Guidelines for Management of Ranchi Mall Blockchain Contracts
What is a Blockchain Contract?
Exciting things are happening in the business world due to the emergence of blockchain technology. Blockchain opens up the possibility for a new, collaborative and individually empowering means of doing business without borders and without the need for regulatory organizations or other intermediaries.
Blockchain empowers people in two ways that have up to now not existed — a) the ability to legitimize innovation and new products without seeking approval from governments and b) the ability to create financial assets out of non-profit based transactions. If a cause has followers, it can be funded very easily on blockchain which is normally unfundable in a government-based legal regime. For instance, on blockchain, ten people could create their own bank without seeking a license from the government. In a central bank dominated banking system, a bank cannot exist unless approved by the central bank. Another new possibility, a financial asset can be created out of a social cause and the gains from that financial asset will be able to fund that social cause as long as enough people support the cause. In a non-blockchain world, only donations and charities can fund a social cause whereas in the blockchain world a social cause can be funded by profit-seeking behaviour in addition to donations and charity.
A Blockchain is of no use until it can get people to cooperate toward a common cause. That common cause has to be expressed in terms of obligations and benefits of all parties involved in the cause. Obligations are what the parties perform and benefits are what the parties gain as a result of their performance. Blockchain Contracts are an expression of obligations and benefits of all parties involved, as written on the blockchain. Another way of looking at it is that blockchain is a technology and a Blockchain Contract is the human application of that technology. Blockchains are useless without Blockchain Contracts. Human innovation in blockchain is at most a technological innovation, but human innovation in Blockchain Contracts is a social innovation which can transform human lives. When we speak about blockchains being revolutionary, it is the Blockchain Contracts, rather than blockchains themselves which are the cause of the revolutionary transformation. That is the reason why focusing on Blockchain Contracts rather than blockchains would yield greater dividends for mankind. This is why Blockchain Contracts are the core pillar of Ranchi Mall’s efforts and innovations.
The current way of putting business agreements onto the blockchain is called a smart contract for which all the decisions, once coded by the contract creators, are automatically implemented by software. Blockchain Contracts, on the other hand, assign a primary role to human judgment in blockchain-based contract decisions. Human judgments are superior to machine judgments in matters of unexpected events that can occur during the course of a contract. As a result, Blockchain Contracts perform much better than Smart Contracts in real world scenarios where uncertainties exist.
There are certain guiding principles which we believe are necessary for administrators of Blockchain Contracts to follow to ensure financial continuity of the contract. The ability to create financial assets out of non-profitable projects comes only because the financial interests of the investors are secured through transferability of their financial interest. Such a system — where the rules of transfer could be solely determined by the creators of the Blockchain Contracts themselves without any government or regulatory approval — did not exist before the creation of blockchains. However, the critical condition is the general interest in the non-profitable projects to be put on blockchains has to increase over time for its value to increase. If this condition is not met, then tokens can drastically fall in value. However, if this condition is met, the project can fund itself up to infinity without generating any profits. A close example in the real world is the funding of Tesla, a publicly listed company, which has not generated any profits but the value of their shares is consistently increasing.
A safe strategy would be to use this blockchain funding model to create a long-term self-income generating plan without the need of further investors. In that case, the blockchain funding model is being used to give initial funding to the Blockchain Contract until it secures regular profits to fund itself.
We have simplified this observation into three principles which Blockchain Contract administrators must follow to ensure continuous funding of their Blockchain Contracts even without profits.
1. Contract administrators must ensure that the contract operating expenses are always lower than receipts from the sale of the original coins.
2. The supply of original coins must always be lower than the demand for all coins.
3. A minimum viable market has to be created for trading of the tokens.
Adherence to the above principles, in our opinion, will give the Contracts at least five years of operations without the need to seek profits from operations. These five years should be used judiciously to create a transaction fee or profit-based model for the Contract.