Another landmark essay from wise master Szaboshi.
Money, blockchains, and social scalabilityhttp://unenumerated.blogspot.hr/2017/02/money-blockchains-and-social-scalability.htmlthe secret to Bitcoin’s success is that its prolific resource consumption and poor computational scalability is buying something even more valuable: social scalability. Social scalability is the ability of an institution –- a relationship or shared endeavor, in which multiple people repeatedly participate, and featuring customs, rules, or other features which constrain or motivate participants’ behaviors -- to overcome shortcomings in human minds and in the motivating or constraining aspects of said institution that limit who or how many can successfully participate. Social scalability is about the ways and extents to which participants can think about and respond to institutions and fellow participants as the variety and numbers of participants in those institutions or relationships grow. It's about human limitations, not about technological limitations or physical resource constraints. There are separate engineering disciplines, such as computer science, for assessing the physical limitations of a technology itself, including the resource capacities needed for a technology to handle a greater number of users or a greater rate of use.
Even though social scalability is about the cognitive limitations and behavior tendencies of minds, not about the physical resource limitations of machines, it makes eminent sense, and indeed is often crucial, to think and talk about the social scalability of a technology that facilitates an institution. The social scalability of an institutional technology depends on how that technology constrains or motivates participation in that institution, including protection of participants and the institution itself from harmful participation or attack. One way to estimate the social scalability of an institutional technology is by the number of people who can beneficially participate in the institution. Another way to estimate social scalability is by the extra benefits and harms an institution bestows or imposes on participants, before, for cognitive or behavioral reasons, the expected costs and other harms of participating in an institution grow faster than its benefits. The cultural and jurisdictional diversity of people who can beneficially participate in an institution is also often important, especially in the global Internet context. The more an institution depends on local laws, customs, or language, the less socially scalable it is.
Modern information technology (IT), especially by making use of the historically recent discoveries of computer science, can often discover many more mutually beneficial matches, can improve motivations for information quality, and can reduce the need for trust within certain kinds of institutional transactions, with respect to an increasingly large number and variety of people, thereby further increasing social scalability in some very important ways.
Whereas the main social scalability benefit of the Internet has been matchmaking, the predominant direct social scalability benefit of blockchains is trust minimization. A blockchain can reduce vulnerability by locking in the integrity of some important performances (such as the creation and payment of money) and some important information flows, and in the future may reduce the vulnerability of the integrity of some important matchmaking functions.
Two things about Nick's latest blast of penetrating insight and Monero.
1. Monero protocol facilitates mutually beneficial matchmaking by picking a tx's ring signature inputs from the set of other people's TXO. Schooling instinct; safety in numbers.
2. Fungibility plays a huge role in the social scalability of e-cash, because (for just one example) in non-fungible systems you must trust the sender to give you untainted coins and/or trust the coins' future recipient(s) will accept them (with their provenance) from you.
Fungibility --> trust minimization --> more/better matchmaking --> social scalability --> MONERO WINS
