The current rhetoric around the blockchain hints at problems with the techno-utopian ideologies that surround digital activism.

A blockchain is essentially a distributed database. The technology first appeared in 2009 as the basis of the Bitcoin digital currency system, but it has potential for doing much, much more—including aiding in the development of platform cooperatives.

Traditionally, institutions use centralized databases. For example, when you transfer money using a bank account your bank updates its ledger to credit and debit accounts accordingly. In this example, there is one central database and the bank is a trusted intermediary who manages it. With a blockchain, this record is shared among all participants in the network. To send bitcoin, for example, an owner publicly broadcasts a transaction to all participants in the network. Participants collectively verify that the transaction indeed took place and update the database accordingly. This record is public, shared by all, and it cannot be amended.

This distributed database can be used for applications other than monetary transactions. With the rise of what some are calling “blockchain 2.0,” the accounting technology underpinning Bitcoin is now taking on non-monetary applications as diverse as electronic voting, file tracking, property title management, and the organization of worker cooperatives. Very quickly, it seems, distributed ledger technologies have made their way into any project broadly related to social or political transformation for the left—“put a blockchain on it!”— until its mention, sooner or later, looks like the basis for a dangerous drinking game. On the other side of things, poking fun at blockchain evangelism is now a nerdy pastime, more enjoyable even than ridiculing handlebar moustaches and fixie bicycles.

So let me show my hand. I’m interested in the blockchain (or blockchain-based technologies) as one tool that, in a very pragmatic way, could assist with cooperative activities—helping us to share resources, to arbitrate, adjudicate, disambiguate, and make collective decisions. Some fledgling examples are La’Zooz, an alternative ridesharing app; Swarm, a fundraising app; and proposals for the use of distributed ledgers to manage land ownership or critical infrastructures like water and energy. Many of these activities are difficult outside of local communities or in the absence of some trusted intermediary. However, I also think that much of the current rhetoric around the blockchain hints at problems with the techno-utopian ideologies that surround digital activism, and points to the assumptions these projects fall into time and again. It’s worth addressing these here.

ASSUMPTION #1: WE CAN REPLACE MESSY AND TIME-CONSUMING SOCIAL PROCESSES WITH ELEGANT TECHNICAL SOLUTIONS

Fostering and scaling cooperation is really difficult. This is why we have institutions, norms, laws, and markets. We might not like them, but these mechanisms allow us to cooperate with others even when we don’t know and trust them. They help us to make decisions and to divvy up tasks and to reach consensus. When we take these things away—when we break them down—it can be very difficult to cooperate. Indeed, this is one of the big problems with alternative forms of organization outside of the state and the market—those that are not structured by typical modes of governance such as rules, norms, or pricing. These kinds of structureless collaboration generally only work at very local kin-communal scales where everybody already knows and trusts everyone else. In Ireland, for example, there were several long-term bank strikes in the 1970s. The economy didn’t grind to a halt. Instead, local publicans stepped in and extended credit to their customers; the debtors were well-known to the publicans, who were in a good position to make an assessment on their credit worthiness. Community trust replaced a trustless monetary system. This kind of local arrangement wouldn’t work in a larger or more atomized community. It probably wouldn’t work in today’s Ireland because community ties are weaker.

Bitcoin caused excitement when it proposed a technical solution to a problem that previously required a trusted intermediary—money, or, more specifically, the problem of guaranteeing and controlling money supply and monitoring the repartition of funds on a global scale. It did this by developing a distributed database that is cryptographically verified by an entire network of peers and by linking the production of new money with the individual incentive to maintain this public repository. More recently this cryptographic database has also been used to manage laws, contracts, and property. While some of the more evolved applications involve verifying precious stones and supporting interbank loans, the proposal is that this database could also be used to support alternative worker platforms, allowing systems where people can organize, share, or sell their labor without the need of a central entity controlling activities and trimming a generous margin off the top.

The blockchain has more in common with the neoliberal governmentality that produces platform capitalists like Amazon and Uber and state-market coalitions than any radical alternative.

Here the blockchain replaces a trusted third party such as the state or a platform with cryptographic proof. This is why hardcore libertarians and anarcho-communists both favor it. But let’s be clear here—it doesn’t replace all of the functions of an institution, just the function that allows us to trust in our interactions with others because we trust in certain judicial and bureaucratic processes. It doesn’t stand in for all the slow and messy bureaucracy and debate and human processes that go into building cooperation, and it never will.

The blockchain is what we call a “trustless” architecture. It stands in for trust in the absence of more traditional mechanisms like social networks and co-location. It allows cooperation without trust, in other words—something that is quite different from fostering or building trust. As the founding Bitcoin document details, proof-of-work is not a new form of trust, but the abdication of trust altogether as social confidence and judgment in favor of an algorithmic regulation. With a blockchain, it maybe doesn’t matter so much whether I believe in or trust my fellow peers just so long as I trust in the technical efficiency of the protocol. The claim being made is not that we can engineer greater levels of cooperation or trust in friends, institutions, or governments, but that we might dispense with social institutions altogether in favor of an elegant technical solution.

This assumption is naïve, it’s true, but it also betrays a worrying politics—or rather a drive to replace politics (as debate and dispute and things that produce connection and difference) with economics. This is not just a problem with blockchain evangelism—it’s a core problem with the ideology of digital activism generally. The blockchain has more in common with the neoliberal governmentality that produces platform capitalists like Amazon and Uber and state-market coalitions than any radical alternative. Seen in this light, the call for blockchains forms part of a line of informational and administrative technologies such as punch cards, electronic ledgers, and automated record keeping systems that work to administrate populations and to make politics disappear.

ASSUMPTION #2: THE TECHNICAL CAN INSTANTIATE NEW SOCIAL OR POLITICAL PROCESSES

Like a lot of peer-to-peer networks, blockchain applications conflate a technical architecture with a social or political mode of organization. We can see this kind of ideology at work when the CEO of Bitcoin Indonesia argues, “In its purest form, blockchain is democracy.” From this perspective, what makes Uber Uber and La’Zooz La’Zooz comes down to technical differences at the level of topology and protocol. If only we can design the right technical system, in other words, the right kind of society is not too far behind.

The last decade has shown us that there is no linear-causal relationship between decentralization in technical systems and egalitarian or equitable practices socially, politically, or economically. This is not only because it is technologically determinist to assume so, or because networks involve layers that exhibit contradictory affordances, but also because there’s zero evidence that features such as decentralization or structurelessness continue to pose any kind of threat to capitalism. In fact, horizontality and decentralization—the very characteristics that peer production prizes so highly—have emerged as an ideal solution to many of the impasses of liberal economics.

There’s zero evidence that features such as decentralization or structurelessness pose any kind of threat to capitalism.

Today, Silicon Valley appropriates so many of the ideas of the left—anarchism, mobility, and cooperation—even limited forms of welfare. This can create the sense that technical fixes like the blockchain are part of some broader shift to a post-capitalist society, when this shift has not taken place. Indeed, the blockchain applications that are really gaining traction are those developed by large banks in collaboration with tech startups—applications to build private blockchains for greater asset management or automatic credit clearing between banks, or to allow cultural industries to combat piracy in a distributed network and manage the sale and ownership of digital goods more efficiently.

While technical tools such as the blockchain might form part of a broader artillery for , we also need to have a little perspective. We need to find ways to embrace not only technical solutions, but also people who have experience in community organizing and methods that foster trust, negotiate hierarchies, and embrace difference. Because there is no magic app for platform cooperativism. And there never will be.

Rachel O’Dwyer | An essay originally anthologized in Ours To Hack and To Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet | OR Books | August 2017| 6 minutes (1,600 words)

Originally published in Longreads.com

Photo by Ars Electronica

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Holochain : The Blockchain picks up a Dimension

Jamie Klinger: Bitcoin’s central mechanism — the Blockchain — is a monumental achievement in computer science. And from that central achievement, many other cryptocurrencies have emerged attempting to improve the model in one way or another. Holochain has come along to further decentralize, maximize efficiency, and allow for all types of interfaces and applications to be built with it.

Holochain harnesses the parallelism of BitTorrent to power fully distributed apps.

Holochain is a data integrity engine for distributed apps

An Engine is “a machine with moving parts that converts power into motion.” (Source: Google)

Data Integrity is what blockchains and torrents have been doing. They make certain that the data on my computer is the same as the data on your computer. They make certain that the order of the data is exactly the same, otherwise there would be a malfunction.

Distributed Apps are apps that run locally on your personal device (as opposed to in the cloud).

https://www.pexels.com/u/lumariia/

A centralized app like Snapchat offers you a small file (the app) to download that sends data through centralized servers.

A decentralized app like TenX runs on a decentralized blockchain (Ethereum).

A distributed app would run locally on your personal device and would offer peer-to-peer connections.

So if Snapchat were a distributed app, you and your friends would all have the (d)app on your phone, and when you send a photo, it would be sent directly to your friends and only to your friends. No intermediary servers. No intermediary blockchain.

Another way of seeing distributed apps are as scripts (executed code) that hook into distributed databases, compiling data.

Holochain allows you to build interoperable apps for communication

https://www.pexels.com/u/gratisography/

If you want to build a Twitter clone on Holochain (which, incidentally, its core team has already started, and it’s called “Clutter”), you decide on the rules for message size, hashtags, and whatever other parameters are important to you. Maybe you decide that for your specific Twitter app, it is crucial to segregate posts by the person’s color preference, so in the creation of your app, you hold a sign-up requirement for people to share their favorite color.

Now, when you post a poll and people begin to respond, you can have their answers sorted automatically by the respondent’s favorite color.

Ok, so you made Twitter with color preferences, we’ll call it Color-Twitter. That’s not the most useful feature in my opinion, so I make a poll asking people to vote on a more useful parameter and gather statistical information. The group votes and they choose age. We then request to the creator of the app to add in this parameter to Color-Twitter. Here’s what happens next.

https://www.pexels.com/u/sebastian/

The app creator likes your idea

Congratulations! The app creator wants to integrate your update! They build the new functionality into the app, but since it is a distributed system, everybody who is using the platform needs to download the latest version.

The founder will run both versions (and hopefully many people will do the same to facilitate the transition) where the users who have upgraded will leave one final tweet saying, “I no longer post here. Find me as HonestlyJamieK on ColAge-Twitter, follow this link.”

Some users may choose to stay behind and continue using Color-Twitter. They will not be able to interact with ColAge-Twitter accounts. But it could be possible in the future that ColAge-Twitter accounts can interact on the old chains of users still running Color-Twitter. This is because the parameters for Color-Twitter have been met by all users, but the parameters of ColAge-Twitter have not been met by all users.

Color-Twitter can only exist as long as there are users running that specific app. If all of Color-Twitter users go offline and/or upgrade to ColAge-Twitter, it will no longer be accessible.

Users who have chosen to use ColAge Twitter are now required to register their age before being able to join..

Once Ceptr — a parent project encompassing Holochains and related tech that would further simplify interoperability — is integrated, it could be fully possible that if another application already holds the information required by this app, Color-Twitter could automatically make a request for access to this parameter. This can be looked at a little bit like an auto-fill feature. In other words, by filling out your age once, you might never have to fill it out again, you would only need to approve access to that information by a specific app that you downloaded.

https://www.pexels.com/u/pixabay/

The app creator does not like your idea

If the creator does not believe that this is the vision of their system, they can refuse to upgrade and remain with Color-Twitter.

Now, the same thing happens as before except that the founder of Color-Twitter is the one who is left behind. I can take the original app’s code, fork it, add the parameter of age, and launch it in holochain as my separate app. People can now use my app to broadcast tweets too if they choose.

Just like in the other example, if my new app follows all of the rules of the Color-Twitter, when someone broadcasts on the ColAge-Twitter app, they can (if they choose) simultaneously broadcast on the Color-Twitter app. As long as the rules of all the apps validation rules (color for Color-Twitter, color+age for ColAge Twitter) are met, you can broadcast across as many apps as you are running; the holochain-equivalent Facebook, Flickr, Slack, etc.

https://www.pexels.com/u/pixabay/

Distributed, not decentralized

Want to post on the Color-Twitter? I hope you’re prepared to share the network load. Holochain apps will be light enough to run on your cell phone and will be efficient enough to only be grabbing the information you request at any given time.

If the system was decentralized, we would require upgraded nodes for ColAge-Twitter to be able to run. With a distributed system, it is entirely individualized and is up to the user base to voluntarily follow along. However, if your dApp is financially sustainable and you want to provide your users with access without requiring them to maintain a shard* of the system, there will be an opportunity for dApp maintainers to run nodes/servers.

*Each app consists of a series of shards distribted across the userbase sharing the serverload, comparable to torrent functionality

https://www.pexels.com/u/kaiquestr/

Lyft & Uber vs La’Zooz & Holochain

La’Zooz was a blockchain-based ridesharing app. It functioned as a self contained system. The network was supported by its mobile app users running the app and earning tokens, who were supported financially by token purchasers, which worked by having drivers accept the tokens. They completely removed the middleman that is Uber. While that project itself has fallen to the wayside, the idea of it seemed completely obvious to anybody who has ever played with blockchain — and it won’t be going away.

Why pay a middleman when the system can be taken entirely out of the hands of a corporation? There actually are a number of very important reasons why Lyft and Uber need to exist today and why the blockchain isn’t ready for them just yet. There are legal challenges, security issues, insurance requirements, etc., that make a purely peer-to-peer system for ridesharing a bit out of reach. But in a few years, we can expect smart contracts to enter the equation and solve many of these problems.

Decentralized and/or Distributed reference systems are right around the corner. We can create parameters for verification of proper insurance, background checks, and any other requirements for potential drivers. This would function similarly to a smart contract, allowing for users to move through to the next level of verification once accepted through the former.

And once the Uber-clone is up and running, somebody can decide to fork it and generate an eco-friendly version which would only support drivers using electric cars. Eco-Uber might cost more, but it would offer a new parameter to its participants.

https://www.pexels.com/u/gratisography/

There Are Too Many Apps!

After Eco-Uber started, somebody created Red-Uber for red cars and Blue-Uber for blue cars. If the driver is subscribed to the Mass-Join-Drivers App, and fits the appropriate driver parameters, they can automatically (with permissions) becomes a driver for all of the latest apps.

For users, imagine someone now has a list of options to choose from (Red-Uber, Blue-Uber, etc) and it’s just too many unimportant choices for them. They don’t care about who drives them from point A to B, they just want to get there quickly.

Just like with Color-Twitter and ColAge-Twitter, if you as a broadcaster meet all of the requirements, you can broadcast to whomever you like, even multiple applications simultaneously.

So the user sends out their lift request to all of the appropriate driving apps. Once the first driver responds to the call, it will ping the user and then automatically cancel all of the other lift requests.

Holochain is like having access to all of the capabilities of all of the Internet apps simultaneously without needing an API, because the languages are entirely compatible. Holochain is the equivalent of having an IFTTT layer built underneath the entire Internet.

It is important to note that some of the deeper features described in this article will require self-describing protocols which have been built into Ceptr, a highly related but (currently) separate sister project.

The Ultimate Dashboard

Today, we are forced to settle for what Facebook’s algorithm decides to show us. Our capabilities for manipulating our feed are extremely limited. With Holochain, we are only limited to the parameters set by the applications. And if you and your friends don’t like those parameters, you can change them with a forked app!

And because the information exists on a layer on top of the app and isn’t held proprietarily, you can mix and match your feeds to your heart’s content. I might create dashboards for all different circumstances and be able to jump between them seamlessly. Everything dog-related from all of my app channels from users who have posted at least 10 times could be one of my dashboards. All pizza-related posts by users with a high reputation level who live within 10km of me could be another dashboard.

Because the information isn’t forced to sit uniquely in each application, the end user can create a customized experience with the parameters of their choosing. The possibilities for data mining and consensus building are endless. End the data-monopolies of Facebook and Google. If we choose to use Holochain, we choose how our information is shared and empower the commons to utilize it for collective growth and understanding.

Sources:

• CEPTR Home
  
• Holochains for Distributed Data Integrity
  
• Arthur Brock’s Personal Web Site | Arthur Brock 

Lead image: https://www.pexels.com/u/invisiblepower/

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Nithin Coca: For Socorro Aguirre Cruz, a home care worker in Staten Island, New York, with nearly 50 years of cleaning experience, many of the challenges faced by gig workers today have been part of her life for decades. Work has been precarious for her long before the emergence of massive, venture capitalist-funded gig platforms that began disrupting — and in some cases destroying — a number of industries.

“It was hard to find work, especially not speaking English,” Cruz says. “I was badly paid for a lot of work, and sometimes I didn’t get paid at all. They took advantage of my situation as an immigrant here.”

As the gig economy grows, more and more stories of worker exploitation are coming to the fore. And as reports of shady labor practices at Uber, Lyft, Taskrabbit, Postmates, and Amazon Mechanical Turk show, these issues run rampant across all sectors of the gig economy. In the home services industry, the platform Handy has made a name for itself, connecting people with pre-screened professional cleaners, fixers, and other professionals. Within three years of its founding, however, the company already faced lawsuits for allegedly underpaying workers and making them pay severe fees for minor transgressions.

To counter poor labor practices, gig workers and entrepreneurs are now taking matters into their own hands by launching their own digital platforms for various services. Called “platform cooperatives,” these businesses bring the structure of traditional cooperatives, including worker ownership and governance, to the digital world.

This June, Cruz and five others formed Brightly Cleaning, a worker-owned cooperative, with support from two social service organizations based in New York City, New York: The La Colmena Staten Island Community Job Center and the Center for Family Life. Brightly Cleaning soon became one of the first members of the new platform cooperative Up & Go.

Socorro Aguirre Cruz, worker-owner of Brightly Cleaning of Staten Island. Photo courtesy of The Center for Family Life

“We’re getting a lot of jobs,” Cruz says. “This work means we can grow more as a co-op, and help other co-ops grow too. It’s like a tree that keeps extending its branches.”

While platform cooperatives have the potential to stand against the tide of exploitative, venture-backed companies, funding is a challenge. For venture capitalists, there’s no incentive to invest in businesses that will not eventually be sold to other investors for a return. For most banks, making loans to new technology businesses is too risky.

But Up & Go and an array of other emerging platform cooperatives are finding innovative, diverse solutions to become financially-viable businesses in the long term. Together, they are charting the way forward for the creation of a far more equitable digital business sector; one that could restore the promise of a sharing economy based on the true sharing of wealth and power — and not the exploitation of workers for profit.

Grants from Foundations 

Up & Go received multiple grants — one from the Robin Hood Foundation, a nonprofit based in New York City, New York, that focuses on fighting poverty, and another from the citizenship initiatives program of the multinational British Bank Barclays. The impetus for launching Up & Go came from our understanding of the marketing challenges facing worker coops – along with the Robin Hood Foundation’s research and focus on the impact of the digital gig economy on low-income workers, says Sylvia Morse, Up & Go’s project coordinator.

“What are the opportunities to create platforms that are more worker focused? That was how the idea was born,” Morse says. The Robin Hood Foundation, which is known for its innovative methods in tackling poverty in the New York City area, was willing to invest in a project like a platform cooperative.

“We were of the opinion that the folks that benefit the least in the world from being ‘on demand’ are the ones that Robin Hood wants to help the most — those sitting on the bottom rung of the economic ladder,” Steven Lee, managing director for income security at the Robin Hood Foundation, says. “[We] came up with this [idea] of creating a tech platform that would source work from consumers around New York City and match those consumers with the low-income worker population.”

Up & Go is jointly owned by three cooperatives that receive 95 percent of the payment from every booking — a far higher figure than any privately owned platform. The remaining five percent goes towards the development and management of the platform.

“We believe that with this initial investment and with the model of having a portion of the booking going back into the platform, and with the worker-owned businesses making an investment, Up & Go can be financially sustainable,” Morse says. The key focus now will be making sure more consumers are aware of the platform, refining the user experience, and bringing more worker-owned cooperatives onboard, she says.

Given the rapid growth of gig work, finding alternatives to business as usual models that focus solely on the bottom line is becoming essential to protect workers. Earlier this year, the Oxford Internet Institute, a multidisciplinary research center, based in Oxford, England, released the Online Labour Index. The Index showed that the online gig economy grew by 26 percent globally in 2016. It shows no signs of slowing down. [Disclosure: I was interviewed about my experiences as a freelancer for the Institute’s study.]

A snapshot of the global gig work marketplace, by the Oxford Internet Institute

Data from Intuit, based in Mountain View, California, and Emergent Research, located in Lafayette, California, expects a doubling of on-demand workers in the U.S. by 2021. While gig work offers a number of benefits, including flexible work hours and diverse income streams, it can also lead to exploitation. Low wages, unsteady work, and lack of benefits are just a few of the many documented impacts of gig work and the rise of on-demand platforms. Platform cooperatives seek to counter this trend by putting power, ownership, and profits in the hands of workers.

The concept of platform cooperatives has been around since at least 2014. It takes inspiration from the cooperative sector, which has played a key role in the global economy for decades. Like traditional worker cooperatives, platform cooperatives follow a core set of democratic and collective values. Member-owners of Up & Go like Cruz vote on major decisions and share in the profits.

This kind of shared ownership and profits is what makes funding a sometimes insurmountable hurdle for platform cooperatives. “Tech investors still expect outsized control and return for what they perceive to be as the risk,” says Jason Weiner, an attorney specializing in sharing economy law, social and regenerative enterprise, employee-ownership and cooperatives. “A platform co-op could look at least as risky, and offer less liquidity, so investors tend to balk on the terms that platform co-ops are offering.”

The very thing that makes platform cooperatives attractive to workers — shared control and ownership — is a turnoff to many investors. “The capital required to launch a platform co-op is as much as a traditional lean tech startup,” Weiner says. “There is a mismatch between supply of capital and demand of capital.”

Cooperative Banks and Credit Unions

Take La’zooz, an Israeli ride-hailing platform cooperative that got ample media coverage as an ethical alternative to large, venture-funded ride-hailing giants. Like many early-stage platform cooperatives, La’zooz was unable to access funding to get off the ground.

“No funds [meant] no real capacity to push development and to build a product that could be an alternative to giant startups backed with millions/billions of dollars by VCs,” says Eitan Katchka, co-founder of La’zooz, who is currently working for Commuterz, an Israel-based mobility platform.

When Uber entered the market, it was hailed for disrupting the taxi industry. But before its entrance, the taxi industry sought a profit out of necessity. If it failed to make money, it would go bankrupt. But as Vox reported this year, Uber has never made a profit in its history. Why? Because it’s able to burn through billions of venture capital dollars in a quest to grow as fast as possible. Because platform cooperatives lack this kind of funding, experts point to a need for other institutions to step in.

“We have yet to see a significant, institutional financing in this new wave of platform cooperative ideas,” says Nathan Schneider, a scholar in residence of media studies at the University of Colorado Boulder. “That absence is glaring.”

Schneider says cooperative banks and credit unions — the institutions that invest in traditional cooperatives — could be potential sources of credit for platform cooperatives. “People who have been interested in cooperative development and investment see cooperatives as small businesses in local communities,” Schneider says. “They tend to be not oriented into investing in the tech industry, which requires a specific tool set.” Schneider says he hopes that as awareness of platform cooperatives grows, this barrier can be overcome.

“It’s great that there are a diversity of projects trying to address financing … some more traditional, some more exploring new territory,” says Schneider. “The way we created [early cooperative] economies was from the grassroots and we have to reinvent what that looks like online.”

One funding model that is already showing promise for platform cooperatives is crowdfunding. Before the advent of crowdfunding websites, traditional cooperatives like cooperative grocery stores, cafes, and bakeries, often sought financial support from community members. “Platform co-ops could be the key that unlocks crowdfunding model,” Schneider says. “So far, in non-cooperative spaces, [equity crowdfunding] has been slow to get moving.”

Equity Crowdfunding 

Some platform cooperatives are turning to equity crowdfunding , which combines shared ownership with crowdfunding. One of the first examples of a platform cooperative using the equity crowdfunding model is Resonate, a music-streaming service based in Ireland that is in beta, but currently accepting new members to join and test the service.

“We are not ready for mass consumption, but once we get through that process of really getting things much more stable and user friendly, then we’ll be able to do more aggressive marketing campaigns,” says Peter Harris, the founder of Resonate.

Resonate co-founder Peter Harris. Image courtesy of Resonate

Harris has high hopes for Resonate. The service benefits musicians and labels — who get more revenue for songs than on existing corporate platforms like Apple Music and Spotify — as well as listeners, who can own a song after a certain number of plays. Resonate’s model means that it is co-owned by musicians, labels, and listeners. All get voting rights and a share of future dividends.

Resonate was the first project for Seedbloom, self-described as a “a seeding, equity crowdfunding, and governance platform for co-ops and ethically driven enterprises.” Victor Matekole, the founder of Seedbloom, comes from a corporate background, where he saw first-hand the problems of exploitative financing.

“Seedbloom really came out of a strong desire to fix our economy,” Matekole says. “Platform cooperatives were something that I came through by working with Resonate, and I saw it a solution for… how to direct capital out of the financial world and towards projects that are oriented towards financial and social justice.”

Seedbloom and Resonate launched their equity crowdfunding campaign in 2016. While the campaign only reached 20 percent of its goal of raising 50,000 euros, it was enough to launch the platform. Today, Resonate is live, and for five euros, users can become a member of the cooperative, with full voting rights. Once the app is out of beta mode, they also earn dividends. Two hours of listening a day for a month would cost around approximately two to four euros, with nearly all of that going to musicians themselves.

Snapshot of artists on Resonate

One of the standout — and financially viable — platform cooperatives out there is Stocksy United, a stock photo platform cooperative based in Victoria, British Columbia, Canada, founded by Bruce Livingstone and Brianna Wettlaufer [Stocky is a sponsor of Shareable]. Photographers may seem like they have little in common with home care workers, but they share similar challenges. Photographers are also dependent on companies like Getty Images for work, and often face challenges in getting paid.

That’s why in 2012, Livingstone and Wettlaufer decided to form Stocksy. Unlike other platform cooperatives, Stocksy received a start-up loan for one million dollars from one of its founders. What followed shows the potential of a well-designed platform cooperative.

“With that money we were able to employee key staff to have the building blocks for a strong tech company, from senior marketing to backend systems development,” says Nuno Silva, Stocksy’s vice president of product and one of its founding members. “Within eight months of being in business we were cash positive and in the black, already in the process of paying back the loan.”

In fact, by mid 2016, Stocky’s members were able to pay off the loan entirely. Today, Stocksy has nearly 1,000 contributing artists, and an annual revenue of $10.7 million in 2016. The platform cooperative model is what made it all possible.

“A platform co-op provides the foundation to run an ethical, sustainable business that’s made stronger by its member-shareholders,” says Silva. “It’s a model we hope more entrepreneurs will consider as an option and as a means to benefit the many and not just a select few.”

But not all platform cooperatives can get a large loan from a member, access foundational grants, or turn to equity crowdfunding options. That’s why many in the community are looking at alternative methods for raising capital that could spur even more growth in platform cooperatives.

Blockchain and Alternative Currencies

One model that people are exploring is the use of blockchain and alternate currencies. The blockchain is an open, distributed ledger that records transactions between parties transparently. One of the most well-known of the blockchain-based currencies is Bitcoin. Bitcoin is just one of many virtual currencies in existence.

Blockchain, as a technology, has many functions and can be used in many diverse ways. Resonate, for example, plans to use a blockchain to keep track of how often songs are streamed as a way to openly distribute revenues and assign ownership of songs to listeners. But the real potential lies in how this technology can be encoded with cooperative values, creating the potential for digital, cooperative currencies.

“In this different kind of economy we have to rethink what is money, what is the relationship of money, and how it is used as a form of exchange,” says Boyd Cohen, joint professor at the EADA Business School and the Universitat de Vic in Barcelona, Spain. “Cryptocurrency changes a lot of things in these equations, and opens up opportunities for new business models and ways of thinking about platform co-ops.”

In fact, 2017 has seen a massive spike in the amount of funds raised by what are called Initial Coin Offerings. While, the Initial Coin Offering market is incredibly speculative and prone to the same types of financial abuses as traditional markets, some advocates see potential in redirecting this technology.

“It’s important that people from the blockchain community work with people in the sharing and co-op movement, so that the things we are designing have the values of the co-op movement hard-coded into its DNA,” says Jamie Burke, the founder of Outlier Ventures, a London, United Kingdom-based investment firm with deep knowledge of cryptocurrencies.

Burke and Cohen are working with three start-ups to launch a meta platform cooperative token in the coming months. The idea behind creating a platform cooperative-specific currency or token is that it would create self-reinforcing ecosystems of financial and technical resources for emerging platform cooperatives.

One organization exemplifying this kind of self-reinforcing system is Purpose Ventures, based in Berlin, Germany. The group has created a fund that invests only in what it calls “steward-owned companies,” a term that includes, but is not exclusive to platform cooperatives. The organization doesn’t take ownership of its investments, which are all evergreen and focused on long-term, sustainable growth instead of short-term capital accumulation.

“We are totally interested in also investing in them and helping [platform co-ops],” says Armin Steuernagel, co-founder of Purpose Ventures. “We’ve invested in several platforms that are thinking of going in that direction.”

Similarly, next year Seedbloom is planning to launch 6fund, named after the six cooperative principles. 6fund is aimed at supplementing Seedbloom’s existing equity crowdfunding model by providing platform cooperatives access to long-term, sustainable capital sources.

“How can we take some of the funding that comes through, and take portions of that money and constantly circulate it through new projects,” says Seedbloom’s Matekole. “There is a desire and need for a vehicle in which large cooperatives can actually invest and spread risk of investment across projects.”

Seedbloom hopes to make 6Fund a viable product for pension funds and other institutions to invest in, tapping into an even greater capital resources for platform cooperatives.

“You’re not going to see the crazy returns like the high-tech startups,” says Matekole. “But what I hope that we see from platform co-ops are investments that are stable, and in the end … more ethical.”

Support from Unions

Unions are also increasingly playing an important role in supporting platform cooperatives, since labor rights are essential to both. In California, United Health Workers West — a 150,000-member strong union — helped nurses launch the NursesCan Cooperative, a platform cooperative for licensed vocational nurses to provide on-demand care options for health care providers.

While United Healthcare Workers West did not directly invest in the cooperative, it did play an important role in helping provide legal support and building connections with potential employers. United Healthcare Workers West hopes this model is replicated around the U.S.

NursesCan Cooperative’s members. Photo courtesy of UHW-West

“There are deep and powerful connection between democratic workplaces and what unions organize around,” says Ra Criscitiello, research coordinator at United Healthcare Workers West. “I hope that both unions and workers co-ops can start to see the value in partnering more.”

The platform cooperative movement has grown in leaps and bounds in the past few years. The network and support that aspiring platform cooperatives have today is greater than ever before. In the meantime, venture capitalist money is not as plentiful as it was just a few years ago, which could stem the tide of venture-backed start-ups, creating an opening for platform cooperatives to enter the market.

While there still aren’t many functional platform cooperative alternatives to various gig economy platforms, change is in the air. Up & Go, Resonate, Stocksy, and NursesCan show that platform cooperatives are making their way into many sectors of the economy, from home care to health care.

Cruz and her colleagues at Brightly Cleaning Cooperative hope that the opportunities they’ve gotten by joining Up & Go can help other gig workers facing exploitative practices. “We are so lucky to be part of Up & Go,” Cruz says. “It’s a backbone that supports us and protects us. We really want to provide this opportunity to other workers as well.”

Header image of Up & Go’s launch event courtesy of The Center for Family Life.

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