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At the frontier of cybernetics and economics
Build your IoT services on Robonomics *
* taking full advantage of decentralized architecture
In the light of a complex and unstable international situation, such as trade wars, economic, diplomatic and political sanctions,
attempts to block internet services in various regions of the world,
IoT device/application manufacturers are facing an increasing challenge
to guarantee the quality service of its users throughout the lifetime of the sold IoT devices.
As a solution to such problems, the Robonomics project proposes to use a globally accessible network built with decentralized open-source technologies such as IPFS, Ethereum, Polkadot.
From smart contracts to cross chain IoT platform
Robonomics project is over six years old,
and it is difficult even for core developers to say the exact day or month when the first steps were taken.
In fact, we started preparing for the first experiment on economically meaningful communication
of people and machines with smart contracts in 2014, but roughly we coincide the start of
the project with the first days of the Ethereum network.
By the beginning of 2021, the development team was able to preserve the strongest elements of
the architecture in Robonomics and complement the techno-economic protocol developed in 2015-2019 over
Ethereum and IPFS with elements of the cloud IoT platform based on parachain Polkadot.
At the frontier of cybernetics and economics
We are experimenters, engineers and scientists. It is important for us not only to develop a solution that is relevant for today, but first to understand the scientific validity of the approach and achieve clarity in the presentation of the principles that should underlie the entire architecture of a software solution.
Since 2017 we have been publishing research articles representing to the academic community concepts united by the idea of the robot economy.
Below we would like to present the most general, important explanation why the robot economy is an inevitable and obvious solution in the wake of the new industrial revolution.
The Nobel Prize laureate in economics Ronald Coase in his highly influential essay "The Nature of the Firm" (1937) tries to figure out on what conditions should we expect firms to emerge, because in fact "production could be carried on without any organization (that is, firms) at all".
He considered the conditions under which it makes sense for an entrepreneur to seek hired help instead of contracting out for some particular task. To answer on this question he introduces the concept of transaction costs.
Imagine vehicle purchase: try to buy a car for parts, and calculate how much money and time you will spend just to assemble all the components in your garage.
Nowadays the idea of reducing transaction costs has become firmly established.
Production, logistics and retail actors over the past 50 years have already done a lot to automate their work.
However, with the rise of robotics and machine learning this task becomes relevant again.
The question is, is lights-out manufacturing truly realistic?
The key element in setting up of interaction among various related automated components within robotics and lights-out manufacturing is the idea of cyber-physical system (CPS).
It is interesting to note that сyber-physical system is the principle idea behind the implementation of Industry 4.0 solutions. This
is what the future of our life in Smart Cities looks like: autopilot taxi on your phone, drone selfie in the park for
Instagram, subscription to air pollution data from thousands of local sensors, a network of 3D printers at metro stations,
your home robot Rosie with access to Amazon, a smart factory that can rebuild the production cycle autonomously or work
directly with the customer.
CPS is complex structure ensuring that machines/plant equipment, logistics systems, work-in-progress components,
and other elements (including application on the phone, AI cloud service for data processing, software for publishing
data, people) directly communicate with each other to achieve collaboration. Such interconnected systems provide new functionalities
for increasing efficiency, productivity, and the autonomous operation of production processes.
The most interesting thing in the CPS design process is to find a fine line between a sufficient and not yet excessive number of automated
elements in the chain of providing the user with services. In other words, where is the limit of the CPS size? To answer this question, we should refer Norbert Wiener.
Inspired by Norbert Wiener
In 1948 a professor of mathematics at the MIT Norbert Wiener published one of the most seminal works
"Cybernetics: Or Control and Communication in the Animal and the Machine". He used the term "cybernetics" as self-regulating mechanisms for the first time and, so, this publication is considered a recognized Cybernetic birthday.
Norbert Wiener speaks about viability of interdisciplinary science approach. For example he drew the parallels between automated control systems and challenges of scaling and complexity increasing of human society.
So, in other words, the cybernetic approach can be applied equally to psychotherapy, biology and automated navigation.
It is based on the function of the system, how the individual actions are controlled and how the individual nodes interact with each other.
Taking into account Ronald Coase's and Norbert Wiener's publications, following up the development of Industry 4.0, we can consider using CPS as an economic agent, while designing robotized services. To regulate the size of the CPS and adapt to the changing needs of the individuals we can use market mechanism.
And what’s so scientifically interesting, taking as a basis the idea of the restrictions imposed by the market on the size of the firm, we can say that the limit of the increase in CPS will always be determined by the market and nothing else is required for this.
Robofirms are an ideal representation for cyber-physical systems.
They are a fairly autonomous unit capable of providing services to both humans and other robots for money. As a result, the robot economy appears to us to be a general set of CPSs that provide services and goods directly to the market.
& Industry 4.0
Mechanization: replacement of muscle power with steam energy.1784 г.
Electrification: introduction of assembly-line production.1870 г.
Automation: introduction of automated systems with CNC.1969 г.
Smart production: development of cyber physical systems.Now
In the world of robofirms it turns out to be natural to provide robots with access to social institutions that previously were only needed by humans.
Social institutions do not appear because we are people and physiologically a person cannot live without banks, contracts, and other instruments of society. But only because a person, at some point in time, entered the path of more complex relations in society and took an important step towards accelerating the processes of those around us.
Money and contracts should become available to robots, not because this is a sick fantasy of robot fans who have forgotten what Skynet is. But only because the new industrial revolution sets itself the task of building complex automated chains, the processes in which will affect the exchange of both technical information and economic information, and will also proceed at a speed inaccessible to humans.
One of the examples of our experiments: negotiating road space and right of way payments for autonomous vehicles to reduce congestion. What a person would absolutely not do in traffic, the car will do for you without difficulties: you want to switch lanes, your car and your neighbor's car exchange offers on the cost of such an operation at a rate of hundreds msgs per second, they will reveal an equilibrium price, and so you are already in the next faster moving lane. This means that now it will become available to “charge” your ride with uber and make it faster.
Robots need money that will be directly available to them in order to be able to perform operations without a person at the speed with which only machines can make decisions. And all this is solely for a person to enjoy life in the Smart City!
And here we smoothly come to the first electronic cash - Bitcoin. The fact that Bitcoin can be stored in your account on the principle of not a bank, but cash in your wallet makes it the first money that the robot can manage independently, more precisely autonomously. At the same time, today we can already say that Bitcoin is not just electronic cash, but a truly global financial institution.
As a result: an event not invented by us, but clearly falling into our vision, makes Bitcoin the first money for robots, or, if we look even deeper, it is precisely that social institution that will help the formation of robotic firms.
Bitcoin became the first money available to robots. Meanwhile we can't talk about Bitcoin in its current form as a tool for full-fledged technical and economic exchange.
Now we already have smart contracts, DeFi markets and a decentralized infrastructure for exchanging messages between robots that
open up the possibility for humanity to create a fully automated part of the human economy - the robot economy.
One of the great opportunity to build the economy of robots is Ethereum technology. With Ethereum functionality
robots are able not only exchange money, but to enter into contracts with humans and among themselves.
But what's the point of machine to machine (m2m) contract based communication? That's a great question! Let's go back to CPS. When we talk about direct communications between sensors, machine equipment or any other elements
we still talk about collaboration within one regulated system.
But if we want smart cities services to be alive (or even smart home in some cases), we need establish communication with various third-party elements.
Let's imagine drone delivery service. If a drone, for example, is DHL's property how it can access to Amazon's warehouses or access to over the entire airspace of the city? Is it be a monopoly? This is a major challenge for many 4th industrial revolution initiatives!
Most corporations say they need nearly complete rights to its surroundings because they don’t know how to securely set up the exchange of technical information between automated systems outside of their own internal corporate structure.
At the same time, if you look at the processes where a person works, then we see that the cooperation of different corporations has been long and successfully existed.
You can easily order door-to-door delivery of purchased goods on the Amazon website, and the courier will be able to drive a car along city roads, receive an order at the warehouse and bring it to you.
What's the difference? In the first case there is no way to build a contractual relationship between machines, and in the second case, in the world of people, contractual relations already exist.
The main difficulty that Robonomics faces today is the high price for launching an IoT device using Ethereum.
In Ethereum you have to pay a commission on each transaction in terms of US dollars in the range of $10 to $100.
It is quite expensive for most cases from the real economy, be it a car-sharing trip, renting a smart apartment, drone delivery or 3D printing of your favorite anime hero to order.
Out of fairness, we would like to note that there are profitable scenarios even with transaction fees in the Ethereum network of 2018 - 2019. For example, automated carbon footprint offset transactions or transferring the order from the website directly to the production.
But still, for the mass application of the web3 technologies in the field of IoT, a reduction in the price that the cloud charges from the connected device is required.
Looking for an opportunity to reduce the cost of interacting with an IoT device, Robonomics developers have studied alternative developments to Ethereum.
Our choice settled on the Polkadot architecture, which would allow us to run our own blockchain, within a common network, in which security is ensured by validators independent of our project.
You may notice that the comparison between Ethereum and Polkadot does not show a clear superiority of one technology over another. Both of these approaches are extremely interesting for Robonomics. We would like to support each of these networks and give the choice to users of Robonomics.
Strong claim: we hope Ethereum 2.0 launch will resolve the issue of high transaction fee. By 2021 developers of Robonomics are sure this is one of the crucial details for increasing the capacity of the network.
At the same time Robonomics parachain in Kusama or Polkadot enables us to use functions that are not available to smart contract developers in Ethereum.
The key difference for developers is that in Polkadot/Kusama there is a possibility to customize the communication protocol and thus have access to global variables.
An interesting example: when we were finishing the implementation of the robot economy protocol on top of Ethereum, one of the tasks was to determine the gas consumed to execute the transaction. It is extremely difficult to calculate the consumed gas inside a smart contract, although any wallet could calculate the required gas without any problems - the reason for the inaccessibility of the communication protocol itself during the execution of the smart contract code in the EVM.
Have you read this?
Great books lead to great ideas. If you're after more inspiration about human-machine communication, try reading science fiction books. Mark the books you’ve already read and see what else can we offer you for further reflection.
Do Androids Dream of Electric Sheep?
Philip K. Dick
Philip K. Dick
The Bicentennial Man
Open questions of teleology
and a treatise by L. von Mises
In conclusion, we would like to mention questions that remain open from a global point of view.
What is the goal of robots?
In fact, the economy of people is often associated with the conscientiousness of performing tasks within the framework of the contract, the desire of the parties to achieve a result, the opportunistic and altruistic behavior of the individual in society.
All of these principles are hard to apply to the robot economy.
What are the motives of the robot economy? It's an open question that we need to research and discuss in society for better understanding and applying robots.
For the start we suggest to look at Mises's work "Human Action: A Treatise on Economics" (praxeological approach) and at early article by Norbert Wiener "Behavior, Purpose and Teleology" (teleological vision).
Praxeology inspires us with interesting ideas about human behavior without direct dependence on the purposes.
This gives us the opportunity to work on the processes of the economy of robots conditionally as with a black
box without delving into the ultimate goals. At the same time, teleology poses a challenge to explain causes.
We hope that somewhere at the junction of the works of Mises and Wiener, a point for further development of the
robot economy may be found, not just as a protocol of interaction between people and machines of a
praxeological nature, but taking into account the teleological elements of building interspecies communication.