Terry Over the past few centuries, humanity has witnessed the birth of successive technological revolutions, such as the industrial revolution, the railroad revolution, and the oil revolution.
These revolutions have significantly reduced transaction costs, created new ways of communication and transformed infrastructure architectures, ultimately enabling new technological paradigms.
The gradual penetration of new technologies into the complex dynamic processes of economy, society and life also brought about disruptive changes in the way human society and its economic organization operate.
In previous economic interactions, we would worry about the credit of our counterparties and be troubled by the authenticity of commercial paper.
In social management, we would doubt the fairness of election results and worry about the effective utilization of charitable donations.
In daily life, we are confused by the barriers of point exchange between different commercial organizations, and embarrassed by the non-repayment of loans between acquaintances and friends. All this, however, will change with the arrival of the programmable economy.
The programmable economy, as a new economic model based on automation and mathematical algorithms, writes the execution process in transactions into an automated programmable language, and ensures the automaticity and integrity of transaction execution by forcing the pre-implanted instructions to run through the code.
It brings an unprecedented level of technological innovation to the table. Significantly reduce the cost of monitoring transactions at the execution level. It holds great promise for reducing counterfeiting, fighting corruption, and streamlining “opportunistic behavior” in supply chain transactions, and is the future of the new economy.
Blockchain’s scripting language makes the programmable economy a reality.
Blockchain’s scripting language is an important way to achieve a programmable economy. A script is essentially a list of numerous instructions.
For example, in each transaction, the conditions under which the recipient of value receives value, or spends the retained value he or she had received, can be implemented in a scripting programming language, as long as they can be expressed mathematically.
If a mother wants to limit her minor child’s spending of pocket money, she can set rules for those expenditures through a scripting language. For example, no junk food purchases, no lump sums, etc. Each transaction initiated by the child can trigger a script to run. Only transactions that meet the pre-set conditions can be executed smoothly.
The beauty of scripting lies in its programmability. It can flexibly change the conditions for spending retained value to better suit the needs of people engaged in social and economic activities. This is where the advantages of a programmable economy come in.
For example, the system can agree that a charitable donation can only be used to purchase emergency equipment. It is also possible to agree on the terms of an inheritance to an heir. It is also possible to restrict a grant to support a college student to be used only to pay tuition. Ideas such as these can be programmed and strictly enforced on the blockchain.
The execution of the above script relies on smart contracts, which are written into the underlying blockchain and are automatically enforced when the rules agreed upon in the code are met, and once started and run automatically, they will not be interfered with or prevented by any unfavorable external factors.
When all conditions are ripe, the central bank can issue digital currency through blockchain technology. Conditions are set in the smart contract for the direction of currency circulation. Assuming that the money must support poor areas in the contract before it is issued, the pre-programming will restrict the flow of the money to places that meet the criteria for poor areas.
In this way we can use smart contracts to achieve management functions at the level of economic and social governance. It will be an important contribution to the efficiency of both the economic system and the operation of society.
The programmable nature of blockchain will drive society into the era of intelligent Internet of Everything based on machine trust.
In 2005, the term “Internet of Things” was formally introduced for the first time in the ITU report. IoT is a product of the development of information technology and Internet to a certain stage, and is an emerging modern information industry. Its concept is an integrated innovation introduced on many basic applications.
After the emergence of blockchain, people try to use blockchain technology to subvert the bottom protocol of the Internet and apply blockchain technology to the Internet of Things, so that the whole society can enter the era of intelligent Internet. A programmable society is eventually formed.
Although the concept of IoT has been popular for many years, practical applications are still rare due to the traditional IoT model of a data center to collect all information, which has defects such as devices cannot be interconnected, hardware products are too costly to maintain, and network security and privacy cannot be well guaranteed.
Blockchain technology allows data and instructions to be coordinated among the interacting devices. Each device controls its own role and behavior separately, and the security and privacy of information are ensured through open and transparent data management, as well as distributed consensus mechanisms.
IBM and Samsung have collaborated on the blockchain-based IoT infrastructure project “Adept”, which is used to automate the purchase of device consumables.
The Samsung W9000 washing machine uses sensors to detect the amount of detergent remaining. Based on the feedback, the cleaner is automatically purchased and paid for from a designated retailer through a programmed smart contract.
The retailer receives the order and charges to complete the order according to the contract agreement with that washer. Once the order is completed, the user receives a timely confirmation of the transaction and delivery information on their phone.
This design allows smart devices to become self-maintaining, self-regulating, independent individuals that can autonomously verify identity and exchange information with other devices, and perform appropriate actions according to pre-drafted rule contracts.
By creating a low-cost, peer-to-peer direct connection bridge for hundreds of millions of devices in the Internet of Things, blockchain systems can spontaneously move and gradually drive our lives into the era of smart Internet based on the emergence of new business models and technology models.
The programmable feature of blockchain can optimize the form of transaction organization and effectively promote the improvement of economic and social operation efficiency.
Technological innovation has changed the organization form of transactions. The transformative power of technological innovation affects the changes in transaction costs to varying degrees.
Under the conditions of such a drastic change in cost structure, relying on the strong support of the widely covered interconnection network, the boundaries of physical organizations are becoming smaller and the boundaries of virtual organizations are becoming larger, and tend to blur, open or even disappear, leading to the emergence of autonomous entities operating alone on the blockchain.
For example, distributed autonomous organization (DAO) and distributed autonomous corporation (DAC), which are the new organizational bodies formed by human beings pursuing economic efficiency.
Slock.it, founded in June 2015, gives us an initial glimpse of how autonomous organizations operate. It is a new sharing economy platform for the Internet of Things built on top of Ethereum (a platform on which distributed applications can be developed).
It is the world’s first distributed autonomous organization architecture platform. It is intended to replace the role of Airbnb, Uber, etc. as a central dispatching station and achieve complete automation of the transaction process.
The smart contract in the Slock.it architecture ensures that users can track and control the items they rent or use anytime, anywhere on their mobile devices. At the end of each sharing, fees can be collected automatically, accurately and instantly, and revenues can be distributed to give rewards to the sharers.
From a historical perspective, shifts in the boundaries of autonomous organizations change not only their internal connectivity structure, but also their external connectivity status.
Purposeful acts of interaction drive organizations to spontaneously evolve to more advanced forms, thus changing the structure of connectivity and regulation of social organizations as a whole.
The transaction cost saving and trust reconstruction brought by blockchain will improve both the efficiency of social management and the way of social governance. Blockchain may eventually lead people to a more just, orderly and secure decentralized autonomous society (DAS).
Blockchain technology uses scripting programming language, which gives the system the opportunity to handle some unforeseen transaction patterns. It solves the problem of automatic execution and coordination in the transaction process while enhancing the flexibility, convenience and expansion of existing web service functions.
With the maturity and implementation of blockchain technology, the economy, society and life of human beings will undergo extremely profound changes. We will gradually enter the era of intelligent Internet of Things where everything is connected and a programmable economic system.
