A Tokenized Identity And The Future Of Cryptocurrency

We are social creature living in large communities like ants and bees yet we each maintain a sense of complete and separate entity, an autonomous being. The main contradiction here is that if each and one of us is motivated to do only the best to humanity as a whole, but since each of us is a different entity we would all end up disagreeing and fighting each other to the end.

These days there is a lot of talk about "identity" in the crypto-sphere but most of it do not touch the fundamentals of identity only try to resolve the very top layer of it from the perspective of verified entity .

In fact the most important characteristic of an "identity" is its history. its unique history of interactions with its surroundings - just like a token. "Identity" shares one more quality with a token - non cloning . much like a token, its non cloning quality defines it. Both tokens and "identity' have no value if can be cloned.

Now that is the statement which we need to review and which have so much implications.

Let me first present a confusing question. Does a gold token need an "identity" to have a value? how about fiat token like a dollar bill? and what about the old subway tokens or digital money?

The answer is yes . most "means of value" are given an identity as authentication by a centralized entity. and thous that can have its own unique marker like gold , do not need an authentication from an authorized third party . Of course The actual value attached to any form of tokens have to do with it being scarce (finite at every moment) and in agreement with all users as a form of payment.

The building blocks of value is agreement and scarcity , and the one quality that makes gold different than the other is The level of agreement. We do not need to agree on "making" it. We use something that we cant control , since created by nature's "force", and we make use of that .

Bitcoin try to do the same, eliminate the ruling third party of authentication and replace it with consensus. However unlike gold, the community of users agree on the validity of a transaction which defines the token. In case of double spend It is not the token that define itself, its is the transaction which is randomly accepted onto the longest chain that validate one "token" over the other. In fact on bitcoin there are only transactions. The value of bitcoin has nothing to do with the original mined which is a function of time. Setting the frequency of all original transaction and a finite number

When we review this in terms of information theory it makes a lot sense: The information that Alice have will always be greater than that of bob regarding her experiences and vice versa, thus the larger the number of individuals we interact with, the greater is the gap of information between each individual in the group to the rest of them.

"culture" as a collective set of rules and knowledge is one way to overcome that, separation of powers is the other way. If "culture" assert a code of behavior that is enforced by a consensus but not by any law, separation of powers is a law which made to disable the ability of one to rule all.

When Tauchain was first conceived it was built on the premise that the program set the rules by which rules are going to be accepted - The rule of rule making. yet when one go on that path of rules using mathematics, it will always hit the wall of consensus. In mathematics we name it axioms. We can never speak of pure mathematical concept without consent to the axioms which give the meaning to the phrase expressed (same a any other language). The notion of Godle incompleteness theorem and its implication on programming make this a great challenge.

Satoshi's attempt to resolve that same paradox yield Bitcoin which is not a complete solution but a great and proven step forward
Satoshi's trick was to apply the "separation of powers" for the agreement reached as a consensus using incentive architecture to compensate for the luck of a "culture" as a motivation then use the state of consensus as the culture on which to built the next block. That "culture" is then enforced by all nodes who wish to take part in the "game" and the gains involved in that "game" The consensus thus represent the social unity (culture) while the transaction and its verification is done by a "separation of powers" method. This equilibrium of interests are reached at every block and allow the entire ecosystem to progress over to the next block. this entire scheme is sustainable thanks to the effort needed to undo the chain and then to compete with the longest chain. However as we are all witnessing these days Satoshi solution lack a major component

"Separation of powers" is an agreement all sides comply with, and so is a consensus, assuming that each individual is free to join or leave at any given moment by exercising free will, however.....no individual should have power over the other once enter the scheme. A fork means that all information and all states are at agreement up to the point of forking thus at the moment of forking each individual can make a choice without losing anything. However this is not true since while consenting to the consensus some individuals (or groups with in) lost power gained by others.

The fundamental question this raise is far more inclusive than "governing" which it is now the common expression to describe the problem withing the bitcoin community. It is the question of identity of an individual participant in the game It is "identity" since it is an information issue and identity is the way information differ. a difference in the state of information each participant have is the fundamental quality that make one be different from the other one and not all be just parts of the same one.

In short the governing issue is not governing but rather information. in order to keep the "separation of powers", information have to stay at the hand of the individual entity. This means that each entity have to have some sort of unique information no other participant can appropriate yet that formation is crucial to the network as a whole. Identity means one unique none cloned information package (like a bitcoin coin) which only that individual can reveal. But.... that a verifier can verified .
How can we built that verifier? Satoshi's solution for verification is open Leger, but such ledger erase the individual as such and result in a 'governing" problem.

So lets look at the verifier problem now. We need to trust the verifier and that verifier thus can not be a third party that can make gains in the game, unless it is the game itself. The trick is the game. I am me only in that game. on each game I will be a new me. each fork will restart all gamers as new entities thus they all will lose. its a game that if you enter you gain and if you leave you lose but whatever you gain or lose dont change the sum for the others only for the total of the game.
Let me tokenize that, first as value of money, then we will be able to move on to see how we transform the token to information other then money.

Lets assume every player get a token once enter the game and all other players get a fraction of a cloned token for each new player (equal to the new player added value). thus for each new player the system gains two tokens one for the new player and one to share between old players. Now these tokens have a unique quality. they can never be spend as a whole. meaning that the program can identify each fragment as part of that one. now lets assume that the token given to the new player is not divisible. thus the only thing that a new player can do is sent his token and by that "delete his account" and at the moment his account is deleted so are all the fragments of the cloned token. this way each individual carry the real power of his original membership even if never accumulated any more tokens.

This is the principle of a token as and identity too. It is made of two entangled tokens one that divisible and transact. and one that is held by the original owner and can eliminates all fragments of the second entangled token by being send to any one.

There are many more details to figure out on the conceptual level before trying the create such system. but it needs to be realized, also in order to make AI sustainable for us as a humans...... but first lets concentrate on tokens... and get through the latest report of the SECURITIES AND EXCHANGE COMMISSION: Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO . So we can move this revolution forward and continue making trade-able tokens of all "shapes" and "sizes"!