The Decentralized Future. I have a vision…
By: Collin Cusce
Tags: Blockchain, Ethereum, Economics, Cryptocurrency, Decentralization

How would this work in a global sense? A question I ask on the podcast (https://thebitcoinpodcast.com/category/hashitout/) a lot is whether our guests are purely one-world-blockhain (or a single source of truth to rule them all), or are they internet-of-blockchains (a mishmash of blockchains which flow value between each other freely). I’m still ardently in the one-world-blockchain camp.

The world depends on standardization. Liters, grams, ohms, volts, Celsius, and Kelvin… they all standardize our measurement of reality. Yet we live in a world where there’s no unitized measure of economic value. Our system, as it stands, is a mish-mash of market values that fluctuate with the speed of information and assets, that has relevance targeted to ones immediate locality. We can’t possibly do it any other way… no government wants to trust another government with their centralized production of value.

Furthermore, this production of value is spooky. It’s arbitrarily printed and distributed to the institutions who distribute it to the citizens as they deem necessary. Dark money has always existed in the cash economy, and this value cannot be known or accounted into economic models reliably. There could be several hundred vaults internationally which contain billions of untracked US dollars each, ready to flood the US market, and the United States government would be none the wiser. Some see a liberty in this, but what I see is a disaster waiting to happen. We need to track our value better, but we couldn’t rely on a single organization to handle the production and distribution of this value.

The solution is obvious to me: eliminate the institutions.

How would such a system work? We would need a central, single source of truth to operate as a ledger of the unitized global measure of value. All assets can be valued and registered through this system. There will be limited participation in the form of posting contracts onto this system, perhaps through an exorbitant staking mechanism which prevents anything short of a nation state or significant global corporation from participating. I also see a low-value staking mechanism by which anyone with some moderate value in their pocket can stake to validate the network and earn some rewards in the form of transaction fees.

Each contractor participant who invests the high stake required can launch whatever “Layer 2” solutions they so desire. These Layer 2 solutions must adhere to the very thin honesty protocols in the network. They use the same addressing system and can flow value throughout their “subchain network”. This handles things such as, say, tariffs and taxation. Asset “spend” will only have value within the context of the Layer 2 subchain network it resides.

If you want to flow an asset across an international border and wish to exchange ownership, there’s a tariff automatically applied to the asset when you transfer it to another Layer 2 subchain network in the form of transaction fees. This can have any rules the exporting nation decides. If an asset is imported, this importation can also be subjected to duty by the country the asset is imported. The term “black market” is now anything that is misrepresented on-chain or is not exchanged using the chain.

Each citizen has a self-sovereign identity. This identity is issued at birth and becomes solidified when they reach adulthood. This adulthood identity can now make purchases such as alcohol, tobacco, marijuana, and adult entertainment. Moving an identity from one country to another is now as easy as moving an asset. On vacation? Notify the system that you will be in a different payment zone and on approved arrival, your assets come with you. You’re now operating under their tax code.

This opens up a whole new kind of international trade system. Banks become their own kind of sovereign “investment state” which owns no land, but may pool capital to increase gains over the general staking mechanisms. Lending institutions become smart contracts written for the investment states. Markets are all tracked live across the entire network, making Wall Street itself a monument to an era long passed.

Supply chain management will be completely revolutionized as full supply chain visibility will become the default, not the exception. The resiliency that decentralization supplies will enable the entire world a level of assurance never experienced before. Asset flow can be fully optimized with recycling and reconstitution being more tenable than they presently are.

Note: call me a wackjob, but I think this is essential given the pending devastating effects of climate change.

Overall, decentralization completely changes how society operates. The concept is nothing new. I’ve been reading Friedrich Hayek and Milton Friedman lately to get my head around the changes going down. They theorized about the ideal currency decades before the first Bitcoin paper was published. These advantages are long known.

Doing it right means that most people won’t even realize the change, though. But… that’s a good thing. Less interference. Just do it.