Blockchain potential and disruptors for South Africa towards 2030

Blockchain (also called distributed ledger technology), the technology that underpins cryptocurrencies, is resulting in a new era of openness, decentralisation and global inclusion (World Economic Forum, 2017). Blockchain technology is set to complement another emerging field or group of technologies which are collectively defined as the Fourth Industrial Revolution. This revolution is characterised by a “range of new technologies that are blending the physical, digital and biological worlds, impacting all disciplines, economies and industries, and even challenging ideas about what it means to be human” (World Economic Forum, 2017). Certain features of Blockchain technology namely; decentralisation, implied anonymity, transparency and immutability presents people with a technology that may well transform business models and indeed entire industries in the world and in South Africa. Some of these industries are explored further in this research, delving into ideas of how Blockchains may add value to them. This research effort approaches Blockchain technology from a future studies perspective, and assesses whether South Africa is ready to embrace the technology. The research also explores what South African stakeholders can do to be better prepared for expected disruptors and opportunities that the technology will bring. South Africa is seen as a developing nation in the global context and can well benefit from strategic use of emerging technologies such as Blockchain. This research effort will implement Inayatullah’s (2008) six pillars methodology, incorporating the various tools and methodologies within each pillar, in an effort to describe and present possible future scenarios for Blockchains in South Africa. This insight will be used to provide well thought out strategic recommendations for South Africa to prepare for adoption of Blockchain technologies, which could ultimately provide a competitive advantage for the country in the global marketplace

Disassembling the Trust Machine, three cuts on the political matter of blockchain

Blockchain technology is, in part, a proposal to resolve ‘the political’ through technical means: decentralised networks to solve the problem of authority; cryptography to coordinate and secure the network; and game theory and incentive design to solve network behaviour. This PhD thesis draws on theoretical work by Karen Barad (2007) and Jacques Rancière (Rancière, 2010) to ask the question of what matters politically in blockchain technology – both in the sense of matter as becoming material of a new mediation of the political, but also mattering in the sense of being of political importance to engineers, developers and communities forming around blockchain as a potential. Rather than treating blockchain as coherent thing to be either celebrated or criticised, this thesis proposes and attempts to draw out the ways in which the potentials of blockchain are negotiated as part of its political effects, looking towards these negotiations to understand how political differences are made and sought materialised. Three approaches to the political are articulated to analyse Bitcoin and Ethereum as case studies and shift their terms of debate. Firstly, addressing the question of algorithmic determinacy, an approach is proposed for critically understanding a blockchain proposition that does not immediately revert to a competition of control between ‘human’ and ‘machine’ through the notion of the insensible, drawing on work by geographer of the inhuman Yusoff (2013a). Secondly, drawing on political theorist Rancière (2010) a particular blockchain sensibility is articulated, addressing the question of the particular kind of ‘disruption’ that blockchain presents. Its specific provenance in political histories of decentralised network computation opens up political significance beyond its intersections with financial capitalism. Finally, addressing the question of blockchain as a resolution to the political, the thesis introduces the concept of dissensible as an ongoing potential for incompatible sensibilities and their negotiation

Virtual Currencies Bitcoin & What Now After Liberty Reserve, Silk Road, and Mt. Gox?

During 2013, the U.S. Treasury Department evoked the first use of the 2001 Patriot Act to exclude virtual currency provider Liberty Reserve from the U.S. financial system. This article will discuss: the regulation of virtual currencies, cybercrimes and payment systems, darknets, Tor and the “deep web,” Bitcoin; Liberty Reserve, Silk Road, and Mt. Gox. Virtual currencies have quickly become a reality, gaining significant traction in a very short period of time, and are evolving rapidly

Thinking with Uncertainty: Scaling Up and Down in the Cryptocurrency World

Against a background of uncertainty, this thesis draws on an understanding of anthropology that disturbs the rushed neoliberal temporality, and looks for mushrooms (Bear, 2014, 2020; Tsing, 2017). It looks closely at the strategies and relations used by occupants of the cryptocurrency space to make habitable a highly volatile and uncertain world. My research participants occupy the heart of contemporary capitalism: in start-up spaces and banks, and also the peripheries: as multi-level marketing investors and 'noisy' retails traders (Preda, 2017). They are united in their engagement with a highly volatile market and uncertain space. They turn to practices of storytelling (Jackson, 2002); take to stages to scale themselves up and scale the world down (Hart, 2014; Tsing, 2012); 'cook money' (Carsten, 1989); form arborescent and rhizomatic networks (Strathern, 2017); and take chances in the face of 'wage slavery', in order to scale their knowledge of the cryptocurrency world

The private governance of entrepreneurship: an institutional approach to entrepreneurial discovery

This thesis develops and applies an institutional governance approach to the economic problem of entrepreneurial discovery of market opportunities. In doing so it expands understanding of one of the fundamental drivers of economic growth, innovation, and contributes both to institutional economics and entrepreneurial theory. This thesis applies the analytical approaches and theories of institutional mainline economics—including transaction cost economics, entrepreneurial theory, common pool resource management and new comparative political economy—to analyse the governance choices of entrepreneurs in the earliest stages of entrepreneurial discovery. Early stage entrepreneurs face an economic problem of coordinating non-price information about future market opportunities with others, under uncertainty, with non-zero transaction costs. This new contract-theoretic approach to the innovation problem does not emphasise a market failure of a misallocation of investment to innovation activities, but rather emphasises the entrepreneurial problem of the governance of knowledge under uncertainty to discover actionable market opportunities. The main proposition is that it may be transaction cost economising for an early stage entrepreneur to privately self-govern opportunity discovery in polycentric hybrids called innovation commons. This theoretical development is applied to the cases of hackerspaces and the hybrid organisations coalescing around blockchain technology. The role of innovation commons also has implications for the political economy of the institutions of innovation policy. As such, this dissertation has three structural parts—theoretical development, application and political economy—that converge on the theme of the private collective action governance of entrepreneurial discovery. The first part of the thesis theoretically develops a transaction cost economics approach to entrepreneurial discovery of market opportunities. The first contribution is to shift the conventional choice-theoretic market failure analysis of the innovation problem—which focuses on allocation and investment of innovation resources—to a contract-theoretic analysis, which focuses on the entrepreneur and the transaction costs they face. In the earliest stages of entrepreneurial discovery the primary economic problem facing the entrepreneur is coordinating distributed, uncertain and non-price information to reveal actionable market opportunities. Given the information proto-entrepreneurs require to solve their economic problem is distributed about the economy in the minds of others, and that coordinating this information faces non-zero transaction costs, the proto-entrepreneurial innovation problem is primarily a comparative institutional governance problem. Given that the structure of transaction costs shifts throughout an innovation trajectory—as the economic problem moves from one of discovering opportunities to exploiting those opportunities—so too may the economising governance structure. As proto-entrepreneurs begin to solve their economic problems and market opportunities become clearer, their level of structural uncertainty falls and the potential for opportunism over quasi-rents increases—that is, there is an entrepreneurial fundamental transformation. The second contribution is to introduce and define a potential transaction cost economising governance solution to these earliest stages of the proto-entrepreneurial problem. The innovation commons are introduced as polycentric collective action governance structures where proto-entrepreneurs coordinate distributed and uncertain information to whittle away uncertainty over potential market opportunities. The theoretical characteristics of these innovation commons are predicted to be transaction cost economising in the beginning of new industries and technologies, where structural entrepreneurial uncertainty is highest. This new type of innovation commons is compared to existing physical and knowledge commons, revealing several unique institutional behavioural characteristics. Innovation commons are predicted to only be transaction cost economising for a temporary period of time because they process uncertainty and in doing so their success may instigate their decline into other institutions of firms and markets. Further, an innovation commons is not an economy-wide phenomenon, but is rather likely to emerge around new technologies and industries, where there are potential gains from trade of non-price coordination with other proto-entrepreneurs. The second part of the thesis applies this theory to the private governance of entrepreneurial resources, demonstrating that proto-entrepreneurs are privately governing early stage entrepreneurial resources under collectively developed governance structures—in both hackerspaces and around blockchain technology. An analysis of secondary data of the governance of hackerspaces reveals micro-institutional mechanisms including graduated social ostracism, costly signalling to facilitate ordering, reputation-based coordination, and nested hierarchies of rules. The analysis also reveals that hackers are at least temporarily choosing to secede from other institutions of innovation, including innovation policy, to solve their economic problem through private governance rules. The second application is to the nascent but potentially general technology, blockchain, revealing collaborative private governance structures including hack-a-thons, embassies and conferences. A higher order institutional explanation for the emergence of blockchain innovation commons is also proposed. The process of crypto-secession creates a new decentralised society called the crypto-economy, which, when seen from the perspective of new development economics, the core problem facing blockchain proto-entrepreneurs is to coordinate non-price information about the institutional complementarities of blockchains to develop ‘protective-tier’ institutions. Because there is no sovereign state, the development process for the crypto-economy must be privately governed by entrepreneurs, and providing a higher order explanation of blockchain innovation commons as examples of private economic development. The third part of the thesis develops a subjective political economy framework, and then applies the framework to understand the political economy of the institutions of innovation. The institutional possibility frontier (IPF) framework is extended to incorporate the notion of Austrian subjective costs into institutional choice. Subjectively perceived institutional costs imply that each individual subjectively perceives their own space of cost minimising institutions. This subjective political economy framework demonstrates the choice by the proto-entrepreneur to govern their economic problem within polycentric innovation commons. The institutional choice to enter the polycentric innovation commons reveals a perception of the transaction cost minimising point with the IPF space. This understanding also has implications for the scope and application of the institutions of innovation and innovation policy. Privately governed innovation commons suggest a subjective systematic overweighting of the costs of disorder in the study of the institutions of innovation. Innovation policies must themselves be understood as the product of a discovery process over subjective costs, framed through the ideas and rhetoric

FedAccounts: Digital Dollars

We are entering a new monetary era. Central banks around the world— spurred by the development of privately controlled digital currencies as well as competition from other central banks—have been studying, building, and, in some cases, issuing central bank digital currency (“CBDC”). Although digital fiat currency is one of the hottest topics in macroeconomics and central banking today, the discussion has largely overlooked the most straightforward and appealing strategy for implementing a U.S. dollar-based CBDC: expanding access to bank accounts that the Federal Reserve already offers to a small, favored set of clients. These accounts consist of entries in a digital ledger—like other digital currencies—and are extremely desirable, offering high interest, instant payments, and full government backing with no limit. But U.S. law restricts these accounts to an exclusive clientele consisting primarily of banks. Privileged access to these accounts creates a striking asymmetry at the core of our monetary framework: government-issued physical currency is available to all, but government-issued digital currency (in the form of central bank accounts) is not. This dichotomy is unwarranted. Congress should authorize the Federal Reserve to give everyone—individuals, businesses, and institutions—the option to maintain accounts at the central bank. We call these accounts FedAccounts. Unlike the CBDC approaches currently under discussion, which would use complicated and inefficient distributed ledger technology and be walled off from the existing system of money and payments, FedAccounts would be seamlessly interoperable with the mainstream payment system, relying on technologies that the Federal Reserve has used for decades

COOPERATIVE GROWTH Mapping scaling strategies for new parameters of wealth

Eight minutes to eleven o’clock. I stand in front of a crossroad, where I can still see the striped tents of the large marketplace behind Oerlikon Railway Station as well as the bright orange logo of COOP Group right on Schwamendingerstr. The weekly market has a long tradition in Zurich due to the top-quality goods on sale directly from the producers, mostly organic from regional farmers, featuring a crowd of health-minded consumers. Right next to it, over 150 years of Swiss cooperative enterprise is illustrated by one of the 2,000 retail outlets of the COOP Group, which began as a small consumer cooperative and became an international retail and wholesale cooperative. Unique structures built on a common core. Both markets share the same economic environment identifying and evaluating potential alternatives to assess the social, technical, and environmental challenges of modern society. Both sum up - in a small local initiative and in an international enterprise - the perspective of different models of entrepreneurship oriented by the urge of a sustainable and democratic- centered economy. They translate the rise of new perspectives on how to do business. The scene I captured in Zurich is a small but significant sample of a bulkier movement that has been quietly growing around the world over centuries. Cooperative endeavors have a blueprint throughout human history. Nevertheless, the modern cooperative can trace its roots to Europe in the late 1700s as a response to changes brought by the Industrial Revolution. Closer to a new technological Industrial Revolution, cooperatives gain novel features and navigate through market pains and opportunities to remain competitive while growing in size and scope. Despite the long history of cooperative enterprises, its significant economic impact, and the substantial data available about these institutions, their vast potential has not been fully explored. They represent a significant portion of the agriculture and food industries, wholesale and retail sales, insurance cooperatives, banking, and financial services, health, education, and social care. Nevertheless, the choice for cooperatives is still shy in most endeavors and there is a profound lack of understanding about what this option truly represents among entrepreneurs, investors, consumers, and policymakers. A question that has always resonated in my mind since the bachelors is if Law is an emancipatory tool capable of designing in advance a better pathway for society and enticing fundamental changes or if our normative body is merely a foxtail - always behind - barely following the brisk development and kaleidoscopic nature of human experience. By the end of the doctorate and the profound dedication towards intellectual matureness, I had the fair expectation of answering this question. However, diving into the search for economic democracy did not provide me with a definitive answer. Still, the doctorate sparked hope of Law as a liberating tool and raised new questions that I am eager to respond to in future developments of my studies. Here I confess the naiveness coming to Italy years ago. My wrongful idea that a PhD would turn me into a subject expert. Little did I know back then that a doctorate serves only to remind us of how shallow our comprehension of the world is, and even individual research objects have a highly dynamic nature and hold a multiverse in itself with a myriad of reflections, beyond what I could anticipate when elaborating the research proposal. Law alone will never solve all the sores. The intricacy of the status quo calls forth a multifaceted approach guided by democratic values and respect for human and environmental wellness. Any ‘one size fits all’ resolution is doomed to failure. We obsessively search for revolutionary and unprecedented innovations when we already have the structural beams we need to support a new societal standpoint. Hence, it is a matter of hermeneutic recognition of the potential of what has already been built by generations. Cooperatives are a perfect example of an old remedy for novel pains. Many advocates in different times, cultures, and legal systems have pointed toward a more equitable life and economy, proving that it is possible to collectively create value and distribute wealth. The literature is rich and vast. So are the many cases and great stories made by people simply trying to reinvent the way of doing business and impact their community. While an undergraduate student, I joined an international conference on Human Rights and Business to discuss the harm of mining companies in Brazil and the recurrent violation of fundamental rights in the communities surrounding those operations in my home country. At the time, we analyzed the judicial attempt of a large mining company of avoiding bankruptcy. We evaluated the primary focus on financial metrics within the recovery plan, which marginalized the interests of many families directly impacted by the business activities. The financial safeguard of businesses over people has always been an unsettling idea for me. Money primacy is not quite over, but we have potent alternatives of subverting the logic behind profit at all costs. Here, I have compiled possible paths for cooperative growth and how they can meaningfully impact our prospects by nurturing new wealth parameters. I uphold that growth and business scalability have a unique denotation based on the pursuit of economic democracy beyond sheer financial metrics. We will indelibly frustrate the safeguard of our democracy if we perpetuate the great divide between the economy and our socio-political choices. Any attempt at building sustainable and perennial democracy in the economic sphere relies on a shift towards non-monetary values. A wise entrepreneur once told me that money is like the air we breathe or the food we eat, what allows the economy to be alive and fuels its operations. Nobody, however, lives to breathe or to eat. The purpose of life and our economic ventures must trespass the pursuit of money and fulfil a larger mission. Capital is a tool, not a self-centered goal

Kickstarter My Heart: Extraordinary Popular Delusions and the Madness of Crowdfunding Constraints and Bitcoin Bubbles

This Article builds on my existing research program that (a) broadly seeks to analyze laws, regulations, instruments, and policy levers that inhibit a market’s ability to recognize an asset’s intrinsic value, whether in terms of financial, social, or human capital, and (b) explores and advances interdisciplinary corporate governance theories by employing a heterodox economic analytic to derive its proposal to the paradox of an unregulated virtual currency market (Bitcoins) and an overly regulated crowdfunding market (Kickstarter). The Article functions not only as an homage to Charles MacKay’s legendary 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, which described the human, social, and economic psychology of financial bubbles—particularly the Dutch tulip bulb bubble—but also as an offering of problems and proposals that crowdfunded and Kickstarted entrepreneurial businesses, including those funded by Bitcoin currencies, present for a wide swath of societal stakeholders. To describe the problem, this Article (i) describes behavioral finance, (ii) details the new entrepreneurial business possibilities that virtual currencies and crowdfunded entities can explore, (iii) describes how current rules and regulations represent unnecessary constraints to traditional equity-based funding models and concerning governance models of entrepreneurial enterprises, and (iv) questions why one form of capital deployment (currencies) may provide equity-like returns and unique governance, while the other form of investing (crowdfunding), provides only softdollar-like returns and no governance for middle-class investors. While both virtual currencies and crowdfunding represent risks, including economic bubble risk, this Article believes that a heterodox economic analysis demonstrates unnecessary constraints on entrepreneurial businesses imposed by extant regulation, regulators, law, and policymakers. To assuage these paradoxic problems for emerging business enterprises, this Article proposes a minarchist heterodox solution of modest statutory language that requires market-based solutions that employ needed risk reduction strategies while redeploying necessary capital to private startup business enterprises. This proposal thus benefits the middle class entrepreneurs, suppliers of capital, and job seekers harmed by the current regulatory regime, while permitting for an expansion of the U.S. and global economies