There is no doubt that humanity could use universal ledgers like the blockchain, to manage more efficiently its agreements and transactions. But just as bitcoin is misconceived as a currency that is extractive to both humans and natural commons, so there are serious issues with how the blockchain is currently conceived. This very clearly explained, yet still complex essay, is a very good explanation of what a better underlying structure could be, and how a currency for the commons could be based on mutual credit, not creation by ‘fiat’.
The proposals described in this essay are coming closer to reality, now that Arthur Brock and associates at Ceptr.org, are advancing in the construction of a alternative Holochain.
- What is a Cryptocurrency?
- Alternate Approach: Parallel Chains with Intrinsic Data Integrity
- Currency Design Principle: Mutual Credit
- A Minimum Viable Cryptocurrency
- More Scalable Security: Notaries + DHT
We identify and clarify the core elements of and describe a new approach to designing such currencies distinct from blockchains – an approach rooted in biomimicry. We explore efficiencies for decentralized data and decision-making and distinguish consensus of distributed process, rather than data in ledgers, at the core. We then illustrate an implementation of a cryptocurrency using these principles and a use case which brings a centuries old practice into the digital era. We address the central vulnerability to this model working at scale, showing how the solution can be built with existing technologies. Finally, we also confront social challenges involved in governance of crypto-systems.
By leveraging Intrinsic Data Integrity to run numerous parallel tamper-proof chains you can enable nodes to do various P2P transactions which don’t actually require group consensus. It is not only possible, but far more scalable to build cryptocurrencies without a global ledger consensus approach or cryptographic tokens. This paper has provided a framework to build a tokenless cryptocurrency, and showed how mutual credit is an appropriate currency issuance method for operating such a cryptocurrency on completely peered chains. Basic PKI with a DHT addresses the obvious vulnerabilities.
Read the full article here.
If you would like to comment on this draft, feel free to do so on the google doc version.