a red rose, and she laid it on his breast.

Who would not be permanently marked, at once inspired and haunted, by such a series of events? Who of us, if this were our dream and our brother, could honestly dismiss it as a series of coincidences? Twain could not. He was obsessed with such moments in his life, of which there were many. In 1878 he described some of them in an essay and even theorized how they worked. But he could not bring himself to publish it, as he feared “the public would treat the thing as a joke whereas I was in earnest.” He offered the essay to the North American Review on the condition that it be published anonymously. The magazine refused to do so. Finally, Twain published the article in Harper’s, in two installments: “Mental Telegraphy: A Manuscript With a History” (1891) and “Mental Telegraphy Again” (1895).

Mental telegraphy. The technological metaphor points to Twain’s conviction that such events were connected to the acts of reading and writing. Indeed, he suspected that whatever processes this mental telegraphy involved had some relationship to the sources of his literary powers. The “manuscript with a history” of the first essay’s title refers to a detailed plotline for a story about some Nevada silver mines that one day came blazing into his mind. Twain came to believe that he had received this idea from a friend 3,000 miles away through mental telegraphy.

Scene 2. The American forensic pathologist Janis Amatuzio’s book Beyond Knowing is filled with extraordinary stories of impossible things that routinely happen around death. Here is one such tale.

It began one night when Amatuzio encountered a very troubled hospital chaplain, who asked her if she knew how they had found the body of a young man recently killed in a car accident. Amatuzio replied that her records showed that the Coon Rapids Police Department had recovered the body in a frozen creek bed at 4:45 a.m.

“No,” the man replied. “Do you know how they really found him?” The chaplain then explained how he had spoken with the dead man’s wife, who related a vivid dream she’d had that night of her husband standing next to her bed, apologizing and explaining that he had been in a car accident, and that his car was in a ditch where it could not be seen from the road. She awoke immediately, at 4:20, and called the police to tell them that her husband had been in a car accident not far from their home, and that his car was in a ravine that could not be seen from the road. They recovered the body 20 minutes later.

Read the full article here: http://chronicle.com/article/Embrace-the-Unexplained/145557

 

The Existential Threat of Algorithmic Trading

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Most of us are well aware of the problem of human labor being displaced by technology. The Thought Infection blog recently posted an informative overview of how even jobs we might not immediately think of as being at risk of obsolescence are steadily being encroached upon by technology. In this follow up article, he explains how automation has an especially destabilizing effect on the financial sector and economic system.

Excerpt:

The advent of algorithmic trading extends the game that has always existed in markets, but now the speed is faster, the stakes are higher and we can’t be sure who is in control. 

The manipulation abilities of trading algorithms may already (and if not, soon will) extend beyond this kind of inter-algorithmic effects. Given that trading algorithms can act on human informational sources, such as Twitter, as news is released, it is not outlandish to imagine that these algorithms could also be producing information in an effort to manipulate the market. Given that algorithms are becoming better at turning basic information into natural language, it seems possible that an algorithm could be designed to Tweet out false information about a company to try to depress the stock price.

If we take the ketchup manufacturer again and we imagine they are in a precarious position due to a new bill to remove subsidies for tomato growing. Imagine a bunch of tweet/comment/news bots aimed at pushing the public dialogue to make it seem that the subsidies are going to be removed. If massively parallelized, this kind of attack on public sentiment could have a significant effect on the ketchup manufacturer and provide an opportunity for major profits. I think it’s likely this kind of algorithmic sentiment manipulation is already happening on some level.

Even this kind of sentiment manipulation is only a drop in the bucket compared to what may become possible in the near future. The astounding profits which can be made in this kind of algorithmic trading is driving huge investment in artificial intelligence. In the near future, algorithmic traders will be capable of much more complex manipulations to try to move market prices.

…Perhaps by identifying those congressmen who are on the fence about subsidies, a targeted campaign to manipulate the opinions of those in said congressman’s district could have a real effect on the outcome for ketchup manufacturers. This may seem a bit ridiculous, but even a tiny effect on the perceptions and opinions of one individual can make a big difference if spread across a wide enough group.

Read the full article here: http://thoughtinfection.com/2014/01/05/the-deep-end-of-decoupling-the-existential-threat-of-algorithmic-trading/

What he speculates could be our greatest threat in the future is not Terminator-like cybernetic weapons but “an army of Gordon Gekko-bots capable of manipulating every aspect of our legal and political systems in an aim to maximize market profits.”

Swiss to Vote on Basic Income for All

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Switzerland is one of the world’s wealthiest countries per capita, and also one of the most democratic. It’s the only European country with true direct democracy in which all citizens have to do is gather 100,000 signatures calling for a vote to hold a nationwide referendum with a binding result. Last November, Swiss citizens created the so-called 1:12 referendum, which would limit the wages of top executives so they couldn’t earn more in a month than lower paid employees do in a year. That proposal lost the vote, but early next year they’ll have an opportunity to decide on an equally radical referendum: a $2,800 basic income for every adult, whether employed or unemployed. There is currently no minimum wage in Switzerland, but there will also be a vote on that next year.

Anger about salaries and fairness has surged among Swiss voters because some of their biggest banks including UBS are responsible for speculative investment bubbles and continue to pay top executives huge bonuses while reporting huge losses. According to Bloomberg News, Switzerland is home to at least five of Europe’s top 20 paid executives. The inequality pay ratio in Switzerland is 1:194 (while in the U. S., average CEO to average worker compensation was 1:243 in 2010).

The idea of a Basic Income or Universal Wages are not only supported by Marxists and Communists, but have have been gaining traction among Libertarians as well. A great post at Thought Infection recently made an argument for such proposals from a civil libertarian perspective:

Freedom in the 21st century should mean freedom from having to engage in productive work simply to meet your basic needs for comfort and dignity. 

At one time, the ready availability of jobs amply filled the need for a basic access to a comfortable and dignified life, but precipitous technological and economic changes erode this dynamic further each day. The function of the economy has never been to provide gainful employment to people, but simply to provide material goods. As the economy manages to produce more with less human labor, we must create new mechanisms aimed specifically that maintaining and raising the minimum level of comfort and dignity to everyone in a society…

…Worse than just being immoral, the desperate poverty of the lower classes is both immoral and useless. It is not a lack of money that compels the great successes of the modern age, but rather the availability of opportunities. It is because healthy, well-fed people were able to get a good education that allowed us to realize the great miracles of the modern age (eg, the internet, smart phones, Google, etc…). 

We must rebalance the right of society to compel people into productive work with the obligation of society to support its citizens. It should be noted that basic income is not aimed at the unrealisitic and undesirable goal of unfettered access for all to every luxury of the world. Freedom from work does not mean the right to luxury; it simply sets a baseline below which no person should fall. Basic income seeks to strike a fair balance between allowing the benefit of work to coexist with a system aimed at delivering dignity and opportunity for all in a society.

Beyond just better enabling access to opportunities, basic income will also allow people the freedom to live as they choose; to explore unpaid work in the form of volunteering, participating in creative projects, or starting new business ventures. Some argue that there would be less incentive for people to start businesses and be productive, but it could just as easily be argued that it would remove the disincentive from the high-risk, high-reward ventures that are so valuable to modern society…

…Requiring people to live so much of their life working simply to earn a basic income is a waste of human potential and bad for progress. By eliminating the obligation to work just for simple survival, basic income would allow a new dynamic expansion of human freedom and human potential.

A society compelled to perfect cohesion and homogeneity lacks the dynamism to compete in the modern world. New ideas can only come into being at the chaotic interface between contrasting worldviews and lifestyles. In a world where progress is completely reliant on our ability to innovate and create new ideas, we should be seeking to maximize the spectrum of lifestyles which can be expressed within the society. By removing the need to work just to live, we will let people explore their true potential, and we will realize the untold benefits of a new dynamism.  

And this brings us to the real reason that I think basic income will happen soon, not only because it is morally the right thing to do (which it is), but because it makes good sense economically. Just as slavery ended when factories made the economic model of slavery obsolete, we will move towards basic income because it makes good economic sense for the modern innovation economy.

Dynamic, creative and competitive economies of today must seek to stretch the social fabric to its limits. Basic income will serve to reinforce this fabric and enable the risky ventures that will power us forward in the 21st century.

Read the full article here: http://thoughtinfection.com/2013/12/15/basic-income-means-basic-freedom/