Block chain is not only a new technology is the new mechanism design
■ block chain integration is not just a technology, but also a center to share information, form new consensus organization, its rules designed to rely on the game between the plurality of nodes in the network structure, to achieve greater range complex transactions and deeper, and show the form of computer applications and algorithms.
■ block chain information is decentralized decision-making mechanism to achieve the established social objectives. Compared center centralized mechanism, the block chain mechanism has two advantages: One is Pareto effectiveness of resource allocation; the other is the incentive compatibility, a better solution to opportunistic behavior due to asymmetric information.
■ block chain is more important to use economic theory to design and create "rules" or algorithm to produce a certain equilibrium outcome. Mechanism design theory and network theory of economics, cryptography, computer technology, artificial intelligence combine, will greatly promote the block chain such disruptive innovations to fruition in the new era of the new economy.
The circumstances surrounding the block chain of ideas and technology
Since Nakamoto released in 2008. "Bitcoin White Paper: a peer to peer electronic cash system," the article began research on the application and bitcoin block chain technology is gradually increasing. But the topic for a long period of time, just a block chain technicians and entrepreneurs discussed within a small range.
Since 2017, the community block chain, and intelligent encryption currency contracts concern about the rapid warming, Block Chaining become a hot topic of public discussion. There are optimistic view even believe that technology is the second block chain mainframes, personal computers, Internet, mobile Internet, social networking, computing paradigm fifth subversive innovation, evolutionary history of human blood following the credit credit, credit precious metals, fourth milestone after the central bank bill credit.
Tracing the source, block chain technology design ideas from the Byzantine era general problem of the Eastern Roman Empire. The block chain design dynamic game is essentially a mechanism or algorithm decentralized decision-making, acting in concert to solve asymmetric information in the transmission of information by multiple agents.
The new technology from the underlying technical point of view, the block chain is a point to point transmission technology, distributed technology, cryptography, network theory such as the integrated use of mature technologies. In 2011, Vitalik first discovered the block chain and encryption technology through currency Bitcoin, and published a "White Paper on Ethernet Square" in November 2013.
From a functional point of view, the core strengths block chain is decentralized, through the use of data encryption, time stamps, distributed consensus and economic incentives and other means, a node in a distributed system without the need of mutual trust, the realization based on decentralized credit point to point transaction, coordination and collaboration, so ubiquitous as the center of the agency cost, low efficiency and data storage insecurity and other issues to provide solutions.
From the evolution of Ideology, Kevin. Kelly in 2016 "out of control" in his book, distributed system has four salient features that no mandatory central control, subunits have qualities of autonomy, the link between height between each other subunits, point to point affect the network formed a non-linear causality. Kevin. Kelly further pointed out, not so much a distributed, decentralized network is an object, than it is a process.
From the application point of view, BATJ (Baidu, Ali, Tencent, Jingdong) and other Internet companies in the field of active layout block chain, promoting the development of block chain industry. May 2018, the Ministry of Industry and Information Technology Information Center launched the "2018 White Paper on China block chain industry." Local governments also actively positioning block chain from industry is highly technical, policy and regulatory framework for the gradual development of the system perfect. Ma in 2018, said Ali three core technologies currently focused input, one large data artificial intelligence-based technology, the other two are block chain technology and networking technology. Block chain technology combined with internet banking, the future will it be possible to create the 21st century the era of data, financial systems and standards in the information age.
From the researchers' point of view, the block chain gradually into view mainstream researchers. University of Chicago professor and professor jungle He Zhiguo released in March 2018 in NBER Working Paper "block chain subversion and intelligence contracts", the block chain proved this decentralized system design helps to increase social welfare, improve Consumer Surplus. Professor Fang Hanming University of Pennsylvania in June 2018, said Penn's Department of Economics professors spontaneously organized a study group. What school? Bit block chain and credits. We took turns reading the literature do report discusses the mechanism of chain blocks, study their basic cryptography and economics, as well as possible what kind of ground-breaking applications.
Block chain is decentralized decision-making mechanism
In our view, the block chain is a way to build the relationship between nodes and nodes with distributed technology, the purpose is to rely on the game between the plurality of nodes in the network structure to achieve greater and deeper range of complex transactions. If you look at from a historical perspective of development economics, first block chain and a direct challenge to the center to center two mechanisms in economic theory and practice, the controversy over a hundred years old, that is the central focus of centralized and decentralized market mechanisms for decision-making mechanism; secondly, the fundamental characteristics of the block chain is also challenging the traditional microstructure, it is a completely new organization independent of the enterprise.
Block chain is not only a new technology applied to the real economy, but also compete with traditional economic mechanisms of an organizational or system design. Block chain advantage is to solve the problem of incentive compatibility and Pareto effectiveness of resource allocation, the disadvantage is the high cost of information mechanisms, need the help of cryptography, network architecture, cloud computing, big data, deep learning, artificial intelligence techniques and algorithms to implement.
Center centralized mechanism
Traditionally, central centralized mechanism means the possession of private information of individuals who report directly to a central planner each type of information, such as the marginal cost, marginal utility, marginal revenue, consumer demand, and the center plans reported in accordance with the individual's information, develop each individual production vector, such as production levels, investment levels, as well as vectors and consumer money transfer payments, and issued to each individual. Among them, the central planners need to be solved include millions of simultaneous equations into the output table.
■ On the theory of economic development and historical center of centralization mechanism is the most important mechanism for the design of a system arrangement, showing its theoretical foundation originated in principle Gibbard, Meiye Sen and other scholars proposed. Display principle refers to the meaning, in the economic environment of asymmetric information, an indirect result of any balancing mechanism can have a unique mechanism displayed directly by a mathematical structure to copy. It proposed the principle of display, which greatly simplifies the mechanism design work, so that work can be focused on mechanism design to design a mechanism for direct display with good nature. From the rules of the game and the transmission of information, the center centralization mechanism is a direct revelation mechanism.
Block chain mechanism
Technology base block chain is a distributed network architecture, has to center, sub-centers and information sharing, consensus shared structural characteristics of tissue. From the perspective of mechanism design point of view, information sharing and consensus to pass information between the performance of each participant.
■ block chain is not just a new technology, but also as an organization or institution designed to compete with traditional economic mechanisms to help the real economy, the traditional transaction withdraw from the centralized hierarchical organization, the decentralized decision-making back to the market. Based on this understanding, its importance in the development process of social self-evident. Of course it should be noted, the block chain mechanism to expand the dimensions of information space, but also exerted a more complex computing tasks to each individual.
Block chain mechanism to meet the incentive compatibility and Pareto optimal
In the practice of social development over the past century, the center and to the center are two completely different institutional arrangements, the performance of the market mechanism and centralized decision-making mechanism centers scattered set. Early on, such as the 1974 Nobel laureate in economics Hayek questioned the planned economy "economic calculation problem." For Hayek, the close interrelationship between the various economic phenomena not easy for us to plan exactly what we want to stop within the limits, and hinder freedom of movement once the market suffered more than a certain degree, plans who was forced to be expanded the scope of control until it becomes all-encompassing so far. In recent years, such as 2007 Nobel laureate in economics Hurwitz quickly discovered, the most important task is to build a mechanism designed to evaluate the merits of an economic system, and can be the standard of most economists agree. Validity of the information, incentive compatibility and effectiveness of resource allocation is Pareto economists generally accepted three criteria.
High cost information block chain mechanism running
An important reason for Hayek's criticism of the planned economy is "required too long a planned economy to gather information and computing equations." If expressed in mathematical language, it is because the high-dimensional parameter space, each individual needs to verify a lot of equations, so the information space is also very "big." Therefore, the design of the mechanism father Hurwitz pointed out that the cost of information is one of the basic standard mechanism designers must consider. Wherein the information is to determine the effectiveness of the economic merits of a mechanism of an important criterion. In various methods measure the effectiveness of the information, the size information of the spatial dimension is one of the methods, the larger dimension of the information space, the higher the cost information indicates that the operating mechanism.
This block chain cost information distributed mechanisms are running high. In fact, in order to avoid popular conspiracy, must be equipped with cross-validation, it will also make the information processing costs. Fortunately, with the further development of big data, smart computers, cloud computing technology and Internet technology, computational efficiency has been greatly improved, which will help reduce the high cost of information distributed mechanism to run. At present, some business models of distributed applications can successfully landed on the premise that the rapid development of computing technology, information storage technology.
Block chain mechanism to meet the incentive compatibility
Social choice and mechanism design commonly encountered a problem that has private information of some individuals will take opportunistic behavior "to hide preferences, distorting the truth or deliberately confuse" the. Individual self-seeking opportunist behavior is often contrary to the collective interest or affect the implementation of social objectives, resulting in the allocation of resources Pareto invalidity. A good economic system only satisfy incentive compatibility, consistency has to be well coordinated individual and collective interests of the participants of asymmetric information. Therefore, the incentive compatibility is a measure of the economic system of the merits of an essential standard, mechanism design theory fundamental problem to be solved is the problem of asymmetric incentive information.
Block chain mechanism to meet the incentive compatibility, center centralized mechanism might not satisfy incentive compatibility. The reason is that, in the first block chain mechanism, for the trust, the trading process cross-validation, the individual probability of fraud is almost zero. Therefore, the block chain mechanism information is true probability one. Secondly, in the center of centralized mechanisms, the information may not be the participants reported their true type. Block chain mechanism above information is true probability information center centralized mechanism for the true probability.
Block chain mechanisms lead to Pareto optimal configuration
Assessment of the system should be based on Pareto effectiveness as a standard. The reason is that the effectiveness of Pareto is a basic evaluation criteria of neoclassical economics on efficiency. Whether the mechanism or mechanisms for direct display block chain, will eventually be involved in the allocation of resources. In terms of resource allocation, the block chain mechanism leading to Pareto optimal configuration, the center will be a certain degree of centralization mechanism of efficiency or welfare losses. The reason is that the block chain mechanism can solve the problem of asymmetric information, there is the problem of asymmetric information center centralized mechanism.
As we all know, asymmetric information causes Pareto inefficient allocation of resources, which is plagued by all organizations and institutional design of the core issues. Designers can design a set of incentives to reduce or avoid loss of efficiency. From a mathematical point of view, designers and incentive compatibility constraint in the participation constraints, design a set of mechanisms to maximize social welfare. Incentive compatibility constraints and constraints involved in the conflict known as the principal - agent contradictions constitute the mechanism design under asymmetric information of the fundamental contradiction. When the designer dilemma when the conflict reached a balance, it is the optimal design of incentive mechanisms. Is obvious that the optimal allocation of resources results center centralization mechanism designed by the designer get is constrained Pareto optimal, and the block chain mechanism need not trust to achieve Pareto optimal configuration compared to a certain efficiency or welfare of the extent of losses.
The impact on human society blocks chain immeasurable
Kevin. Kelly in the "New Economy New Rules," a book that, in the next ten years, the new economy has brought enormous benefits largely from the development and use of distributed and autonomous networks. As a resource allocation of a new decentralized decision-making system design, the block chain mechanism in the sudden emergence of the Internet economy era, the impact and influence on human society immeasurable.
In the future, we need a comprehensive use of mechanism design, network theory, cryptography, computer science and other technical means to set presents new rules and new market applications and algorithms based networks. At present, a lot of people to block chain as a kind of computer products, such as Bitcoin, a consensus agreement, the state channel, hash algorithm, slicing technology, lightning and other large network of computer technology language appears in the block chain research literature. Of course, these computer technology is essential for solving the incentives and increase the efficiency of the block chain.
However, the block chain is more important to use economic theory to design and create "rules" or algorithm to produce a certain equilibrium outcome. Mechanism design theory and network theory of economics, cryptography, computer technology, artificial intelligence combine, will greatly promote the chain block this disruptive innovation blossom in the new era of the new economy As a result, a growing number of emerging economic model and autonomous decentralized organization. In fact, the combination of technology and mechanism are more prone third hand outside the visible hand, the invisible hand that distributed organizations.