Learn about the present and past lives of the password economy in one article

The cryptographic economy refers to the economic form of asymmetric cryptographic technology used in various fields of the economy, which is the third economic form of the information economy after the digital economy brought by computer technology and the Internet economy brought by network technology.

Learn about the present and past lives of the password economy in one article

What is the cryptographic economy

The cryptographic economy refers to the economic form of asymmetric cryptography technology used in various fields of the economy, and is the third economic form of the information economy after the digital economy brought about by computer technology and the Internet economy brought about by network technology.

Digital economy->Internet economy->Cryptographic economy

In general, in the last hundred years, human society is shifting from material economy to information economy, that is, the core of people’s life is shifting from material products to information products.

The starting point of the information economy was computer technology, which standardized all kinds of information into binary numbers composed of 01 and opened the era of “digital economy”, from the invention of computers in 1940 to the heyday of the computer industry in 2000.

Network technology further enabled digital information to be connected on a global scale, bringing about the “Internet economy. Network technology began in 1960 and will reach its heyday roughly by 2020. The Internet economy currently faces two major bottlenecks: the problem of information security and the problem of information monopoly. Almost all of the negative news about the Internet economy can be attributed to these two major problems.

You can pay attention to these negative news.

The cryptographic economy is a new economic form based on asymmetric cryptographic technology, which fundamentally solves the problem of information security and information monopoly of the Internet.

So the cryptographic economy is the evolution of the Internet economy.

The basic solution to the information security problem lies in the popularization of asymmetric cryptography technology. When everyone can control their own information security with private keys, the information security problem of the whole society can be solved.

To solve the problem of information monopoly, on the basis of asymmetric passwords to achieve information security, important data and rules of social economy should be further put into a distributed consensus system that is not monopolized by any center with the help of peer-to-peer network technology.

After solving the problems of information security and information monopoly with asymmetric passwords and distributed consensus, the Internet economy has fully shifted to the password economy.

From the 1980s when asymmetric passwords began to be civilized, the cryptographic economy began to sprout and is expected to be fully realized by about 2040.

The two main functions of asymmetric passwords

The two main functions of asymmetric ciphers are encryption and decryption of messages, and signature verification of messages.

Encryption and decryption are mainly used to prevent information leakage.

The basic method is that the sender encrypts the message with the public key of the recipient, and then transmits the ciphertext to the recipient, and only the recipient can decrypt it with the corresponding private key. It does not matter if the ciphertext is leaked during transmission, because only the recipient has the corresponding decryption private key.

Signature verification is mainly used to prevent message forgery.

The basic method is that the message publisher signs the message with his own private key, and then publishes the message, signature and his own public key. The message recipient can use the publisher’s public key to verify that the message is signed by the publisher’s private key. Anyone who forges the content of the message, the verification will not pass.

Since asymmetric cryptography was originally invented to encrypt information for the military, it was translated as asymmetric cryptography in Chinese when “Asymmetric cryptography” was introduced.

This led to the later cryptocurrencies and cryptographic economies being called “cryptocurrencies” and “cryptographic economies” as well. In fact, this is wrong.

Encryption, decryption, signature, and verification are all just ways of applying asymmetric cryptography. A correct understanding of this can reduce the detours in the process of building a cryptographic economy.

There are two phases of the cryptographic economy

Asymmetric cryptography was invented in 1970 and pushed to civilian use by cryptopunks in the 1980s, and has gone through roughly two phases since then.

  1. Cyber Security Phase

From the 1980s to 2009, asymmetric cryptography was used primarily by commercial enterprises in the digital and Internet economies to improve the security of devices and network transmissions.

With the support of asymmetric cryptography, online payment, e-commerce, https, etc. were popularized, contributing to the prosperity of the Internet economy.

At this stage, asymmetric passwords are hidden behind the scenes, used by enterprises and platforms, and not in the hands of ordinary people.

  1. Password Consensus Stage

Starting with the launch of the Bitcoin system by Satoshi Nakamoto in 2009, asymmetric cryptography was combined with distributed consensus mechanisms to begin building an independent decentralized economic system, which is often referred to as the blockchain, called “cryptographic consensus.

In a cryptographic consensus system, ordinary users hold their own private keys, thus gaining greater economic freedom. The resulting decentralized economic system can reconfigure various global economic infrastructures and become a new engine of global economic growth.

In the first stage, asymmetric cryptography is used mainly for encryption and decryption functions to secure information transmission.

In the second stage, signature verification is used to establish verifiable trust relationships between people on the network.

Many people do not realize that all data in the Bitcoin system is completely public and no data is encrypted.

What is Distributed Consensus

Distributed consensus is a natural solution to information monopoly and has existed since the beginning of time.

Information monopoly means that all the important data and institutional rules of an economic organization are controlled by a single center, i.e., data monopoly and rule monopoly.

Distributed consensus means that each member of the economic organization can have the important data and rules, i.e., data consensus and rule consensus.

The most typical scenario of distributed consensus is playing mahjong: everyone records important data, everyone knows, follows and monitors others’ compliance with the rules, and no one person needs to or can call the shots.

Distributed consensus systems have been feasible since ancient times, but are constrained by the level of information technology development and can only be adopted for very small economic activities.

As the size of economic organizations increases, the efficiency decreases dramatically. So, since ancient times, all large economic activities have been centralized.

Now the situation has changed. Computer and Internet technologies have dramatically increased the ability to store, analyze, and disseminate information, and asymmetric cryptography provides remote authentication capabilities, so distributed consensus can be implemented on a large scale.

Cryptographic consensus is the cornerstone of the cryptographic economy

There are two fundamental features of cryptographic consensus, one is individual mastery of private keys, and the other is decentralization.

Individual mastery of private keys is not only a prerequisite for realizing information and asset security, but also a fundamental guarantee for the basic rights and interests of individuals, which is the foundation of the cryptographic economy.

A blockchain in which individuals cannot hold private keys is not fundamentally different from the traditional Internet.

Decentralization is the source of efficiency of the cryptographic economy beyond the Internet economy, which can eliminate huge central operating costs and prevent the ecological hazards of central self-interest, and promote high-speed knowledge sharing and free collaboration on a global scale.

Cryptographic consensus is suitable for building the most important infrastructures of the global economy, such as currency, network, storage, etc. The infrastructure reconstructed based on cryptographic consensus cannot be stopped and divided by any individual, organization or country, and can achieve true global economic integration.

In the cryptographic economy, various centralized business activities can share the decentralized infrastructure, and the operation cost will drop dramatically, the market space will expand significantly, and the efficiency will improve rapidly, which will form a descending blow relative to the traditional Internet business.

Now to 2025 is a critical period for building a global cryptographic consensus infrastructure, and both PlatON and Freecash are working in this direction. If this phase progresses well, a worldwide cryptographic economy will be largely realized by 2040.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/learn-about-the-present-and-past-lives-of-the-password-economy-in-one-article/
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