the Magna Carta of the Internet: Bitcoin and the value of serious guarantees
The Magna Carta marked the beginning of a sustained movement towards greater use of legal norms (kings and aristocracy were also to obey the law) and human rights (the right for everyone and not just for the elite).
Creating more serious guarantees regarding property rights and legal norms, this movement changed the economic incentives for investment and growth, which in the end, hundreds of years later led to the adoption in England of the bill of rights, the industrial revolution and a significant improvement in the welfare of humanity.
Similarly, highly decentralized networks form a free basis of serious objective guarantees for property rights, fair rules and provide them with a stable compliance.
The most important difference is that with the adoption of the Magna Carta influential people decided to forego some of their privileges and rights. At first this rule worked for the aristocracy and the elite, and then for everyone.
Highly decentralized networks create rules in reverse order, starting from the bottom, with a “normal” person. To create these networks do not need to ask permission from the king and negotiate with him about the rights. They’re just there.
The deeper implications of some highly decentralized networks is to create opportunities to provide better guarantees than those offered by the largest countries today. This allows you to create a more robust digital Foundation for economic growth.
For example, the Bitcoin network is Autonomous, rule-based, self-regulatory judgment, which confirmed transactions are clearly defined, can be objectively verified and accurately performed by members of the network. And that’s not all, but we’re already ahead of…
What is a “serious guarantees”?
First, what do we mean by the phrase “serious guarantees”?
In simple terms, “guarantees” mean that “rules are rules” and they will be performed on a regular basis and objectively. In practice, you can also talk about the definition and adherence to property rights: people have the exclusive right to determine the use of the goods, to receive income from its sale and to transfer the product to others.
Why guarantees are so important
In General, property rights and “serious guarantees” may seem an everyday problem, but property rights are a major component of economic growth and the primary explanatory variable for understanding differences in the development of different competent authorities.
Intuitively it seems that this makes sense: the innovators and builders use their capabilities and skill in what they are most confident. The greater the risk of unexpected outcome or enforcement action (changing the rules, confiscation of property and so on), the lesser builders will be willing to take risks and to work with a certain platform or country. This intuition is complemented by an unambiguous growth trajectory of countries that provide the most serious and reliable guarantees of property rights.
In other words, guarantees are valuable because they reduce the risk of economic activities and therefore encourage the growth. If this process is not efficient transaction, investors would do long-term contributions to those competent authorities, which offered stable rights of ownership of the last hundred years. It is these organs responsible for most economic growth in the world during this period.
The following are the basic factors that provide economic growth through a reliable property rights and stable rule-keeping.
- Reducing the risk of alienation. People will be more willing to invest time, money and labour, if the fruits of these efforts can be unexpectedly taken away.
- Reducing the risk of disadvantageous changes of the rules. Investors and operators willing to invest and create something, when the rules of the system did not stagger beneath their feet.
- Reducing the cost of asset protection. If ownership rights are not clearly defined, the participants have to spend more time and resources on activities that may strengthen those rights (or would create a risk that others will do so). For example, if private keys define the property right, users can spend time to protect their private keys (and not to any other activities that may lead to a redistribution of rights).
- Increased opportunities to benefit from trade. With clearly defined and openly recognized the rights of property owners can participate in the contractual agreements, including asset and better use of asset for production of the maximum number of values.
Serious guarantees in the digital decentralized context
As we move into a world where people are more likely to create something in the cloud sphere, economic activity is moving into the digital world: digital framework that offers solid guarantees and provides a stable implementation of (digital) property rights. This platform will increasingly become value, as the boundary of economic activity will further move into the digital world.
In the creation of a parallel cryptofirewall the world people are investing billions of dollars and millions of man-hours and, therefore, the establishment of major platforms, highly decentralized networks on which this world is based is of great importance. It is those networks that attract and support the builders in prospect for the medium and long term will provide serious guarantees and stable and objective implementation of the rules.
Historically, serious guarantees of such a plan could only provide a strong and credible Central government that protected the declared rights and rules due to the large amount of resources (e.g., influential).
The interesting thing is that as soon as we depart from a strong centralized authority, it can obtain serious guarantees only using its opposite — a highly decentralized network. Something average, for example, produzentengalerie network are likely to be exposed to the economic and social impact that will be the worst option (weak warranty) than the centralized and highly decentralized alternatives.
Network serious guarantees: Bitcoin — the structure of digital property rights
Bitcoin, for example, offers a holistic sound basis for property rights in the digital world. The Bitcoin network is based on the rules of self-regulatory court, which is perhaps the most honest, transparent and predictable court in the world.
This is largely so due to the fact that the Bitcoin network purposely restricts its authority to the successful implementation of a minimum set of functions. Purposely limited capacity of the network provides greater predictability of the result and strict adherence to the rules of the network: the transaction clearly defined, can be objectively verified and accurately made in the network.
Thus, the Bitcoin network is a decentralized structure that defines and controls the rights of ownership. It is a reliable basis for serious guarantees, which can be used as a base for add-in more complex systems for innovation and economic growth.
Linking it all together
Ultimately, serious guarantees necessary for human progress as economic growth appears and increases where there is a reliable property rights, stable rules and their implementation.
If we take the example of cloud storage, which is now showing unprecedented growth in economic activity is highly decentralized network move guarantees at a higher level:
- The global. Serious guarantees, which offer a highly decentralized network like Bitcoin, are global in their nature (while historically serious guarantees were limited to the geographical or civil factors).
- A clear certainty. The rules of the Bitcoin network is clearly defined, while most rights and rule sets in the history of mankind could be interpreted subjectively, which created additional risk.
- Perfect fulfillment. The Bitcoin network follows a set of rules objectively and accurately, and to that desperately seeks every system of justice, but none has so far failed to achieve its goal.
To summarize, we can say that such a highly decentralized network like Bitcoin, offer a clean Foundation for economic growth in the digital world and will likely become an important basis for the growth of the digital economy. With the onset of the twentieth century, the structure that offered serious guarantees, provided for the improvement and growth of economic activities. And today, these highly decentralized network like Bitcoin, offer serious guarantees for productive growth and development of the digital world.