AT THE INTERSECTION OF CYBERNETICS AND ECONOMICS

The creators of the project are working to ensure the safe operation of smart devices for users around the world using decentralized applications (dapp) that do not require the user data transfer for authentication. The creators of Robonomics presented various concepts and solutions, united around the idea of the robot economy in scientific research and articles. The essence of the idea is in the economic system in which robotic devices act as independent agents capable of performing key economic activities, previously reserved for humans. If the M2M (machine-to-machine) structure is set up correctly, then the robot economy can become an extension of the human economy, improving and accelerating its processes. However, the organization of the M2M structure presents various difficulties. For example, company owners risk to face significant costs trying to securely set up the exchange of technical information with another company. In this article, you will infer the theme and understand the inevitability of the robot economy.

Ronald Coase in his 1937 work «The Nature of the Firm» argued that the complex hierarchy in the company creates more transaction costs (the cost of collecting and processing information), therefore entrepreneurs are looking for ways to reduce these costs. The reduction of these costs is observed in the sharing economy, the economist M. Manger wrote about this in his work. Due to the development of smart automated devices, entrepreneurs want to reduce organizational costs. Thus, the regular operations of most business processes of large companies are fully automated. We can assume that it leads to the emergence of robofirms in which the entire business process cycle is completely automated and doesn`t require human involvement.

For the successful implementation of robofirms, we need to build an established cyber-physical systems (abbreviated as CPS) - a strong unification and mutual integration of multiple computational, networking, and physical processes. It's a complex structure of many different elements: from the app on the phone to controlling the drone in flight, and only then processing by cloud AI. But what is the most important thing in the process of creating a CPS? It's to find a balance between sufficient and excessive number of automated elements in the service user supply chain. We should turn to the work of the famous mathematician Norbert Wiener «Cybernetics: Or Control and Communication in the Animal and the Machine». He argued that at first glance, completely unrelated theories can help each other solve problems. His approach has become an important part of the science of cybernetics and laid the theoretical foundations for various scientific areas - automatic navigation, AI, neurobiology, telecommunications, analog computing. We can find a connection between the teachings of N. Wiener and R. Coase: both theories consider independent agents who need to perform specific tasks at minimal expenses and transaction costs. Let's imagine a situation when cyber-physical systems are being introduced to the market, in its ideal representation - robofirm. In this case, robofirm forms an economy of robots, which inherits all the features of any economic system. Thus, the growth of robofirm (and, accordingly, the balance between the number of automated elements) will depend on the market, forming a self-regulating system.

However, this system will have an important difference from the current economic system of people - the speed of transactions. Over the past 70 years the speed of accepting and processing transactions has become easier. Mobile devices can communicate with an automated banking system almost anywhere and anytime. The companies are actively using robotic process automation in the management of large business operations. Even today autonomous systems interact with the same autonomous financial systems. We provide access to robots to manage our money without our intervention to simplify processes and make human life easier. All this leads to the fact that the construction of more complex automated chains will begin, in which the processes will affect the exchange of both technical and economic information.

It's time to talk about the first digital cash that robots can manage autonomously - cryptocurrencies. Cryptocurrencies will probably become the main means of accumulating money by robofirms in human society. We need a deeper integration of technical and economic transactions to take full advantage of this. The solution to this problem was first proposed by Ethereum. This platform introduced the first qualitative implementation of the concept of smart contracts — computer algorithms, capable of describing conditions, triggers and business logic for the execution of transactions. Robots have not only access to money, but also the ability to contract with humans and other machines.

Even if the described-above tasks can be solved, Robonomics faces another problem - the high price (from 10 to 100 US dollars) for launching an IoT device using an Ethereum smart contract. Robonomics developers chose Polkadot to reduce transaction costs. It is a protocol for building heterogeneous multichain networks. It allows us to run our own independent blockchains, for which security and interchain communications are provided by a larger network. Another option is the Kusama network (Polkadot experimental network). It allows developers to create parachains and test different features and validations of Polkadot in a real environment. Robonomics parachain in the Kusama or Polkadot network will allow us to implement features that are not available to developers of smart contracts on Ethereum.

The last question is the purposefulness of robots when providing services to people. The work process between people includes such qualities as conscientiousness, honesty, etc. Nowadays, it is difficult to talk about such things in the topic of the robot economy. You will learn how to properly adapt work functions in robofirms by studying these processes in detail.

You can read more about the interaction between a robot and a person on the Robonomics website: https://robonomics.network/white-paper-2022/