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From YouTube: Cryptoeconomics of Enterprise Blockchains
Description
John-Paul Thorbjornsen, CanYa & Rory Houston, Skyy Network
Enterprise blockchains are fundamentally redundant, shared-access blockchains with high fault tolerance. Deploying an enterprise blockchain is far more expensive to implement and maintain, but the cost-savings are realised beyond the infrastructure layer. Enterprise users realise efficiency, compliance and governance cost savings when multiple enterprise users (or departments) can share fault-tolerant read/write access to a database that is a verifiable single-source of truth. Additionally, by using programmable money on a triple-entry ledger, multiple enterprise users can turn data access into its own economy that trustlessly distributes value where it is demanded.
In this talk, JP and Rory deep dive into real-world use cases that employs these principles to disrupt how enterprises share and monetise data using blockchains.
----
Hyperledger – Open Source Blockchain Technologies
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#Hyperledger #HyperledgerGlobalForum2018 #Blockchain
A
My
name
is
John
Paul,
Johnson
and
Roy.
Houston
will
be
myself
we'll
be
talking
about
the
crypto
economics
of
enterprise.
Blockchains
talk
about
our
background,
we'll
talk
about
what
we
think
curta
economists
is
where
we
can
essentially
construct
it
down
to
just
mechanism
design,
and
then
we
want
to
draw
a
parallel
between
what
we've
known
of
security
and
a
cut
regime
as
incentives
and
define
what
could
be
a
new
new
form
of
the
observable
security
and
the
correct
incentives.
A
There's
actually
in
one
word
scalable
and
then
we're
going
to
finish
off
with
a
example
of
how
this
is
being
implemented
into
this
sky
network
and
that
will
fill
the
questions
at
the
end.
So
myself,
I've
been
a
blockchain
for
about
five
years.
I've
done
a
couple
icos
last
year,
my
serious
gaming
or
whatever,
but
we
are
actually
fundamentally
pursuing
decentralized
characteristics
and
to
enable
people
with
permissionless
and
open
access
to
finance
through
create
economics.
We
from
the
director
of
bounty
sauce,
which
is
the
largest
open
source
software
bounty
hunting
platform
in
the
world.
A
We
want
to
transform
the
world's
essentially
airline
industry
to
be
completely
autonomous,
no
pilots
or
air
traffic
control
Rory
as
well.
He
gave
a
brief
background
he's
also.
Pilots
he's
fine,
those
aircraft,
tech
entrepreneur
and
with
me
building
sky
network,
so
like
I
Lutz
before
we
believe
that
Kurt's
economics
is
actually
just
mechanism
design.
So
we
want
to
talk
a
bit
about
that's
a
mechanism.
A
As
characterized
in
a
DLC
and
then
we'll
talk
about
the
regime
that
we're
pretty
familiar
with,
which
is
trust,
based
security
architecture,
trust
based
incentive
models
and
then
we'll
shift
that
to
how
we
can
chain
it
to
be
to
have
crypt
economic
security
models
and
the
set
of
models
and
we'll
use
garnett
work
as
an
example.
How
we're
building
that?
So
this
might
be
a
familiar
diagram
to
some
of
you,
but
inherently.
If
you
can
essentially
perceive
it
there.
We
have
SpaceX,
which
is
the
kind
of
the
outcome
space.
A
As
in
given
a
essentially
like
a
game,
design
or
arena
or
a
collection
of
rational
actors.
We
have
our
starting
resources
and
then
our
final
outcome
so
well.
We're
interested
to
know
in
is
the
equilibrium
States.
As
in
given
given
a
arena.
Where
will
this
converge
to
and
what
is
equilibrium
and
if
we
assume
there's
rational
actors,
you
know
you
know,
community,
you
know
essentially
organization
or
in
even
our
game.
Then
we
can
try
and
work
out
what
the
equilibrium
is.
A
So
we'll
just
step
through
that,
so
for
a
desired
outcome
in
spacex
with
the
starting
resources
in
space
0.
What
should
be
the
mechanisms
that
allow
rational
actors
in
space
chi
and
we
define
rational
actors
as
actors
that
essentially
will
try
to
exploit
the
utility
function,
to
maximize
it
and
be
prophesying.
A
A
So
if
we
know
where
the
equilibrium
state
is,
then
we
can
essentially
work
back
in
order
to
change
the
mechanisms-
and
that's
that's
crypto
economics
in
a
nutshell,
so
Krita
graphically
enforced
mechanism
design
allows
micro
incentives
to
be
essentially
scale
throughout
the
entire
entire
structure
of
your
of
your
system
and
when
they
are
cryptographically
in
force,
it
means
that
you
don't
need
you
reduce
the
compliance
cost.
You
don't
need
to
crush
check
everything
and
is
sure
that
the
rules
been
followed.
A
You
know
the
rules
are
going
to
be
followed
because
it's
it's
not
possible
to
just
get
around.
Essentially
the
the
cryptograph.
The
cryptographically
motives
allows
us
to
design
essentially
design
the
rules
of
participation
in
the
network,
and
once
we
have
the
rules,
participation
or
even
the
rules
of
access
in
your
network,
then
you
can
create
scale
of
incentive
design,
and
if
you
treat
those
rational
actors
as
actors
that
will
try
and
exploit
the
utility
functions,
then
you
can
try
and
steer
them
at
a
point
to
essentially
get
them
to
converge
to
an
equilibrium.
A
Now
what
is
important
is
becomes
leaderless.
You
no
longer
need
people
or
entities
or
agencies
or
organizations
to
create
the
rules
because
they
have
already
been
created
and
they've
already
factored
in
all
possible
types
of
rational
actors.
Rational
actors
actually
include
attackers
in
this
case
and
we'll
see
why
this
is
important
and
that's
if
you
remove
the
leaders
and
you
remove
the
possibility
of
a
centralized
entity
organization
creating
the
rules,
then
you
can
have
scalable
social
contracts,
and
we
can
see
this.
We
theorem,
whereby
the
cost
of
computation
is
exceedingly
high.
A
The
cost
of
story
is
exceedingly
high
and
what
that
costs
is
giving
us
were
sacrificing
that
cost
for
a
much
much
lost
social
cost.
That
is,
anyone
can
now
access
a
decentralized
and
open
permissionless
network
of
Finance,
and
the
good
example
of
this
is
Mac
Adele,
which
is
a
super
national
organization
that
is
essentially
created
by
nothing
but
smart
contracts
and
very,
very
sound
crew
to
economics.
A
There's
over
one
and
a
half
percent
of
the
entire,
a
theorem
circulating
supply
looked
in
the
making
our
contracts,
and
it's
essentially
MIT
at
about
sixty
million
dollars
worth
of
a
stable
coin,
could
die
nothing
about
crude
economics,
no
leaders,
highly
scalable
so
and
I
want
to
do.
This
is
essentially
a
soul.
The
tragedy
of
the
Commons
for
so
long
there's
been
the
charity
of
the
comments.
If
you
essentially
put
in
into
a
public
space
a
public
good
and
you
do
not
enforce
the
rules
of
access
to
that
public
good
they're,
very,
very
quickly.
A
Rational
actors
trying
to
exploit
the
utility
functions
well
essentially
over
utilize
that
public
good
and
we
eventually
lead
to
a
point
where
it's
not
optimally
used
optimally
distributed,
and
we
use
governance
and
governments
and
local
councils
to
essentially
govern
how
we
treat
public
goods.
But
now,
for
the
first
time
ever,
we
can
use
smart
contracts
and
critic
economics
to
take
over
that
and
make
it
scalable
so
essentially
their
sustainable
allocation
of
limited
resources.
A
We're
gonna
talk
about
a
public
good.
A
public
good
is
a
good
that
everyone
can
access
to
at
the
same
time,
and
it
should
be
optimally
used
and
utilized
beveren
in
the
essential.
Your
ecosystem
and
what's
most
important,
is
now
that
the
interests
of
the
organizations
are
aligned
with
the
interests
of
the
participant.
So
as
they
attempt
to
exploit
their
utility
functions
and
extract
value
out,
they
serve
to
strengthen
the
network
and
grow
it,
and
nothing
is
more
sure
of
this
than
Bitcoin,
which
is
just
pure
free
market
dynamics.
A
So
we
can
well,
let's
look
at
the
theory,
its
economics
and
actually
dive
down
into
four
main
parts.
I
won't
dwell
on
this
too
heavily,
but
we
can
we'll
choose
one,
the
queen,
most
transaction,
so
every
block
a
coin
based
transaction
emits
an
asset
that
has
a
value
to
minor
that
has
expended
energy
to
violate
the
block.
That
is
the
incentivized
behavior
of
that
minor,
and
we
assuming
the
mind
as
a
rational
actor.
A
What
are
they
disincentive
us
to
do
will
submit
into
our
blocks
because
I'm
not
gonna,
get
paid
and
the
outcome
is
a
heavy
chain.
That's
costed
over
right,
and
essentially
that's
what
you
the
mission
of
the
coin
based
transactions
is
paying
for
now
we
can
go
right
down
to
even
the
user
users,
our
rational
actor.
They
need
to
submit
sufficient
mining
fees
in
order
to
get
the
transaction
process.
The
disincentivize
behavior,
then,
is
doing
tonight's
service
attacks
from
the
network
creating
useless
transactions.
A
The
outcome
is
essentially
that
a
fee
market
is
traded
at
valuable
transactions
process,
and
we
can
look
at
that.
We
can
observe
it.
We
make
empirical
statements
around
it
and
we
can
treat
our
actors
as
rational.
I
should
say,
though,
that
these
agents
can
also
be
attackers,
but
we
can
see
that
attackers
also
have
a
cost
in
order
to
perform,
so
they
essentially
compute
the
utility
function.
A
Work
out
should
I
be
attacking
this
network
or
not
is
doing,
can
I
get
more
gain
out
of
attackers
Network
now,
if
you're,
following
the
etherium
space
this
year
in
June
I
think
was
July.
We
had
a
smart
contract
theorem
that
had
about
eleven
million
dollars
worth
in
it,
and
it
was
essentially
a
FOMO
game
like
a
pyramid
game,
more
users
would
put
in
ISA
and
it
tend
to
be
the
last
person
to
do
so
now.
A
Go
to
a
point
where
the
cost
of
attacking
the
network,
as
in
being
a
minor
that
was
trying
to
prioritize
transactions
in
order
to
influence,
actually
exceeded
the
cost
of
losing
that
block.
So
eventually,
we
saw
a
rational
actor
exploit
that
loophole
and
withdraw
11
million
dollars
out
of
the
out
of
the
contract,
but
hey
rulers
code,
and
that
was
actually
part
of
these
smart
contracts,
design
we're
all
familiar
DLT.
So
from
the
centralized
ledger.
A
Let
work
where
there
is
a
leader
right
through
to
a
decentralized
legend
network
where
it
was
some
sort
permissions,
but
essentially
decentralized
without
it
without
a
leader.
So
if
you
want
to
move
from
the
left
to
the
right,
we
now,
let's
not
start
thinking
about
what
those
rational
actors
are
going
to
be
doing
in
order
to
work
out
what
the
equilibrium
will
be,
and
that's
that's
important.
So
my
position
is
that
Delta's
require
critics
and
it
or
any
form
of
DLT
that
has
public
or
semi
emission
access
need
rules
of
access.
A
So
that's
an
axiom
that
is
true.
You
know
of
itself,
because
you
cannot
have
a
public
good
or
a
public
source
of
data
that
doesn't
have
rules
of
access.
So
if
you
have
rules
of
access,
then
you
now
have
compliance
and
trust
problems,
and
if
you
have
compliance
of
trust
problems
in
order
to
determine
that
you
rules,
acts
is
being
followed,
then
you
have
scaling
problems
because
you
can't
scale
and
cross-check
every
everyone's
as
they
access
that
public
good.
A
So
if
you
can't
scale,
then
it
removes
any
advantage
of
having
a
deal
to
in
the
first
place.
Now
you
can
solve
this
by
having
critic,
anomic,
s--
yeah
a
case
study
of
the
from
my
perspective,
of
the
trade
lines.
Blockchain
obviously
owes
nonce
allows
in
a
january
this
year,
IBM
as
IBM
high
college
instance
and
mayor
sled,
we've
seen
a
slow
start
to
adoption
of
this
blockchain
stephen
me
publicly
rejected
by
mass
their
rivals.
A
So
when
this
blockchain
is
supposed
to
solve
a
lot
of
the
problems
with
supply
chain
and
shipping
and
improved
transaction
times
and
get
containers
move
around
with
a
lot
more
efficiency,
you
know
what
what
could
have
gone
wrong
and
what
may
be
used
to
fix
this
blockchain
or
I
fix
this
ecosystem.
Rather
so,
when
I
looked
at
this
instance,
I
first
thought
to
myself
what
are
the
rules
of
access
well,
when
I
dug
deeper
at
Moscow
and
all
the
IP
and
they
control
the
access,
which
is
it's
the
first
problem?
There
is.
A
Why
would
you
join
a
network
when
which
you
only
benefits
and
an
individual
or
an
entity,
and
what
are
the
costs?
Will
the
cost
of
training
migrating
running
in
the
nodes
who's
subsidizing
that,
if
the
only
incentive
to
subsidize
that
cost
and
give
up
the
data
to
a
centralized
entity,
is
faster
shipping?
After
use
of
that,
then
a
kind
of
goes
again
and
the
incentives
aren't
there.
Then,
rather,
the
incentives
aren't
strong
enough
to
encourage
these.
The
participants
in
this
business
network
or
coin
saw
diem
to
join
in
the
first
place.
A
So
how
can
we
fix
it?
First
of
all,
I
think
that
the
rules
of
access
needs
to
be
codified.
The
leaders
need
to
be
removed
and
on
chain
governors
you
should
be
utilized
so
that
everyone
in
this
Queens
Audient
look
consortium
rather
have
the
ability
to
influence
the
setting
of
rules.
The
costs
need
to
be
subsidized
with
greater
transparency.
We
can
admit
a
block
reward
to
cover
the
costs
of
running
infrastructure.
We
can
use
transaction
fees
to
push
complexity
to
the
edges,
so
load
balancing
is
not
done
in
a
centralized
way.
A
It's
done
using
free
market
dynamics.
We
may
need
to
make
the
incentives
clearer,
monetize
the
data
sharing
and
use
the
concept
of
slashing
an
opportunity
cost
to
prevent
any
self-interested
activity
in
network
that
doesn't
advance
the
interests
of
the
consortium.
So
it's
perhaps
how
we
can
fix
the
trade
lines
blockchain.
So
therefore,
we
have
a
paradigm
shift
that
well.
The
statement
is
that
trust
based
models
are
inferior
to
critic
economic
models
and
we'll
we'll
take
a
bit
of
a
deep
dive
into
that.
A
So
what
I
mean
trust
based
security
architecture
I
mean
that
if
anyone
here
has
an
iPhone
and
uses
iCloud,
you
trust
that
your
photos
are
not
being
sold
Apple
and
they
release
blog
posts.
They
have
information
on
the
website,
saying
that
you
use
the
latest
military
and
encryption,
but
essentially
it's
a
black
box.
You
don't
actually
know
if
Apple
haven't
built
in
back
doors
to
your
iMessage.
Well,
they're,
not
exploiting
your
iCloud's
user
data,
a
bit
like
how
perhaps
Google
or
Facebook.
Do
it's
a
complete
black
box.
We
have
to
trust
that
Upland.
A
Do
it
and
yes,
Apple,
are
putting
up
their
brand
on
the
line
and
they're
putting
up
their
profits
on
the
line.
To
do
that.
But
inherently
you
need
to
trust
that
they
don't
have
another
agenda,
another
hidden
agenda
where
they
could
be
making
more
money
by
selling
your
data,
and
you
can
see
this
everywhere.
So
here,
Wow
yeah
encrypted
messaging
app.
You
know
they
uncle
Isaac,
uncompromising
security
and
dashed
line
here.
A
You
waste
all
your
passwords,
we,
you
know,
we
can't
read
your
password
system,
but
how
can
you
trust
that,
whereas
a
Krita
economic
security
model,
you
remove
all
trust?
You
just
simply
need
to
observe
it,
because
attacking
the
network
is
part
of
the
mechanism
design
of
that
network,
and
now
we
know
that
tacking
has
a
cost
and
everyone
can
observe
that
cost.
So
if
you
look
at
Bitcoin,
we
know
we
can
actually
pull
out
our
calculator
and
work
it
out.
What
is
that
cost?
A
The
current
hash
powers
about
15
million
tera
hash,
the
cost
acquire
51%
of
that
hash.
The
capital
expenditure
is
about
1.7
billion
dollars
using
the
latest
mining
for
structure
the
one
hour
rewrite
of
operational
expenditure
is
about
a
quarter
million
dollars
and
the
number
of
days
to
rewrite
the
entire
chain
is
260.
A
These
are
all
empirical
figures
so
now
we
know
the
cost
to
attack
that
network
and
displace
that
ledger,
and
these
are
these
are
numbers
and
we
can
do
the
same
through
theorem,
but
we
know
that
any
attacker
needs
surface
this
money
in
order
to
pull
it
off
now
these
are
proof-of-work
blockchains.
The
difference
between
proof,
work
and
proof
of
stake
is
the
capex
and
the
op
X
is
external
to
the
network
on
a
proof
estate
network.
A
The
attacker
needs
to
acquire
the
asset
first,
which
has
some
interesting
dynamics,
because
it
causes
large
price
action
and
that
price
action
can
be
observed
in
markets.
So
the
difference
between
a
proof-of-work
block,
channel
and
previous
state
blockchain
is,
you
may
not
know
if
someone's
amassing
the
OP,
X
and
capex
in
order
to
attack
you
just
don't
know
they
could
have
you
know
a
nation-state.
Actor
who
wants
to
take
down
etherium
might
have
a
master
already.
A
What
is
the
likelihood
that
this
network
is
under
attack
or
is
about
to
be
attacked,
and
if
you
start
putting
assets
on
these
in
these
networks
and
the
theorem
supports
a
lot
of
tokenizer
acids,
you
should
know
that,
if
you're
putting
say
a
billion
dollars
worth
of
assets
to
be
tokenized
on
a
theorem,
you
should
know
that
the
attack
cost
should
be
far
more
than
a
billion
dollars.
And
that's
the
paradigm
shift
now
we're
going
on
to
incentive
models
here.
A
So
currently,
the
trust
based
incentive
models
are
not
transparent
and
are
not
clear
and
but
hey.
The
organization
needs
to
make
money,
needs
the
funders
operations
and
needs
to
pay
for
staff
and
and
to
grow,
but
we're
not
clear
on
how
those
incentive
structures
work
and
what
the
point
of
equilibrium
is,
because
these
price
tiers
can
change
these
product
lines
can
change
without
a
moment's
notice.
So
now
we
know-
and
we
do
not
know
what
the
point
of
equilibrium
is.
A
We
don't
even
know
if
there's
even
rational
actors
on
and
then
work,
but
in
a
critic,
anomic
incentive
model,
it's
much
much
more
clearer,
so
you
might
have
seen
headlines
like
this
large
amounts
of
money
being
moved
around
by
these
block
chains.
But
what
are
actually
the
incentives
who's
paying
for
this
for
these
features
and
for
this
utility?
Well,
if
you
look
at
it
in
the
same
block,
that's
two
hundred
million
dollars.
This
mood
on
Bitcoin
thousand
eighty
thousand
dollar
block
reward.
A
So
the
the
network,
which
allowed
that
large
transaction
that
allowed
that
utility
to
the
user
was
being
subsidized
by
the
same
network
in
the
in
that
was
an
$80,000
block
reward
in
that
time
in
a
block
and
if,
like
Wayne,
not
as
much
but
again,
the
network
was
paying
the
miners
to
process
that
function.
So
it's,
but
it's
much
more
clear.
We
can
pull
out
a
calculator
and
work
at
these
things
out
now
then
we
realized
that
and,
as
such,
the
point
is
that
trust
based
incentive
models
are
more.
A
What
would
you
would
call
taxation,
whereas
the
curta
economic
model
is
more
akin
to
inflation,
which
is
almost
say,
hidden,
hidden
tax,
here's,
the
hidden
network
fee,
but
in
the
case
of
the
correct?
Well,
the
correct
implementation
of
these
inflation
models
is
something
that
is
mathematically,
sounds
and
cannot
change,
and
that's
probably
one
of
the
reasons
why
people
point
to
Bitcoin
all
the
time
and
trying
to
draw
the
parallel
with
it
being
a
store
of
value,
because
we
know
it's
monetary
policy
right
through
to
21:40
and
these
numbers
will
never
change.
A
So
now
we
as
well
as
all
the
other
actors
in
the
network
know
the
incentives
of
the
nodes,
all
the
entities
that
support
the
network
and
who's
paying
them.
So
when
I'll
switch
over
to
Sky
network
and
I'll,
get
Rory
up
here
to
essentially
discuss
how
sky
network
is
using
current
economics
just
shift
from
trust
based
security
and
set
of
models
to
create
economic.
B
Thanks
JP
hi
everyone,
my
name
is
Rory
co-founder
of
Scott
Network.
What
I'm
gonna
do
now
is
take
you
through
some
of
the
concepts
that
JP
has
just
talked
about
and
how
we're
going
to
transition
from
a
trust-based
ecosystem
to
a
crypto
economic
Lee,
incentivized
ecosystem
before
I
talk
about
the
problem
statement.
Is
there
other
any
aviation
aerospace
professionals
in
the
room?
Okay,
cool?
B
That
gives
me
a
starting
point
so,
over
the
last
20
years,
I've
thrown
about
three
and
half
thousand
hours
on
multiple
aircraft,
all
across
the
spectrum,
from
autonomous
right
through
to
fast
jets,
and
everything
in
between
aviation
is
going
through
a
paradigm
shift
at
the
moment
and
that
paradigm
shift
is
the
move
from
manned
aviation
to
autonomous
aviation
and
it's
about
a
50
year
window.
We're
about
a
third
of
the
way
through
it,
where
more
and
more
use
cases
for
aviation
are
turning
fully
autonomous.
B
Urban
air
mobility
is
coming
very
quickly
and
it's
just
one
use
case
for
fully
autonomous
aviation.
Let's
take
a
look
at
the
scalability
problem
here
now
in
a
manned
aviation
world,
every
pilot,
that's
in
every
aircraft.
That's
in
the
sky
has
an
Associated
pilot
and
an
associated
air
traffic.
Controller
of
some
variety
over
here
have
proposed
what
looks
like
a
central
station
for
urban
air
mobility.
Now
Los
Angeles
Airport
will
process
about
1
to
2
aircraft
movements
per
minute
uber
with
all
of
their
data
around
people.
B
Movement
want
to
process
about
10,000
people
per
hour
through
one
of
these
nodes
which
equals
about
2,000
aircraft
movements
per
hour,
which
is
an
aircraft
taking
off
or
landing
every
two
seconds.
The
problem
here
is
scalability.
How
can
we
achieve
that
throughput
without
full-scale
autonomy
and
a
simple
answer?
Is
we
can't
so
let's
talk
about
how
we're
going
to
get
there?
The
answer
is:
distributed:
ledger
technology
and
using
crypto
economics
to
achieve
the
scalability
solutions
that
JP
started
to
talk
about
already.
B
The
goal,
of
course,
is
to
allow
interoperability
between
large-scale
drone
networks
in
what
is
a
finite
piece
of
airspace.
Now
that
airspace
is
a
shared
public
good,
so
we
need
to
have
a
way
to
achieve
some
scalability
within
that
shared
public
good.
The
way
to
do
that
is
to
enable
machine
to
machine
communication
through
a
trusted
single
source
of
data
truth,
and
that's
what
distributor
ledger
technology
can
do
in
the
aviation
world.
B
B
B
The
manufacturers
contribute
value
to
the
ecosystem
by
innovating,
with
hardware,
with
sky
pads
and
other
pieces
of
technology,
which
will
advance
the
ecosystem
and
then
finally,
we've
got
the
regulator's.
The
important
thing
to
take
out
of
this
slide
is
that
all
of
these
ecosystem
participants
economically
incentivized
in
some
fashion
or
another.
So
how
do
we
solve
the
tragedy
of
the
Commons
with
all
of
these
participants?
B
B
What
happened
here
was
the
control
center
fire
shut
down
that
particular
ecosystem
and
thousands
of
flights
across
the
United
States
and
internationally
were
either
canceled
or
delayed,
which
had
huge
economic
impacts
throughout
throughout
the
environment
in
2015
a
rogue
pilot
Germanwings.
You
probably
remember,
flew
the
aircraft
into
the
ground
and
killed
about
170
people.
That
was
a
trust-based
security
system
and
it
failed.
B
What
we
do
now
is
by
using
crypto
economics
and
distributed
Ledger's.
We
can
observably
view
the
value
of
the
ecosystem
and
we
can
calculate
the
cost
to
attack.
So
now,
if
a
network
has
100
billion
dollars
of
value
within
it,
which
can
be
observed
through
the
native
asset
which
is
directly
proportional
to,
we
can
calculate
the
attack
cost
if
I
want
to
fly
from
one
side
of
the
United
States
to
the
next
on
an
aircraft
that
cost
250
million
dollars
to
fly.
B
B
Moving
on
to
the
compliance
layer
today,
as
a
pilot
or
an
air
operator
of
some
kind
trying
to
produce
an
aviation
service,
I
need
to
go
through
a
whole
host
of
compliance
checks
with
regulatory
authorities.
I
have
to
go
and
get
trained
as
to
how
to
fly
these
aircraft
and
then
once
I've
got
all
those
ticks
in
the
box.
You,
as
the
end-user,
are
trusting
that
I'm
going
to
adhere
to
those
rules
and
adhere
to
the
the
bounds
and
constraints
of
my
license.
B
There's
no
way
to
computationally
enforce
that
that
that
compliance
in
a
crypto
economic
environment
of
false
autonomy,
we've
now
got
economic
alignment
such
that
if
a
machine
endpoint
was
to
break
the
rules
of
the
network,
there's
an
economic
slashing
or
impact
for
that
aircraft
or
that
operator
of
that
aircraft,
and
we
can
do
that
through
a
staking
mechanism.
So
an
aircraft
can
be
deployed
to
the
network
with
a
particular
financial
stake
and
the
rules
are
built
in
such
that.
If
that
aircraft
breaks
the
rules,
they
take
an
economic
hit.
They're.
B
Moving
down
to
the
next
layer,
we're
looking
at
trust
based
incentives,
so
today
in
the
aviation
ecosystem,
if
you
want
to
go
and
extract
value
from
the
ecosystem,
because
you
see
a
great
startup
or
business
idea,
you
add
value
to
the
ecosystem,
but
you're
going
to
charge
for
that,
so
you're
actually
going
to
extract
extract
value
in
the
form
of
fees
and
payments
to
deliver
your
product
or
service.
There's
no
vested
interest
in
you
adding
value
back
into
that
ecosystem,
you're,
actually
just
trying
to
extract
value
in
the
form
of
I
guess:
traditional
capitalism.
B
B
Remember
the
native
asset
of
the
network
is
directly
proportional
to
that
network
value,
and
we
see
we
see
this
today
with
with
permissionless
block
chains
like
like
the
EOS
Platform.
It
behoves
the
block
producers
to
invest
heavily
into
the
ecosystem
because
they
want
the
value
of
that
network
to
go
up
alright
and
the
final
level
level
that
we
talk
about
is
the
social
level.
So
today's
bureaucracy
and
I'll
call
it.
B
There's
a
lot
of
operational
and
administrative
overhead
that
right
down
to
the
printing
of
documents,
which
just
doesn't
scale
everything
that
I've
said
there
can
be
programmed
into
a
blockchain.
What
this
does
is
it
can
incentivize
participation.
So
me
wanting
to
provide
a
new
drone
service
that
nobody
else
has
thought
of
before.
I
can
now
go
and
buy
my
drone
off
DJI
or
another
major
drone
manufacturer
and
with
with
coded
rules
built
into
the
network,
I
can
deploy
that
aircraft
without
having
to
jump
through
those
unscalable
mechanisms
to
achieve
licenses
and
ratings,
etc.
A
Awesome
so
we
started
off
by
defining
mechanism
design
and
correlating
that
with
Krita
economics,
so
we
can
essentially
cage
it
and
define
it
empirically.
We
talked
about
trust,
based
security
models
and
trust
based
instead
of
models
and
define
a
new
regime
of
security
and
incentive
to
allow
us
to
scale
rapidly
and
grow
networks
faster.
A
So
we
view
that
crypt
economics
is
then
scalable
mechanism,
design
deployed
in
a
trustus
manner
and
deal
teas
with
uniform
and
public
access
require
critics
so
that
they
converge
to
an
equilibrium
which
is
known
assuming
rational
actors,
and
if
we
do
that,
then
security
becomes
observable
and
transparent,
and
you
known
all
you
need
to
trust
brand
power
or
trust
in
a
quarterly
reports
or
or
trust
regional
jurisdiction.
You
can
just
look
at
the
network
and
make
your
own
decision
and,
lastly,
incentives
create
a
positive
externality.
A
So
what
I
mean
by
that
is,
let's
say
the
carbon
tax.
The
carbon
tax
is
a
negative
externality.
That's
attempting
to
force
actors
around
the
world
to
minimize
the
production
of
carbon.
If,
instead,
we
had
a
positive
externality,
then
that
would
happen
a
lot
faster.
Instead
of
penalizing
people,
not
a
bang
you're
rewarding
them
for
abiding
by
essentially
the
the
outcome
space
that
you
want
to
push
them
to.
In
this
case,
to
minimize
carbon
in
our
atmosphere,
we
haven't
seen
a
positive
externality.
A
So,
for
the
first
time,
I
believe
that
perfect
work
incentives
are
driving
a
positive
externality
to
reducing
carbon
emissions,
and
that's
just
an
example
of
that,
and
well-designed
critics
should
create
highly
scalable
social
constructs
and
contracts
to
minimize
the
cost
of
joining
to
maximize
the
value
extraction,
as
well
as
the
value
creation.
So
that
is
fundamentally
a
win-win
for
all
participants
in
the
network.
So
that's
our
kind
of
points
here
today
would
love
to
field
some
questions
on
it's.
A
C
C
A
A
really
good
question
and
as
a
question
that's
been
fraught
after
at
the
moment
in
the
current
web
3
world.
The
answer
is
on
chain
governance
instead
of
using
our
band
and
social
governance,
and
you
know,
proof
of
social
media
instead
revert
to
essentially
codified
governance
on
on
the
blockchain
and
those
actors
which
have
the
most
stake
in
the
blockchain
running
the
most
nodes
running.
The
most
miners
committed
the
most
capital
then
get
to
influence
the
direction
we
that
does
lead
to
plutocracies.
C
Is
anybody
German
here
and
knows
the
name
for
occurs
Tecate?
Do
you
know
what
I
mean
those
special
guys
who
are
brilliant
in
doing
mining
and
then
get
the
rules
and
they
are
deciding-
or
this
is
the
new
privileged
area
of
decision
takers
because
they
are
the
biggest
one?
You
know
this
might
be
something.
A
It's
a
very
good
question:
it's
difficult
to
answer.
I
think
the
solution
is
direct
democracy.
It
is
a
democracy
of
the
form
or
the
contract
similar
to
liberal
radicalism,
encourage
you
to
check
it
out.
A
very
famous
economist,
called
Glenn
well
has
issued
a
paper
recently
on
liberal
radicalism,
but
essentially
it
empowers
the
minority
and
takes
power
away
from
essentially
capital
intensive
players.
Yeah
I
will
certainly
share
it
after
this.
A
Governance
is
a
very
dynamic
part
of
the
Box
chain
industry
right
now,
they're
excellent
questions
as
yet
unsolved,
but
we
hope
to
push
towards
away
from
this
to
represent
a
democracy,
that's
quite
inefficient
towards
the
record
remark
to
see.
That
is
opt-in
that
allows
anyone
to
help
influence
the
setting
of
those
rules.
That's
a
good
question.
It's.
D
A
The
problem
with
the
doubt
attack
was
the
theorem
blocks
at
the
time
and
still
doesn't
have
any
form
of
working
on
chain
governance.
So
a
network
failure
like
the
case
of
the
Dow
I,
would
say
it
was
a
network
fairly
rather
than
a
protocol.
Failure
should
have
required
on
chain
governance
to
correct
it
in
in
the
direction
of
the
community
one
of
the
community.
A
One
of
the
fork,
however,
that
to
hard
work
towards
it,
which
which
was
divisive
if
they
had
already
implemented
an
effective
form
of
Unchained
governance,
they
could
have
achieved
the
same
thing
and
the
fork
was
good.
It
prevent
a
lot
of
capital
loss
and
fixed
the
problems
at
the
time,
but
it
should
have
been
effected
through
on
chain
governance,
as
opposed
to
out
of
balance
social
governance.
We
don't
know
who's
setting
the
rules.
A
A
U.S.
does
have
what
US
doesn't
have
on
Chang
governs
a
u.s.
has
on
Chamber
robbery
and
it's
acceptable
to
plutocracies,
whereby
the
rich
gets
richer.
I,
don't
think
the
u.s.
is
effective
solution
that
they've
made
a
lot
of
shortcuts.
I.
Think
a
better
solution
is
what
tase
awesome,
polka
dots
and
even
cosmos
is
doing
where
users
can
delegate
the
through
capital
allocation
their
votes,
but
they
can
instantly
instantly
shift.
A
It's
not
answer
question,
but
it's
very
important
parts
of
networks
like
this
who
gets
to
start
setting
the
rules.
If
there's
no
leaders
and
we've
been
fascinated
this
for
thousands
of
years
by
the
way
we've
gone
from,
you
know,
vac
electing
our
village
leaders
to
religion
through
to
flirting
with
communism
to
finally
represented
democracy.
Today
we
represent
democracy
is
very
inefficient
to
look
at
France
right
now.
Look
at
the
you
know,
look
at
outcomes
right
now.
A
We
need
direct
democracy,
because
we
need
to
feel
reassured
that
we
can
be
part
of
that
rule
set
and
represent
democracy's
inefficient,
Stern
years
old
as
a
function
of
electing
someone
else
to
travel
two
hours
into
the
civility
Center.
But
a
network
like
this
and
networks
like
the
one
that
we
work
with
trade
lands
blockchain.
They
need
effective
on
chain
governance
and
that's
what
we're
trying
to
build.
E
I
think
that
you're
really
wrong
about
direct
democracy,
I
think
direct
democracy.
Frankly,
you
know
doesn't
work
above
a
certain
small
level
and
representative
democracy
really
is
the
answer,
but
well
I
would
say
all.
Equally
importantly,
I'm
look
I'm
a
lawyer.
I've
been
working
in
Silicon
Valley
for
35
years,
I
think
on
chain
governance
can
only
cover
part
of
the
problems.
I
mean
you
know,
there's
a
book
called
machine
platform
and
crowd
where
they
talked
about
the
fundamental
economic
theories
around.
You
know
this
automated
governance
and
how
they
just
don't
work
in
the
real
world.
E
You
can
cover
certain
number
of
problems,
but
you
cannot
predict
the
future
completely
and
having
watched
technology
companies
in
Silicon
Valley
for
35
years
and
done
a
thousand
venture
deals.
The
idea
that
you
can
actually
program
the
rules
for
all
this
stuff
is
a
delusion
and
a
dangerous
illusion,
because
it
leads
people
into
situations
like
they
Adele,
which
I
you
know,
I
think
the
fact
that
they
named
it,
the
Dow,
which
is
it's
like
name-
was
something
the
company
showed
the
hubris
they
had
and
the
the
problem
with
that
is.
E
F
D
F
A
I'm
sir
I
think
about
the
question
was
like
I
guess
to
clarify
that
public
access
doesn't
require
public
blockchain
and,
in
fact,
any
form
of
permission
blockchain
that
has
large
scale
of
access.
So
a
large
consortium,
that's
beyond,
say:
ok,
a
trust
circle
of,
say:
five,
four,
five
participants,
that's
when
it
doesn't
lose
the
scalability
and
it's
it
was
a
solution
to
scalability
in
the
face
of
large
groups
of
groups
of
actors
attempting
to
access
your
network.
A
So
if
you
have
a
small
permission,
blockchain
with
you
know
a
handful
of
entities,
you
can
maintain
a
trusting
relationship,
your
convergent
point
or
your
equilibrium
point
is:
you
will
continue
to
trust
each
other
and
you
will
continue
to
behave
the
rules
that
you've
defined.
You
don't
need
unchanged
over
us.
A
You
don't
need
Christian
items
in
that
case,
but
if
you're
entertaining
a
blockchain
that
has
access
to
you,
know
quantities
of
agents
that
far
exceed
your
abilities
through
compliance
check
and
maintain
trusting
relations
for
them
all
you're
gonna
need
to
think
about
the
scalability
of
your
rules
of
access,
and
that
requires
script.
Economics,
oh
yeah,
check,
novels
I
think
we
need
to
wrap
up
there
thanks
very
much
for
your
input.