Ethereum

A few months ago Parker Thompson, a well known Silicon Valley VC, tweeted that “the concept of crypto-economics is stupid. It’s economics. Inventing your own word is just an excuse to ignore well-understood concepts.” The term “cryptoeconomics” causes a lot of confusion. People are often unclear on what it is supposed to mean. The word itself can be misleading, as it suggests that there is a parallel “crypto” version of the whole of economics. This is wrong, and Parker is right to mock such a generalization. ...

A concept I often use to explain the potential of blockchain technology is “the space of possible economic relationships”. What do I mean by economic relationships? I mean any situation where two or more persons enter into a relationship concerned with value: A transfer of cash An informal agreement to borrow money from a friend A legal contract to buy a house The relationship between all the shareholders of a corporation The relationship between all persons who use US dollars This is meant to be very broad, including informal agreements, legal contracts, and very diffuse relationships that we don’t often think about, like sharing a national currency. ...

A version of this article first appeared in Coindesk on June 4, 2016. Read Part 1 of this series here. The term “smart contract” has no clear and settled definition. The idea has long been hyped to the public as a central component of next-generation blockchain platforms, and as a key capability for any practical enterprise application. They are defined variously as “autonomous machines”, “contracts between parties stored on a blockchain” or “any computation that takes place on a blockchain”. Many debates about the nature of smart contracts are really just contests between competing terminology. ...

Note: initially published on Medium under the pseudonym Creole Imagine thousands of computers all over the world connected by the internet. Some are home PCs, some are laptops, some are servers sitting deep underground. But each of them runs the same computer program, which connects all of these computers into a network of equals. This program sets out rules for how the computers should work together. How to talk to each other. How to store data. Specifically, this program lets them behave as though they were all together a single, world-spanning computer. Every one of the thousands of devices that makes up the whole does the same thing, in the same order, in lock-step. They’re all recording the same information and running the same programs. In a real sense, it is one computer. This computer is Ethereum. ...

Note: initially published on Medium under the pseudonym Creole You’re up early for work this morning, in the kitchen making coffee. In the backyard, out the window above the sink, is your landpad & charging station, decorated with the bright bold outlines of its QR address. On the landpad sits the delivery drone, charging quietly. As its batteries fill, small amounts of money are paid into your house’s account every few kilowatts. It could charge lots of places — there are cheaper sources of power available of course —but in the end the drone cares about location. Your backyard is close to several distribution centres and a dense neighbourhood that makes a lot of purchases that are in the right weight category for this model. It’s a nice bit of cash every month. Some neighbourhoods tried to ban renting backyard space. It worked in some places, but others weren’t happy having to pay a higher average delivery fee for drones having to charge farther away. ...

Note: initially published on Medium under the pseudonym Creole In the third post, we explored how blockchains can serve as a platform for what I called “value technologies” — things that act like currencies, shares, or rewards points. In this post, we take this idea further. Many people now believe that blockchains will let us build things more complex and more interesting than the simple value technologies discussed above. We can write software that can itself control currencies, shares, or rewards points. This “software agent” would be more like an independent economic entity. Living on the blockchain, it would be able to send, receive, or hold money — whatever it was programmed to do. Maybe it even provides a useful service to people, or to other software, for which it is paid. ...

Note: initially published on Medium under the pseudonym Creole You’re a little early for work that day and decide to walk to the far Starbucks instead of going to the close Starbucks. The close Starbucks is one of those ones they cram into a rough corner of an office building, halfway between the fire exit and a fern. The far Starbucks is glass and wood and gleaming like a Starbucks should. You arrive and wait in line to buy a coffee. ...