Decentralized Ledgers - Engineering Paradise

Succeeding in our everyday personal objectives without worry of survival is something coming out of science fiction.  But as illustrated in this book, it is feasible to build such a future for ourselves.  All it really takes is the public’s willingness to move in that direction.

And if we want the general public to be willing to let their guards down and just trust a new governing system, a new economy and a new social framework, lots of trust is required.

Humanity, unfortunately, is not very well known for its trustworthiness.  We all know, that it is always a few detractors that ruin everything for everyone else.  Many of our laws are in fact very logical social guidelines (do not kill each other, do not steal etc.), social rules that really do not need to be written down.  Most people know what bad behavior is and what is proper.  But even in a low stress, ideal environment, there would always be a few that, for some reason, fall outside of social rules due to mental illness, neurochemical imbalances and other unforeseeable reasons.

So, our ideal world economy must also follow some strict rules that cannot be changed unless the whole population agrees.  Otherwise, we’re back to where we’ve started with a single entity or persons capable of directing our fate without our consent and possibly for their own benefit.

This is where decentralized ledgers come in, more commonly known as blockchain technology.

I prefer using the term decentralized ledgers because blockchain is a certain type of algorithm among others, used to manage these ledgers across the web.  I also want to stay away from the Bitcoin brand, the first popular decentralized ledger, as this blockchain enabled cryptocurrency was just a first of many very different types of decentralized ledgers.

For those of you less familiar with Bitcoin and blockchain, you probably have heard of the term cryptocurrency.  Basically, this is digital currency that is stored on the Internet and on your own devices that people can use to make transactions with one another or with merchants.  It is all digital and Bitcoin is not associated with any bank or government. 

Today, there are over 1,000 decentralized ledgers in circulation and they are not all equal.  Some are in fact controlled by a central company or individual, while others, like Bitcoin, are open source initiatives that are not controlled by anyone at all.  All of them however, can be used and they all work slightly differently under different rules.  Some are exclusively used as cryptocurrency for monetary exchange, while some are for asset transfers or smart contracts.  It gets complicated.

Suffice to say, a distributed ledger can be created to accommodate any need nowadays and any protocol the creators want.

To keep things simple and in the context of this discussion, I’ll simply describe decentralized ledgers as a general concept.

Most decentralized ledgers have four basic characteristics:

•         Security:  No single person or participant can affect the data stored in the ledger, making historical data tamper proof.  Well programmed ledgers ensure that the data cannot be altered once it is put into the system.  If the ledger is meant to be private, then only the participants on individual transactions and pieces of data can read them.
•          Authentication:  Each transaction (of data) made on the ledger is associated with a specific identify belonging to whoever participated in the transaction.  This makes each transaction transparent.  Great to be used for smart contracts and currency since you need to keep track who the terms or money belong to.  Facial recognition and biometrics could easily be used to serve as identification for individuals using the system, but current systems usually use alphanumeric codes as ways to identify owners.
•          Shared data:  The data on this single ledger is stored across a whole network instead of being stored on a traditional centralized database that can be overloaded, go down or be hacked.  There are multiple copies of each piece of data stored throughout the network and each participant has access to the entire ledger.  This protects the system against disruption, corruption or attack since a massive amount of computers working under different protocols would need to be disrupted in exactly the same way to change any part of the data. 
•          Auditability:  Since each transaction and piece of data is associated with an identity, there is a clear audit trail to follow.  The ledger has total transparency.  The history of the transactions is saved across the whole network, so it can be viewed by an auditor as needed.

Naturally, this sort of system builds a large amount of trust.  Therefore, if the ledger is created to have no controlling entity, once it is released to the web and starts being used by the public, it could not be altered, would be tamper-proof, would allow for private and public information to ride on it, it would be auditable by anyone with proper access (with proper identities) and unalterable by hacking or other known method.

A national decentralized ledger

For our ideal nations, if we use such a ledger, the population would be able to audit the ledger in full transparency, with support of artificial intelligence to browse and make sense of all the data, transactions and identities located in the distributed system.  Citizens would not be concerned by government officials cheating the system because they could be easily caught by defense agencies and the citizens themselves. 

All the transfers of value mentioned in the Economy Section of this book could be associated with individuals by identity and added or subtracted accordingly.  From lease arrangements over land, cash transfers, contracts, income, taxes paid, goods owned.  You name it.  It could all be in there for each citizen’s security and to ensure no one is cheating anyone else.  It would be fair.  Exchanges between individuals, people and companies or everyone with the government would be easily done and tracked for later audit at any time.

The lawmakers would be the ones that would create regulations on who would be able to view private information for audit purposes for national security or investigative reasons. After all, we want our agencies to have some fair protocol allowing them to read the system to keep our society secure.

Work compensation

For those individuals choosing to work or being selected to serve the citizens of the nation, they could be paid through the ledger instead of using a bank.  After all, since the decentralized ledgers live in the Cloud, it can be accessed through any Internet-capable device.  No banks need to be involved in any transaction.  Besides, who wants to pay bank fees and be controlled by such a thing as banks when a better, more secure, more transparent and more trusted system available.  Just like current decentralized ledgers, all you need to have is a contract with someone that asks for your value and the contract closes when the value is provided and accepted by the other entity.  Your employer or contractor can transfer compensation Units into your account from theirs directly.  

The agreed upon contract lives on the ledger and is associated with both identities that participated, including the terms of engagement.  The remuneration for the work done also lives on the ledger, is connected to the contract, and both identities are mentioned.  The transaction is shown clearly.  So, if the contract has certain values associated and the later transaction is not the same, it is obvious for anyone to see, just in case a disagreement occurs between the two parties.