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Archive for 'Cognitive Capitalism'

Video of the Day: Alternative Forms of Labor Organizations: Union Substitutes or Something Else?

photo of Stacco Troncoso

Stacco Troncoso
25th November 2014


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Third of a series of videos from the New School on Digital Labor. You can find the whole series here.

Alternative Forms of Labor Organizations: Union Substitutes or Something Else?

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Posted in Cognitive Capitalism, Collective Intelligence, Culture & Ideas, Economy and Business, Featured Video, P2P Labor, Sharing, Videos | No Comments »

Video of the Day: Algorithmic Hegemony & the Droning of Labor

photo of Stacco Troncoso

Stacco Troncoso
22nd November 2014


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First of a series of videos from the New School on Digital Labor. You can find the whole series here.

Algorithmic Hegemony & the Droning of Labor -

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Posted in Cognitive Capitalism, Collective Intelligence, Culture & Ideas, Economy and Business, Featured Content, Featured Video, P2P Labor, Peer Property, Videos | No Comments »

Video of the Day: The Future of Workers in the Sharing Economy

photo of Stacco Troncoso

Stacco Troncoso
21st November 2014


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Second of a series of videos from the New School on Digital Labor. You can find the whole series here.

The Future of Workers in the Sharing Economy

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Posted in Cognitive Capitalism, Crowdsourcing, Culture & Ideas, Economy and Business, Featured Video, P2P Labor, Sharing, Videos | No Comments »

Choosing between 3 strategies against netarchical capital and its state form

photo of Michel Bauwens

Michel Bauwens
11th November 2014


The internet and technology are often essentialized which then results in versions of technological gnosticism, where technology is either seen as a false god that inevitably plays an evil role in human society, or the different forms of cyber-utopianism. In its most recent iterations, the dark vision takes root in the revelations of Edgar Snowden about NSA and other surveillance, to argue that the internet has become a tool of control and oppression; while for example the bitcoin enthusiasts often see the mis-identified ‘peer to peer’ currency as the tool that will bring down governments and large banks to usher in a anarcho-capitalist utopia.

To avoid these simplifying debates, it helps to see technology and the internet specifically, as socially constructed and reflecting various social interests and biases, who are engaged in an ongoing battle. In order to do this, it helps to make some crucial distinctions. The first is the polarity between centralized and distributed control, which can also be interpreted in the context of scope or geographical orientation, distinguishing the global vs local polarity. The second polarity is economic, which allows us to distinguish for-profit orientations, i.e. maximizing shareholder value, from ‘for-benefit’ orientations, where the economic logic is subsumed to the achievement of social goals.

This allows us to look at at least four possible scenarios that can serve both as analytical tools for the critique and identification of current technological models, but also to envisage them as ‘societal scenarios’, i.e. socio-technological structures that are dominated by either one of the four models.

The first model we can identify is the ‘netarchical’ model, which combines centralized control of the technological infrastructure with a for-profit orientation. In this model, exemplified by the internet giants such as Amazon, eBay, Google or Facebook, while the front-end allows a certain, and even large measure, of peer to peer driven interactions, the technology itself is nevertheless owned and controlled by shareholders. These forces are the new ‘intermediaries’ of the internet, positioning themselves as facilitators of social cooperation and peer to peer interaction, but connecting these sharing platforms and spaces, dominated by the logic of use value, to the logic of exchange value. Users have very limited ways to create livelihoods, pay heavy transaction taxes to the platform owners, have no input into the design or social protocols which govern their own behaviour and interaction. Netarchical capital ‘enables and empowers’ peer to peer interactions, while also exploiting it. In fact, we can consider this as a form of hyper-exploitation, since in many cases, nearly 100% of the extracted exchange value goes to the owners, while the creators of the use value, without which the platform could not exist nor extract exchange value, remain unrewarded.

Could we argue that to this emerging new sector of capital, corresponds a new state model ? We would say yes, and the Snowden revelations point towards the emergence of netarchical state forms, in which peer to peer interactions are allowed, but also monitored and controlled. It is no secret that there is a close cooperation between both the commercial netarchical operators, and the national governments that support them. The dream of the netarchical state is behavioural control and modification by directly connecting our online behaviours, to neurological prompts.

There is a second for-profit model, which is ideologically distinct, though pragmatically leads to very similar results. This second model opts for distributed infrastructures, but with a underlying for-profit orientation. Bitcoin is of course the exemplar of this approach. The ‘peer to peer’ aspect of bitcoin however, is limited to consider computers as peers, obviously not seeing any issue with the existence of super-peers which own thousands if not more computers, vs. the poorest three billion of the population, who may not have access to computers at all. With its deflationary design, its highly unequal property structure which exceeds the GINI coefficient of countries with sovereign currencies, it favours the ‘hacker class’ of early believers and investors and quickly leads to domination by a new class of ‘mining’ intermediaries. Because anarcho-capitalism sees no qualms in inequality, it ignores power law dynamics (concentration of resources in the hands of the few), and rather quickly moves to netarchical monopoly. We also put in this category the emerging sharing economy, which similarly aims to “liberate” p2p commercial interactions for idle goods. While we could say that netarchical capital capitalizes directly on non-commercial social cooperation, and creates market dynamics around it, distributed capitalism aims to commodify every social interaction directly. Things that could have been shared (excess space through non-monetary couchsurfing), are monetized and commodified, turning every citizen in a owner of distributed capital. At least in the sharing economy, though perhaps less in the bitcoin economy, all interactions are also transparent to the platform owners and the same techniques of social and behavioural control, can be perfected over time. While anarcho-capitalist ideology may be theoretically opposed to concentration of resources, they quickly lead to highly unequal social structures.

However, there are alternatives, for-benefit alternatives, which we believe hold a better deal for the majority of citizens and technology users.

The third model, and our first alternative model, combines a local orientation with a focus on community benefits. We have seen over the last few years an exponential growth of open food networks, of local complementary currencies and time banks, of Transition Towns and their multiple localization initiatives, where networked technology is used to increase local resilience. Countless fablabs, hackerspaces, and co-working spaces have also been created to stimulate local cooperation. While the orientation is local, the cooperation is often global, such as for example the co-learning through a formal pattern language, undertaken by the Transition Towns the world over. Nevertheless, we believe this approach is still insufficient in terms of the creation of global counter-power.

Thus, we would argue for the fourth model, which combines for-benefit practices with a global commons orientation. In this model, the internet and networked technology is not seen as a means of communication, but as a ‘means of production’. Global open design (and knowledge, software) communities create global technical, scientific commons that allow for local distributed manufacturing, using these open designs for local benefit. At the same time, the local producers see themselves as nodes of a global cooperative value-creation and on-demand manufacturing network, that can create global ‘phyles’, i.e. global community-oriented, commons co-producing alliances that have the potential to become peer to peer transnational organisations creating global solidarity mechanisms. In time, these organisations will also produce social and political power that can challenge the domination of the shareholder multinationals. We have argued elsewhere for the adoption of new cooperative governance mechanisms, on the basis of commons-based reciprocity licenses.

So what are we to do. We see three main options ?

The first option is the hacker option, which entails the reconstruction of a wholly new true p2p internet. This is necessary and vital work but it should be undertaken without illusions. Thus, it may already be too late to wean average consumers from the netarchical platforms, which are highly funded, easy to use and already have obtained insurmountable network effects. We would argue that such hacker alternatives should be above all used internally by the global peer producing communities, as real tools of production, that could be increasingly inter-networked.

The second approach is to directly challenge the governance, ownership and extractive practices of the netarchical platforms. Rather than leave them and isolate the most conscious activists amongst themselves, this approach calls for organizing user groups, and create political pressure to regulate these platforms for public benefit. Eventually, depending on social strength and the balance of forces, the private ownership or at least exclusive hierarchical governance, of such public utilities can be challenged. This strategy is pretty much akin to the strategies of the labour movement and how it tackled privately owned factories. If we have no real choice but to use them, then we need to challenge them and change them.

But the third approach is to concentrate on the actual reconstruction of a different counter-economy at the heart of value creation. To create vibrant, self-governed, cooperatively owned peer production communities, as we have indicated above. And from this practice, reconstruct political and social movements.

The role of art and artists may be to explore some of these alternatives, or actively co-construct peer produced alternatives. We are thinking here of art collectives like Furtherfield.org in the UK, with Ruth Catlow and Mark Garrett, with their projects like the creation of a Furtherfield Commons (a common space for artistic and cultural peer production), the World of Open Source Art (curation of open art), their Do It With Other series, exploring co-produced networked art and which has become a global movement. In Italy, we have the Art is Open Source movement by Salvatore Iaconesi and Oriana Persico, which recently supported the Near Future Education Lab, a serious attempt to let design students redesign their own education, after the future of the institution was challenged by budget cuts. These art collectives, through their own peer production practices, prefigure what can be done with technology, if its social contradictions are embraced, with a vision of using it for human emancipation. The technology itself can’t do it, but technology that is used as one of the political and social tools, can make a huge difference. Rather than the simplistic debates pro and con ‘technology’, the real question is ‘which technology’ and how to enhance and spread the existence of tools which can really assist with the distribution social and political power, never on its own, but always in conjunction with struggling social and artistic social movements, and their ongoing co-production of social realities.

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Posted in Cognitive Capitalism, Empire, Original Content, P2P Art and Culture, P2P Foundation, P2P Hierarchy Theory, P2P Theory | No Comments »

Essay of the Day: Spectrum Regulation in the Communism of Capital

photo of Michel Bauwens

Michel Bauwens
7th November 2014


* Essay: Spectre of the commons: Spectrum regulation in the communism of capital. By Rachel O’Dwyer.

From the Abstract:

“The past decade has seen a growing emphasis on the social and juridical implications of peer production, commons-based property regimes and the nonrivalrous circulation of immaterial content in the online domain, leading some theorists to posit a digital communism. An acquisitive logic, however, continues to operate through intellectual property rights, in the underlying architecture that supports the circulation of content and in the logical apparatuses for the aggregation and extraction of metadata. The digital commons emerges, not as a virtual space unfettered by material exploitation, but as a highly conflictive terrain, situated at the centre of a mode of capitalism that seeks valorisation for the owners of network infrastructure, online platforms and digital content.

Using a key example from core infrastructure, this paper will explore how controversies surrounding the management of the electromagnetic spectrum provide insight into the communism of capital in the digital domain. This paper proceeds in two parts: The first is historical, exploring how the history of spectrum management provides a lucid account of the expropriation of the digital commons through the dispossession and progressive deregulation of a communicative resource. The second considers current transformations to spectrum regulation, in particular the growing centrality of shared and commons spectrum to radio policy. Does a shift towards non-proprietary and unlicensed infrastructure represent an antagonistic or subversive element in the communism of capital? Or, if this communality of resources is not at odds with capitalist interests, how is it that an acquisitive logic continues to act?”

Rachel O’Dwyer discusses ‘virtual communism':

“The facility to leverage communicative capacities, support non-hierarchical cooperation and enable the circulation of non-proprietary content, has led a number of theorists to posit a ‘virtual communism’ (Lessig, 2004; Benkler, 2006; Kelly, 2009). This traces an immaterial space that trades in knowledge and culture, at once free from commercial subjugation and conversely capable of exerting influence on the material substrate of capital.

Such ‘virtual communism’ is, to echo Virno, ‘a communality of generalized intellect without material equality’ (Virno, 2004: 18). The underlying architectures that support the circulation of content are still proprietary. While user-generated content becomes increasingly central to the economy, the possibility of a ‘core commons infrastructure’, as Benkler (2001) calls it, is constrained by a variety of institutional, technical and juridical enclosures. The digital commons emerges, not as a virtual space unfettered by material exploitation, but as a highly conflictive terrain. The commons is situated at the centre of a mode of capitalism that seeks valorisation for the owners of network infrastructure, digital platforms and online content. This proprietary interest is diffuse, and increasingly so; it blends in a series of highly confluent mechanisms the essence of ‘the commons’ with new forms of enclosure.

Today we encounter conditions in which the core tenets of communism – the socialisation of production, the abolition of wage labour, and the centrality of commons-based peer-production – are remade in the interests of capital (Virno, 2004). These conditions imply new forms of sovereignty and political economy. This is not to say that the commons has not historically potentiated capitalist accumulation, but that we are witnessing a dramatic intensification of these conditions. In turn we are faced with a number of questions: through what proprietary mechanisms and juridical processes is the digital commons enclosed? How, in turn, is surplus value extracted from the digital commons – through what technological apparatuses, property regimes and composition of capital? Finally, what political and economic possibilities might emerge alongside the hegemony of the commons?

This paper will explore how recent controversies surrounding the management of electromagnetic spectrum provide insights into the composition of contemporary capitalism. As the communications channel for all mobile and wireless transmissions, electromagnetic spectrum is a core apparatus in the digital economy; its enclosure is part and parcel of the techniques that facilitate capitalist accumulation through production over wireless and mobile networks. This discussion proceeds in two parts: First, the history of spectrum regulation provides an account of the expropriation of communicative and cooperative capacities through the dispossession, deregulation and progressive rarefaction of a common resource. As mobile data grows exponentially, however, we are witnessing changes to the ways in which this resource is managed, with many calling for a greater communality of the radio spectrum in response to perceived scarcity in mobile bandwidth. The second part of the paper explores these emergent conditions. On one hand, it appears as though antagonisms between openness and enclosure in information capitalism prefigure a crisis in property relations that potentiate possible forms of anti-capitalist ‘exploit’ (Galloway and Thacker, 2007). On the other, it is also possible that capitalist accumulation is becoming ever more tightly organised through highly fluid and distributed mechanisms that route, not only around a direct intervention in production, but increasingly around the old property regimes.

The aims of such a study are reflexive. If the burgeoning political vocabulary of the ‘communism of capital’ offers a critical insight into the enclosure of the digital commons, spectrum management also provides an empirical case to reflect on the theoretical underpinnings of this vocabulary. For example, much of this theory not only acknowledges correspondence between forms of the commons with capitalist accumulation, it also identifies a number of contradictions in such an alliance, whether through the socialisation of production or through the imminent crisis of an underlying proprietary logic. This paper explores how the production of artificial scarcity around electromagnetic spectrum, when situated against the growing demand for a greater fluidity of network resources, provides a lens for what are perceived to be the irreconcilable elements of the communism of capital. Does a shift towards non-proprietary and unlicensed infrastructure represent an antagonistic or subversive element in the communism of capital? Or, if this communality of resources is not at odds with capitalist interests, how is it that an acquisitive logic continues to act?”

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Posted in Cognitive Capitalism, Featured Essay | No Comments »

The problem with Facebook “likes” and Netarchical Social Media Metrics

photo of Stacco Troncoso

Stacco Troncoso
26th October 2014


A fascinating video on Facebook’s dubious practices, which will (hopefully) make you think twice before making grandiose proclamations based on any for-profit Social Media stats.

From the notes to the original video

Evidence Facebook’s revenue is based on fake likes.

My first vid on the problem with Facebook: http://bit.ly/1dXudqY

I know first-hand that Facebook’s advertising model is deeply flawed. When I paid to promote my page I gained 80,000 followers in developing countries who didn’t care about Veritasium (but I wasn’t aware of this at the time). They drove my reach and engagement numbers down, basically rendering the page useless. I am not the only one who has experienced this. Rory Cellan-Jones had the same luck with Virtual Bagel: http://www.bbc.co.uk/news/technology-…

The US Department of State spent $630,000 to acquire 2 million page likes and then realized only 2% were engaged. http://wapo.st/1glcyZo

I thought I would demonstrate that the same thing is still happening now by creating Virtual Cat (http://www.facebook.com/MyVirtualCat). I was surprised to discover something worse – false likes are coming from everywhere, including Canada, the US, the UK, and Australia. So even those carefully targeting their campaigns are likely being duped into spending real money on fake followers. Then when they try to reach their followers they have to pay again.

And it’s possible to be a victim of fake likes without even advertising. Pages that end up on Facebook’s “International Suggested Pages” are also easy targets for click-farms seeking to diversify their likes.http://tnw.co/NsflrC

Thanks to Henry, Grey, and Nessy for feedback on earlier drafts of this video.

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Posted in Cognitive Capitalism, Culture & Ideas, Economy and Business, Featured Content, Featured Video, Media, Networks, Videos | No Comments »

Going beyond platform capitalism

photo of Michel Bauwens

Michel Bauwens
23rd October 2014


“By controlling their ecosystems, platforms create a stage on which every economic transaction can be turned into an auction. Nothing minimizes cost better than an auction – including the cost of labour. That’s why labour is the crucial societal aspect of platform capitalism. It is exactly here that we will have to decide whether to harness the enormous advantages of platform capitalism and the sharing economy or to create a ‘dumping market’ where the exploited amateurs only have the function to push professional prices down.”

Excerpted from sebastian olma, who analyzes the sharing economy for what it is, platform capitalism (or as we call it at the p2p foundation: netarchical capitalism):

“Sascha Lobo, a German technology blogger for Der Spiegel, has recently suggested to drop the obscure notion of “sharing” altogether. “What is called sharing economy,” he argues, “is merely one aspect of a more general development, i.e., a new quality of the the digital economy: platform capitalism.” As Lobo emphasizes, platforms like Uber and AirBnB are more than just internet marketplaces. While marketplaces connect supply and demand between customers and companies, digital platforms connect customers to whatever. The platform is a generic ‘ecosystem’ able to link potential customers to anything and anyone, from private individuals to multinational corporations. Everyone can become a supplier for all sorts of products and services at the click of a button. This is the real innovation that companies of the platform capitalism variety have introduced. Again, this is miles away from sharing but instead represents an interesting mutation of the economic system due to the application of digital technology.

It should be clear that understanding the “sharing economy” in terms of platform capitalism is by no means a matter of linguistic nitpicking. Calling this crucial development by its proper name is an important step towards a more sober assessment of the claims made by the proponents of “sharing.” Take, for instance, the notion that everyone benefits from the disruptive force of the “sharing economy” because it cuts out the middleman. Sharing models, the argument goes, facilitate a more direct exchange between economic agents, thus eliminating the inefficient middle layers and making market exchange simpler and fairer. While it is absolutely true that internet marketplaces and digital platforms can reduce transaction costs, the claim that they cut out the middleman is pure fantasy. As one blogger puts it: “Sure, many of the old middlemen and retailers disappear but only to be replaced by much more powerful gatekeepers.”

In fact, the argument is quite an obscene one, particularly if it is made by the stakeholders of platform capitalism themselves. As globally operating digital platforms, these companies have the unique ability to cut across many regional markets and reconfigure traditionally specific markets for goods and services as generic customer-to-whatever ‘ecosystems’. It seems fairly obvious that the entire purpose of the platform business model is to reach a monopoly position, as this enables the respective platform to set and control the (considerably lower) standards upon which someone (preferably anyone) could become a supplier in the respective market. Instead of cutting out the middleman, digital platforms have the inherent tendency to become veritable Über-middlemen, i.e., monopolies with an unprecedented control over the markets they themselves create. In fact, calling these customer-to-whatever ecosystems “markets” often turns out to be a bit of a joke. For the clients of Uber & Co., price is not the result of the free play of supply and demand but of specific algorithms supposedly simulating the market mechanism. The effect of such algorithmic tampering with the market is demonstrated for instance by Uber’s surge pricing during periods of peak demand. It is not very difficult to see where this might be leading. Taking a cab to the hospital in, say, New York City during a snow storm might become unaffordable for some under conditions of mature platform capitalism. For those who believe this to be overly pessimistic and a bit of an exaggeration, just ask your local taxi driver what percentage of her work is already coming from one of the digital platforms.

As Sacha Lobo puts it succinctly:

“By controlling their ecosystems, platforms create a stage on which every economic transaction can be turned into an auction. Nothing minimizes cost better than an auction – including the cost of labour. That’s why labour is the crucial societal aspect of platform capitalism. It is exactly here that we will have to decide whether to harness the enormous advantages of platform capitalism and the sharing economy or to create a ‘dumping market’ where the exploited amateurs only have the function to push professional prices down.”

I agree. The basis for such a decision needs to be a proper understanding of the reality of platform capitalism. The anger we have seen over the last few months directed against the “sharing economy” has a lot to do with the utterly unsubstantial claims and stories that are constantly churned out by the marketing machine of platform capitalism. Take John Zimmer, co-founder of Lyft, who told Wired earlier this year that the sharing economy bestows on us the gift of a revived community spirit. Referring to his visit to the Oglala Sioux reservation, he writes: “Their sense of community, of connection to each other and to their land, made me feel more happy and alive than I’ve ever felt. We now have the opportunity to use technology to help us get there.” No question, the pompous impertinence of this comparison is truly breathtaking. And yet, neither is this kind of rhetorical gymnastics the exception in the sharing-scene nor does it come unmotivated.

Noam Scheiber of the New Republic explains the rationale behind the obscenities of Zimmer (and his kind) with great lucidity :

“For-profit “sharing” represents by far the fastest-growing source of un- and under-regulated commercial activity in the country. Calling it the modern equivalent of an ancient tribal custom is a rather ingenious rationale for keeping it that way. After all, if you’re a regulator, it’s easy to crack down on the commercial use of improperly zoned and insured property. But what kind of knuckle-dragger would crack down on making friends?”

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Posted in Cognitive Capitalism, Economy and Business, Sharing | No Comments »

Can we turn Netarchical Platforms into worker-owned businesses?

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Stacco Troncoso
18th October 2014


facebook
In answer to the question posed in the title, I don’t think we can do much to reclaim our rights as producers of content and use value in netarchical platforms. However, we can work to raise awareness on the subject and help the shift toward real P2P platforms. This is already happening right now, with Diaspora enjoying a revival in the wake of Ello’s failed promise to deliver a true alternative to Facebook. The following article was written by John Robb and originally published in Home Free America.


“We don’t get ownership because we don’t expect ownership… We’ve been conditioned to give away our work and our patronage for free while the schmucks on Wall Street walk away with buckets of money.”

Do you contribute to Facebook, Yelp, Reddit, or sites like that?

Most of us do contribute to some sites like this and our contributions, more or less depending on our contribution, are the reason these companies are valuable.

Our contributions are the reason people come to these sites day after day, so why don’t we get a bit of ownership for our contributions?

Lots of ownership goes to the employees.  But, nobody goes to these sites for the high quality software, elegant design, or robust hosting.  Further, all of the tech they are using is the result of innovation by other people.

Most of the ownership goes to the financing.  Yet, these sites don’t cost much to run.  A pittance actually.  The cloud makes them very cheap to operate.  In fact, the amount is so small, nearly all of the money needed to launch these sites could be raised by the customers using these sites.

We don’t get ownership because we don’t expect ownership.

We’ve been conditioned to give away our work and our patronage for free while the schmucks on Wall Street walk away with buckets of money.

There is a small glimmer of hope things might finally be changing (it’s something I tried to do back in 2010-12 and got my ass handed to me for trying to do it).

My hope is due to three things:

  1. Desire to do the right thing.  We don’t see enough of this in Silicon Valley anymore, despite the fact that all great innovations start with getting the “why” right.  Reddit’s CEO, Yishan Wong (formerly of Facebook) is doing the right thing.  He’s planning to make Reddit’s users into owners, depending on their contribution to the site.
  2. There’s a way to create a form of liquid ownership that doesn’t require Wall Street.  This new method is based on the bitcoin blockchain.  That technology makes it possible to issue ownership to contributors in a decentralized and trusted way.
  3. The combination of blockchain stock, Yishan’s example, and the experience of participants will set in motion a wave of change in Silicon Valley.  The message is:  if you want to build an online company, you better find a way to make your customers/contributors owners.

PS:  This is potentially a sea change in financing/ownership.  There’s much more to this.  Wall Street’s banksters should be worried.

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Posted in Anti-P2P, Cognitive Capitalism, Collective Intelligence, Copyright/IP, Culture & Ideas, Economy and Business, Empire, Networks, Politics | No Comments »

Video of the Day: Bruce Sterling on Design Fiction

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Stacco Troncoso
12th October 2014


Bruce Sterling and his iBook

“[…This] is gonna kinda hurt: In the startup world, you work hard and you move fast in order to make other people rich.”

Don’t miss this outrageously inspiring video, where Bruce Sterling proceeds to break the hearts of a few thousands wannabe venture capital baiters at last year’s NEXT Berlin conference for “digital forethinkers and tech experts”.

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Posted in Anti-P2P, Cognitive Capitalism, Collective Intelligence, Copyright/IP, Culture & Ideas, Economy and Business, Empire, Featured Content, Featured Video, Media, Politics, Technology, Videos | 2 Comments »

The emergence of dynamic ownership

photo of Michel Bauwens

Michel Bauwens
9th October 2014


Reddit’s CEO, Yishan Wong (formerly of Facebook) is doing the right thing. He’s planning to make Reddit’s users into owners, depending on their contribution to the site. There’s a way to create a form of liquid ownership that doesn’t require Wall Street. This new method is based on the bitcoin blockchain. That technology makes it possible to issue ownership to contributors in a decentralized and trusted way. The combination of blockchain stock, Yishan’s example, and the experience of participants will set in motion a wave of change in Silicon Valley. The message is: if you want to build an online company, you better find a way to make your customers/contributors owners.*

Excerpted from John Robb:

“Yesterday I wrote about how Reddit’s CEO, Yishan Wong, is planning to issue ownership in Reddit to the users of its site.

It’s a bold move that has a level fairness and integrity we don’t expect from business leaders anymore.

It’s fair because these users are the same people that put the time and effort into making Reddit a great site to visit, and they’ve been doing it for years.

So, why is this going to change everything? It’s the start of something called dynamic ownership.

It’s going to end the free ride Internet companies have had for the last two decades. Companies that are exceedingly profitable because they don’t pay the people that do the work they make money selling.

Once people learn to expect ownership for the work they do online, few will spend time on sites that don’t award it.

Here’s an example.

Let’s say I start a challenger to Yelp. My goal is to build a site that has higher quality reviews, written by verified customers. It’s a win win.

Normally, Yelp would be hard to unseat. They have lots of existing content and people are used to using them. However, they don’t reward reviewers/users with ownership. I do.

So, I start by crowdfunding the venture.

How? I build a prototype site and demo it on Kickstarter (or some site like it).

I then offer the initial group two million shares at a dollar a share, using a loophole in the law that avoids triggering a public offering. Ownership is awarded to this group in the form of a corporate coin like bitcoin.

When I launch the site, reviewers and site users earn ownership (coin) as they contribute to the site drawing from a different pool of stock that uses the same loophole.

Soon, millions of reviews are up and the site is humming. Yelp’s traffic plummets as my revenue shoots to the moon (and given that the system is built in “the cloud” and the ads are run through third parties, the costs of the system are nearly zilch relative to revenue).

It’s not long before the people working on sites like this are able to earn a living from the money they earn this way.

When this happens, we’ll know that this new economy has found a way beyond the silly commercial malware and billionaires in hoodies it produces today.”

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Posted in Cognitive Capitalism, Commons, P2P Company Watch, Peer Property | 1 Comment »