Economic systems are complex social systems that coevolve with the technologies that underpin them. Blockchain is an innovative economic infrastructure, but designing decentralized economic systems must extend beyond the technological and into the realm of behavior where actions are embedded in networks at multiple levels. There is a computation and communication network, an on-chain economic network, and an off-chain social and economic network. Viewed as a multigraph this network contains multiple types of nodes and edges; the formalism aids in contextualizing models aimed at answering specific questions in one or more layers of this network. The interplay of these layers can be viewed through the lens of networked dynamical systems with the computation and communication network serving to enforce that the history of a blockchain network is a valid trajectory through an on-chain state space characterized by cryptographically enforced rules about what state transitions are legal. Furthermore, there are local objectives, hidden states, and private signals associated with the agents in the off-chain social and economic network. When combining core concepts from dynamical systems, convex optimization, multi-agent control, and game theory one can construct purpose driven economic systems with well defined mathematical properties despite a lack of centralized control. Numerical methods for testing and iterating designs as well as analytics architectures for monitoring live systems will be discussed.

Speaker Bio:

Michael Zargham is the founder and CEO of BlockScience, an engineering, R&D, and analytics firm combining systems theory, computational social science and empirical economics to improve the way we design, develop, operate, and govern economic systems. He holds a PhD in Systems Engineering from the University of Pennsylvania where he worked on dynamic resource allocation in decentralized networks. The research team at BlockScience has supported startups and SMEs, has produced the open source software project cadCAD (complex adaptive dynamics computer aided design), as well as several forthcoming academic papers on complex systems and economics.