One thing I think Bitcoin, or a similar blockchain-based token system, may be useful for is to replace centralised social networks, or more broadly messaging systems.
A core if oft forgotten feature of a social network is how it manages spam and other forms of network abuse. One solution may be to exploit altruistic punishment, a tendency people have to want to correct bad actions even if it’s not in their direct private interest to do so. In familiar terms, people seem to enjoy pushing the “dislike” button even if they get no personal benefit.
How could one devise a cryptocurrency transaction type that cab be used to harness this effect?
One possible way is what I’ll call “altruistic destruction”. The basic idea is to have a transaction that can cancel some of the recipients’ funds, that is enriching everybody else, through the reduction of the monetary base. If this is free to the sender, this is open to abuse — though whether such abuse would be common could be a subject to interesting experiments — so a compromise might be simply that both the sender and recipient destroy some tokens. As a base case a simple matched ratio may do. The altruistic destruction transaction semantic would be as follows.
When Alice sends to Bob an altruistic destroy for N tokens,
- Alice’s account value decreases by M tokens.
- Bob’s account value decreases by M tokens.
- where M = min(N, Bob’s balance)
M copes for the case where Bob’s has fewer token than N, assuming the token system does not allow debit balances.
In paper terms, this would be equivalent to burning a bank note with the name of a miscreant on it, where through some magic burning the named banknote would also make a banknote of the same value vanish from the miscreant’s wallet. Economically this reduces the total amount of banknotes in the system thus making holders of the remaining banknotes richer (like simply burning one without magic does) everything else being equal.
For practical use in a spam control system, this would have to be implemented with policies that uses minimum balances as condition of message transmission — a distributed deposit system of sorts.
There may also be other application of that transaction type. The ratio of destroyed tokens between sender and recipient may also be toyed with, but 1:1 may be special in that the cost of inflicting damage is equal to the damage individually, while the social benefit is leveraged: destroying 1 of one’s tokens produces 2 tokens’ worth for the community, and the punishment’s social value is free on top of that.