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Blockchains and ecosystems


By Ben van Lier, Centric.






Ben van Lier
Ben van Lier
In 1935, Arthur Tansley [1], a pioneer in the field of ecology, stated that an ecosystem is to be considered a whole that is made up of interconnected constituent parts.

This whole, Tansley claimed, is not only the whole of the available organic systems, “but also the whole complex of physical factors forming what we call the environment of the biome – the habitat factors in the widest sense.” (1935, p.299).
For Tansley, there is no distinction between the natural organic elements or physical elements that are present within the whole of an ecosystem. The ecosystem as a whole is made up of separate parts through their mutual relations with their environment. These interrelations, intercommunications, and interactions between the separate elements are precisely what create a whole.
Jan Smuts [2] (1926, p.127) defines this whole as follows: “The whole fuses the action of its elements into a real synthesis, into a unity which makes the result quite different from what it would have been as the separate activities of the parts.” The whole of the ecosystem can therefore not be explained based on knowledge of the separate constituent parts, but rather by acquiring knowledge of the pattern of mutual interaction and communication between the separate parts, which thus make up and further develop the whole of the ecosystem.

Blockchain

In 2008, Satoshi Nakamoto [3] said that “what is needed is an electronic payment system based on cryptographic proof instead of trust allowing any two willing parties to transact directly which each other without the need for a trusted third party.”

The bitcoin ecosystem he describes, and which was created in that era, is based on interaction between people and distributed and random technological nodes (i.e. computers) that are interconnected in a network. With this network, he creates a new way of executing information transactions between peers without the intervention of a trusted third party. Through this new kind of interaction, new people and technological nodes can always join the network (or leave it at any random moment) to execute one or multiple information transactions.

The nodes accept that new decisions are made within the network all the time, and that these are linked up as blocks. In Nakamoto’s theory, networked nodes vote on these decisions using “CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.” The fundamental features of the bitcoin ecosystem are hence the result of communication and interaction between organic and physical entities that operate in a distributed manner and are interconnected in the bitcoin ecosystem or network.

The whole of this ecosystem develops itself based on the mutual relations of and communication and interaction between the separate parts. The functioning of the whole depends on the voting that is necessary to reach consensus for the execution of information transactions.

With this consensus requirement for information transactions between autonomous nodes, Nakamoto not only lays the foundation for the bitcoin network, but also for current discussions on the possibilities offered by blockchain technology. It isbecoming increasingly clear that it is essential for the functioning of a blockchain that autonomous and distributed nodes update the information on their transactions themselves (in distributed ledgers).

Aside from that, it is essential that the blockchain works based on voting and consensus procedures that lead to decisions on the execution of information transactions with other nodes in the network. Connections within the network enable individual nodes to engage in communication and interaction, based on which they can autonomously take part in decision-making procedures in the network. By accepting decision-making procedures completed by technological nodes, humans effectively, based on trust, hand over responsibility for the execution of information transactions to the technological nodes. Humans thus no longer occupy a central position in the decision-making process about information transactions with others in the network, even though this decision-making process was initiated by humans. The whole of interconnected humans and technological nodes that communicate, interact, and share information with each other in this network is starting to show similarity to Tansley’s description of an ecosystem. In this case, it is a socio-technical ecosystem where combinations of human and physical components naturally strike up interrelations, communicate, and interact, creating a synthesis or a new whole that adds up to more than the different separate activities.
Hissam, Klein and Moreno [4] (2013, vii) referred to such a synthesis of man and technology as a socio-adaptive system: “systems in which humans and computational elements interacts as peers. The behavior of the system arises from the properties of both types of elements and the nature of their collective reaction to changes in their environment., the mission they support, and the availability of resources they use.”

Ecosystems

According to Russell Ackoff [5] (1971), a system is “a set of interrelated elements”. A system is, in Ackoff’s theory, made up of at least two elements and the relationship that keeps these two elements together and unites them with at least one other element in their environment. The functioning of the system as a whole can hence, in Ackoff’s view, only be approached from a holistic perspective. He claims that the functioning of the system as a whole is not only driven by the separate elements, but also shaped by these elements and their mutual communications and interactions.

For John Miller [6] (2015), the combination of interconnected systems and their mutual communication and interaction are the basis for the complexity of the whole, which tacitly develops in the interconnectedness of the separate elements. Knowledge of patterns of communication and interaction between the separate systems is, in Miller’s view, of fundamental importance if we want to understand the behaviour of these complex systems.
According to Miller, this is, however, impossible as long as our contemporary science is still driven by reductionism, which is focused on “the idea that to understand the world we only need to understand its pieces” (2015, p.22). This leads Miller to state that “even if we can study and know the world’s simplest components, that doesn’t imply that we will understand everything just because the world is constructed from these components. Indeed, to reconstruct the world we have to have a theory of how components once put together, interact” (2015, p.22). Interaction and communication between people and technological nodes based on equality is also the basis of new ecosystems in the form of blockchains.

As Tansley already said, ecosystems arise and develop as a whole based on interconnectedness between the separate components and their communications and interactions. Humans and technological nodes communicate and interact in new blockchain ecologies based on trust. Trust between humans and technological nodes is hence the basis for the transfer of decision-making responsibility from humans to technological nodes within a developing blockchain ecosystem. The technological nodes and the consensual decisions made by them lead to information transactions with other technological nodes or humans within the blockchain ecosystem. The development of such a system therefore depends on a new combination of humans and the possibilities (and limitations) of the available technological nodes and their ability to communicate and interact within such a blockchain ecology. Without acceptance of the new whole and the technological possibilities (and limitations) of intercommunication and interaction, any discussion about the development of new blockchains will simply be pointless.

As asserted by Murray Gell-Mann [7], this is one of the reasons why ecologists, in their observation of an ecosystem, “would also include interactions among organisms in the forest, such as those between predator and prey, parasite and host, pollinator and pollinated, and so on” (1994, p.29). From the perspective of an ecosystem, the creation of new blockchain ecologies is possible only if we accept that this ecosystem will be based on new combinations of man and technology, combined action by humans and technological nodes that strike up equal relationships, based on which they communicate, interact, and exchange and share information.

(1) Tansley A.G. (1935) The Use and Abuse of Vegetational Concepts and Terms. Ecology, vol 16, issue 3, pp 284-307
(2) Smuts, J. C. (1926) Holism and Evolution. New York, the MacMillan Company.
(3) Nakamoto S (2008) Bitcoin: A Peer-to-Peer Electronic Cash System
(4) Hissam, S., Klein, M. and Moreno, G. A. (2013) Socio-Adaptive Challenge Problems Workshop Report. Chicago, Carnegie Mellon Software Engineering Institute. June 2013, CMU/SEI-2013-SR-010
(5) Ackoff R.L. (1971) Towards a System of Systems Concept. Management Science, vol. 17, issue 11, pp. 661-671
(6) Miller J.H. (2015) A Crude Look at the Whole. The Science of Complex Systems in Business, Life, and Society. New York, Basic Books. ISBN 978465055692
(7) Gell-Mann M. (1994) The Quark and the Jaguar. Adventures in the Simple and the Complex. London, ABACUS. ISBN 9780349106496

Ben van Lier works at Centric as an account director and, in that function, is involved in research and analysis of developments in the areas of overlap between organisation and technology within the various market segments.

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