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Sovereign Nations

Blockchain’s Private Enclaves; Sovereignty and Value of a Nation

Is it the method of exchange used for transfer of assets between parties that defines a sovereign nations strength?

Michael Holdmann, CEO.
Prasaga LLC – Aug 28th 2019

When the DataGrid project first started in November 2017 we were just looking to clip a blockchain onto our Internet of Things Message Bus and offer real-time data from physical world devices for sale through a multi-sided market, commodities type exchange.

Yada, yada, yada, almost 2 years later we are now ready to start publishing the formalized patent applications of our provisional patents we discovered and filed over the 16 months of R&D.

As we are writing the final commercial white paper in an attempt to explain the very technical papers that have been written, we are also preparing/anticipating what we believe could be FUD from some sectors of the market.

The latest FUD conversation was regarding the newest enablement capability on the DataGrid Blockchain (DGB) of setting up private permissioned “enclaves” within the DGB that still allows the hash power to be shared and beneficial to entire open DGB chain. This is enabled by our patent pending distributed PoW consensus and parallelization protocols, and systemic Extensible Object Model Technology.

Each account is essentially its own infinite virtual RAM. That is what we mean by account state. A private permissioned shard will have all the accounts that are part of it, encrypt in their state space, their RAM. All objects, whether classes, meta-classes or objects are stored (again virtually) in that state space, the RAM of each account. Thus, if the state space for each account is encrypted, and only those mining nodes that are part of this enclave can decode them to perform operations, validate, and re-encode, they are effectively their own world.

The concern then comes up regarding the ability for criminal activity such as money laundering on the DGB…

If, by chance, a criminal group is using our open source code and whatever encryption schemes they want, and perhaps their own classes which might be encrypted and their own object instances which also might be encrypted, it is no different than running their own chain.

When it comes to DGB however, accounts will have to function as bridge accounts, where everything has to balance. We are not going to allow incentives, transactions, or anything internal to such enclaves but, we can use their PoW hash power. The bridge accounts will provide in a sense, an onramp/offramp between the opened DGB and the private DGB enclaves, which will make them much easier to track for law enforcement. Thus, it is less likely that criminals will use the DGB over other tools.

So, if there is concern that we could be building a blockchain for a new “silk road”? Bitcoin is a far better answer for that, its original idea is to make anonymous cash, it still does that. The only means of tracking is essentially the onramp/offramps. Further, things like “ring” accounts that merge multiple streams of coins together and then resend them make it very hard to track money laundering on Bitcoin. Can you do the same thing with DGB, probably. However, we hope that anonymous accounts stand out on the DGB, using the KYC certificate concept. That should limit DGB’s usefulness for criminal activity.

With respect to protected “enclaves” that encrypt their own operations on designated shards, but get to share the PoW hash power, we do not know how this would help criminal activity. By sharing the hashes, immutability for their encrypted shard(s) is maintained. This means that any single defector will deliver the shared key to decrypt, and all of the activities are permanently recorded. This creates a shared trust relationship, rather than an untrusted relationship. Not particularly criminal-friendly. However, very useful for Businesses or Sovereign Nations.

The enclave function will allow Enterprises and Sovereign Nations to use DGB and XBOM under a restricted single use binary license and migrate over time from the permissioned closed state to the open chain as they gain trust in the technology.

So, now that the background is done let’s get to the subject matter around the subtitle. Back to spring/summer of 2018, one of the questions I had for the team was “can we create micro-economies (sovereign nations currencies DGT-USA, DGT-CHINA, DGT-EURO etc.) that feed to the macro-economy of the global DGB and DataGrid Token (DGT)”. The answer was no.

What led to the writing of this post and underlying thesis? If we can now enable each Sovereign Nation to have their own enclave, combined with another of our XBOM enablement features, an enclaves real-time GDP can be measured and contribute to the internal value of the enclave and to the global DGT, the question then comes about, is there necessity for a Sovereign Nation to utilize their own currency as a method of exchange? Or, can a global, opened, decentralized currency which utilizes along with other metrics, the Equation of Exchange to determine monetary supply be accepted as a Global Currency?
The argument first will be that Central Banks will lose all their power, so what, civilization advances as time goes on and technology has rendered them obsolete to all civilization outside of their immediate benefactors.

Then we have the entire Banking, Forex and other Intermediary industries, again, so what, how many industries have become extinct to advancements over the history of civilization. Also, there is nothing stopping an entity from opening a service on the DGB, people will still need a loan to make large purchases i.e. home, car, etc.

If the governments of nations were represented on a governing body that was established for purpose of making recommendations on monetary supply policy, which would be put to vote to the general community for final implementation approval, can we satisfy the archaic views of yesteryear for acceptance of a more fair and decentralized monetary future?

What we need to ask is, what does give the Sovereign Nation its ultimate economic strength? Is it a sovereign method of exchange, or is the assets it owns, its natural resources and the Price Index and GDP of its producers the proper measure of an economy?

The ability, through digitalization, for externalities also be included into an economic equation is immense. Imagine if we could measure environmental conditions within any sovereign borders allowing its “green health” to be included in the overall value?

Interestingly, the governor of the Bank of England made a statement during G7 this past weekend regarding currencies. “A central bank-supported digital currency could replace the dollar as the global hedge currency”, said Bank of England governor Mark Carney.

The problem is that the central banks still have control, with key word being central. If they made a global currency how would that change the status quo? They don’t care about the third world underdeveloped countries currently, how would their attitude change towards them under this proposal? Would they favor the large economies that their pay and benefits depend on, allowing the continued corruption and manipulation of individual sovereign currencies?

It is time to change to a decentralized mechanism for a global economy and currency. It is time to change to an immutable system, where all metrics are measured in real-time and all decisions and changes are fully transparent and again immutable. It is time to ensure that few ordained elites are not the ones whom control all the potential to your future through their personal agendas of wealth and prosperity for them and their friends.

Now, this is just one individual’s thoughts, one which has not had an economics class since ECON102 in 1983, but hell neither has any of the plethora of young coders that are now self-proclaimed computer scientists and think using monetary policy from 100 B.C. is a great idea.

As Economist Stephen Moore told me, “economics are not rocket science”. I agree, however it must be studied to be understood. Economics is only a single, albeit primary gear in the structure of what is required for a global financial foundation. And yes, parts of the foundation can be considered rocket science, as we will reveal over the next few weeks.

For more information, please contact Michael Holdmann (CEO) on [email protected] or visit our Team page for other members of the leadership team.