Any prejudice in these machines is therefore purely a reflection of the biases of the human programmers who engineer these algorithms. This is one way of envisioning the significance of computationally driven economic phenomena like cryptocurrency and blockchain. Their decentralized, distributed, framework is pivotal for engineering financial systems that are unsusceptible to human errors.
Human Brain — The Natural Computer
Think about your brain right now. Specifically, think about the fact that you are ‘thinking’. This cognitive activity is the overall outcome of billions of neurons in your brain communicating with each other. The ‘thought’ that you have, is a manifestation of this underlying biological activity, which involves staggering events of data transfer. The electrochemistry of synaptic communication is incredibly complex and ultimately predicated on some very fundamental laws of physics. Unsurprisingly, even the most sophisticated mathematical and computational models do not come close to describing the unimaginable complexity of the neural networks that characterize a single human brain. Let alone the collective behaviour of billions of human beings that constitute the global society.
It is therefore intriguing to consider that in a way, our thoughts, decisions, and actions are a result of ‘network consensus’ amongst billions of interconnected neurons, which are dynamically processing cognitive data. The collective computational activity of this internal neural network literally determines every consequence of every action and reaction that an individual responds with to a constantly changing reality. In a philosophical sense, a blockchain-based decentralized finance system can also be conceptualized in the same way. It is a system based on decentralized distributed network consensus.
Stock Market and Swarm Behaviour
Large groups of people, reacting to dynamic changes in their environment, bring forth a collective emergent phenomenon called swarm behaviour. This phenomenon is not unlike the swarm behaviour observed in ant colonies, schooling fish, or the majestic murmurations of starlings, wherein collective operations occur in the absence of any centralized coordination. In a way, the collective actions of human beings, as expressed through stock market behaviour, is also a kind of swarm (or herd) phenomenon. After all, the stock market is a collective aggregation that embodies the irrational proclivities of human psychology. In the larger context of capitalism, one can even fairly assert that the market is largely driven by avarice and fear. Those who benefit most from it are the ones who know how to take advantage of this inherent irrationality.
This begs the question: what if the collective behaviour of markets was rather based on rationality and driven by reason instead of greed? What if the woes caused by flaws in human thinking, which significantly impact issues like ‘trust’ can be eliminated from the material reality of our economic paradigms?
Blockchain (and possibly its integration with machine learning) has the technological potential to make this possible. As I have discussed in a previous article, computers can indeed overcome the limitations of collective human errors. Hypothetically speaking, what if all human interactions concerning money are outsourced to incorruptible, trust-less, decentralized, and distributed computational frameworks like blockchain? Would we (hypothetically at least) see a more just and fair distribution of resources and economic power?
Tech-Based Economics in the Twenty First Century
Tech behemoths like Facebook, Amazon, Apple, and Google are already miles ahead in the game of using prediction machines to foster their stock values. Most other industries are also using (or working on using) these powerful computational tools for optimizing their resources to nourish their business or industry. Prediction machines are thus emerging as the key toolkits for operating in twenty-first century economies. They are literally beginning to propel the flux of modern economics through space and time.
However on the financial side of these astounding advancements, we are still deeply entrenched in traditional economic systems. According to the proponents of cryptocurrency, these traditional, fiat-based, centralized financial paradigms are rife with issues when it comes to trust, discrimination, and power. This is why network consensus is hailed as the foundation for a ‘permisionless’ and ‘trustless’ mode of conducting financial transactions. The most persuasive arguments in favour of decentralized models of blockchain-based cryptocurrencies are based on this premise.
Revolutions Can Only Be Delayed
To me it appears that applying blockchain to upgrade the economic systems of the twenty-first century is more than a natural progression of economic evolution. It is rather a technologically driven solution to fundamental human problems that cannot be ignored for political as well as social reasons. In this sense, Bitcoin is a revolutionary movement. It is an experiment in the application of technology to overcome limitations of the collective human psyche — a dimension that is astoundingly incomprehensible in nature. The fact that the success of Bitcoin is inextricably predicated on network consensus, further supports this optimistic contention. The more people use it, the more effective it will become. That certainly sounds like a much vaunted software upgrade for our computationally wired global economic system.