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Author: Dima Starodubcev
Existing cryptocurrency industry have problems of early stages:
- pack of innovative independent networks with their own protocols;
- low compatibility with existing web infrastructure;
- high cost of development new generation polymorphic decentralized applications;
- absence of big picture vision between participants of emerging technology.
Almost the same problems the Internet suffered at early stages.
This paper propose to achieve innovative form of social consensus inside existing cryptocurrency infrastructure on the future of the Internet that will allow developers, entrepreneurs and investors effectively coordinate in building efficient industry of decentralized polymorphic applications adding more value for existing and future artificial intelligent networks, and the most important - us the people.
We begin by discussing the nature of an Ideal System of Internet Applications [ISoIA] from first imperfection of existing Internet, than its motivation to the axioms required. Our goal is to develop a foundation that will serve as reference point for both cyber•Shares and its competition.
Existing Internet very similar to the tyrannies of states. Service providers locks the ability to control user's data. Mainstream applications is closed source. Huge corporations like Google, Facebook control user's datasets and knowledge of user's behavior through massive ad networks. Network effects allow corporations to build business models that are free for users, but incredibly profitable. RTB protocol does not hide that users data are massively and successfully traded. Whatsapp users recently has been sold $35 apiece to Facebook. This has led to appearing the mem:
If you use free app - you is the product.
Through ICANN and local internet providers governments have ability to manage freedom of the Internet. Recent case with Edward Snowden just prove that government won't stop their efforts to manage us. Through legacy finance system governments have exclusive right to print money diluting human wealth and allocating them to unnecessary wars.
Cryptocurrency technology have all necessary components to solve problems of existing Internet and Economics: Bitcoin, BitShares, MaidSafe, Ethereum, NXT, Ripple. This list is not exhausted and it wouldn't be. Any technology that open and decentralized add significant value to common pocket. Though these technologies could compete with each other, let me cite James:
"In crypto, the competition is not each other, it is fiat. If any crypto does well, we all benefit."
So, usage of particular technology is completely at the mercy of market forces and future of these technologies is uncertain. Obvious is that we can use advantages of every platform simultaneously. That is the problem for existing web. Though Google and Facebook technically have resources to switch almost the whole Internet to cryptocurrency technology overnight, legislative and monetary point of view wouldn't allow them to do it in next few years.
So we have several years to change this situation giving the power of global intelligence in people's hands, but not greedy corporations and governments. In the core of evil is modest and harmless cookie. Changing cookie to public keys right in user browsers and developing apps that follows principles of Polymorphic Decentralized Applications the Internet could be liberated in several years. Recently published report by cyber•Fund: Cybernetic Economy Report 2014 show tremendous commercial potential of proposed innovations.
As developers we want to easily create open source applications improving quality of life for the whole planet which are compatible with existing web and add significant value for anybody who will use and create this apps.
As people we want to control our data, privacy and values using simple apps with unified identity which improve quality of our life.
After careful consideration and community review, the following axioms were chosen to define the characteristics of an ISoIA and thus defining the foundational goals for the cyber•Shares network:
All parties in an ISoIA enjoy equal status, no special privileges are required, and at any point in time shall not require resources not already owned and used by over 50% of the population.
No trust shall be required of any party in an ISoIA. No party has the ability to default and should have no contractual obligations as a prerequisite of use.
An ISoIA must have a level of security on par with Bitcoin or better.
Cryptocurrency technology allows to build apps that have internal economy regulated by network's participants. Through network effects internal economy become stronger more people adopted by application. Created value should be distributed among contributors of network created by an app. That allow to implement more efficient and fair business models which switch industry to business models there apps pay their users through network effects combined with horizontal and vertical value creation.
People's data controlled only by them self. Public-key cryptography allow to build identification systems recognized by majority of networks. This allow to build applications which give ability for any user to store encrypted data without lockups from service providers.
Any economic activity anonymous or public could be visible on blockchains. Existing RTB should evolve to more open industry where audiences and it's metadata is available for everybody.
People have the choice remain private or become public. Anybody should accept that no sense either a way to control privacy.
Developers don't need to reinvent the wheel. Innovative forms of social consensus and protoshare mechanics allow to build libraries, components and apps that are easily monetized in case of extensive usage.
Any element in the PDApp is built as independent Web Component that interacts with artificial intelligent network directly.
An ISoIA shall be easy enough to use that anyone who can handle email can successfully realize the benefits of using next generation applications within the system.
In ISoIA through open code, open data and open protocols any professional: developers, entrepreneurs, investors, scientists, etc. could join any network and app development without permissions choosing desirable level of economic motivation by itself by acquiring or earning networks or apps shares.
One private key should be enough for managing all accounts for one identity regardless of the underlying complexity of used networks.
Low level consensus of underlying artificial intelligent networks and auditable improvement and distribution of PDApp's code should provide ultimate reliability of PDApps.
To the best knowledge of this paper’s authors, we have not yet to find a system that fully implements all 13 axioms. Thus we have endeavored to develop one that can implement the axioms in both a simple and elegant manner. This paper will now describe our best efforts.
Decentralized applications or DApps was proposed and described by group of authors in the paper The General Theory of Decentralized Applications. Authors defined 3 types of Decentralized applications:
- Type I - independent DApps.
- Type II - DApps that use blockchain of type II.
- Type III - DApps that use tokens of type II.
Authors argue that definition of Decentralized Autonomous Corporations for type I DApps proposed by Daniel Larimer could cause legislation impacts. So definition - DApp type I is better solves problems of emerging industry. Also authors do not admit the possibility of using multiple blockchains by DApp level II and III don't explaining what is the purpose of level III and what is the difference between type II and III except inheritance. Authors argue that theoretically could exist DApp type IV, V and so on.
Proof-of-origin paradigm solve problem of distributing shares of the same entity through multiple protocols remaining coherent. Recently published papers (1)Enabling Blockchain Innovations with Pegged Sidechains and (2)A Peer-to-Peer Polymorphic Digital Asset Exchange prove that polymorphic nature of emerging industry of blockchain based apps is the most probable.
We also propose three level architecture, but with completely different logic and new naming conventions.
Level 1 - Artificial Intelligent Network (AIN) - independent autonomous closed economy system which exist on the basis of low-level consensus algorithm. AIN is defined by the paper cyber•Fund: New generation cybernetic economic system .
Level 2 - Formal Agreements - protocols which are used as high level API for writing and reading blockchains by PDApps.
Level 3 - Polymorphic Decentralised Applications (PDApps) - web applications which can morph into many different number of AIN's and another PDApps effectively inheriting it's properties.
Proposed definitions (1) better reflect their nature using metaphors, (2) doesn't contradict with legacy legal definitions and (3) better solve the problem of marketing and explanation for widespread adoption.
Proposed architecture (1) add flexibility, (2) remove unnecessary complexity following Occam's_razor principle, (3) reduce complexity for newcomer developers on each layer.
Developer of PDApp need to know nothing about complexity of cryptographic and consensus algorithms of AIN. From marketing point of view that metaphor definition also wins because it removes all complexity of explaining people why Bitcoin and other crypto technologies is better. Artificially created intelligence of global community concept give one simple message for widespread adoption:
Billions of interconnected brains is significantly smarter than billions of isolated brains.
Developers of AINs don't need to worry about compatibility with existing PDApp infrastructure.
Axiom: Once blockchain is exist there is no way to understand which agent transact: biological or artificial, as well as we can't know which AI abilities has been acquired by the agent.
That fact let us state that all independent blockchain based networks has inborn strong AI capabilities. More PDApps created on blockchain - more probability of appearing phenomenons - emergence autonomous self-aware entities from the depths of cyberspace.
We assume that independence in cybernetic economy could be achieved via 2 different ways:
- Horizontal value creation. This business model is implemented in every DAC and based on transactions theory proposed by Dan Larimer. DAC by itself create value providing transactions and has profit in form of transaction fees. If entity doesn't have independent blockchain this approach is impossible to implement through openness of cybernetic economy.
- Vertical value creation. This business model could be implemented in entities which has not their own blockchain and thus has not ability to create transactions fees based value. We assume that an app could be easily copied and reimplemented. Though by Bitcoin dependent Counterparty already implemented transactions fee model we suppose that such approach doesn't have longterm advantages before, for example, Open Assets + DApps model. So the question is: How value could be generated by entity which couldn't generate it based on transactions fees in open environment there code of apps and contracts, and even the audience could be easily copied? We call it vertical value creation. Value created by producing code and content through social consensus which doesn't guaranty but make probable donations for content and code creators is vertical value creation. Of course there is ad business model, but existing RTB brake privacy requirements and significantly reduce quality of products.
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Proof-of-Origin - method of cryptographically proving origin of derivative tokens that was moved from one protocol to another in accordance with proof-of-existence agreement between shareholders using blockchain endorsement. Basic idea behind proof-of-origin paradigm is to make possible easy and transparent cross chain moving of any digital value. Benefits of proposed approach for DApps:
On the date of publishing paper for end users is available 7 distributed protocols for shares issuance: NXT, Counterparty, BitShares, Open Assets, Coinspark, ChromaToken, Mastercoin. That is very beginning. 65 trln. market of public companies and unknown but significantly bigger market of existing private companies could create the whole universe of protocols. There is fact that if AIN do not have ability to create internal assets it significantly reduce possibility of creating internal economy. Just imagine that you live in country there you cannot create company. Networks without this ability has no chances for survive. Otherwise - networks who flourish give ability to create internal economy through asset issuance.
Morph properties of several AINs for PDApp could be easily reached by distributing PDApp shares to AINs internal protocols which PDApp operate with. With Namecoin you can register and manage decentralized generally accepted identity, with BiShares you can access to bitAssets and high liquidity markets of your apps distribution, etc..
If app uses several networks for product delivering, for instance, MaidSafe for storage, Ethereum for contracts, BitShares for bitasets and Namecoin for identity it should have ability to pay for services provided by this bunch of networks. These complexity should be hidden from people who use DApp. It's much more easier to have some parts of asset's app inside every system, than managing operations externally as far as more complicated exchange process should be implemented. Having native PDApp native tokens in every AIN it operate with PDApp could regulate supply and demand easier.
Make survival mechanisms of PDApps more stronger and independent on particular system existence. In case of death of some artificial intelligent system value could be moved by people to more efficient system.
Endorsement of moving value from one system to another could be implemented using Ethereum contracts. The specific implementation will be defined as Ethereum or similar technologies come to production. Obvious cons of proof-of-origin paradigm is different implementation of specific features: dividends, votes, issues burning possibility etc. Eventually there is strong demand on both crosschain & crossapp protocol for issuance of derivative tokens. For bootstrapping cyber•Fund will use proof-of-origin manually registering movements until implementation won't be developed. Morph value into any network or PDApp
Basic idea behind protoshares is simple - targeted audience. List of protoshare holders serves as mailing list for any future assets that was created with technology under protoshares. Protoshares model is well tested by BitShares and described in the article BitShares Sharedrop Theory . In BitShares case social consensus object is BitShares toolkit. Any developer who will use it to build DAC should honor it's developers and sharedrop 20% of created DAC. Advantages of this approach are just unbelievable: Just born idea gets engaged, motivated, professional and ultimately targeted audience. Nobody guaranty nothing. That is just win to win for protoshares holders and potential entrepreneurs who could utilize technology. And that's work. Anybody can create protoshares for any purposes.
Possibilities are limited only with imagination. In cyber•Shares case protoshares object is cyber•Wallet - wallet which works with majority of assets and could be easily embedded into any existing or future web application adding powerful possibilities of digital property. Any developer using cyber•Wallet in the app will benefit from 5% sharedrop to cyber•Shares holders. Though volume of sharedrop is not fixed. You can sharedrop 90% of you product if you want more motivated community. For exploring how your app could reach the most valuable audience visit cyber•Talks thread. You can find cyber•Fund's assets issuance and sharedrop plan here.
- 10% to honor cyber•Shares founders
- 10% to honor cyber•Fund holders
- 10% to honor BitShares holders
- 10% to honor Ethereum holders
- 10% to honor MaidSafe holders
- 10% to honor Next holders
- 8% to honor leaders and inventors
- 10% to build system of distributed trusts
- 22% to genesis purchasers
Though initial offering is finished financing of cyber•Share industry and it's projects will be managed through issuance of product shares. Some part of which will be distributed to cyber•Shares holders, some for initial purchasers. For every project could be defined unique appropriate terms by project participants.
The most critical part of the industry is expertise. Thousands of venture investors come to industry some times do not understanding what is all about, why and how industry works. Everybody have almost similar questions:
- What business models works?
- How to make due diligence of new generation projects?
- How to maximize future profits and get share in industry?
- How to secure possessions? cyber•Shares is excellent platform which allow to share efforts and expertise with other participants, building trust inside cyber•Shares industry. Role of distributed trusts:
- Expand focused expertise;
- Due diligence of projects;
- Improvement efficiency of their investment funnels; Targeted audience for distributed trust program is venture capital teams who want to build cybernetic economy expertise. More about distributed trust program on cyber•Talks.
cyber•Fund serves as initial trust of cyber•Shares ecosystem.
Vitalik Buterin's quadrant of choices from the point of developer:
cyber•Wallet brings new approach.
Segment.io in 3 years by providing API in simple library analytics.js united more than 100 digital marketing tools. cyber•Wallet will stick to the same strategy. You can explore consumer vision of cyber•Wallet on cyber•Fund page
- Crowdsale - 1Q2015
- API Draft - 1Q2015
- Reference user interface - 2Q2015
- Alpha with Open Assets - 2Q2015
- Alpha with Counterparty - 3Q2015
- Alpha with BitShares - 3Q2015
- Alpha with Ripple - 3Q2015
- Alpha with NXT - 4Q2015
- Alpha with Ethereum - 4Q2015
- Alpha with MaidSafe - 4Q2015
- Beta relying on trusted API - 1Q2016
cyber•Wallet development is open source. So any blockchain developers could join project and expand functionality by adding support of networks compatible with cyber•Wallet high level API.
After proof of concept with working implementations we will start cyber•Node project. cyber•Node - trustless multiprotocol node with elastic search included which will form economy of API services in cybernetic economy providing trustless services for cyber•Wallet and next generation PDApps. In case of successful cyber•Wallet funding and high support of communities cyber•Node project could start earlier.
Industry has been appear recently so still there is know clear understanding among nor existing communities nor newcomers. There is strong demand on high quality coordinated communication between communities, as far as task of aggregating knowledges across networks.
cyber•Talks is the core part of cyber•Shares communications ecosystem. Purpose of cyber•Talks - to gather talented and engaged community who will develop cyber•Shares ecosystem. But that is not all. We like decentralization so community has opportunity to participate in trust mining of cyber•Talks shares which will create cyber•Talks PDApp. Details could be found in cyber•Talks thread "What is cyber•Talks about?". For accumulating knowledges we decide to use integrated forum capabilities.All knowledges accumulated by cyber•Talks will become embeded cyber•Talks wiki pages.
You can think of CBF as community generated Body of Knowledge for entrepreneurs of cybereconomy. It's in development and will be distributed as part of cyber•Paper. Early working draft you can explore here.
All updates and valuable content generated by cyber•Talks and crypto communities will be published in cyber•Blog. A lot of of industry's media answer on the question "What". cyber•Blog will focus it's content answering the question "How".
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