Exponential systems and how to accelerate human progress

What made the internet such a force for change in the world and how can we make more systems like it? I have asked myself this question for the past few months and this article aims to outline my answer to it. Let’s consider a variation on the famous adage in order to understand the issue:
“Give a man a fish and you feed him for a day, teach him to fish and you feed him for a lifetime, teach him to create and sustain a fish farm and contribute to public scientific knowledge and you feed the whole society for a lifetime.”

#What are exponential systems?
In this article my use of the term “exponential systems” refers to networks whose growth follows an exponential curve. Here we will discuss what characteristics these networks have that allow them to grow at such a rapid pace without constriction and what we can learn from them to accelerate projects that impact the world.

A network-centric way to think about the world

Before we are able to break down and understand the intricacies involved in the quotation above we need to establish a common perspective of the world that helps us look at the problem in an objective manner. In particular we need to think of this as a problem of scale in which actions that work for small networks don’t work as well in large networks. These networks can consist of people or machines based on the particular problem at hand. In this article however we will discuss the fishing related example given above where a network of people want to improve their state by reducing hunger or poverty and increasing productivity. We will call the potential of a network to achieve stated goals as the “Carrying Capacity” of the network. Additionally the participants in the network can be categorized into “suppliers” who contribute to the carrying capacity of the network, and “recipients” who drain the network’s capacity.

The breakdown

Let’s breakdown the given example in order to understand it. The first two choices are well understood by people. However we still need to re-frame them for a complete understanding of the third choice. We look at these scenarios with the goal of maximizing positive change in the world resulting from our choice and therefore increasing the carrying capacity of the network. When looking at this scenario we also want to take into account how these behaviors will scale when more participants are added to the network so instead of just one person receiving the fish what if there are N people, where N is any arbitrarily large number.
Let’s examine the first choice. The act of giving a person a consumable product which in this case is a fish doesn’t confer any ability to catch or produce more fish. This means that the total possible change depends on you, the sole supplier’s, ability to donate which is fixed regardless of number of participants in the network. In mathematical terms this is expressed using the Big O notation as O(1). This signifies that this choice doesn’t scale at all as the network size increases.
In the second choice let’s imagine you open a fishing class. People can come here to learn how to fish but it has some maximum capacity of M individuals. We can observe that the total amount of fish captured increases as a result of teaching people how to fish such that for N participants the total amount of fish captured would be some multiple of N. This is a linear bound represented as O(N). This implies that the system will grow as long as your classroom’s max capacity M is greater than N otherwise the network’s carrying capacity will stagnate.
Finally the third choice confers knowledge that helps sustain the person while also ensuring that they improve upon the system and share their knowledge with others. This creates a feedback loop where participants in the network help new people up to a point where those new people are able to help others thereby converting recipients in a network into suppliers. As a result an increase in the number of participants increases the network’s carrying capacity. This is represented as O(K^N) where K is some positive constant number greater than 1. In this last scenario I tried to exclude the effect of over-fishing in a common resource pool which is why I used the concept of sustainable fish farming. This is to state that the points discussed here may not apply to a system with a limited resource pool. Fortunately for us, in many real world use cases this restriction doesn’t apply.
From this example we learn that in order to successfully design an exponential system which can scale indefinitely barring resource scarcity it must have the following properties:

• Network Model: Well understood supplier and receiver roles. As a designer of the network it is important that you understand what each role does in the network.
• Incentive: Recipients have incentive to become suppliers. Sometimes being a participant of a network is incentive enough but other times some monetary form of reward must be included e.g The bitcoin network gives incentive to suppliers a.k.a “Miners” by paying them in bitcoin for securing the transactions in the network.
• Open Access: Anyone can participate in the network. One of the most important aspects of an exponential system is the influx of new participants that later become suppliers. Without new participants growth of the network is obviously limited.
• Decentralized: There is no central authority or institution. Centralized control structures tend to limit the network’s carrying capacity and growth because they can only process a limited number of requests and therefore become the bottleneck.
• Permissionless: Any participant can add new knowledge or services to the network. This point is important because it allows people to use existing networks to solve some new problem by creating a network of networks. As long as people are allowed to innovate on top of the platform freely the exponential growth carries over into a bigger ecosystem of multiple networks.

  Incentives vs institutions

  With the rise of cryptocurrency it is now possible to convert any network into an exponential system. All that is required to accomplish this is to figure out the right incentives for the suppliers in the network and their responsibilities. The crypto token itself allows creating monetary incentives where no other incentive could be provided. This allows us to reconsider humanity’s dependence on institutions and make a transition to incentive based exponential networks. If the incentives and roles are defined correctly governments, corporations and educational institutions can be replaced by exponential systems that have much more potential than their conventional counterparts.
  It is likely that in the next decade we will have replaced corporations by such exponential systems, educational institutions will shortly follow and later on governments as we know them. For the first time in history we are about to wake up to a world where borders and nationalities won’t matter, where leaders will be chosen not for their personality or heritage but for the value they provided to the network. I hope to play my part in creating this world and hope you would join me in making this dream a reality. If you have technical skills to offer go solve any problem you see around you using this approach otherwise just spread the word and help educate other people on this paradigm shift.