Resource Economics and Multidimensional Money: On the Path to Co-Prosperity (Authored by Stan Taktaev with SVET Preface )
The following is the translation of the original text inspired and authored by one of the Evernomics early enthusiasts — Stan Taktaev together with a group of business practitioners and researchers.
The concept of the IOU-based economy, backed by an unlimited productive capacity of individuals, is closely aligned with Evernomics notion of Money, as the Medium of Time, which permits all humans to exercise their ownership rights in the Eternity, reaching from the Past to the Future.
Stan and his co-authors express in this text an optimistic view on the planetary societal structure, which they call ‘co-prosperity’ as opposed to Evernomics’ ‘Co-survival’.
Evernomics makes an emphasis on an individual reality perception and enhances humans ability to implement non-confrontational survival strategies, which essentially makes an ‘universal happiness’ unreachable.
Authors’ approach is different. Speaking by the words of celebrated si-fi writers Arkady and Boris Strugatsky, their Gnosis might be summarized as — ‘’Happiness for everybody, free, and no one will go away unsatisfied'’.
Stan and his co-authors question a validity of the current (‘one-dimensional’) monetary system, under which several central banks monopolize money-currencies issuance function, which prevents earth’s society to non-violently establish the value / goods ratio.
To address this authors propose to implement (quote) a “new old” resource exchange system — barter, but on a modern computing base (end quote). This exchange system is to be based on (quote) Obes and the Economics of Obligations (end quote). That must lay the foundation for, as authors call it, ‘obonomics’ or IOUnomics.
Authors recognize that (quote) In general, these ideas are already 70 years (end quote) and they try to put a new twist on it, citing (quote) the developments of V.V. Golikov, who identified about 30 types of economies, by types of key resources. which together they can be represented as a multidimensional economy — resource economy (end quote).
However, as its predecessors, the proposed system, which is fundamentally based on the Leontief (Wassily Leontief ) matrix, or, so-called ‘input–output model’, requires establishing multiple coefficients (including, regional multipliers and location quotients) to be extended as a model of general equilibrium. Obviously, that can’t be accomplish because, factually, it involves a central authority figure(s) and, even if we have it, there are still a great multiplicity of those coefficients which are not universally superior across all use-cases.
Authors believe that thank to recent advances in economics data gathering and computation technologies (coupled with a decentralized issuance and p2p transactions as well as scoring system) they can avoid that conundrum (quote) by programming the distribution of resources directly. That is, everyone can decide for himself whose resources he needs (and keep these obligations) (end quote).
I do not think that any types of ‘distributive’ systems will work properly outside of very limited realms of humans activities (mostly those, which involve a well defined set of inputs-outputs as, for example, on a machine factory floor or in a cobbling shop).
Nonetheless, I fully support ‘obonomics’ as one of multiple attempts to free ourselves of a religious adherence to the medieval centralize governance models, which, as current world-wide events are proving us everyday, pushes us into a poverty precipice, leading to a kinetic confrontation among three global Constructs and resulting in the complete evaporation of our species from the face of this rock.
Now to my unprofessional translation of the Text of:
Resource Economics and Multidimensional Money: On the Path to Co-Prosperity
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How to reduce poverty and with the help of individual technologies “transparent money” and resource cooperation and build a co-prosperity society.
Authors: S.A. Taktaev, K.S. Bakulev, Ph.D., V.V. Golikov, Yu.V. Malkova, Ph.D., I.R. Lensky, Jordan Gitterman
‘Free labor for fair pay’
Problem to address:
3 (THREE) BILLION PEOPLE IN THE WORLD LIVE ON LESS THAN $2.5 A DAY.
For an emotional understanding of possible causes, we apply a metaphorical approach and turn to folk wisdom (crowd wisdom). Here are three anecdotes.
Aliens flew to our Earth, first flew around it, looked at what and how, and then decided to talk to the people of the Earth, they ask:
- And why do you have so many garbage and dumps around?
- This is because we do not have enough money for the construction of waste processing plants.
- And why do you have so many hungry and homeless people?
- This is because we do not have enough money to feed them and build houses for them.
Why are you always fighting with each other?
- This is because we do not have enough money, and we are trying to take it from others.
… aliens scratched their “heads” (or whatever they think) and ask:
- Here we are flying between galaxies, we have explored many worlds and planets, but we have never met such a rare and very necessary resource as money, could you show us how it looks, and in general show us where you mine it in space, then we we will try to fly for him, bring you more of this money and help you establish harmony on your planet.
- But we do not fly anywhere for money, — the earthlings answer, — we print them ourselves.
- Yourself? — asked the aliens.
… after this answer, earthlings were deleted from the list of intelligent beings…
A wealthy tourist has come to town.
Leaving $100 as a deposit to the owner of the hotel, he went up to look at the rooms of the hotel.
The owner of the hotel, without a moment’s hesitation, takes a bill and runs with it to the butcher to repay a debt.
The butcher, with a bill in his hands, runs to the farmer and repays him the debt for the beef.
The farmer repays the debt to the owner of the auto repair shop.
The owner of the workshop goes to the local shop and repays the debt for products.
The owner of the store ran to the local teacher-tutor-guide to pay for the lessons for the children. . .
She immediately runs to the owner of the hotel and repays him the debt for the rooms that she filmed for clients.
At this moment, the tourist comes down and says that he did not find a suitable room, takes the deposit and leaves …
No one has received anything — but the entire town is now debt-free and optimistic about the future.
- Alf, how do you think to solve the problem of the homeless?
- Already decided!
- How did you decide?
A house is being built for each of them.
What are you thinking of doing about unemployment?
- She’s gone. Everyone is building houses!
Maybe there are no more wars?
- And who will fight? Everyone is running around, choosing wallpapers for new houses.
What is money? (Now apply the scientific approach)
So Alf proposed a simple recipe for universal happiness … But from anecdote №1 it is clear that … there is no money))). Why is that?
Money VS currencies
It is necessary to introduce a distinction between “money” and “coins/currencies”. “Money” is what serves as a common contractual equivalent of value in exchange (shells, skins, gold, bitcoins, etc.). And “coins”, “currencies” are a subspecies of money, “fiat”, “fiduciary” money, which are issued by the authorities and the acceptance of which is obligatory and regulated either by the sovereign (who mints his portrait on the coin), or, in modern democratic states, — ruling elite (currency issue by Central Banks).
Currency is a planned scarce resource (for some reason — a little lower). Access to it is tightly regulated, in commerce mainly through a loan and collateral scheme. That is, in order to gain access to such money (open a loan), you need to pledge something to the bank: gold, buildings, other assets, and if there is nothing, yourself (for a while). All money enters the economy from banks: they are emitted only by the Central Bank, which sells money (credits) to other banks, and they already sell money — loans — to enterprises and people, there is no other money in the economy (this was before the advent of cryptocurrencies) . And since banks include all possible risks in the assessment of collateral and the loan rate, such a system severely limits the range of possible activities in business according to the minimum profitability:
In such a system, most business models that are “unprofitable” for banks, especially socially oriented businesses that could solve some local social problems (for example, employment of people in landscaping, services for the older generation, etc.) are impossible. .This increases unemployment, social tension, which leads to an increase in crime, reduces the overall level of happiness in society and kills faith in the future.
Banks, with the help of discount rates, regulate the general level of “fractional reserve” of collateral throughout the state, and through the World Bank for International Settlements — in international relations. “Fractional reserve” means that the money supply of the local currency is dependent on the “gold and foreign exchange” reserves of the state, in terms of world currencies (why it happened — a little lower). Unfortunately, in recent decades, the existing models of economic management are no longer able to provide the necessary amount of foreign exchange funds for the exchange needs of grassroots (local) economies, thereby causing a severe monetary deficit in them.
Bad and good money
This situation can, among other things, be explained by an unexpected conclusion from the Gresham-Copernicus theory, which states that “bad money drives good money out of circulation”. Indeed, if people try to keep their savings in “good” money and get rid of “bad” money, then world reserve currencies, being now the standard of money quality, are inevitably forced out of circulation and accumulated in places with the most developed financial infrastructure (City global network).
But this, due to the policy of partial reserve of local currencies, leads to the fact that in the regions, on the “world’s outskirts”, there are not enough funds to maintain the exchange of goods and effective demand, which leads to “sterilization”, the withdrawal of fiat money from local economies.
The second possible explanation of the situation, which indirectly follows from the first one, is that all the functions of money are “dumped” and closed on the modern world reserve currencies (dollar, euro), and they contradict each other (“The Triffin Paradox”, “The Impossible Trinity”). As a means of payment in trade, money should be cheap and easily accessible, as a general measure of value for financing in complex (construction, technological) projects — stable and sufficient in volume, and as a means of accumulating wealth — grow in price, that is, demand must exceed supply, those. there must be a monetary deficit.
Historically, these functions of money: retail payment, measure of value (financing) and accumulation — were separated, respectively, between copper, silver and gold coins. There were no clear boundaries, but it would never occur to anyone to pay in gold at a bakery or buy expensive jewelry with copper coins. “Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants — but debt is the money of slaves.” protected the system from hyperinflation. Moreover, in the history of Europe there was a case of hyperinflation and depreciation of gold and silver — when in the 16–17 centuries the countries of the Old World robbed the countries of the New World, gold and silver flowed to Europe in tons and … depreciated.
The transition in business to paper notes, and then to digital money, completely removed this “fuse”, which required the development of new emission rules — partial reserve agreements, when the issuance of regional currency is limited by gold and foreign exchange reserves — the amount of gold and “ world” currencies (dollar, euro) from this state.
The largest owners of currency in the world’s financial centers are interested precisely in the growth of their capital, that is, in the increase in the price of money, which means in an increase in demand for them and an increase in the lending rate. Therefore, they create a deficit, reduce the money supply in the currency markets as much as possible.
This increases the value of the currency (loan rate) in local markets, which further stifles local business, business cannot take such expensive money => investment opportunities are narrowing for capital, => this further stimulates the outflow of capital from the regions to the City. This is how a positive feedback occurs, which leads to a further increase in the local monetary deficit, and “unwinds” the spiral of poverty in the regions.
There must be a lot of money!
To solve the problem of monetary deficit, you can again go on the path of “specialization” of types of money.
We are accustomed to think that money is a single, state currency. But this is already 100 years old, how not so. In all countries that work with Central Banks, the government does not control the emission, and can only borrow money from the bank, against its treasury bills. https://upload.wikimedia.org/wikipedia/commons/d/d5/Delaware_Bridge_Company_Dollar.jpg
However, “unity” is more of a current situation than a historical rule.
There was a Free Banking Era in the USA, from 1837 to 1866, when every self-respecting bank printed currencies — up to 8,000 types of dollar bills were in circulation, in Australia this continued until 1910.
Hong Kong now — legally coexist private and public dollars, issued in one ATM.
The Bank of Scotland, Clydesdale Bank and the Royal Bank of Scotland, and in Northern Ireland the Bank of Ireland, Danske Bank, First Trust Bank and Ulster Bank are authorized by Parliament to issue sterling notes.
In total, about 600 local currencies were used in the world (before the appearance of the crypt). Cities in the UK that use their own currency: Brixton, Bristol, Totnes in Devon, Stroud in Gloucestershire and Lewes in Sussex, Exter Pounds (Exter). BerkShares is a local currency that circulates in the Berkshire region in Massachusetts (USA), in Baltimore — BNotes, Canada — Calgary dollars, Bavaria — Chiemgauer, Dobrodengi — Fureai kippu (Japan, China).
The concept of a “single currency” appeared only in the 20th century, it can be assumed that this seemed to be a solution to the problem of management under ultra-industrial centralization at the state, and later at the global level, when all management functions are closed to a single decision-making center.
Submonetary economy. Local and individual currencies — the way to solve the problem of monetary deficit
According to the World Bank, 40% of micro, small and medium enterprises (MSMEs) in developing countries have an unmet need of $5.2 trillion annually .
Microbusinesses, start-ups and the self-employed are the hardest to get loans or investments, with a gap of $718 billion a year.
These are the values of the world demand for money. However, the existing financial system is not able to deal with such demand — the cost of distribution and maintenance of fiduciary funds is too high for such markets, and management is not motivated to reduce it — it is easier to “scroll” funds in financial markets.
When in 1971 the United States refused to link the dollar to the gold standard, two economists almost simultaneously — B. Kline in 1974 in the article “The Competitive Supply of Money” (The Competitive Supply of Money) and the future Nobel laureate F. von Hayek in 1975 in the book “Denationalization of Money” (in Russian translation — “Private Money”) — put forward the idea of so-called “private” currencies. At the same time, it was about the competition of private banking institutions, but in the international arena. Hayek pointed out that the existing monopolization of money circulation leads to all the distortions inherent in a monopoly: a shortage of a resource, a decrease in the quality of money as a resource, and corruption of the system as a whole.
The solution to this problem can be the return to the economy of “bad”, according to Gresham-Copernicus, “copper money”, but in digital form, as an analogue of city coins that were minted by medieval Hanseatic cities for retail payments — private local and individual currencies.
The advent of trustless trust technologies has created new ways to solve such problems. On the blockchain, everyone can issue their own money and pay with it:
1) The cafe wants to buy cookies and pay the bakery with its tokens;
2) The baker sells cookies and wants to pay for flour with cafe tokens to the miller;
3) The miller pays grain to the farmer with these cafe-tokens;
4) The farmer goes to the cafe in the evening and returns the cafe tokens.
Obviously, within such a community, for internal settlements, “external” currencies are not needed. They are needed only for the purchase of external goods. However, the more players in such a system, the less the need for “external” (currency, credit) money. As the experience of the Community Exchange Network (formerly LETS) shows, such a scheme has been working for more than 30 years in almost 100 countries
Multidimensional economy and multidimensional money
Crisis of one-dimensional economic model.
Today we are witnessing a picture in which extreme poverty coexists with super-wealth all over the world, regardless of the degree of “development” of the country. And the point here, most likely, is not that the “secret lodge” rules the world, but in the obvious mess of the existing economic model. Its basis is the ultra-industrial approach of the general unification of the assessment of resources through money, moreover, through a single currency (dollar, euro).
Thus, the whole variety of social and economic relations is flattened to a single “currency” line. This has a number of consequences, such as, for example, the inability for the traditional banking system to finance new economic models (for example, the attention economy), transfer non-standard resources into assets (for example, monetize trust in local communities). All this leads to the fact that, on the one hand, huge monetary assets have been accumulated, and on the other hand, these assets cannot be invested anywhere, since there are no financial technologies for working with new and non-standard resources. The consequence of this is that modern currencies become, in fact, liabilities — we see that in places of their oversupply, zero and negative rates are already being introduced for the storage of such money.
It is interesting to note that the same situation was observed in the late USSR, when the accumulated capital in the form of non-cash money of enterprises was cut off from the consumption sector, which was constantly underfunded. The ill-conceived removal of this barrier in 1989 (through the law “On the State Enterprise”), which made it possible to cash out non-cash rubles, simply swept away the economy of the USSR, then the second world and destroyed the country. But if the financial storm in the USSR “only” devalued the ruble by 10,000 times (!!!) and was, as a result, absorbed by the world economy in the form of exported assets, now there is nowhere to put the supermonetization of the world economy…
Back to the Future — Neobarter or Barter 3.0
The convenience of single money is obvious — almost everything in the world “has” a price. No need to recalculate every time how much a pot in shells or in skins costs. There is a price standard, there are exchange rates to quickly calculate the cost — simple arithmetic operations are enough.
However, given the availability of colossal computing resources today, this problem can be solved in another way. The calculation of cross-rates of tens of thousands of values can be performed in real time, on a pocket computer (smartphone). The systems of standardization of technical processes also make it possible to calculate the cost of composite products and the share of resources in them with a sufficiently high accuracy.
Thus, it is possible to propose a “new old” resource exchange system — barter, but on a modern computing base.
First, barter is much more multidimensional than commodity-money exchange, which creates new degrees of freedom of exchange.
Secondly, thanks to trusted technologies (blockchain), it is possible to introduce another dimension of time (I gave oil now — I received food in the fall).
Thirdly, thanks to multi-agent technologies, it is possible to build multi-way exchanges, that is, to introduce more degrees of freedom.
This creates new dimensions for economic growth — a multidimensional economy.
Multidimensional money or what does blockchain and smart contracts have to do with it…
Based on the developments of V.V. Golikov identified about 30 types of economies, by types of key resources. Together they can be represented as a multidimensional economy — resource economy. Obviously, for such a multidimensional economy, the existing “one-dimensional” currencies will not work. Since the existing infrastructure for servicing currencies has developed in an industrial society, that is, it is inflexible, non-optimal, we observe that in conditions of rapid changes it cannot adequately respond to market fluctuations. This means that new money should have a larger dimension, a larger set of cost parameters. For example, one can imagine that when valuing different types of assets, different types of money are needed — “oil” money will be different from “attention money” or “sharing money”. In general, it is possible to issue a derivative for any type of resource by describing its behavior in a smart contract, thus making it an asset for some type of economy. There may also be “complex money” — analogues of stock indices, consisting of various assets, but being means of calculation (we are working on this;)). One can include the dimension of time here by describing options on such derivatives. You can go even further — describe option strategies in smart contracts, and thereby create synthetic assets with reduced volatility — a new kind of stablecoin, swinging on the waves of the market…
Obes and the Economics of Obligations
In general, these ideas are already 70 years old: E.F. Russell explained how the “obligation economy” works:
“So,” Baines explained, “you did something for me. It means that you have an obsession with me. For what you have done for me, I will not thank you. It’s useless. All I have to do is pay off the ob.
— Obligation. I owe you (literally in English I owe you — IOU). But why spend money on a long word when a short one is enough? Commitment is about. I deal with him this way: Seth Warburton lives across the house. He owes me half a dozen obovs. So I will pay off about you and give Seth the opportunity to pay off one ob in the following way: I will send you to him so that he feeds you. Jeff scribbled something on a piece of paper. “Give this to Warburton.
Harrison stared at the note. In very sloppy handwriting was written: “Feed this mutt.”
How public services (for example, firefighters) work in obonomics (IOUnomics):
“Suppose your wife needs a new coat. Where will she take it?
“He’ll go to a store that owes the firemen. Taking a coat, she will pay off a couple or two obovs.
- And what if there were no fires in the shops selling clothes?
- Brother, where did you come from so dark? Almost every shop has a fire department. If they are not fools, then every month they allocate a certain number of obovs. For insurance. They are thoughtful, you understand? To some extent, they and our oba have, so that when we rush to save them, we have to extinguish obi with them before we get new ones on them. It does not allow us to abuse. It seems to reduce the debt of shopkeepers. Exactly, right?
How new projects are launched (startups in a modern way):
For example, you start a farm. Neighbors help you build a house. It imposes on you — solid oba. You will, for example, supply a carpenter and his family with food from the farm for two years and pay off about. And then you will supply him with food for another two years and thus you will have money for him. And so it is with everyone else.
But not everyone needs agricultural products.
- So what? For example, a tinsmith made a butter churn for you. He doesn’t need food. His wife and three daughters are on a diet, and the mere thought of food terrifies them. But he has a tailor or a shoemaker who has a habit on him. He translates these obas to you. By delivering food to a tailor or a shoemaker, you will repay the tinsmith. And everyone is happy.
How to do it: software solutions
The “Obov” model, the economy of obligations, is now implemented in the form of IOU tokens. IOU offers a community-based solution for the unbanked.
The IOU token implements a solution from the ideas of private money and mutual guarantee of Nobel laureates Frederick von Hayek and Mohammed Yunus and the use of blockchain technologies.
How the IOU token works:
Communities can start with a peer-to-peer (P2P) exchange of IOUs, and after enough IOUs are exchanged and their issuers appreciate the organization of a common guarantee scheme as collateral for loans, the sale of IOU tokens to external lenders, investors, patrons can become a reality.
Based on a community guarantee, loans can be secured by collateral, allowing lenders to take the risk comfortably and thus make loans. Communities can help their members fund projects and businesses by vouching for their IOU tokens:
This is implemented in the www.iou.loans project.
From a legal point of view, IOUs are nowhere regulated as financial instruments, only as relationships between individuals. This means that IOUs do not violate the laws of most countries and are not subject to financial regulation.
But also IOU tokens can be (re)issued in the form of tokenized bills of exchange, which can be issued in currency by any private party at anytime and anywhere. This is a promissory note that is tokenized and regulated by a smart contract; a digital loan document that can be a private alternative currency. Such a bill is already a full-fledged financial instrument. IOU tokens are digital currencies backed by promissory notes. They may be private and under the sole control of the issuer and holder.
Also, IOU tokens can be issued as convertible loans (convertible notes, CN) of startups — and used by founders in the initial stages, as a tool for paying for resources. That is, all contributions to the project are fixed from the very beginning and the founder can pay them, for example, to designers, consultants, coaches. This allows startups to go through the “valley of death” with a significantly lower need for investment money, which, of course, increases the sustainability and survival of projects.
Then, when the project “ripens”, these tokens can be converted into real “slices”. in the project, under a legal agreement, or buy out from the “earliest” investors. And since everything is transparent on the blockchain, the incoming investor immediately sees how much people have already invested in the project with their work. IOU tokens are made compatible with regular Ethereum tokens, that is, they can be transferred, sold, traded on the exchange.
Obstacle-1: Unfair play by participants
However, the hype of ICO projects that took place in 2017 showed that not all such “money” tokens are equally valuable. People tend to look for easy ways, make commitments, advances and not fulfill them.
Solution 1: Transparent tokens
Accordingly, if everyone begins to issue their IOUs and use them like money, then there should be a system for controlling their quality, for example:
To do this, we have developed a system of “transparent tokens”:
The participant installs the DARFChain system free of charge and keeps records in it. He can tokenize his assets and immediately place them on the exchange, raise funds. Accounting data is laid out for analysis by partners, clients, investors and stored independently in a distributed file system.
Investors, creditors, partners can go to this address and see the state of affairs at the enterprise. The level of access is regulated by the number of obligations (tokens) a given client or investor has. Thus, the actual value of liabilities-tokens can be verified — the net value of tokenized assets, adjusted for the quality of governance ratios in the enterprise.
As a result, we have received an objective mechanism for determining the quality, value of certain personal or corporate debt obligations.
Solution 2: Money with Feedback
For individuals, such a scheme is too complicated and therefore a feedback mechanism has been introduced at the IOU token level — those people who received IOU tokens as payment for their services, having received a service from the issuer in return — can rate it and write a short feedback text (in the IOU scheme token — item 8).
If the issuer responsibly and qualitatively treats the repayment of its obligations, then its rating in the system will grow. If vice versa — respectively, on the contrary, to decrease. This creates a base of ratings of responsibility and quality of the participants in the system. In fact, each participant immediately sees who he is dealing with.
Based on these ratings, scoring models can be launched, as in IOU.loans, as well as more complex social interaction schemes can be developed, for example, a public voting system can be built on this basis.
Obstacle-2: Too much (kinds of) money
Money is convenient in that it is the same for everyone. Indeed, if we move to the IOU token model, then the number of “currencies” will be equal to the number of enterprises in the economy. This value in the world is about 500 million.
Solution 1 Robot Tokens
To solve this, it is necessary to implement a system of distributed exchange trading, when the tokens themselves look for options for transactions on the exchange. This will require a hyperexchange environment where software agents can work — semantized smart contracts. We called it robot tokens:
1) The cafe wants to buy cookies and pay with their tokens. The cafe bot starts placing cafe token sell orders and looking for cookie sell orders.
2) The baker sells cookies and wants to pay for the flour with his “bakery” tokens. The bakery bot starts placing bakery token sell orders and looking for flour sell orders.
3) The mill, accordingly, also wants to sell flour, and buy grain for its mill-tokens. The mill bot places mill tokens and looks for where to buy grain tokens.
4) The farm sells grain, and the farmer is looking for somewhere to go to a cafe in the evening and programs his bot accordingly. :)
Solution 2: building a chain of optimal exchange of IOU tokens using AMM algorithms
The class of algorithms AMM — automatic market makers comes from the concept of Bancor’s “bonding curve” (“Bancor bonding curve”) and is used for algorithmic linking of digital asset trading parameters, for example, supply and price of different assets. The most commonly used are binary binding curves (where there are two assets, these are Uniswap compatible systems), but there are also ternary (Curv) and more multidimensional, up to 8 assets — (Balancer).
However, as shown above, the dimension of the asset space is immeasurably larger, so even an 8-dimensional algorithm will not be enough.
Therefore, it seems appropriate to implement an iterative approach to graph search based on the 2-dimensional Uniswap algorithm. This software framework has a built-in swap chain function, which has an input parameter — the path[a1, a2, a3, …, an] vector. This function performs sequential exchange for each pair of assets (a1 -> a2, a2-> a3, etc.). Thus, the task is reduced to finding the most optimal chain for the exchange of digital assets in terms of exchange rate differences.
Such a chain can be found by searching for the optimal route along a graph in which digital assets are nodes (vertices) and valid exchange pairs are edges. For this, existing classes of algorithms for finding a route along a graph can be used. The results are passed for exchange to the swap function as an array path […].
To optimize the search, for example, lists of the most frequently exchanged resources, clustering by geography, etc. can be created in advance.
DisPOS — Distributed POS consensus
Decentralized money -> distributed money
Bitcoin, Ethereum and blockchains with a single consensus are just the first step towards the decentralization of money. These are still very centralized solutions. At a further stage, it will become obvious that every company and even every person will start issuing their own tokens — IOUs. This means that the number of blockchain users will be measured in hundreds of millions, and the number of transactions in billions. It is obvious that existing blockchains with centralized consensus will not be able to withstand such a load without centralization, as we already see in the example of blockchains like Near, Solana, Binancechain, which destroys the very idea of decentralization. It is logical to assume that there will be a massive increase in the number of “local” blockchains — both geographically (blockchains of a separate city, village) and socially — each community will have its own blockchain.
Bitcoin and Ethereum, of course, will remain, like Visa and Mastercard, but why should I, as a user, even in New York, know the entire transaction history of the whole world, transactions in some Russian village or Chinese community? It is enough for me, when accepting a transaction, to know that some community is vouching for it, enough to cover if the obligations are not fulfilled.
Here, the problem of exchanging transactions between these blockchains inevitably arises.
Limitations of Logical Consensus Centralization in Blockchain
The logical centralization of consensus is the main limitation of blockchain scalability. “A single blockchain for the whole world” is a fantasy, a chimera, a too overloaded solution turns out, a ready-made center of vulnerability, a point of failure.
Such a Blockchain has limitations on scaling, as the system falls under the Amdal law, since the transition of the system to the next state (mining a new block) is performed strictly sequentially after a consensus is reached between 51% of the system nodes. Synchronization time (sending a new block) between all nodes of the system is not equal to zero. With an increase in the number of blocks or the volume of transactions in them, this time will increase. Thus, with an increase in the number of users and transaction traffic, the system simply will not have time to switch to a new state more often than once every few seconds. Apparently, the current Ethereum block timing is the practical limit of synchronization time on existing communication networks.
Now this is actually solved through centralized mining centers, when all servers are located side by side in the same building. But this contradicts the very idea of decentralization. Whoever controls the centralized pool of nodes also controls the consensus.
Conclusion — we need a fractional, distributed consensus.
Existing L2 solutions, such as PolkaDot, Cosmos, etc, follow the path of “federal”, “star” decentralization — when many sidechains / parachains are created with their own consensus, synchronized through a central relay chain. Obviously, such a solution only transfers the point of vulnerability of the centralized control of the blockchain to the relay chain. At the same time, parachains cannot control the consensus in the central relay chain in any way.
However, the XCM roadmap of the polkadot protocol plans a direct exchange of transactions between parachains.
Blockchain with distributed consensus
A solution is proposed that is similar in architecture to a network of email servers, where “local blockchains” can be represented by mail servers.
The solution can also be presented as an analogue of the banking system before the era of central banks. Then it was much more decentralized, banks could establish correspondent relations directly, peer-to-peer. Banks opened correspondent accounts for each other, credited them with assets (physically transported gold to each other’s vaults), for a certain amount. Then special employees made sure that there was no significant imbalance in the settlements on correspondent accounts. Accordingly, if the settlements were skewed to one of the parties, the other party asked to increase the reserves on the correspondent account, otherwise it could suspend the settlements. Such is the handmade proof of stake.
Implementation at the node level
Similar to POS, with an extension: each node contributes a stake (stake) and can sign without synchronization with other nodes transactions within this stake. If these transactions are later rejected by other nodes, then the funds are debited from the node’s collateral.
If a transaction needs to be signed for more than the current collateral, the node will encourage other available nodes to underwrite the transaction. If they agree and give guarantees, the transaction is carried out, otherwise it is rejected.
Blockchain exchange layer
To implement the exchange of transactions between blockchains, you need to enter the chain-id in the address structure, similar to the email domain.
Step 1 ( see picture below)
When forming an outgoing transaction to the external chain, the transaction is sent to the mempool of the “local” chain node with the addition of the chain-id address.
If a node, when forming a block, encounters a transaction in the mempool to an external address (not with its own local chain-id), then it looks in the routing table, where each chain-id is associated with the addresses of the starting nodes of this chain. The node sends the transaction to the mempool of any node from this list, while adding “its” chain-id to the sender address of the transaction, as it happens in SMTP.
The receiving node, when it detects a transaction from an external blockchain in its mempool, before including it in the block, similarly accesses the routing table and asks the sending node for the proof of the Merkle tree for the sent transaction.
If the proof is received (i.e., the transaction is confirmed by the sending node), the receiving node proceeds to verify the content of the transaction.
We can say that the receiving node acts as a “light client” of the sender blockchain: “If a light client wants to determine the status of a transaction, it can simply request a Merkle proof showing that a particular transaction is in one of the Merkle trees, the root of which is in the header block for the main chain.” [sixteen]
Further verification of the transaction can be set at the level of smart contracts. It can be checked whether there are enough staked resources on the correspondent account to debit this transaction. Additional checks on the reputation of the blockchain that sent this transaction and others, at the choice of the receiving party, can be performed.
Next, the execution of msg.data is analyzed if they were transferred to the smart contract on the receiving side.
If all checks are passed, the transaction is included in the receiving blockchain.
This architecture is much simpler than the proposed XCM from polkadot and does not require changing the format of transaction messages, only expanding the address structure. Using the Ethereum address as an example, this could be the hexadecimal code before the ‘x’ character in the address: 0x63ea7F78107dF4C6fd8b17e7b05b1b3D41a5B1Ab -> e2e4x63ea7F78107dF4C6fd8b17e7b05b1b3D41a5B1Ab, where e2e4 is the code for the local blockchain.
Relationship with external chains without routing. relayspace
.. in progress
What is already done and what still needs to be done
Distributed resource management system and token quality control (center and bottom) — done www.angeles.vc, http://dobro.online
IOUs wallet (top right) — done. IOU / CN token is developed — a decentralized application in which the founder can issue his tokens — like IOUs — CN (convertible notes) of the project, on the blockchain, of course.
The system of semantic smart contracts and the hyperexchange (upper left) — to be done — is implemented on the basis of technologies of distributed automatic exchanges such as Uniswap.
DisPOS — must be done
Lots of documentation and tutorials in different languages - needs to be done.
Let’s sum up the intermediate results
The use of trustless trust technologies makes it possible to solve the problem of lack of money in local economies by issuing and accounting for debt obligations of market participants. This approach significantly expands the space of opportunities to launch local social and/or low-margin businesses, which creates new jobs, reduces poverty, unemployment, reduces social tension, and in the long run generates new tax revenues.
The creation of a system of robotic tokens in the future will make it possible to move to a pre-order economy, increasingly reducing dependence on credit, and then move on to fractal planning “from below”. This will make it possible to abandon the hard stimulation of consumption to justify overproduction, which, in particular, will significantly reduce the environmental burden from industry on natural systems around the world.
Why is it written “Free labor for fair pay” in the beginning?
Because resource economics frees labor from financial oppression.
In the current centralized monetary economy, you can never freely make a deal, nor can you freely price it.
Firstly, if you make a deal in fiat money, you immediately fall under financial regulation. And the point is not only in taxes (taxes, as payment for the services of the state and public structures, are necessary and fair), but also in the fact that you must keep records of funds, confirm the reliability of your counterparties. And you cannot conclude an agreement otherwise than in money — after all, any money surrogates are prohibited by law, up to and including criminal prosecution.
And when setting a price, you inevitably find yourself in front of the fact that the cost of money includes all the risks of the creditor, in addition, the availability of money also affects the price. The fact that money is an artificially scarce resource inevitably reduces the value of all other resources — human, material, intangible — in their assessment. That is, paradoxically, but by agreeing to accept money, you immediately agree to discount your resource.
By accepting money, you agree to accept all other rules of the game associated with them. And they are not written by you and not for your benefit, but for the profit of money owners.
Models for applying the economics of obligations
For monetization and lending in a submonetary economy
https://www.iou.loans/ — decentralized scoring system for non-bank loans in the submonetary economy;
It is not uncommon for a small business or aspiring self-employed person, be it a baker or an artist, to find it difficult to get financial support from a traditional bank. Quite often you have to fiddle with a lot of paperwork, enlist the help of lawyers, and often you still need to have decent start-up capital to start your business.
IOU token is able to help bypass all these energy-consuming actions, by means of a system, so to speak, “IOUs”. With IOU, you can issue your own token representing the services of your business and exchange it equally for the necessary or desired services of other businesses.
And thanks to the token rating system, you can be sure that the owner of the IOU token you are interested in can be trusted. Moreover, after the transaction, you yourself can evaluate the work of this business, and he, in turn, will evaluate yours.
For example, Alice, a young mother, a designer, lives in Africa (or Latin America, Ukraine or somewhere else). She saw a beautiful hairstyle and wants to get this service from Bob’s hairdresser, but she has no money. :((
Alice, a young mother, a designer, lives in Africa (or Latin America, Ukraine or somewhere else). She saw a beautiful hairstyle and wants to get this service from Bob’s hairdresser, but she has no money. :((
Bob plans to redesign his hair salon, but like Alice, he doesn’t have the money…
Issuers may create their own IOUs backed by the value of their goods and/or services.
For startups — IOU/CN token
The IOU/CN token is a decentralized application in which the founder can issue his tokens — such as IOUs — CN (convertible notes)  of the project, of course, on the blockchain. That is, all contributions to the project are fixed from the very beginning and their founder can pay, for example, designers, consultants, coaches for their services. This allows startups to go through the “valley of death” with much less need for investment money, which certainly increases the sustainability and survival of projects.
Then, when the project “matures”, these tokens can be converted into real shares in the project under a legal agreement or redeemed from the “very early” investors.
And since everything is transparent on the blockchain, the incoming investor immediately sees how many people have already invested in the project with their work.
IOU tokens are compatible with regular Ethereum tokens, meaning they can be transferred, traded and traded on the DEX exchange.
For Freelancers — Iou Portfolio Token #Socialfi
Freelancers on centralized exchanges can be blocked for any reason and lose all their social capital: -portfolio, ratings, connections.
IOUvers offer a solution: IOUtoken as a decentralized portfolio. A freelancer can create their own IOU tokens as portfolios and sell them to clients as a “job obligation”. After he/she has completed the work, the client pays the IOU and evaluates the work.
Check out www.iou.works for more information.
For Students and Educators #Learn2earn
Currently, there is no system that would link the business success of a graduate with the contribution made by the teacher in the learning process.
Teachers have little interest in the success of their students.
Each student can issue their own IOU token — both a grade book and a personal share. In the future, it will become a sign of his business reputation.
Teachers, trainers accept the student token as payment for tuition and write in the portfolio what they were taught so that we get the student’s record.
Since the IOUtoken is ERC20 compliant, this means that teachers can sell these tokens (or HODL).
We can also program a student token to entitle you to a share of its income in the future. Voila! Now all teachers are interested in the success of the student — the rules of the venture business apply, and if one of the students becomes a billionaire, a certain percentage of his success will return to the teachers, literally.
It also removes the problem of money at the start of a career — students do not need to go into a credit hole to get an education.
In IOUedutoken, employers, clients, suppliers accept its token and write reviews in the portfolio — this is how the student’s “personal file” is formed.
For Came Guilds #play2earn
1. One or a group of players wants to buy an NFT of a learning asset in the game, but it is too expensive.
2. They issue IOUs associated with game accounts and stakes in the Team Token contract.
3. They then stake the IOUGuild token to raise funds with loan interest or a profit share.
4. Investors buy teams’ IOUs, and the team receives funds to buy NFTs to earn money.
Co-prosperity — a society for the realization of the potential of people Co-op? Potlatch? Prosperity!
The transition from a one-dimensional model of money to a multidimensional model of obligations/resources makes it possible to qualitatively change the social approach. Co-prosperity as getting good for oneself through giving good to all can be a new way of doing things. This is a society for the realization of the potential of people, where everyone is interested in the success and development of everyone.
What distinguishes co-prosperity from existing social models? In short, then -
• Capitalism: how much can be squeezed out of each, to each under an agreement
• Socialism: from each according to his ability, to each according to his work
• Communism — from each according to his ability, to each according to his needs
Co-prosperity offers a different approach: everyone gives their resources (services) to everyone. That is, everyone, giving their resources, labor, competencies — to the community, has access to all the resources of the participants and can get back what he needs. It is proposed to implement this through the tokenization of the participants’ obligations — the IOU token.
Co-prosperity is when everyone participates in the affairs of everyone. The success of any member of the community becomes a common success. Helping each other becomes beneficial.
What does it look like? At first glance — to the cooperative, because there, too, everyone pools their resources, and in exchange they receive shares of the cooperative. However, in a cooperative, the board manages the affairs, this is a centralized structure that can have its own interests (the problem of an intermediary, MITM, man in the middle). We eliminate the board by programming the distribution of resources directly. That is, everyone can decide for himself whose resources he needs (and keep these obligations), and whose — not, and they can be exchanged with other participants. Chaining algorithms will make such exchanges complex and flexible enough so that everyone can get what they need.
It is similar to a potlatch, only on modern technologies — the contribution (“gift”) of each member to the community is distributed strictly equally among its members.
Can we say that all Coprosperity members receive a basic income? No, basic income is when taxes collected from the most active part of society are then redistributed equally among all citizens. The co-prosperity approach is more like investing — you invest in the development of the community and get the opportunity to receive income from the investments made in the community. So the participant can secure a pension — by investing in community projects.
Participants can form a pool of their resources and start a business, paying off its obligations. They can also transfer the obligations of the business to the community and receive in return the resources of the community members. This is how you can implement a mechanism for transferring business to the community — if the participants form a project, then in 2–3–5 years the initial project team will transfer their project to the community through such “spraying” (airdrops) of project tokens. But in return, it will acquire a portfolio of tokens from all other projects. The team is not obliged to give away all the tokens, it may well keep up to 50% for itself. But 50% must be distributed without fail so that the community is interested in supporting this project. In this way, investment protection is achieved — the founders, the initiators of the project, for some time bring the project to the planned parameters and transfer it to the community, and then they can switch to the next project. At the same time, they either retain a share in their project, or receive shares in other projects.
If a team stops giving away its tokens, it stops receiving tokens from other projects.
This is how the commonwealth space is created — projects, businesses bring profit not only to their founders, but to all community members.
The fulfillment of the obligation on tokens is guaranteed by the reputation of the team. Reputation records are fixed on the IOU smart contract of the team token.
To ensure equal access of all participants to benefits, all obligations that a person gives to the community are divided equally between all participants using a smart contract. The use of distributed ledger technology, blockchain (or blessing chain) allows you to store all these obligations on distributed servers, thereby increasing their safety and eliminating the possibility of substitution — if the blessing chain is compromised by a “51%” attack, then all obligations will be compromised, which means everyone will lose their investment. As the experience of operating blockchains of Bitcoin and other cryptocurrencies has shown, for this it is necessary to fulfill the condition that the cost of an attack is always higher than the value of assets in the network. As long as the majority (50% + 1 vote) of the community plays fair, the BFT (byzantium failed tolerance) condition is fulfilled. Since the communities will work on the DisPOS consensus, even the discrediting of one blessing chain will not lead to a complete stop of the entire Co-Prosperity network.
This can be implemented like this:
1. All participants initially own equal shares in the general fund in the DAO format and transfer 25% of the projects created in the community to it. Future projects will be financed from the fund. Accordingly, DAO transfers a proportional part of its shares-shares-units-tokens (hereinafter — tokens) to the created projects.
2. Before appearing / participating in the project, each participant contributes ¼ (~ 40 hours per month — will need to be approved at the DAO) of their obligations to the community, respectively, receiving the same amount from all participants.
1. ¼ of them form endowment communities (need to be approved at the DAO);
2. ¾ “airdrops” among all other community projects, thereby creating cross-pollination and momentum for mutual support.
3. The community smart contract distributes the transferred tokens equally among the number of participants and displays them in the participant’s personal account. The participant can withdraw the received tokens at any time, for example, for sale and exchange. Sold (exchanged — etc.) tokens become the property of the participant and are not returned to the system.
In Co-Prosperity, only a part of the resources (25%) is transferred to the “centralized” DAO, and the rest is directly distributed among the participants. The central DAO is needed only at the stage of system launch, to ensure the impact-resourcing of the first projects, with a sufficient set of resources, the need for it may disappear.
An invitation to prosperity
The invitation of a new participant is carried out on the guarantee of the existing participant, who bears subsidiary liability for the obligations of the newcomer.
Quality control and removal of unscrupulous participants from the community.
If a participant systematically does not fulfill his obligations or does not fulfill them qualitatively (has a low public rating), then a group of consumers of his resources (services, etc.) of at least 5 participants has the right to vote on the issue of excluding him from the community.
 “The currency in the Russian Federation is the ruble. Money emission is carried out exclusively by the Central Bank of the Russian Federation. The introduction and issue of other money in the Russian Federation is not allowed.” Constitution of the Russian Federation, art. 75. p.1.
 https://en.wikipedia.org/wiki/Gresham%27s_law (Copernicus here is the same astronomer who first said that the Earth revolves around the Sun)
 “Gold is the money of kings, silver is the money of masters, barter is the money of peasants, and debt is the money of slaves.” Norm Franz, Money & Wealth in the New Millennium: A Prophetic Guide to the New World Economic Order
 in the 1951 short story “And there was none left”
 Cross-Consensus Message Format (XCM)
 What is CN: https://habr.com/ru/company/luxoft/blog/156547/ (thanks to comrade val_potapov)