Evolving obligations
Money is constantly evolving, having gone from gold to paper money, to electronic payments, and now to cryptocurrencies.
Each step of this evolution follows the same pattern:
- we find an exchange medium;
- we build a new exchange on top of the previous one;
- the newly built exchange medium is a trade-off. sacrificing some safety and stability for better commercial use.
Gold is the most stable of the exchange mediums because it’s scarcity and forge-resistance are ensured by its chemical properties. On the other hand, paper money only works if there is a banking system in place. Banking systems rely on politics, control, policy, and is overall significantly less stable than the chemical stability of gold. On the other hand, paper money is a better trade medium than gold, boosting trade and business and picking up the slack of the banking system.
The next evolutionary step, Cryptocurrencies, replaces bank staff with a computer algorithm that runs in a transparent open network. Cryptocurrencies are global, fast, and resistant to banking fraud.
This is not the perfect one fits all solution, however. Currently there is steep learning curve for any new entrant into the ecosystem, with a lot of backend complexity to be mastered if you want to use Crypto. If you can’t handle it — then you have to use intermediaries that work just like small banks, except with much with worse security and no insurance policies. Crypto is still a trade-off, but it is a trade-off in favor of another boost in trade and business development.
Moving on… Money can be considered an abstract view of how society values what you are currently doing, and what objects and services are worth.
Stocks are another step forward with that logic, providing an abstract view about how well society expects your enterprise to perform. Stocks have evolved into security tokens roughly the same way money evolved into cryptocurrencies. Albeit, with much more drama in the process.
Are there other types of socially important information that follow this pattern? What about obligations? Obligations are like inverse-stocks. These are pledges you take, or duties you receive one way or the other. Failing to do them in a proper way can result in penalties.
In tribal societies for our ancestors to receive duties, you simply had to say them out loud in front of your tribe or perform an appropriate ceremony. After that, your mates had new expectations about you. Living up to those expectations results in status gain and failure resulted in a status loss. In a small tribe, everyone knows you and everyone remembers your successes and failures as though it is written on a ledger.
Some tribes like the Maori inscribed all obligations on a person’s skin as tattoos. Their obligations were lifelong and everyone could figure out what kind of a person someone was just by viewing their tattoos. This is a pretty cool sort of legal system, although it is somewhat inflexible… On the bright side, it greatly reduces the amount of paperwork in cases when you really need it. We could probably even consider that as an option for modern management…
Many African and Native American tribes had similar traditions with piercing, codified clothing or accessories.
The drawback of these obligation management systems is that they are not scalable. When society grows into cities, we can no longer know everyone and remember every pledge they have ever taken. Therefore it is way harder to enforce such deals and obligations.
To effectively scale, documents became the solution. A piece of paper (parchment, papyrus, clay table, birch bark) with a written obligation and a signature instantly received a privileged status. A signature and a seal meant things got really serious.
Skipping a couple of thousands of years forward and…
This is still how we run things today. We have bureaucracy specialists to deal with a cryptic art of managing paperwork in the proper way. We also have computers and electronic signatures to somewhat ease the burden that bureaucracy brings (with limited effect). But in the legal world, an obligation has to be represented by a physical document with a signature, or even a signature and a stamp if things are getting real.
Imagine how big of a bottleneck on society this is. Legal operations are slow and expensive for the sole reason we use technology that is a couple of millennia old to manage them.
Why do we still use it?
Obligation management in larger societies deals with trust. Bureaucracies have worked with trust-sensitive information for centuries. Computers are new and offer many advantages, but we don’t trust them enough to take full advantage just yet.
We have had centralized networks of computers essentially acting as faster bureaucracies for sometime, but that’s not the ideal solution. Decentralized networks are a real step forward here. Blockchain is a new technology designed to deal with trust. The irony is we don’t trust anything new that isn’t time-tested.
As time goes by, cryptocurrency is slowly earning societies trust. Money is sensitive information, and Bitcoin has proved it is capable of handling that for over 10 years now. Ethereum proved we can go one level further with the tokenization of securities and the development of utility tokens.
Can we make a push and move in the same direction with our document driven bureaucracy?
Not that easy.
The reasons behind the resistance to change are not as obvious as they seem. Obligations matter because there is a system enforcing them. In ancient times it was a tribes opinion and knowledge of your obligations. After the formation of larger societies we still had that primal honour, but on top of that, there was an army of your neighbour, feudal system, or state that could get you in trouble for acting fraudulently. Nowadays we have police, courts, rating agencies, and customer reviews.
All enforcement of the obligations is still in the hands of state owned courts and legal system. This is something blockchain cannot handle on its own before cheap mass produced combat drones become a thing. Right now, any innovator in this field is on a hard quest of persuading state-owned legal system to cooperate with new and suspicious “Blockchain Technology” that promises to take away jobs and cut the prices of the legal services. Because, as you know, this is the kind of thing governments love to do.
Long story short — obligations enforcement is outside of our scope. So we develop some software that makes obligations tracking easy as never before. We develop a decentralized system that allows everyone who participates in it to ensure that everyone is playing by the same rules. These rules can be changed only if majority supports the change. This is the end goal of a CiL network project.
On top of this system we create multiple interfaces that enable using this network in an easy and efficient way. SNTR application and Ubikiri network for general use. Niche appliances like Bankstroycontrol for construction monitoring. We believe that high value practical use cases will lead to a snowballing adoption. With wide adoption the enforcement institutions will cooperate leading to even more robust and sustainable ecosystem.
This is the quest that SilentNotary is striving to accomplish right now, and we hope you share our vision of the future, minus the combat drones of course. As one US president (or his speechwriters) once put it “We choose to do this and other things not because it is easy but because it is hard. Because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win, and the others, too”.
