Whole > ∑ Parts, No. 2: What Blockchain Wants.
Knowledge Grows when Information Flows.
Blockchain wants to be biotic … it wants to enable life. This means ever-increasing diversity, specialization, freedom, opportunity, scale, learning and continual reinvention in the pursuit of new value.
As James Carse presents in his book, Finite and Infinite Games, Blockchain wants to play an infinite game where the objective is not winning, but the continuation of play. This play will yield new insights and create new value that enable Blockchain to align better with its environment. Under this paradigm, ideas are continually built upon previous ones, and combined with others in the environment until a radical new invention is realized, and new value created. Steven Johnson compares human innovation to biological evolution, providing an example of the simple ‘grape press’ (for faster wine production) morphing into the revolutionary ‘printing press’ that kick-started the information age.
“Our mission as humans is not only to discover our fullest selves in the technium, and to find full contentment, but to expand the possibilities for others. Greater technology will selfishly unleash our talents, but it will also unselfishly unleash others: our children, and all children to come.”
But while evolutionary biologist Stuart Kauffman observed that there are always possibilities in every eco-system, they are also constrained by their existing context of biological diversity, their environment and the flow of information. We can look to current Internet companies for examples of these constraints, and to help understand the significance of the potential paradigm shift. But before we can explore this, we need a brief explanation of information and discussion around how it is used.
What is Information?
Information may be thought of as patterns of differences that make a difference, and is not necessarily a property of matter, energy, space, time. Shannon refers to Information as any type of pattern that influences the formation or transformation of other patterns.¹ Kauffman, Logan, et al. suggests that information provides some of the constraints that allows a living organism to harness energy from its environment to do the work of propagating its organization.²
How Major Internet Companies Currently Employ Information
According to John Hagel,³ our world is largely shaped by flows of information. Hagel advocates that companies position themselves at the intersection of as many flows as possible. He argues that privileged access to flows improves companies’ opportunity to: (i) better anticipate the future; (ii) shape flows; (iii) improve, accelerate and direct learning.
In many current Internet business models, there exists a network of users and central control of information flow. At companies such as Facebook, Twitter and Google, data from the system is mostly proprietary — internally analyzed or sold to partners for analysis and “use”. Data, and the information from that data, is not being presented back to the entire network of participants. By controlling data, and access to the Information flows, one not only gains the advantages articulated by Hagel, but can also ‘charge’ for access, essentially monetizing the use of this information.
Unleashing Information
While the Internet business model described above has resulted in extremely profitable businesses that distributed great wealth to their shareholders, managers and employees, and provided incredible value to millions of users, these models are inherently limiting. As mentioned earlier, information is the constraint that enables the harnessing of energy from a system. Privatizing information constrains its access, use, influence, and therefore the opportunity for new insights, and in this way seriously limits the ability to harness the full potential of system to adapt, innovate and diversify.
The alternative is to shape systems where participants have: (i) access to all system information, as well as (ii) the ability to contribute to Information flows. Giving participants equal visibility and access means that all participants have the same opportunity to collaborate, learn, and influence the system in ways that may create new value through exponential network effects.⁴
Trending Toward Biology
In a viable biotic system, information is generally available to all of the participants within the system — in order to enable the ongoing self-organization of the whole. In this way, participants have access to the knowledge on the state of the system, and are able to influence the system state based upon that knowledge. This means that all participants may leverage their combined experience and capabilities to influence the system.
Influence generally comes in the form of combination and re-combination of other participants’ influence, creating an endless circularity of a kind of co-created mashup of contributions. When the flows in this ‘mash-up’ gain speed, and include a sufficiently large variety of perspectives, it may begin to emulate biotic systems. And we know from research into biotic systems, small moves can set very big things into motion.
Ultimately, a system like this in nature can exhibit evolutionary properties that grow and scale at exponential levels, organizing themselves into an ever-changing system that meets the evolving needs of all participants.
Sandy Pentland at MIT’s Media Lab sees “the rise of new types of companies and governments that are more agile and efficient.” Agile because they would be formed around social networks rather than traditional top-down hierarchies. Efficient because they would be powered by incentives providing maximum motivation to participants rather than the plain old boring rules that govern most organized groups.
Blockchain’s Secret Sauce
Blockchain is essentially the old paper style accounting ledger — like the one pictured. For purposes of this discussion, the reader does not need to understand the technical details of how blockchain works.
What’s essential to understand is that Blockchain is a store of data about a system, and therefore creates the basis for revealing system information and recording acts of influence on the system. Given that the marginal cost of this activity will eventually be near zero, it is now feasible to record and store actions of micro influence. This is important for the following reasons:
- First, storing data at this scale is unprecedented, and provides system participants with unparalleled insights into patterns, or information about the system, at new levels of granularity.
- Second, as blockchain is designed to be transparent, each participant has equal opportunity to the knowledge on the state of the system.
- Third, given blockchain can record participant actions, each participant is able to influence the system state by acting upon it, as adding to the ledger is effectively influencing the system. Further, each action and its actor are permanently recorded.
- Fourth, given blockchain can record participant actions, participant actions can be rewarded through an exchange of value. Hence, each participant can be extrinsically rewarded for every action in the system no matter how small.
Blockchain’s secret sauce is that it is a feasible record keeping system for recording and rewarding influence in a system. This means that participants may leverage their combined experience and capabilities to influence a system in a free and transparent flow of information. Blockchain enables the evolution of co-created mashup of contributions, where value is distributed to those who create it, and are not siphoned-off by controlling actors.
Blockchain’s Promise
If Blockchain is used to free Information flows, it can become a part of a global human–machine system that allows us to innovate collectively in ways and at speeds that we can’t yet imagine.
Eventually, Blockchain allows us to deploy systems that:
- grant people, who were previously excluded from incumbent systems, access;
- are no longer subject to economic rules of scarcity, and can exhibit positive sum properties;
- facilitate crossing of material-digital barriers, creating greater opportunity for new combinations and value;
- increase the likelihood of creating new insights, and therefore more complex and more interesting outcomes than can be achieved in existing linear system.
Ultimately, Blockchain can help us develop systems that not only help us stay in front of Wicked Problems, but convert uncertainty into opportunity for more people.
The future is incredibly bright, if we choose wisely.
Series Overview
The Whole > ∑ Parts Series goal is to discover how to design systems that create an entire revolution in human evolution. Too often we approach problems with a set of assumptions, rules and solution boundaries that no longer need to apply. Rather than attempting to predetermine what knowledge and information is necessary, we should be making information available to all people where and when they need it. Technology innovation should focus on providing tools that create systems of influence and value return for all participants.
Series Pieces:
Whole > ∑ Parts, No. 1: Humanity is in a race against wicked problems.
Whole > ∑ Parts, No. 2: What Blockchain Wants.
Next in Series:
Whole > ∑ Parts, No. 3: Why Blockchain Wins. (coming soon)
[1] Claude Shannon, A Mathematical Theory of Communication
http://math.harvard.edu/~ctm/home/text/others/shannon/entropy/entropy.pdf
[2] Kauffman, Logan, et al., Propagating Organization: An Enquiry”
https://www.researchgate.net/profile/Robert_Logan5/publication/225894962_Propagating_organization_An_enquiry/links/0deec53c9e1ba9ecce000000.pdf
[3] John Hagel on positional advantage in the postnormal
https://gigaom.com/2014/02/15/john-hagel-on-positional-advantage-in-the-postnormal/
[4] A Brief History of the Power of Pull
https://hbr.org/2010/04/a-brief-history-of-the-power-o.html
