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More than blockchain

Intercon is the fulfilment of the promise of blockchain technology. It is the first protocol that uses Internet bandwidth as a real-world resource that can be invested to mine blocks – instead of, e.g., hashing power. It allows for consensus that cannot become centralised – neither through the manufacture of specialised hardware (like ASICs) nor advantageous conditions in some parts of the world (like cheap electricity). It is social fairness achieved through technology.

Society is both the solution and the problem

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ll social structures strive to achieve two goals: that of functionality and that of coordination. “Functionality” in this context means the ability of a social structure to serve its purpose well. That purpose can be anything, e.g., passing and enforcing a law or emitting and controlling a currency. Without this ability our lives would be chaotic and hardly endurable. “Coordination” in the same context is the ability to make the processes that serve social purposes concerted and predictable. This means aggregating the individual processes directed at serving said purposes of a social structure into complex, interdependent clusters that are hierarchical by nature. Think of individual, municipal governments being controlled by a central, national authority. Think of national central banks being controlled by the IMF or the World Bank. Both are examples of a social consensus that is structured hierarchically in order to provide coordination of individual processes, aimed at specific social goals, by an institution above them. This hierarchicity is necessarily involved.
However, it introduces a problem of its own. Any hierarchical consensus is by necessity centralised.

All different processes finally must be supervised by one, central entity – otherwise the crucial property of coordination would be lost. And this central entity is simply a person or a group thereof; said person or group will always be guided by their own interests. This assumption is simply an assumption of a rational behaviour. If and when this happens, the will of the few becomes the principle shaping the fortunes of many. We have always been struggling with this dilemma of either sacrificing social functionality for the sake of better coordination, thus changing the social aim from achieving goals that are truly benefiting the majority of us to the ones benefiting the minority, but allowing for coordination of efforts leading to those goals, or drifting towards anarchy, which gets rid of the problem of centralisation of power but at the cost of halted social coordination. Now more than ever, with the advent of the Internet, AI, Big Data, etc., the decisions of the ruling part of society can be made and enforced globally, almost instantaneously and in an automated manner, thus reducing the role of the individual in the process of social governance.
The invention of blockchain technology was the first attempt to create a system facilitating social consensus that is both functional, which in this case means creating and operating a financial ledger, and coordinated, i.e., every transaction is verifiably interdependent with the other ones (no double spending), and yet the system is decentralised.

- excerpt from the whitepaper

Blockchain is a novel solution... But it comes with a new problem

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he two main types of consensus mechanisms in permissionless blockchain-based networks are the Proof-of-Work and the Proof-of-Stake. The Proof-of-Work at first seemed to, thanks to its “one CPU – one vote” rule, allow for decentralisation. But with the invention of the mining ASICs this feature was lost. When the value of the Bitcoin system grew, decentralisation was to a great extent replaced with the technological race to develop more and more efficient mining hardware. And every such race ultimately leads to either monopoly or oligopoly. . . . The crux of the problem is that the means of reaching consensus in the Proof-of-Work protocol, i.e., hashing power, has a tendency towards centralisation due to the natural technological monopolisation and economies of scale.
Even if a resource other than the hashing power would be used to distribute the coins and decentralise consensus, e.g., storage capacity of hard drives (as in Proof-of-Space-and-Time) or a special, purportedly ASIC-resistant kind of Proof-of-Work (vide Programmatic Proof-of-Work), this would not get rid of the fundamental problem – that as long as the competition is global and is based on some sort of hardware, even if not a specialised one, few hardware manufacturers will inevitably capture the market (by the force of economies of scale) with the products that provide the highest profit margin.
With the Proof-of-Stake protocol the problem gets even bigger. As the distribution of newly mined coins is governed by the current ownership thereof, there is no way around the “rich getting richer” problem.

- excerpt from the whitepaper

We need a system of connected blockchains, where each blockchain works in a specific place. Competition to secure it and earn coins is local, not global

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s we can see, even blockchain technology ultimately leads to centralisation of power and it does not solve the dilemma, presented above, between functionality and coordination in social systems. In contrast, probably the most widely used technology – the Internet, is decentralised and yet both fulfils its functional goals perfectly and does that in a concerted and predictable manner.
If we look at the Internet as a social system, we can see that it is composed of many nodes, none of which is a central one, and yet all of them cooperate according to a certain protocol. So the Internet is a system composed of many independent processes that run concurrently, while being interoperable with one another, and yet no central scheduler or managing element is introduced. What we need is a similar system for social and economic consensus.

Instead of constantly creating systems that are either hierarchically structured from the onset or systems that will always lead to hierarchicity because of technological monopolisation and economies of scale, i.e., blockchains, we need to create a system of individual, decentralised consensuses, each serving a specific part of society and/or designed for specific purposes, wherein no one single, global means of exercising control over those consensuses exists. If such means exists, it leads to centralisation, either through politics or technology, in the way it was previously described. The logical conclusion here is that the very means of reaching consensus must form a decentralised net of independent, yet connected by a common protocol, consensus-reaching means – rather than being a single, universal and geographically-and-functionally unbounded resource, like hashing power in the case of Bitcoin or network effects in the case of central banking or governments. A net of consensuses that are independent from each other, geographically-and-functionally bounded, non-hierarchically structured and yet interoperable.

- excerpt from the whitepaper

Intercon concept

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How can we solve the problem using our technology?

Consensus by everyoneByzantine fault tolerant distributed consensus that utilises a broadly distributed real-world resource whose value grows with its decentralisation (according to Metcalfe’s Law) as a factor governing distribution of coins and participation in consensus – Internet bandwidth. As only the Internet bandwidth originating from a geography specific to a given network can be used, the circumstances affecting the ability to compete to produce a block (hardware prices and availability, electricity and bandwidth costs) are similar for all competitors. This ensures that decentralisation is self-sustaining and cannot be stopped by centralisation of e.g. ASIC manufacture and use (as in Proof-of-Work) or initial coin distribution (as in Proof-of-Stake).

Consensus on everythingInfinitely scalable network of interoperable networks, without any kind of a central chain responsible for coordinating the system (which would be a choke point limiting scalability) in its architecture. This network of networks distributes the task of reaching decentralised consensus on external (network-exogenous) values, wherein consensus on any such value reached in any particular network can be used in any other one, thus giving birth to the “Internet of consensus-based servers” – a trustless net of interdependencies between data and values of limitless variety, reached through completely decentralised processes.

Infinite scalability and mass adoptionNew method of creating algorithmic stablecoins and synthetic assets that maintain pegs in a robust and secure manner, without compromising decentralisation in the process.

Problems it solves

As the Intercon-based consensus achieves granularity through geographical boundedness, each single part (sub-network) serves a specific local or regional society; investments into any particular sub-network come from that geography and returns are distributed within it. It is not like in the case of Bitcoin; no special hardware can be designed by a particular manufacturer, which would centralise the distribution of the newly minted coins – no “Application Specific Internet Connection” exists; furthermore, as each node competes with the other ones that are localised in the same geography, no advantage specific to a certain geography, such as inexpensive hardware or electricity in some parts of the world, can become a factor. This allows for a more egalitarian distribution of wealth.

- excerpt from the whitepaper

Opportunities it gives

In the case of the Intercon system, the more centralised consensus within a given sub-network becomes, the more likely the system is to upgrade by creating new sub-networks that cover the same geography, but with greater level of geographical granularity – to eventually outcompete the centralised one by partitioning the competition itself geographically, thus allowing for more entrants into the competition, which translates into accelerated mass adoption. If we apply this principle to scalability, we can see that the more congested the sub-network becomes, the more likely it is to be partitioned into smaller, interoperable sub-networks, thus increasing scalability. Same goes for security – with many subparts, if a vulnerability occurs within a subpart, it does not imply a central point of failure. This is impossible with modern blockchains, which are either completely unitary in nature or they introduce some central element in their architecture (e.g., the Relay Chain or similar).
Solving the trilemma through antifragility, coupled with the fact that the protocol can, as will be explained in the following subsection, facilitate consensus both on the occurrences that happen within it (state and state transitions) and without (external events, financial and political decisions), could possibly allow for the emergence of new kinds of social systems.

- excerpt from the whitepaper

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