Blockchain based economy and society

Note: These are my personal views and not those of my employers, Tata Consultancy Services

Over the last 1.5+ years, I have been thinking about how blockchains will affect insurance and the wider economy. My latest independent thinking is in this article. I am sure the ideas there are influenced by reading material from others, but I am unable to recall any specific one (other than those linked to therein). I recently had two great discussions with Venky from Cognizant and Prakash Sunkara, a batchmate from IITB, CFO at Elavon. Venky and I spoke about how blockchain offers an alternate way of organising affairs among a group of competing/collaborating humans/firms. Prakash and I spoke about how once some core identity infrastructure is available, digital transfer of value and risks can be enabled.

Thinking of relationships between parents and children, there is an implicit social contract supported by social norms/sanctions which could potentially be implemented by smart contracts. Similarly social organisation is created and sustained by social contracts. Could these be captured through more expressive smart contracts, so as to enforce the social organisation through some means?

Similarly, I recalled discussions with my wife, Prerna Tambay about industrial relations wherein the attempt is to study the fundamental conflict/cooperation between the capitalist and the worker. The capitalist brings capital, the worker brings his labour and they together generate economic surplus and the challenge is to divide it equitably. Many relationships in human/firms are of this conflict/cooperation nature. Blockchains offer a way of organising firms so that capitalists and worker can work together without one exploiting other. One needs to work out the smart contracts for this.

Extending this thinking further, Adam Smith's invisible hand could very well be a smart contract based way of organising the economic affairs of humanity balancing the wastage of capitalism with the dissatisfaction of communism.

Constitutions and law need not be paper based. Factoring in IoT based data about the actions of humans/firms, it should be possible to monitor the compliance to laws and/or enforce the same.

I know this is exotic thinking, but I know that capturing these thoughts for posterity is my duty. I may not live to see this come true in part or full, but I feel in my bones that this is the direction for the future. The nature of evolution of the human technosphere till now has been that it is far too fragmented and the fragmented pieces do not coordinated well with each other on their own in a trustless (in a blockchain sense). This makes it difficult to build complicated structures on top of this brittle base, since human elements are needed for the end-to-end coordination and trust in humans is not as reliable a means for organising affairs as the trustless coordination offered by blockchains. If we find a way of building a layer on top of the brittle base, which is complete and reliable, we might be able to build complex coordination structures on top of it, like some of the one's alluded to above.

Regards

Pratap