How will the decentralization revolution change the world economy?

Bitcoin revolution and cryptocurrency predicts the beginning of the monetary age.

The current system of economics is largely dependent on trusted third-party organizations to ensure, verify, and control cash flow worldwide. This dependence has led to the fact that corruption, inefficiency and uncoordinated incentives are flourishing in the system.

When it comes to financial solutions, we trust our friends, we trust the media, we trust the "experts"; In short, we trust our information sources.

Payments are only the beginning

Payments are just one aspect of the marketplace, whether it be the market for goods, services or ideas. Communication, reviews and investment advice from reliable sources are important elements of commerce.

As we become more connected with people all over the world, the trust we feel for them becomes harder to justify and even more so to check.

In the context of a product review system or social bulletin board, each user is a trusted third party. In the context of raising capital to finance start-ups and entrepreneurship, venture capital firms and investors act as trusted outside organizations to determine the best investments in the interests of the economy as a whole.

As investment opportunities open up to the general public, the ability of these “inexperienced” investors to receive information that they can trust becomes a necessity. User incentives and ecosystem well-being should be consistent. Decentralized, “non-trustworthy” systems should go beyond providing the same payments and resolve other aspects of the marketplace.

Dead and Long-Term ICO

Frauds with ICO and scam projects appear daily in the news. Huge flows of funds come from uninformed investors who want to invest in any team. This phenomenon threatens to undermine confidence in the cryptocurrency space in general.

The process of finding, testing and investing in an ICO is complex and inherently erroneous in its current manifestation. Too much confidence in untested experts and a lack of in-depth understanding of the market by investors lead to high costs of overcoming the factors that impede the conclusion of lucrative deals.

To unleash the full potential of democratized investments through the economy of tokens, solutions must be found to ensure that all participants act properly. It is important for systems to encourage good participants and to make work against the system impractical and costly.

Projects should be rewarded for honestly presenting their technologies and experience, as well as punishing dishonesty. Analysts should receive compensation for the analysis of projects, at the same time they lose their reputation due to incorrect or ineffective work. Investors should have enough information to make informed decisions.

Proof of reputation

To do this, we need to create a mechanism for decentralizing trust. It should be a codified, self-regulated system that allows users to gain reputation through useful contributions and use that reputation to gain trust from others. As the user's reputation and share in the system increases, investors and analysts of a higher level will pay more attention to him.

As an expert analyst, I need a platform that rewards me for sharing reliable, accurate information about the projects I am studying. My reputation and remuneration should depend on my track record of honest reporting and verification through peer review of my work.

As an investor, I need a platform for opening high-quality projects using crowdsourced research conducted by experts. I have to be able to safely manage my funds, view my investments and share promising projects, which I treat with great enthusiasm. As my experience and investment experience grows, I should be rewarded for my attention and my contribution to projects.

Financial incentives create a theoretical situation in the game, which ideally promotes good behavior from all sides.

Modern approaches

The reputation problem turned out to be a challenge, but it is only a matter of time before the system is developed. The following promising projects are working on this:

Userfeeds

Userfeeds is working on what they call the “Proof of Importance”, a decentralized protocol for determining the degree of compliance of information with customer requests. They consider the degree of compliance of information with the demands of consumers as the national currency of the Internet and strive to break the monopoly on relevance, which Google, Facebook and other information tracking mechanisms currently use.
This demonstrable relevance can be used to create platforms for collectables and investing, social content and preserving media in any form. They are working to decentralize the economy of attention in all areas.

Menlo one

Menlo One created the foundations for decentralized markets and communities based on the incentive system, dubbed “Proof of Reputation.” The protocol creates a social level of peer-reviewed content that rewards users for providing value and building trust.

The “Proof of Reputation” protocol can be implemented and used by developers to create new dApps, the flagship of which is Menlo One, which creates itself as a platform for analyzing ICO.

Projects requiring expert review will pay for this service, while experts will receive earning reputation for reviews. The project team has a skin in a game in Menlo Token (MET) to look at their project, and reviewers have a skin in the game in the form of tokens put to general reviews that will be checked by other members of the community.

Steem

Steem has created a platform for introducing financial incentives to the media network, providing a protocol of basic elements for publishing, promoting, commenting and supporting any content.

When you participate in a community or marketplace, your influence grows through the accumulation of Steem Power, and you pay with Steem tokens, stimulating the creation and promotion of high-quality content.

Their reward mechanism allows creators, experts and consumers to build a mutually beneficial marketplace around any set of content, and the upcoming implementation of Smart Media tokens will give community organizers very precise control over the economics of tokens.

DAOStack

The DAOStack project created the so-called operating system for a decentralized future. They consider Decentralized Autonomous Organizations (DAO) as the future for cooperation and organization, and also created a set of tools and protocols to reduce the cost of overcoming the factors that impede the conclusion of a transaction when setting up these systems.

Collaborative media, decentralized research projects, community-driven companies: using the DAO model, you can effectively implement any network of facilities that requires a reputation system, an internal means of transmitting value and a control protocol.

By introducing abstract markets around the implementation of management proposals, they hope to stimulate participation in decision-making and reward for quality decisions.

Trust in the future

As these and other startups are implemented in practice, we will increasingly learn about possible mechanisms for decentralizing reputation, relevance, and managing collective information.

Digital identity and reputation are perhaps the most pressing obstacle to entry into the era of decentralized communities and markets on a global scale, and once they are overcome, they will have profound implications for the next stage in the evolution of society.

A bright future ahead, believe me.