society Archives

From Mechanical to Organical Business Models

Most businesses and startups are designed following the traditional mechanistic thinking of the last two centuries. This approach assumes that the business works as a mechanism in which one piece engages after the other: from customer acquisition to profit. The problem: this has been obsolete for years.

The change is there for all to see. Nothing that does not work as a network can grow beyond a certain size. And that size threshold is getting lower and lower because big players like Amazon or Google are already imposing their dynamics on society.

Almost all large corporations have this obsolete “mechanical” structure. But they survive thanks to legal and financial privileges that parasitize the rest of society. These privileges are also doomed to disappear.

Exchanging your Time for Money is a Loser Bet

In a world of increasing competition and decreasing returns, for most business owners investing time and money in personally running the machine is a guarantee of long-term ruin.

Professionals are the most exposed, but so are other types of businesses. All of them invest their most limited resources: time and capital in exchange for getting some money in each transaction.

Capturing Value, Converting it to Capital

The alternative is to invest part of that effort in creating capital, in the form of a technological platform. Only with technology can you capture and retain a part of the value you generate for yourself, instead of having your client take everything.

Limited resources must be invested in technology that allows for three things: generating value for participants, scaling in the network, and turning transactions into money.

The Challenge: How to Become a Network

I know, designing platforms and aligning incentives is a big challenge. But so is the amount of change we are going through.

Get help in the form of a little consulting advisory, or partner with other players in your same industry, including competitors. Their main problem is the same as yours: how not to be devoured by a system that has mutated into a network.

Fiat Money and the Post-Covid Economy

Investors have stopped considering the value ‘utility’ and are moving to the value ‘store’. They buy apartments -like in China- to “save” money, not to foster research or innovation.

The same goes for many other products: people are thinking more and more about the resale value of things, and less about their utility value.

This is a consequence of the abundance of fiat money at 0%. There is no good deposit of value, and everything becomes a deposit.

Fiat money encourages this behavior. Who wants to risk 100% of an investment to get 5% return, when you can get 200% return by selling the “ticket” to the next person who comes in to play?.

That’s how bubbles are formed, and that’s how it was formed the gigantic Ponzi scheme we are all trapped in.

The intention of the central banks is to create a new electronic currency -also fiat- for the post-Covid economy: the CBDCs (central bank digital currencies).

With it, and once countries, societies, and natural resources have been plundered, the parasitic class is preparing the next bubble. It is called space exploration.

A Bright Future

They say you don’t hear the shot that kills you. Because the bullet travels faster than the sound of the shot. You can be dead before the sound arrives.

Which is what is happening now – deadly events are coming at such a pace, and from such strange directions, that we are dying as a society without a clue as to what hit us.

But all crisis are opportunities to improve. I am sure that when all this is behind us, and the necessary reckoning is done, each of us, and all society will be much more prosperous and free.

“There will be in the next generation or so a pharmacological method of making people love their servitude and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies so that people will in fact have their liberties taken away from them but will rather enjoy it.”

― Aldous Huxley

Blockchain tech, is it time?

The dot com vision was e-commerce, but the killers came in the form of social and search… In crypto, its still to be seen where the killers are. But I’m not sure it will be crypto money.

Why? Because you need a real ‘crypto economy’ generating value for many people. Then -and only then- some cryptocurrency will emerge to become a global standard. The economy is first, then money emerges out of the economy. Not the other way around.

Without any major crisis this event would be still 10 years in the future. But because of Corona the event is probably here. The plandemic is sponsored, and players like central banks and pharma industry are just pieces of a huge chess board. We will see, soon.

CBDCs are for the Banks, not for the People

The world has too much debt, which cannot be repaid (actually by design). But growth is too slow to allow governments to cope by inflating away debt service costs.

So they try and trick the people by offering a quick, bank free way of taking on more debt. These are the CBDC (Central Bank Digital Currencies). These digital currencies will still be debt obligations. This time is probably going to boost a new bubble: the new space exploration career.

The ‘Wall of Money’ is coming

A world that is overly indebted doesn’t need more debt to solve their debt problem. Central banks are just using these as ways of keeping banks assets from being defaulted on.

This isn’t for the people. It is for the banks. Just legal money laundering so banks don’t blow up yet again. And on the way you get a new layer of despotism and control over the people. (“Sorry, your social score is too low for you to spend money!. Go to the nearest vaccination center.”).

CBDCs are fiat money on steroids; a good play for social parasites, but a terrible idea for the economy. The good news is that it will never happen (but that´s a different story).

The AI Hoax

Media and some experts proclaim that we are about to create Artificial Intelligence (AI) that will allow machines to basically start thinking like people, and take care of everything.

But the term ‘artificial intelligence’ should be abandoned. When some day real AI takes place it won’t have anything of “artificial”. And there is no special reason to believe that we´ll be able to recognize or understand it.

We tend to assume that other intelligences will use a sequential, linear language, like ours. But reality can be very different, and unrecognizable.

Just check our failure to understand other intelligent species such as elephants, dolphins or whales. We do it on our terms, not theirs. Even after decades of study of the matter.

The simplest worms have a brain of 300 neurons. This connectome has already been completely mapped, and yet the most basic behavior of these creatures is barely understood.

We don´t even know how and why the most simple forms of life behave, and we are about to create some intelligence that will replace 3 billion years of biological evolution? … sure.

Current AI models and research assume that you can recreate consciousness using equations and logical procedures. But they are basically systems of equations and feedback. They work well when they are trained, but only under very strict boundary conditions.

So-called Artificial General Intelligence (the one supposed to imitate a human brain) is probably decades away, if it ever happens.

The Uncomfortable Truth About Blockchain Tech

…what is often neglected is the possibility of authoritarian regimes flipping the switch by using blockchain technology to create systems and applications that limit individual liberties for their citizenry.

Continue reading “The Uncomfortable Truth About Blockchain Tech”

Blockchain: The fusion of a Database with a Network

To some, the blockchain architecture is a breakthrough because it constitutes the first large-scale fusion of a database with a network.

The Networked Database

Frst we had isolated databases, then we created the internet to connect databases to the network, and with the blockchain we are essentially merging both concepts in a completely secured and reliable way.

So at the basis of everything we have a peer-to-peer network of nodes who all run a special piece of software that can store data, run some transactions to update the data, and connect with its peers to download and spread new data.

One of the breakthroughs of Bitcoin was the ability for the database and the consensus to stay consistent, even as nodes join and leave the network, without requiring those nodes to authenticate in any way.

All you need to do to join the network is to install the wallet client on your machine, let it synchronize its local database copy and start creating transactions and downloading new blocks as they are created.

Getting into the net

Now to run a fully secure node, you actually need to download a full copy of the database first, which can take days, and is a major barrier to entry for most people.

That’s why it is also possible – although way less robust and secure – to create an account on a website running a remote node storing your wallet in a remote database, and creating transactions on your behalf.

That’s what most exchange marketplaces like Coinbase or Kraken allow you to do. But they are mostly proxies for currency transactions. They don’t deal with smart contracts and more sophisticated business transactions.

There are also browser plug-ins that allow you to link your browser with a remote wallet, like Metamask for Chrome.

On the other end of the security spectrum, you also have the possibility to use hardware wallets like the ones offered by LedgerWallet, or pure cold storage by printing your wallet information on paper and storing it in a physical safe.

The wallet is the key

The main point to remember here is that, contrary to a centralized system, in a blockchain your wallet is your only key to joining the network. So if you lose your wallet or you store it online and somebody steals it there, you essentially lose access to your balance and your transactions.

Once you join the network the next vital element is the distributed ledger. And again, the only way to make fully secured transactions is to first download a full verified copy of the entire ledger.

With this, you can trace all transactions and all blocks, all the way to the genesis block, and make sure that transactions you create are going to be based on the right version of the truth.

Truth is consistency

This truth is essentially a series of blocks, chained with one another and containing lists of ordered transactions. The integrity and validity of those blocks of transactions is guaranteed by a series of cryptographic mechanisms.

But the one thing to know is that, once those proofs are established, it becomes extremely costly to go back in history and change one transaction in the past.

If you want to do that, then you have to compute again the block in which the transaction is stored, along with all the subsequent blocks to catch up with the rest of the network, the cost of which increases exponentially with each added block.

We call this property transaction finality. In the case of an open blockchain, it is never absolute, but breaking it requires what is called a 51% attack.

In other words, one mining node, or one organization controlling a set of mining nodes, would need to have more than half of the entire network’s power to be faster than the rest of the network in creating fraudulent transactions and blocks.

The consensus algorithm

Which brings us to another key element of the blockchain: the consensus algorithm. Simple user nodes don’t need to participate in the consensus algorithm. This mechanism, which is implemented by the mining process, can be disabled in most software clients, but if you do enable that feature and start participating in the mining process, then you take part in the consensus algorithm.

The most widespread form of consensus algorithm right now is of type proof-of-work (PoW). That’s what both Bitcoin and Ethereum blockchain implementations are using for now, and that involves contributing power in the form of computing capacity, measured as hash rate.

Most proof-of-work algorithms actually work, but the more processing power you can contribute, the higher the probability of your machine solving the consensus puzzle, and finding the next block to be appended to the blockchain ledger.

In other words, you can see this consensus algorithm as a game process to choose who is going to be the next node to decide how the network history is going to evolve.

It is a very clever mechanism as it doesn’t require any central point to choose a winner, and it mitigates potential race conditions, which means several nodes finding puzzle solutions almost simultaneously and spreading them across the network competitively.

This consensus algorithm also uses a combination of cryptographic mechanisms to do its work in an indisputable and immutable fashion. This adds a built-in trust mechanism to the blockchain that is incredibly valuable when you’re dealing with valuable transactions such as currency transfers or any kind of smart-contract-worthy business transactions.

Put differently, this consensus algorithm, once proven and accepted, essentially has the potential to replace a multiplicity of human processes to check and verify the validity of business transactions, which gives it all its disintermediation power.

Scalability as a weakness

One last important point about consensus algorithms is that, although Bitcoin and Ethereum chose to use some variant of a proof-of-work algorithm, those are starting to show their limits in terms of scalability and energy efficiency.

Indeed, they tend to get slower and slower as networks grow, and they consume more and more useless electricity and computing hardware, which is regarded more and more negatively in this world of climate change. That’s precisely why alternatives are being researched, the most promising of which is probably proof-of-stake.

The mathematic specifics are complex but in its most generic definition, you can see it as a way to come up to a consensus based on betting money instead of hardware and electricity to increase your chances to win the mining competition.

Ethereum is currently working on a future switch to a proof-of-stake consensus algorithm to replace is current proof-of-work one. this work-in-progress is codenamed Casper, and it should be deployed sometime in the future.

Lets talk about Solidity

It’s about 2 years since I don’t code a dapp and it’s time to recapitulate about the whole concept. Here are some notes and thoughts about Solidity.

Solidity itself is a simple language as a programming language

Solidity is a high-level language for ETH contracts. It makes it much easier for human to code, understand and then compile the code into the EVM so the ETH network can read it in a way the computer can understand. It’s a purposefully slimmed down, loosely typed language with a syntax similar to ECMAScript (JS).

Compilers such as Solidity is a compiler code into IBM code which is uploaded into the BC in the form of a transaction. Then anyone can execute it later on ETH BC.

Some basic ideas

– A OO Programming Language to Generate Smart Contracts.
– It helps developers in writing smart contracts which gets converted into byte code, which further gets executed in Ethereum Blockchain.
– Initially proposed in August 2014 by Gavin Wood.
– It has similarities to JavaScript and C (check the functions below)
– Program language of ETH BC and other competing platforms.
– Solidity is first converted into byte code and then gets executed in the EVM
– With Solidity developers can develop self enforcement applications.
– Solidity supports inheritance, libraries and a complex user-defined type which make it possible to create contracts for voting, crowdfunding, blind options, multisize wallets and many more.
– Runs in ETH BC and other BCs.
– Dapps: application that implement SELF ENFORCING business logic in the smart contracts.

Solidity to build smart contracts on top of Ethereum

Once the contract code is in the EVM (ETH Virtual Machine, the network) it needs people to interact with reality because there are no connections, otherwise its isolated. The reason is that anything that executes in the EVM needs to be deterministic. You can’t generate random numbers easily inside the EVM: it requires an outside interaction.

The contract object is the highest level we have in Solidity (class). Contracts expose some number of functions.

Functions and the issue with security

Contracts are easy to WRITE. But difficult to write SECURELY. Specially when you are dealing with funds. Many functions let someone to hack it and manipulate it circularly which makes them unsafe.

Public functions are callable by anybody e.g. want anybody who has X coin to check how many of them do they have in their wallet. Anyone can call it!.

=> Public functions are sort of the exposed API, exposed to the world. Things that you allow outside actors to interact with your contract.

Internal functions: only callable from inside the program so you only let other functions and not outsiders to use them.

The Quantum Computing Hoax

Quantum computing has failed to deliver something for about 40 years now. Any other technology with such a results would have been already scrapped. Due to fundamental physical limitations, QCs will never scale the way digital computers did for a long time.

But for some reason there are lots of clueless people that think this is magic and will suddenly scale. There are lots of indications this is not going to happen in the near-medium term at all.

To break modern encryption you need to test algorithms which have a surface are of 2exp1000 which makes a million monkeys on typewriters for a million years look like basic arithmetic.

Timothy John Berners-Lee

There are people who believe that information protocols such as WWW are an asset for all Humanity since their very conception. Not just a machine to make profits for a few.

This ultimately means helping people to achieve freedom from world governments, corporations and bankers, who either want our money, our freedom or our health.

Timothy John Berners-Lee, inventor of the World Wide Web, Director of the World Wide Web Consortium (W3C) w3.org, and founder of WebFoundation.org under let the web serve humanity.

Hacks and Leaks will Keep Pouring In

When is people going to understand that ANY centralized database is hackable and leakable. No matter how many security or layers of protection you built upon it; it’s always vulnerable.

The only way to really secure personal data is decentralized databases, and full identity sovereignty. Are govs, corps and leftist citizens going to allow this to happen? NO because we are just consumers and/or potential criminals for them.

Snowden revealed confidential data from his time in the FBI and CIA. He revealed how govs spy in us and keep track of our data. Not just browsing data, but also internet-connected devices being constantly assessed and monitored: cameras installed in phones, laptops, or any other internet-connected device. AI is making all of this easier for them.

Therefore, leaks and hacks will continue, and they will get more dangerous because there’s more and more stuff being recorded from us.