A" Social Bitcoin" Could Sustain a Democratic Digital World
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A \Social Bitcoin" could sustain a democratic digital world Kaj-Kolja Kleineberg1, ∗ and Dirk Helbing2, y 1Departament de F´ısica Fonamental, Universitat de Barcelona, Mart´ıi Franqu`es1, 08028 Barcelona, Spain 2Computational Social Science, ETH Zurich, Clausiusstrasse 50, CH-8092 Zurich, Switzerland (Dated: July 4, 2018) A multidimensional financial system could provide benefits for individuals, companies, and states. Instead of top-down control, which is destined to eventually fail in a hyperconnected world, a bottom-up creation of value can unleash creative potential and drive innovations. Multiple currency dimensions can represent different externalities and thus enable the design of incentives and feedback mechanisms that foster the ability of complex dynamical systems to self-organize and lead to a more resilient society and sustainable economy. Modern information and communication technologies play a crucial role in this process, as Web 2.0 and online social networks promote cooperation and collaboration on unprecedented scales. Within this contribution, we discuss how one dimension of a multidimensional currency system could represent socio-digital capital (Social Bitcoins) that can be generated in a bottom-up way by individuals who perform search and navigation tasks in a future version of the digital world. The incentive to mine Social Bitcoins could sustain digital diversity, which mitigates the risk of totalitarian control by powerful monopolies of information and can create new business opportunities needed in times where a large fraction of current jobs is estimated to disappear due to computerisation. Keywords: Multidimensional incentive system, self-organization, qualified money, digital revolution, digital diversity, decentralization, information routing, Social Bitcoin I. MODERN SOCIO-ECONOMIC CHALLENGES dividual, cultural, social, or economic domains. For in- REQUIRE A NEW APPROACH stance, diversity among digital services in competition for the attention of users can mitigate the risk of totalitarian Nowadays we are facing a number of serious problems control and manipulation by extremely powerful monop- such as financial instabilities, an unsustainable economy olies of information. As we explain in Sec. III C, the loss and related global warming, the lack of social cooperation of diversity in the digital world can lead to a systematic and collaboration causing the rise of conflict, terrorism and irreversible collapse of the digital ecosystem [10, 11], and war. Traditional approaches to remedy such prob- akin to the loss of biodiversity in the physical ecosys- lems are based on top-down control. Whereas in the past tem. Such a collapse can have dramatic consequences for this way of thinking worked reasonably well, the high the freedom of information and eventually for the free- interconnectivity in modern systems will eventually but dom of society. In this contribution, we show how such unavoidably lead to its failure as systems become un- a catastrophic collapse could be avoided on a systematic controllable by central entities due to stronger internal level by introducing a multidimensional incentive system effects, leading to often unpredictable cascading behav- in which an appropriately designed cryptocurrency pro- ior [1] and catastrophic failures [2]. vides an incentive for individuals to perform certain tasks Instead of entirely top-down based approaches, de- in their socio-digital environment. We refer to this cryp- 1 signing mechanisms to promote desired results like in- tocurrency as \Social Bitcoins" . creased cooperation, coordination, and better resource Importantly, to successfully meet these challenges, efficiency could help to deal with current socio-economic tools, ideas and concepts from complexity science have challenges. Importantly, a multidimensional incentive to be combined with technologies like the blockchain, system is needed to design the desired interactions and economic knowledge (and potentially Internet of Things appropriate feedback mechanisms [3, 4]. Such incentives technology to measure \externalities"). have to be implemented in a bottom-up way, allowing systems to self-organize [5] and thus promoting creativ- ity, innovation, and diversity [6]. II. A MULTIDIMENSIONAL FINANCIAL Diversity acts as a motor of innovation, can promote SYSTEM collective intelligence [7], and is fundamental for the re- silience of society [8, 9]. This renders socio-economic and The invention of money has led to unprecedented wealth and has provided countless benefits for society. arXiv:1604.08168v2 [physics.soc-ph] 21 Sep 2016 cultural diversity equally important as biodiversity. The importance of diversity, however, is not restricted to in- However, the current monetary system is not appropri- ∗ [email protected] 1 The details of the implementation of such a cryptocurrency is y [email protected] beyond the scope of this contribution. 2 ate any more to control highly interconnected dynami- directly, hence avoiding the problem mentioned earlier. cal complex systems like the ones our economy and fi- In other words, the decision space on which institutions nancial system nowadays form. Whereas such systems like the ECB can act would considerably increase without are in general difficult to control and understand and them acting outside of their mandate. Qualified money, nearly impossible to predict, they exhibit the tendency which could be realized in a Bitcoin-like [24] way2, could to self-organize [5, 12]. New approaches to face todays earn its own reputation depending on how and where it challenges should therefore take advantage of this system was created and what businesses it supports. The repu- intrinsic tendency. tation then can give the money more or less value, which Central banks like the ECB can control the amount can lead to a more sustainable economy as sustainability of money in the market by means ranging from adjust- would become measurable and transparent to individuals ing interest rates to quantitative easing. Recently, the (for details see [20, 22]). The concept of qualified money ECB has lowered interest rates to the lowest value of all is not limited to the above described two dimensions. In- time (even introducing negative rates for some bank de- stead, everything people care about can be represented posits [13]) and has further increased its efforts to buy by a dimension in the currency vector. As we explain in government bonds [14]. These measures are intended to the following, one dimension of qualified money could be boost economy and increase inflation in the Euro zone socio-digital capital that can be acquired in the digital to the target of 2%. Despite these efforts, inflation has world. remained close to 0%, raising doubts about the capac- Modern information and communication technologies ity to act and the credibility of the ECB [15]. Further- play an important role in facing todays challenges. more, liquidity pumped into the market does not reach Indeed, nowadays the digital and physical world are efficiently enough the real economy. As a consequence re- strongly interdependent and cannot be treated in isola- cently \helicopter money" has been discussed as a possi- tion any more [1]. The huge success of Web 2.0 and online ble solution [16, 17]. Importantly, these problems are not social networks is changing the way humans interact at limited to the Euro zone. For example, due to the inter- a global scale. They promote cooperation and collabora- connected nature of our economic and financial systems, tion on unprecedented scales, but at the same time pow- the state of the global economy limits the decisions the erful monopolies of information have the power to alter Fed can take concerning a raise of interest rates, as such individuals' emotions and decisions [25, 26]. Supercom- a raise could pose a threat for the global economy [18]. puters nowadays perform a large fraction of all financial The problem is that the current monetary system pro- transactions, hence influencing the prices of important vides only a one-dimensional control variable. Let us commodities, which can lead to starving, conflicts, war, consider the human body and how it self-organizes as an etc. Information and communication technologies thus example. To ensure its healthy function, it is not enough are both a crucial part of the problems society has to to adjust only the amount of water one drinks. Instead, solve as well as a fundamental and promising piece of the the body needs water, air, carbohydrate, different pro- solution. teins and vitamins, mineral nutrients and more. None of these needs can be replaced by another. Why should this be different in systems like our economy, the financial III. DECENTRALIZED INFORMATION ARCHITECTURES AND QUALIFIED MONEY: A system, or society? SOCIAL BITCOIN Indeed, a multidimensional currency system could help to solve the problems mentioned above, where the differ- A. Decentralized architectures ent dimensions can be converted at a low (or negligible) cost. Such multidimensional incentive system could be used to promote self-organization of financial and eco- The existence of powerful monopolies of information nomic systems in a bottom-up way [19]. This opens the like big IT-companies or even some governments can lead door to \Capitalism 2.0" and \Finance 4.0" (see [20{23] to the loss of control by individuals, companies, or states. for details). Besides, the economic damage attributed to cybercrime is growing exponentially and is estimated to reach 2.1 A special