Business Sans Frontiers
Things like the financial markets — a proper grounding in mathematics could help the common man. I believe that if people are more familiar with mathematical concepts… it can help deal with modern life, which is increasingly complex — V. Anand, Former World Chess Champion
When Diogenes of Sinope, the founding father of the Cynic movement in Ancient Greece was asked “where he comes from?” , he replied “I am a Citizen of the World (kosmopolitês). The cosmopolitan movement, in that sense can be traced back to c. 412 B.C.
In his 1975 essay, Immanuel Kant claimed that:
“use of the right to the earth’s surface which belongs to the human race in common” (see common heritage of humanity) would “finally bring the human race ever closer to a cosmopolitan constitution”
More recently, in 1996, Samuel P Huntington, in his book “The Clash of Civilizations and The Remaking of The World Order” provided an argument against the cosmopolitan thought, much like Francis Fukuyama before him.
According to Huntington, the main basis for conflict in the post Cold War era will be on religious and cultural lines.
In my opinion today, the concept of nation states is being increasingly blurred by technology. This statement will hardly surprise anyone.
However, what is exciting is the emergence of a new breed of entrepreneurs utilizing blockchain as the instrument of decentralization and democratization of almost everything including business.
Business, therefore, is not confined to any frontiers but only to the limitations of quantum physics and mathematical theory.
The Third Arbitrage: Aragon
According to German historical economist Andre Frank, archaic globalization can be traced back to the Indus Valley and Sumer civilizations in third millennium BCE.
While the precursor to modern globalization was the emergence of the Portuguese and Spanish empires and later the Dutch and the British empires symbolized very nicely by the Dutch (est. 1602) and British East India Company (est. 1600), the modern precedents were the industrial revolution and the historic Breton Woods conference in 1944 which established the International Monetary Fund(IMF) and laid out that framework for global monetary policy including the pegging of the exchange rates to gold.
As a result of globalization, the first arbitrage was multinationals exploiting economic and demographic differences such as the exchange rate and productivity differences by outsourcing manufacturing to China and services to India. For simplicity sake, let’s say cost savings were behind the first wave.
When productivity nearly equalized and demographics worsened in the western world-technology and robots conveniently took over. For simplicity sake, let’s say efficiency took over.
With the third arbitrage, establishing trust, enhancing security and consequently removing intermediaries essential to creating trust and security but also essential to creating transaction costs such as taxes and fees is key. For simplicity sake, let’s say trust took over. Of course, the Blockchain trades off efficiency for security. Blockchain is not the most efficient form of computing but according to its proponents, it is transparent, decentralized and secure.
Enter startups such as Aragon which aim to create a decentralized jurisdiction for businesses to setup shop and resolve disputes. Aragon aims to create and manage whole organizations using its platform which in turn is based on the Ethereum Blockchain. The idea is to enable any individual to start his/her own Silicon Valley style startup.
Now imagine, if the CEO is physically in USA, the engineer in India, the supplier in China and the marketing team spread across the globe but using platforms such as Aragon, they are able to form a corporation which was previously impossible under centralized headquarter based companies.
Forget about individual digital nomads, the entire corporation is a nomad with super specialization of labor.
What about taxes? Well, the tokens are the tax paid to the nodes/individuals providing the computing power. All the intermediaries such as ISP’s disappear.
This paradigm calls for a world government which can regulate such structures. However, decentralized platforms use the Blockchain to settle disputes. In theory, they may not need courts. Theoretically then, regulators will have to own the majority of computing power to collect tokens(taxes), regulate the business and monitor nefarious activity. However, that would be the very antithesis of disintermediation. The counter view is that the Blockchain already provides the trust that a regulator would provide. However, we still need consortiums to monitor and keep out unwanted parties.
Creating A Global Bank:Dharma
Consider the Ethereum based platform called Dharma. The platform states:
“Dharma attempts to globalize lending by abstracting away the origination and issuance of loans into a shared, decentralized infrastructure, connecting borrowers and lenders around the globe through free, open-source software”
Dharma aims to tear down national walls in creating a global, financial services conglomerate.
Dharma is a peer to peer lending protocol based on the Ethereum platform that allows lending using open source software. The protocol has 3 layers: the loan layer, the origination layer and the risk assessment layer.
A Global Supercomputer: Golem
The fastest supercomputer in the world today is in China — the Taihu Light with a theoretical peak performance of 124.5 petaflops. A petaflop equals one thousand trillion (one quadrillion) sustained floating-point operations per second.
Golem, on the other hand, is attempting to create a supercomputer by combining decentralized computing power.
According to its website:
“Anyone will be able to use Golem to compute (almost) any program you can think of, from rendering to research to running websites, in a completely decentralized & inexpensive way”
The applications are many and can range from Machine Learning to rendering graphics.
The Virtual Nation:Bitnation
As per disruptordaily:
“BitNation has been covered by BBC, CNN, Wired, New York Times, and other high-profile outlets. It is a blockchain jurisdiction, a virtual nation that is altering the way we look at politics and how we govern ourselves and connect with our peers”
Bitnation aims to create a peer to peer, decentralized government using the Ethereum Blockchain.
It is attempting to be the first Blockchain jurisdiction.
When we run out of resources, we look to the ocean and outer space for more. I don’t know which is more fascinating — deep diving in the Mariana Trench, exploring the Milky Way or the navigating the parallel universe that is the digital world which (also known as the Dry world with the actual world known as the wet world)
A Blockchain is a search for the one and only truth and the journey to that truth is called ‘proof of work’. Not unlike the search for the one true purpose of life that can have multiple paths or in the words of J Krishnamoorthy, it could be pathless with not one single path.
Whether the version of truth that Blockchains espouse is the one the business world embraces, only time will tell. But, the new breed of visionaries with their own unique visions have already cast off the anchor.
The question for you, my reader is:
What does your heart say?