the Ghost of the blockchain is more important than artificial intelligence

Translation of the lecture, Wang Feng, a famous Chinese blockchain and investor, Peking University.

This lecture was delivered in Chinese in Beijing University may 5, 2018, Wang Feng, founder Huoxing24 (Chinese news site on the blockchain), LineKong (Chinese industrial company in the field of media and entertainment) and partner GeekFounders (companies that invest in technology).

Van has provided a thorough and concise overview of the history of the blockchain and its role, offered a global view on this technology from the perspective of China (the lecturer began his speech with a direct quote “the Communist Manifesto”).

As I worked on products related to artificial intelligence, I was interested to meet a fresh look at its potential in comparison with the potential of the blockchain to find out why people are so confident in the power of these two revolutionary technologies.

I want to note that this is not a literal translation but rather a paraphrase. Some parts, for example, appeals to the audience, I lowered. I also supplemented the text with their own comments and ideas and ready to discuss them.

All the main ideas in this article belong to the lecturer. My contribution is only a translation, dramatic momentum and contextual comments.

Призрак блокчейна важнее, чем искусственный интеллект

In 1848 Karl Marx wrote his “Communist Manifesto”: “a Specter is haunting Europe — the specter of communism.”

This lecture took place on 5 may 2018. For two hundred years before Karl Marx was born. As a person with a mathematical mind, Wang is difficult to give dates in history lessons in high school. However, he remembers the birthday of Karl Marx, because the numbers 1818.5.5 very easy to remember. Van inclined to believe that the date of birth of great men is a secret code, reading of which we have not yet found. He suggested that God put the secret key in their date of birth, the most blessed people on the great achievements in different periods of time. Among these people were Marx, Einstein, and jobs, and today, Satoshi Nakamoto.

Bitcoin and the blockchain is the technology ghosts of the modern world, which quickly seep into our reality, changing the seemingly immutable truths and beliefs. Many leave these technologies without attention, downplaying their significance, some happily use them or speculate, but even more people just sit and watch as the world changes around them.

For 30 years, the Internet via the data exchange Protocol TCP/IP and standard language hipertextos HTML markup changed human society, accelerating the revolution the most effective and productive period in the history of mankind. This is especially noticeable in China, where the government provides strong support to the information age over the last 30 years of reform and open trade, entrepreneurs truly mastered the Internet space. The life of a Chinese, shopping, food, entertainment, sharing of vehicles, payments and all the household of the action was much improved, discourages countless observers around the world.

Review: I share the feeling. You can literally not leave the house and live in abundance. Everything from food to clothing and every conceivable thing that can be delivered directly to your door within hours or days. If you leave the house, you don’t need a wallet. For payment, you will only need your face. You can come to the office, and he gets to know you and determine your access based on your status.

In the past, when the Chinese came to Europe, USA, Japan, they were jealous how the level of Western civilization superior to the level of their own country. Today, when Chinese people visit the same places, then complain that the Internet space is undeveloped and inconvenient and can not be compared with China. Maybe some Chinese are asking today the question: “If the Internet is so great, then why do we need something called a blockchain?”

The concept of the blockchain and the Internet are two parallel universes. Some believe that the biggest followers of the blockchain — people born after 1990 or even after 1995. To really understand the blockchain, those who lived all his life with the Internet, need to open their “heavenly eyes”.

Comment: the Chinese have an expression “开天眼”, which means space eye, which allows to foresee and penetrate the essence of things. In a broad sense, this expression means that the person has the qualities that he can reveal the mysteries of the universe, at first seeming elusive.

The blockchain is a bad side: globality and the immensity of Bitcoin is opposed to national sovereignty; bitcoin use on black market; a lot of people are engaged in mining, and POW (proof-of-work — proof-of-work) consumes 42 trillion kWh of electricity per year. And all this happens at an early stage, when technology is only used by 10 million people around the world.

Can the Ghost of blockchain technology to exist in harmony with the Internet society?

First, let’s find out who created Bitcoin.

November 1, 2008 person or group of people under the name Satoshi Nakamoto in secret cryptoforge published whitepaper, in which he described his vision of electronic money, creating an electronic monetary system, with equal peers. This document details how to create a decentralized system of electronic Commerce, the Foundation of mutual trust between the parties without the need for the participation of third parties. According to this whitepaper, January 3, 2009 was developed and released the first program, using bitcoin algorithm, was carried out, mining the first 50 bitcoins. This day is considered the official birthday of the financial system of Bitcoin.

In less than ten years bitcoin has grown enormously, its value increased to $19 000. Over the past two years the value of bitcoin has increased nearly 30 times, and the turnover of bitcoin reached almost 170 billion U.S. dollars, more than the market value of McDonald’s.

Why is Bitcoin becoming so popular? As it has evolved from coins that cost less than a cent in competitor gold? Based on his success? Should list the three factors:

  1. First, Bitcoin has ardent supporters. Freedom, equality, the fight against commercialization — the most important properties of Bitcoin. Bitcoin will become the major project of the free software and open source, like Linux. With each passing day it appears more and more tech-savvy supporters. Support for these people Bitcoin provides a solid Foundation. Faith is a guiding factor in the development of all great things. This is true for the technological, political and religious beliefs. The roots of many successful projects grow out of faith, not of material values and self-interests.
  2. Secondly, there will be created only 21 million bitcoins. Today nominee more than half of that number, people begin to understand the growing importance of bitcoin as a valuable investment asset. Wenchen Tsai, a well-known Internet investor, has set a goal to get 10,000 bitcoins and recently reported that has already achieved this goal. Chandler, also known as Bao Er Ye (宝二爷 — investment his nickname), advises all to buy at least one bitcoin and give it to your child when he/she is married/getting married. Even investment guru of Silicon valley Tim Draper recently said that he believes that the bitcoin price will reach $250 000 by 2022. More and more people are optimistic about the long-term potential of Bitcoin.
  3. Third, Bitcoin has attracted the attention of speculators, who use every available opportunity to make money. China’s “dancing aunties” and “gangs of Wenzhou” also broke into the bitcoin scene, capturing in a Korean youth. They carry out the speculation in the world’s highest level. Thanks to them, the price of bitcoin continues to grow.

Review: “Dancing aunt” is a pensioner-housewife in China who often gather in the squares and open spaces shopping centers together to dance folk dances. “Wenzhou gang” — people from the Chinese County called Wenzhou, which has gained the reputation of the valley scammers in China. I once someone said: “Wenzhou is a place where throughout history have been child trafficking and the sex trade”. Wow.

Moreover, some governments began to create laws to protect Bitcoin and exchangers of digital currencies. Many Asian countries have started to prepare the licenses for companies engaged in trade and exchange cryptocurrency, especially noticeable in Japan and South-East Asia. In China, enterprises directly subordinated to the Central government has not expressed its final position. However, we see that local governments in Hangzhou, Hainan and other provinces of China began to attach importance to the local blockchain-companies. For example, the famous bitcoin investor Saali Lee went to Hangzhou, with the help of local self-government created focused on blockchain fond Xiong An Global Blockchain Innovation Fund. We also heard about Huobi Labs, an incubator under the auspices of the exchange Huobi, which is going to create an industrial Park in Hainan.

Many have heard about Bitcoin, but few truly understands the blockchain technology on which it is based.

In fact, the blockchain is the underlying technology of Bitcoin. Bitcoin works without the control or management of the Central organization since its inception. Bitcoin can be called the first application of the blockchain, while the latter gradually leaked into other industries, in addition to payments between peers. We often talk about Bitcoin as the Blockchain 1.0, and the ether with smart contracts is Bloccano 2.0 because it allowed even more blockchain projects to allocate their tokens, and chain.

Some believe that one of the most important features of the blockchain, among which Bitcoin is the “meeting of the minds” that occurred because of the emergence of this technology. This is a very interesting point of view. Bitcoin was the original “Bible” that gave rise to the revolution, but the door blockchain Church only opened a little. What’s next? Nobody knows. However, it is worth paying attention to. This world is not the same as before.

For existing too centralized Internet the birth of the blockchain happened “at the right time in the right place with the right people”.

Review: In the original, the lecturer used the expression “区块链的诞生可谓符合”天时地利人和” as a reference to the “Art of war” by sun Tzu, which means that everything fell into place, we need certain factors: the heavens have a timely opportunity, land offers situational advantages, and the agreement of the people provides the unity.

In 1989, Tim Berners-Lee proposed to create a global hypertext project the world wide web (WWW — World Wide Web). It was originally intended to facilitate all people search and exchange information online. However, today the Internet has become a monopolized industry giants. Centralization has led us to adverse effects, the Internet is no longer an open system. Facebook is a closed platform like WeChat. These closed systems, betraying the original aspirations, has created isolated Islands of information that are drifting separately, greatly impeding the free flow of information via the Internet.

In the real world the infrastructure define the fundamental factors of the economy. In the virtual world of the Internet infrastructure determine the fundamental factors of technology.

Model of blockchain technology consists of six levels: a lower level data level network level conensus, motivational/economic level, contract level, level of application. Many entrepreneurs in the technology sector, looking at the model, missing the fact that it is not new and is similar to the old technology with peer nodes (P2P — peer-to-peer) in a new shiny wrapper. Good old Napster, NetAnts or even Chinese the QVOD video player was created based on this model. However, if you explore the technology more deeply and thoroughly, you will understand that it’s still a brand new model. The point of this new model is to create a “consensus-based incentives open source” in its structure, a multi-level system architecture, integrated data, calculations and control. Using these tools, you can create a new system of technological and social civilization. The blockchain will give us a more free, transparent and fair world.

Over the past 30 years, the Internet civilization achieved great success, as the horse broke the reins. In the last 30-40 years (forget for a second about evoking the boredom of the superiority of mobile Internet over traditional) we had the Internet and industry 4.0, which were the starting points for the next wave of important developments: smart watches, smart wristbands, smart glasses, robot assistants and humanoid robots, driverless cars, the latest developments in medicine, reproduction, AI, natural language, machine translation… it is Obvious that our development in the field of artificial intelligence have borne fruit.

If you look at it from a long term historical point of view, all development processes in the world took the sudden jolt to the inevitable. No one can predict the sudden push, but we certainly can promote the development forward to make it inevitable. Internet, big data, cloud computing, Internet of things and artificial intelligence were progressive improvements, inevitable developments that have emerged by random chance and chaos. Artificial intelligence is just following the trends of increasing productivity and growth in human history.

Artificial intelligence is the robot the speech recognition system, computer vision, natural language processing, expert systems, and more. All these developments improve productivity — let the machines do most or even all the work for people.

If in the future we will lose the need to produce anything, because we will not have the productive forces that can exceed a machine that has all the data and computing power, in this world, you can forget about the legal status of the consumer. Engels said that work is what makes us human, productivity is the essence of a person, but if we will never need to work, what will become of our existence in the future?

If we reach the ultimate heights of information processing and technical perfection, but lose our own productivity, we will completely replace the machine, we will run several monopolists owning the AI systems, then what? Should we just accept our current point of view, implying that human flourishing is always dependent on continuous growth of productivity, or we need to reconsider the impact of technological revolutions on productivity growth?

The blockchain will revolutionize the field of effective relationships. In the future he will free people from the iron clutches of the superiority of robots and lack of work, will give a new impetus to the growth of productivity. For example, today most of the business is exposed to monarchical power. If you sell consumer goods, the costs of such activities are very small, but before you earn a few cents, you have to work at the Mall or supermarket. If you have a Mall or a supermarket, then before to earn a few dollars, you need to pay most of their money for rent. The Internet destroyed the traditional business and channels, but the entrance on the online market is even stronger and the centralized channel. Small online stores pay online platforms, users, and traffic games depend on the Internet channel on which they are based.

Some people even call the Internet the “massacre of the users” created by the giants. No one person or Corporation can not escape the fate of cows or sheep on the giant Internet field, humbly waiting for when they will be skinned and killed.

Thanks to the blockchain manufacturers can advertise their products and content directly, depending only on the consent of the masses. Anyone want to share good content if they get a reward for it. In this system, users are not tied to the traditional channels, they do not use the online channels or entry points to the Internet. Good products and content in a natural way will spread worldwide and will grow with price. Thus, manufacturers and users finally are in the same boat, sail where the wind blows fair and distributed technological systems.

The blockchain can increase the level of welfare of mankind, spreading values around the world. But it is much more important than the increase in productivity thanks to artificial intelligence.

31 October 2015 on the cover of The Economist appeared the heading “The Trust Machine” (from English. machine confidence), the value of which is much deeper than just the impact of cryptocurrencies on the world. The blockchain creates consensus for those who do not want to trust the mediators, and that this consensus provides true confidence.

The steam engine freed the productivity of man, electricity has satisfied basic needs in daily life, the Internet has dramatically changed the way of communication, and the blockchain has become a machine of confidence, which fundamentally change the way people exchange value. Thus, the blockchain technology is the successor to the steam engine, electricity and the Internet, will be the next revolutionary technology.

The basis of this technology is trust, be it a narrow application in the form of payment of registry of Bitcoin with peers, or more masshtabnoe the use of a blockchain as a mechanism of consensus. The mechanism of consensus is the unique ability of the blockchain to ensure trust between peers, an algorithm that allows the exchange of rights and interests. The basic system of the blockchain based on pure logic, it is more powerful and practical than computers and mobile devices connected to the Internet, which are based on physical systems and infrastructure. The blockchain can work on the computer and on the phone and the servers, mainframes, and even on the platforms quantum computing of the future.

The absolute centralization of our model in the end will lead to even more negative social and external consequences. In March in connection with a poorly organized government, Facebook revealed personal information of more than 50 million users, which was used for the rigging of political elections. In April it became known that Twitter was involved in the sale of these Alexander Kogan, a researcher Cambridge Analytica. These are highly efficient centralized platform provoked a serious crisis of confidence, which is only getting worse.

Distributed and decentralized blockchain appeared just in time to solve the problems of the Internet.

The famous theory of impossible Trinity argues that the existing blockchain technology cannot be effective, decentralized and safe.

However, despite the unsolvable puzzle, which we now limit, the blockchain-industry needs to move forward and develop. In the end, the security, the set of nodes and decentralization more important to mankind than the efficiency.

And, finally, many in the industry believe that there should be separate blockchain of the company from the normal Internet companies. It is possible that in the next three years, all Internet companies will implement in their products, and blockchain technology and blockchain every good company no doubt will use the existing Internet technology and user base to scale.

If you look at the situation from a broader point of view, the Internet and the blockchain is in human history only a few decades. If they cooperate, then both will solve the problem with the rights to information, and the problem with the transmission of values.

What is a blockchain: a revolutionary technology or a new version of the Internet? It’s hard to say for sure. Early problems were solved in the following way: if I can’t get what you want, I can start a revolution and power to take wealth and lives, to create a new order, which I like. However, later on, people realized that this animal model creates even more chaos. In many cases it is not a question of interest, and perception.

Human civilization is developing very quickly. New technologies have increased the level of cognitive ability and consensus in society. The question is whether the blockchain to revolutionize Internet, perhaps the best answer is that the blockchain and the Internet today exist in two parallel worlds, which gradually unite in the future. I hope that many of you will be watching closely bloccano, understand its importance, challenges and opportunities that will inevitably arise on the path of its development.


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