When: Thursday, 27 June – Friday, 28 June
9:00 am – 8:00 pm

Where: University of London, Malet Street, London

In previous years, we’ve promoted platform co-ops in a traditional conference format. This year we’re doing things differently and will be exploring opportunities to increase decentralised collaboration in a completely open space format. We’re proud to be working on collaboration with Phoebe Tickell and Nati Lombardo from Enspiral, to convene and facilitate the event.

Who is OPEN 2019 for?

OPEN 2019 is an inter-network event for community builders, network organisers and key connecting members of organisations from a wide range of progressive communities. We welcome all cooperators, rebels, mavens, network builders, systems architects, open source developers, and anyone else who is interested in designing and building our collective future. The idea is to network the networks by creating deeper connections and relationships between some of the key connectors from a wide range of mutually aligned communities.

What will we be doing?

To kick off each day attendees will be introduced to a handful of new, distributed, cooperative, technical and social projects, through a selection of lightning talks. After that attendees will be guided to co-design the event by proposing, refining and voting on the content for the rest of the two days’ sessions. Experienced facilitators from the Enspiral network will help us create a ‘container’ for our time together. Working in small groups we will discuss, debate and feedback ideas to the wider group, to ensure everyone has a chance to have their say and that the collective wisdom of the group is captured and shared.

With an informal evening dinner and drinks and more networking opportunities, there will be plenty of time for building deeper understanding and relationships too.

What will you get out of it?

Recognising that effective collaboration, at any scale, can be hard to define and even harder to achieve OPEN 2019 does not aim to build immediate collaboration between attendees. Having studied the key ingredients of collaboration we know that the first step towards effective collaboration is building deeper connections and trusted relationships, and that is what OPEN 2019 aims to deliver.

By introducing more connectors to each other, getting to know one another, and working together over two days we aim to strengthen our relationships, deepen our understanding and to cross-pollinate and fertilise the pre-existing projects and evolving ideas within our networks.

We will explore opportunities to coordinate our existing organisations better, to keep each other better informed about what we are working on and to potentially cooperate if we can find opportunities to do so. Ultimately, as a result of the networking, we aim to pave the way for any collaborative opportunities which might arise as things evolve…

When and where is it?

The OPEN 2019 Community Gathering will take place on the 27th and 28th of June at the University of London in Holborn, London.

What should I do if I want to come?

Spaces are limited to 150 attendees in order to keep the group small enough to be effective so, if are interested in being involved, please order your tickets below asap. If this event becomes over-subscribed we will explore the possibility of running additional events. If you have a project you would like to present at a lightning talk we’d love to hear from you (please email a short description of your project) but please note – all attendees, including presenters, will be required to buy a ticket.

Please join us to discuss, explore, connect and decide how we can deliver systemic change, together.

For more information and tickets click here!

The post OPEN 2019 Community Gathering – Decentralised Collaboration appeared first on P2P Foundation.

A cooperative cloud would also provide a clear stepping stone towards the open source, collaborative working environment we have described as PLANET and could help form the basis of an entire open source suite of apps for the cooperative economy.

This Internet of Ownership ‘Clouds directory‘ explores and documents efforts to form free, open source alternatives to corporate cloud infrastructures, especially through cooperative business models and is a very useful resource for anyone thinking about building something similar.

As ever, at The Open Co-op we are keen to encourage as much cooperation and collaboration in this area as possible because it seems crazy for new initiatives to re-invent the wheel and greater gains, and network effects, will be easier to achieve if more effort is focused on one larger collaborative effort than many disparate initiatives.

The post below is the latest update from the CommonsCloud project from the Free Knowledge Institute which helpfully details a lot of their technical decisions and subsequent setup.

Members of the CommonsCloud project will be speaking at OPEN 2018 in London in July – come along and say “Hi” if you are interested in collaborating on a common solution.

Photo by neXtplanaut

The post The Making of the Cooperative Cloud appeared first on P2P Foundation.

I know some of this may seem idealistic or unreasonable, but if we’re going to raise the bar for integrity on ICOs, we may as well set our sights high.

Caveat Emptor: When I started writing this post a couple months ago, my lofty ideals had not been dragged through the shark-pit that the ICO space has so quickly become. I have been humbled by the process of seeing just how hard it can be to stay true to high ideals for maintaining integrity.

NINE WAYS TO RAISE ICO INTEGRITY

I’m going to skip over some pretty basic things, like making your project open-source, sharing your smart contract code publicly, getting it security audited, and such. And I also want to specifically note, we are not doing an Initial CoinOffering, but an an Initial Community Offering, because Holo fuel is crypto-accounting-based not crypto-coin-based.

1. Measure Actual Demand for Your PRODUCT to Scale Your ICO Supply

It’s tempting to believe all those buyers of your coin are banging down the doors to get your product. Some surely are. However, the fact that people will buy a poker chip to play with should not be confused with having found the early adopters for your product. In fact, if these two things are distinct, how do you know there’s actually demand for your product at all?

I’d suggest it is possible to find ways to have your early adopters pre-commit to your product, not just purchase gambling chips. Doing this seems more reasonable for measuring demand than a token they may ditch before you ever get to launch.

In our case, we want to know who will run P2P apps that can be built on Holochain. So, we launched a crowdfunding campaign to sell Holo hosting boxes, and tickets to dev trainings or hackathons where people build Holochain apps. In each case, a purchase shows us someone who will either host and run apps, or build them. Our token supply is then scaled to support a host/dev ecosystem of that size (times a growth multiplier) over the first year.

It was quite surprising to see how much demand there is for what we’re building. We became Indiegogo’s #1 trending project in about 6 hours. We raised $90K or 40% of our goal in the first 24 hours. Unfortunately Indiegogo’s legal team then delisted us because they were uncomfortable about our project being connected to cryptocurrencies. Even while hidden from being displayed on their home page and category displays, we still met our $200K minimum goal in just 78 hours. I’m excited to see what happens when our ICO launches and people realize that buying from our Indiegogo campaign is what unlocks more token supply each day!

A crowdfunding campaign may not be the best way to demonstrate demand for your project, but I’d suggest you find your own way. How might you find sponsors or customers willing to put up front money for use of your product? If you don’t try, how do you expect to separate mere gamblers from your actual early adopters? How will you test if you actually have a market for your product or identify how to communicate with them?

2. Seek the Crowd, Not Just the Funds

My last post covered why this is an important orientation to be rooted in if you want to reach your crowd of actual users and early adopters, not just crypto speculators. If your sale doesn’t last long enough for regular people to get in, then you are not getting your real stakeholders on board, for example, when your offering sells out in 30 seconds.

What if you were to code an escrow account that gathers all the purchase bids, maybe caps them so no one could buy more than 10% or so, and then transfers coins to accounts pro-rated by what portion of the actual bids they placed. This would at least allow everyone to get something, rather than sell out in one block to the people paying the highest gas prices.

In fairness, this isn’t easy to do. When we tried to implement that approach in Ethereum, it did not prove feasible to do on chain. We had to split the work across multiple blocks because of gas limits, and it gets expensive really fast. We considered taking the calculations off-chain from Ethereum to Holochain, but decided it may be too early in the review of our own security model to expose all the funds for our ICO as such an early real-world test case.

Given how easy this kind of computation is to do on Holochain, it was quite a wake up call about how little practical computation smart contracts can actually do, and how immature most of the state-channel/off-chain integration systems were. So we all get to watch as some people trading pictures of kitties brings the world’s global computer to its knees.

In the end, we opted for a simplified approach of reserving part of the token supply that your Indiegogo purchase unlocks for a brief time. This way big crypto whales paying higher gas fees or leveraging automated processes can’t just swoop in and take all the tokens in our sale. Regular people — hopefully our real early users — get a reasonable amount of time to set up a crypto wallet and decide if they want to buy the token supply they unlocked.

3. Be Radically Honest

For me, there’s something wrong about the incongruence of seeing people scramble for “easy ICO money” while setting up themselves up as a non-profit, charitable foundation. I’m sure some groups truly do have noble motives to foster good things and a good community with their project, but much of this approach just seems like legal shenanigans.

Everyone is guessing about the legal status of most things happening in this space. Nobody knows for sure how cryptocurrencies or fundraising by crypto will end up getting treated legally. There are very few places with actual regulatory frameworks designed to enable ICOs and regulate decentralized currencies.

Therefore much of what is happening is rhetorical positioning, and may get determined retroactively. Equity. Commodity. Utility. Security. Regardless of what you call it, it may end up getting based on how, when, and whether you delivered what you promised. It can be tricky to cut through the red tape from lawyers to try to just “tell it like it is.”

In order to use accept cryptocurrency in an ICO and have bank accounts where we can deposit the money, we have to gather KYC (Know Your Customer) information for Anti-Money Laundering laws. Unsurprisingly, banking turns out to be one of the more challenging things to do if you’re a crypto company (Monopolies like to protect their turf.).

Even if it means scaring people away from our offering, I feel the best thing to do is be as truthful and straightforward as possible. It’s best if they walk away now rather than get angry later because they didn’t want what we’re actually providing. We try to make it clear what we’re actually doing, even if it doesn’t match the typical crypto-anarchist political ideals.

For example, Holo fuel has transaction fees to sustain the infrastructure and app ecosystem. People immediately assume centralization — that transactions come through us, or that we’re party to every transaction. We’re not. In fact, we don’t even receive copies of every transaction. They’re distributed around the DHT so a bunch of people have them, but without a global ledger, we’re not holding them all.

Even though we know many cryptocurrency people are likely to have a negative reaction to these fees, it is actually the responsible thing to do in our design. So we’ll just have to bite the bullet and re-explain (in forums, chats, emails, etc.) how our currency is actually less-centralized than most cryptocurrencies, even with transaction fees.

4. Deliver Substance Beforehand — Show Don’t Just Tell

Cryptography and decentralized computing is some pretty dense stuff. Many people seriously involved in the space don’t have a solid technical understanding of what’s going on under the hood in crypto projects. Certainly, most people thinking about participating in an ICO are in no position to differentiate between the real deal and smoke and mirrors.

So, even if your tech plan is solid, having a team that can work together and produce results is a whole other thing. Bringing complex tech from design, to build, to usability, and then into widescale adoption is something far more tech startups are failing at than succeeding. Before asking people to fund you, can you deliver something — a proof-of-concept, prototype, or alpha release? It doesn’t have to be bulletproof yet, but it can demonstrate you have a team that can at least get something across the finish line.

Remember, if you don’t limit your ICO to accredited investors who can afford the risk, then you’re asking regular folks for their cash. It’s only fair that you and your team put some skin in the game too. A white paper plus some marketing materials and angel funds for expensive ICO lawyers is not what I’m talking about. Have your team do some work for which their payout is in the same currency created in the ICO.

We held our first hackathon for people to build things on Holochain in March 2017. Six months later we finally felt ready to call something an Alpha release, and we expect to have many dApps and a handful of currency systems built on Holochain before our Holo fuel for hosting next-gen crypto apps goes live. We put years of design and a solid year of software development into our platform before asking people to purchase our hosting credits.

5. Don’t Take it All Up Front

Some ICOs almost accidentally raised hundreds of millions (like Bancor or Tezos), others (like Filecoin or EOS) targeted raising half a billion or more. They have argued these figures are justified because they have to raise everything up front. But actually, that’s just a design decision they made. And if you raise that much money, you’re going to have to devote a significant portion of your attention to protecting and managing those assets.

If you can’t structure your crypto infrastructure with incentives that pay for maintenance of the infrastructure, maybe you haven’t found a sustainable design yet. How can you include a revenue model for the infrastructure so everything does not need to be taken up front, without compromising the values of decentralization people seek in crypto systems?

Holo is sustained by nano-transaction fees on the micro-transactions used for hosting services. We do this without centralizing transactions, records, or enforcement. In fact, we don’t even have copies of all transactions (although the network as whole does). The pattern of mutual enforcement ensures that when a large enough transaction fee has accrued in someone’s account, nobody will do the next transaction with them until they pay it.

As someone who has been designing a wide variety of types and structures of currencies over the last decades, I see many viable approaches for building in a revenue model to sustain the infrastructure. What if software updates carried similar rewards as mining blocks? Shouldn’t a currency reward the people maintaining the software and security as well as those running the hardware?

6. Establish a Reasonable Cap

Once you’ve designed system updates and maintenance into the operating revenue of a currency, then wouldn’t it make sense to limit how much you raise up front? Why create unnecessary risks in managing funds, failing to deliver, getting beat to market, or having a security flaw in your early designs which leads to complete loss?

Doesn’t it make more sense not to get greedy and to cap the ICO at a reasonable amount to launch your system plus a little extra runway for unforeseen obstacles? We expect to have our systems operating within 6 months, so we’re capitalizing our first year, just to be safe. Extra capital can be used as reserves to liquidity and backing for the currency.

Once you’ve included a way to generate sustaining revenue, and you don’t have to raise all future capital in one Token Pre-sale, then you can set a responsible cap on your ICO. Having hundreds of millions in cryptocurrency may seem like a dream come true, but it can make you a target, or disrupt your team and become as much a problem as a solution (look at Tezos).

Even though we are arguably providing a solution which encompasses everything EOS (now in the billions) and many other huge ICO campaigns have promised, we are capping our sale around €25 million. This helps us stay focused on delivering the goods instead of gambling on crypto markets with other people’s money.

7. Minimize Risk of Being Considered a Security (for Everyone’s Sake)

Many people know about the Securities and Exchange Commission and the fairly tight regulation of investments in the U.S., but most countries have laws to protect people from being defrauded by people selling bad investments. The criteria for defining a security are complex, but one significant dimension is about risk. The more you can protect your ICO participants from risk, the better off everyone is.

Disclaimer: I am not a lawyer. Do not consider this to be legal advice.

Typically selling equity in a venture puts it directly into the class of being a security and a shared risk. Many groups are focusing on selling utility tokens with a clear usefulness, or commodity tokens with some kind of clear value. There’s a framework some law firms have developed as general guidelines for navigating these categories.

In our ICO, we pre-sell hosting credits. Participation is simply a pre-purchase of hosting services for P2P apps — an item with actual utility in a $200 billion dollar hosting market. Our cryptocurrency functions like when you buy $20 of credits at a stock photo web site and spend a few dollars on rights on different photos, and the site uses this to determine which photographers get paid.

Holo sells hosting service, which gets provided by various hosts, who get paid in internal currency for their computing power. So, in order to lower risk, rather than just creating speculative coins, we are using a business model with an established precedent in a rapidly growing industry, and leveraging traditional accounting methods augmented with cryptographic immutability.

If you run a HoloPort hosting box, build an app, or install Holo software on your own server, you are a direct participant in generating value in that ecosystem. Because these participants provide direct value, rather than primarily relying on investment in value produced by others, our hosting credits might not be deemed a security.

Another significant way to reduce risk is to shorten the timeline between ICO and the launch and use of the goods/services you’re offering. Additionally, you can define clear and direct benefits, services, products, or rights that people are purchasing (rather than speculative collective upside of future value). Also, you can limit your sales to “qualified” investors (people rich enough to take such risks). Or if you’d like to keep your ICO accessible to normal folks, you can limit purchases to small, low-risk amounts. Combining all of these approaches significantly lowers everyone’s risks.

Are there creative approaches you can take to reach and serve a broad enough audience that your real fans and early adopters can participate? How might those approaches let you access people in the U.S. and other places with restrictions on securities?

8. Better Currency Design and System Dynamics

I’ve written about this elsewhere, but I don’t think enough people are questioning fundamental currency design and dynamics nearly enough. Cryptocurrencies don’t just have to be speculative tokens detached from any real-world value. They don’t have to be coins magically created from nothing.

No matter how cool your idea is, the lid on the success of your future crypto platform comes down to how well you designed the currency that powers it. If it doesn’t move value to the parts of the network which sustain it, it will die. If it doesn’t create the right flow dynamics, it will become imbalanced. Great tech that is only accessible to the ultra-rich, or the ultra-techie because of what it takes to buy into the currency that runs it, is not actually great tech at all.

What’s worse, although blockchain claims to be a decentralized platform, most blockchain systems use either Proof-of-Work or Proof-of-Stake as their consensus algorithm with incentive rewards to nodes providing those proofs. Both of those algorithms are actually approaches to centralizing power and control. In both cases, the rich get richer. It’s no accident that Bitcoin, not even 10 years old, is already more centrally held, issued, and controlled than the national currencies it sought to replace.

The problem here is most everybody assumes there’s basically just one way to run a cryptocurrency, and people have no idea the hundreds of choices available which fundamentally change the patterns of value and wealth in your currency ecosystem.

Holo fuel is not coin- or token-based, instead it is run on massively scalable, double-entry crypto-accounting. Holo fuel is never created from nothing, every credit is accompanied by a balancing debit. This has two interesting side effects:

1) There is always a stable net supply of ZERO credits in the system.

2) Holo starts out in debt for the amount people bought from the ICO and we will literally have to produce 100 times the value we received in economic activity to repay that debt.

Holo fuel is backed by the computing power of the people offering hosting of P2P crypto apps. We will set the price at ICO launch to a benchmarked set of distributed computing tasks at a fraction of the cost (probably 1/10,000) to run on Ethereum. For the hosts providing computing, Holo fuel is also partially backed by outside currencies that were used to purchase credits, so hosts can redeem the credits they’ve earned to pay their bills.

Since the supply of the currency is bound to provide computing power and grows with the capacity of the network to provide it, the value of this computing power for hosting services provides a stable center of value for the currency. There is virtually infinite demand for computing power, so, with or without exchanges, both fairly stable demand and convenient liquidity for meeting that demand already built into Holo fuel. You can’t prevent speculation, but you can design your currency so that the tail doesn’t wag the dog.

Holo fuel is designed to have a rapid rise in value and spending power and then largely stabilize in value to support and encourage active spending and use instead of hoarding. We’ll see how successfully our design pans out — but it will not be just normal crypto speculation tokens.

I’d like to challenge everyone in the crypto space to move beyond just crypto-tokens created from nothing (which is what “fiat” issuance actually means). Instead, imagine new ways your currency can be issued, held, linked to other value and reputation, and tied to reliable real-world value to strengthen and stabilize its value.

9. Accountability

Did you know there are ICOs spinning up with no team members visible, fake team members, or stolen identities? For starters, have a visible team of real humans connected to real world accomplishments and failures, that responds on social media which is also connected to other real world humans. Let’s start with knowing who we’re holding to account.

Provide a clear design of what you’re delivering, a road map to get there, and approximate timelines. Everyone understands timelines and strategies can shift. Be public about that when it happens too.

Be responsible for how much money you accept. Have a way to make value you’ve produced visible. This is more than than the value of your token, but the functioning of a mature crypto project. As mentioned above, the Holo organization’s negative balance makes it quite clear how much was taken in and where we stand in the process of returning 100 times that original value to the community.

Navigating the strange and complex variety of logical contradictions emerging in the ICO space can feel challenging. One way people try to hold a project to account is to issue a bunch of tokens to team members that vest slowly so that they have to stay in the game to create long-term value. ICO rating forms seem to imply if team members don’t have to wait a couple years to vest, then you are just some kind of dump scam. When speculative tokens are the only way of creating a currency, this makes some sense.

Isn’t the point of an ICO to self-capitalize a crypto project? Why wouldn’t you want a project to use the tokens as their own capital to replace the cash costs of paying their team. Does it actually make sense to sell more tokens, putting other people’s money at risk, to just keep value locked in the team’s accounts? Of course, when value comes from artificial scarcity, you want to keep the team from dumping their tokens and crashing the currency. How about a slow release plan? Let them draw salary type equivalents for period of time.

What ways are you taking accountability for ensuring the value of your offering, and for how much your community has funded you?

Conclusions

The ICO space may seem fresh, new, and exciting, but it is also full of scams (whether by intent or by accident). If we want to keep this space alive and maintain the possibility for projects to gain access to creative capital, we need to raise the bar.

There are many sites out there doing ICO listings, reviews, and ratings. It seems some may just be leeches attached to an ecosystem with crypto-cash flow. It’s really hard to tell what kind of due diligence is really getting done, or how well equipped they are to even do it.

When we filled out the listing forms, there was simply no room to communicate anything innovative — no place to explain how our currency or supply actually worked. ICOs have been around for like 10 minutes and they’re already cookie-cutter, fill-in-the-blank projects. I want room to invent and discover the better ways of doing this than the few patterns that have emerged so far!

As we’ve spoken with experts and potential “advisors” in the space, some didn’t like our process. They thought the “small” numbers in the crowdfunding campaign made it hard for the big players to take us seriously. They wanted to push us straight to taking from VCs, when we took this path to connect us directly to our user community and limit the influence of VCs.

In any case, don’t think that doing an Ethical ICO means easy money. It takes a strong moral compass to steer clear of the patterns already emerging in the ICO space, but that may be what it takes to not compromise your integrity, accountability, or relationship with your community. I mean, lawyers are practically in the business of making sure you’re not accountable, and protecting you from the risks of being held to account.

At this stage, I can’t know for sure we’ve avoided all the missteps. In fact, there have been a few times we’ve had to backtrack and do things over again in new ways. But I’d like to think we will at least stand out from the crowd a bit for having tried so hard to get this right. I hope people will still be figuring out all the things we’ve done differently for many months to come.

What do you think of our choices? Do you see any major missteps?

What ideas do you have about how ICOs should work that would make things cleaner, clearer, and safer for all?

Photo by Gwendal_

The post Launching an Ethical ICO appeared first on P2P Foundation.

Every week new ICOs are riding the wave of the crypto craze.

Billions of dollars worth of investments this year… Yet many don’t know about the darker dynamics fueling the process. Why is so much flowing into these offerings? Could it be that exchanges can’t cash out the bitcoin whales so they need to dump into new coins just to diversify holdings? And bonus for them if they can seize control of enough of a coin’s supply to manipulate its value.

$30 Million raised in 24 seconds… Hundreds of millions in an hour… An ICO sold out in a single block of transactions… The whole Ethereum network bogged down by preemptive, over-gassed transactions… One thing we know is those ICOs as a crowdfunding tool are challenged in reaching much of the crowd of end-users for their product — whales are jumping into small pools where they can exert massive influence.

Yet, fundamentally, there are good ideas hoping to grow. And good people, hoping to support and benefit from good ideas. Can we establish a healthier pattern so that the possibilities inherent in decentralized currencies don’t collapse under the weight of over-regulation, and burnt-buyer-backlash?

If we don’t raise the bar of integrity for ICOs ourselves we’ll lose the opportunity to establish stable footing for them to continue. I think we need to challenge a lot of the assumptions that are already hardening in this immature ICO space, including the structure and very nature of the cryptocurrencies being used.

What makes an ICO approach responsible and ethical?

I’ve read the criteria from various rating sites. What stands out to me is their weird blend of obviousness and blindness. Obviously, having a revenue model and demand for your product still applies to crypto projects. Blindly, everyone pretends the clumsy first-gen, global-ledger, burn-the-planet (proof-of-work) approaches are here to stay. ICOs to build data centers just to mine near hydro-electric dams are ranked quite highly.

In other words, I don’t believe you should take these people’s advice. And frankly, you have no reason to take mine either. As a builder of blockchain alternatives, I’m completely biased and focused on the next generation of tools. Yet aside from these varying perspectives about the future of decentralized technology, I believe there’s some common sense about making better ICOs that we can identify.

(And a legal disclaimer — I am not a lawyer, please do not construe any of this as expert legal advice.)

The first question everyone should ask if considering an ICO: Is this ICO primarily a tool to reach money, or to reach people?

Don’t be lazy and say “both!” Even though it is a form of “crowd” — “funding”, there’s an easy way to tell if the operation is tailored to one goal or the other. If you sell out in 24 seconds, or even an hour or two, then it’s pretty clear you were structured for money — not participation. If you can tell yourself the truth about your actual priorities, that should change the shape and structure of everything about your ICO.

It sure looks like there are some pretty sketchy projects pretending to do something useful that will really just abscond with people’s money. And that’s going to bring down the regulatory hammer on everyone. In fact, while this blog post was sitting in drafts waiting to get published, and the SEC started rattling swords, China and South Korea both banned ICOs, and have then steered toward regulation instead.

For the Money

If your ICO is primarily about getting money, I believe you should consider full-compliance with securities laws in the jurisdictions you are selling. Register your offer. Get regulated. That’s exactly what those laws are for — preventing people from getting fleeced by investment offerings they are in no position to evaluate.

Buzz-kill, right? Aren’t ICOs exciting because they sidestep government regulations?

That’s certainly true of ICOs, past and present — I propose a different future.

For the People

ICOs don’t have to be about gambling on the value of some volatile cryptocoin. I’m convinced that it’s possible to design for value stability and to offer clearer kinds of returns. A truer path to thread this needle may involve doing the work to overhaul what you’re offering in order to reduce unnecessary risk, and actually attempting to engage actual, long-term users, not just short-term speculators. I also see ways to structure so that there is greater accountability for funding received and for delivering results.

There are law firms working on frameworks for ICOs, categorizing rights vs. equities and all that jazz. Others will tell you to start a non-profit foundation in Switzerland and pitch your coin sales as if they are donations. Although masquerading as a non-profit may be easier, it won’t build long-term trust with your user-base nor with regulators. (let’s tell the truth: a cryptocoin by any other name will still be as volatile.)

Look, it’s your lawyer’s job to cover your butt. However, when we are building truly decentralized, peer-to-peer systems, we’ve got to cover each other’s butts — in how we design, build, and fund. We can’t afford to take an us vs. them stance against our users in any part of the process. We are them. They are us. If you build in systemic inequities at the funding stage, there’s no reason to believe they won’t be there in every stage of operation.

A House Built on Sand…

Cryptocurrencies don’t have to be worthless tokens with their only value determined by gambling markets. Please see my previous post on Responsible Cryptocurrency Design if you want to understand what else is possible.

Fundamentally, you can’t make your ICO more responsible or valuable than the currency underlying it. And frankly there are some weak-ass cryptocurrencies out there which are really just digital poker chips that waste a lot of electricity.

I know it’s heresy to say some of what follows, but it must be said. Please do the whole community a favor of making the extra effort to improve the field of ICO approaches.

Elements of an Ethical ICO:

This post has gotten long enough, so I will just share some of the questions I’m grappling with:

• Truthful: How could you structure for the most straightforward, truthful representation of your product and intention to your crowd? Cryptography and decentralized computing are hard enough to understand without being buried in marketing spin.
• Measure of Demand: People buying a coin does not prove they’re interested in using your product. How can you separate demand for your product from demand for poker chips to gamble with?
• ICO on proof not theory: How can you help people determine if your idea is possible, and if your team has the chops to build it? What can you build before an ICO as a show of good faith?
• Don’t take it all up front: Can you design your currency to avoid needing to grab all funds in a single initial raise? How can you enable expansion in a manner that’s responsive to future demand and growth?
• Reasonable Cap: Given the prior question, what is a reasonable amount to raise to deliver your first round of solid results? Can you structure so that your cap expands based on true, up-front interest from users of your product (not just the coins)?
• Fair balance of power and wealth: If your thing is so darn cool, you’ll already have all the advantages of being the earliest movers and shakers. How can you structure the distribution of power and wealth to make it a good deal for latecomers as well?
• Not a security: Can you reach more people by ensuring your offer is not interpreted as a security? Might this let you access people in the U.S. and other places with restrictions on securities? Can you offer a clear and known value, not just odds in a betting market?
• Embedded Value: Can your currency be connected to reliable real-world value to strengthen and stabilize the market for it? Would value stability allow cryptocurrencies to move into more mainstream use for a productive economy, not just a speculation market?
• Accountability: Are there ways to take accountability for ensuring the value of your offering, and for how much your community has funded you?

I’m really not trying to rain on your ICO parade. Let’s keep the party going! But that means that, as geeks and crypto-practitioners, we’ve got to raise the bar! Wasn’t at least part of the point to not get dragged down the path of corruption with the rest of the financial industry?

Remember, we started building ICOs to solve real problems with our current financial systems. Duplicating these problems (or worse) in crypto-space fails to accomplish that goal.

These kinds of questions must be asked and answered by more groups doing ICOs. SPOILER ALERT: I’ll offer some answers for all of them in my next post on the trials and tribulations of Launching an Ethical ICO.

This is part two of Arthur Brock’s three part series —. Part three will be available on the P2P Foundation Blog within the next week. 

Photo by ellen reitman

The post Toward an Ethical ICO appeared first on P2P Foundation.

The software has been adapted by FairCoop developers with the help of Bob and Lynn to fit the needs of the project, one of the most important innovations being the introduction of FairCoin wallets within the software, which means that people can seamlessly be paid in the project’s own cryptocurrency for their work.

As the post points out:

Many hours of volunteer work have made it possible for us to reach the point where we are now. However, the growth of the FairCoop community and the corresponding increase of the value of our currency has put us in a position where collaborations can now be fairly remunerated when necessary. We have tried to find a scalable system in order to be able to respond to our growing needs in an open, fair, decentralized, horizontal and transparent way.

This highlights the ongoing success of the ‘hack’ of the cryptocurrency markets carried out by FairCoop: buy a cheap cryptocurrency in large quantities, and grow its value by creating a community around it, based on shared ethical values. Use the inevitable speculation taking place on the open markets in relation to its value as a positive – guarantee an ‘official price’ for merchants and consumers which maintains trust in, and stability of, the project, which in turn makes the coin seem a worthy investment, making its value rise again in a ‘virtuous circle’.

Once sufficient gains in value have been achieved (FairCoin is now above parity with the US$ and almost 1:1 with the Euro), the project has essentially funded itself to the point where developers can be paid to create open source software for the Commons, and the previously-voluntary activists can now receive remuneration. At this point the payments are still somewhat ‘symbolic’ as the consensus was to keep them low so as to avoid a possible overshoot of capacity. ‘Slow and steady’ is the project’s unofficial motto…

So the Open Coop Work is creating value for the Commons, and is entering a stage where it will be possible for activists to work full-time on the project, in a voluntary and non-hierarchical way, and be paid in an alternative, non-state currency (easily convertible to government currencies when required), and support themselves without having to seek work outside of the FairCoop ecosystem. In this way we can see the possible dawn of a new era where the chronic ‘work to live’ problem is finally solved, and people can dedicate all their time to working on projects close to their hearts, without having to compromise their values in order to pay for food and housing.

The OCW overall plan is considered a breakthrough in terms of organizing FairCoop’s work on a more stable basis, which will enable free and willing collaborations, empower commitment and the sharing of a common budget. It is therefore a plan that will provide a significant boost to the ecosystem; especially now that our common value is rising consistently we need to take advantage of that by expanding to a whole new dimension. The challenge is out there for all of us to grasp and participate even more actively in this amazing journey that’s been going on successfully for 3 years now!

As a participant in the project, I can report that the OCW schema really does work, even if it is necessarily chaotic and in need of streamlining at this early stage of its development (issues which are being worked on by dedicated devs – of which we need more, please contact us via the website for details if you are interested). It is extremely exciting (even if at times confusing!) being involved in a project which is at the forefront of so many innovations at once, and heartening to see that the original vision of the project is now beginning to come to fruition. Of course there is much more to be done, but having solidified this new way of coordinating cooperative work, progress should be even more dynamic in the future.

For more details about the OCW process itself, please see the blog post.

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I’ve been thinking a lot about how to make ICOs really solid, ethical, lasting sources of good. However, at the heart of an ICO is the “C” — the cryptocurrency which is being offered. How can we really get to ethical ICOs when cryptocurrencies themselves aren’t ready to serve mainstream needs? [This is the first of three articles about getting to ethical ICOs.]

’Cause let’s tell the truth — cryptocurrencies just aren’t safe for everyday use by normal people and businesses yet.

I’m not talking about double spends, or 51% attacks. I’m not talking about inaccessible UI, and impenetrable language. I’m not even talking about poor key management or device security. While those are substantial issues, more fundamentally, most people simply can’t take huge risks with the value of money. The crypto-roller-coaster is certainly fun for some people, but it is not a ride for those who can’t afford to lose what they invest.

Crypto trading markets are not currently meant to be very accessible. The risks seem vast and incomprehensible. Most cannot analyze code (think of DAOhub, for example) or tell from a whitepaper who’s blowing smoke and who can deliver the goods. There’s too much news to track and too much insider information to be connected to.

Crypto whales can jump into smaller coin pools and play pump & dump games to manipulate prices. If you aren’t one of those folks shaping the market, then you are probably one of the suckers hoping to get lucky instead of screwed. And so far all we really have are trading markets. There’s no substantial economy using cryptocurrencies yet. All this nonsense market cap stuff is just people trading one kind of poker chip for another.

I know that paints a pretty dark picture. Many will want to point to the long-term upward trend of the few giants like Bitcoin or Ether, even in the face of economists who think those bubbles are bound to burst. I wonder what happens to them when the next generation tech comes out that transcends proof-of-work, proof-of-stake, consensus, and blockchain itself? How long will those bloated energy hogs — already centralized under the control of very few mining pools — stand against truly resilient, low-power, fully distributed alternatives?

It Doesn’t Have to Be This Way

It is not fundamental laws of physics or laws of computation which has us repeating the toxic patterns in the crypto-space that have corrupted global financial markets — concentrating wealth and power to the few, and manipulating volatile boom/bust cycles. We are simply repeating the problems of the past because of our failure to see real alternatives.

The designers of blockchain may have understood cryptography, but it looks like they didn’t learn the basics of currency design or weren’t willing to challenge the dysfunctional patterns of our financial system.

Cryptocurrencies do not have to be gambling tokens created from nothing. They can be responsibly connected to assets, promises, or real-world value. They don’t have to re-create all the speculative money problems that they were supposed to be solving.

In fact, the whole crypto community understands currency design so poorly that they have practically redefined the word “fiat” (from Latin, meaning spoken into being from nothing) to mean national currencies. This fails to notice that every cryptocoin so far is also spoken into being from nothing. (Hint: Here’s how you can tell, ask yourself, “Who gets debited when someone is credited with newly mined coins?” If the answer is “Nobody,” then you know it is fiat.)

Optimizing for Medium of Exchange

National currencies enjoy monopolies propped up by mandatory tax in the currency and legal tender laws. Essentially, this makes life almost impossible without using a national currency. This compulsory monopoly should be easily crushed by cryptocurrencies if we had good ones — fast, cheap, interchangeable, decentralized. But we’re still stuck in the monopolistic mindset of money.

We’ve collapsed a bunch of different functions into money that actually can and should be reconfigured in many ways: medium of exchange, store of value, unit of account, and token of status.

Monopoly Busting Rule: Don’t try to be everything to everyone. Currency design should be optimized to be a medium of exchange or a store of value, but not both. These two traditional functions don’t actually play too well together. If you optimize a currency to be a good store of value, then people don’t want to spend it. They sit on it, and no activity in the mainstream economy takes place in that currency. One of the ways to optimize for circulation, is various forms of “demurrage” (almost a kind of hoarding tax) which create a kind of hot-potato effect to keep the money moving. It has to be easy to spend, using familiar tools, with minimal overhead.

What if we gauged the success of a cryptocurrency on its level of integration into the daily productive economy of how work gets done? If the only measure of a cryptocurrency’s success is its market price or market cap, then we won’t have cryptocurrencies that people will want to use for every spending. And if they stay so volatile, then many people simply can’t rely on them for everyday survival. When we have cryptocurrencies with stable values over time, we’ll see many more businesses being willing to accept them, and more people willing to participate and spend them.

However, the design principles for a value stable currency are rather different than the ones employed in current cryptocoins. Some of the characteristics you need when optimizing for value stability are:

• Dynamic supply — that can expand and contract based on real market behavior and demand
• Sufficient supply — not too scarce, not too plenty, but just right
• Strong internal value — a strong spending sink with clarity about the currency’s value in obtaining it

Given today’s cryptocoins, this may seem like a pipe dream. But it’s not really as hard as it may seem. Imagine a currency backed by an asset which can pretty easily be delivered by a loose network of providers who accept the currency in payment for: electricity from solar panels, computing power from idle computers, rides from passing drivers, stays in empty bedrooms, etc. A currency tuned to kilowatts or computing power would have a strong enough internal value to serve as center of gravity and common economic need.

For a sufficient supply which can expand and contract, I only know of one form of currency issuance that fits the bill: Mutual Credit. One of the strange things about mutual credit is that the net supply is always ZERO. It uses double-entry accounting type transfers which always have an offsetting debit for every credit. Positive and negative account balances always balance each other.

The active supply in mutual credit is controlled by managing credit limits. If you use an algorithm to tie people’s credit limit to their recent earning history in the currency (with some tweaks to prevent gaming), then their credit expands when there’s demonstrated demand for the value they sell, and it contracts when there’s not. We get at least some kind of breathing — expanding/contracting effect — that we were looking for.

Finally, you’d need to build an interface that connects this Open Value Network (electricity, computing, open source hardware, etc.) to outside demand. People could buy the crypto-credits, denominated in kilowatts or kilobytes, with outside currencies which the providers would be able to use to cash out for the services they provide that back the value of the whole system. Special reserve accounts would need to be created for this cashing in or out, operating as a very limited type of exchange focused on the asset providing the center of gravity for value.

To implement this we’d have to abandon the cryptocoin token-centric approach for a crypto-accounting, user-centric approach. Luckily there’s a blockchain alternative called Holochain that makes this kind of thing pretty straightforward to build.

Whew! If you’re not used to detailed currency design discussions, that may have sounded like a lot of unfamiliar words. Hopefully it’s enough to paint a picture of a viable alternative approach to cryptocurrency.

Optimizing a Store of Value

People with excess cash should be able to easily convert from medium of exchange currencies to other cryptocurrencies, optimized to be stores of value. It is only fair to share this as a counterpoint to the medium of exchange currency design above, however, as often happens, this blog post is getting too long and I will need to make it a separate post to give it the space it deserves. Suffice it to say that it is designed to move slower and to be correlated to real world value which grows not because of speculation or perception, but because of actual growth of the asset itself.

As a simple example, imagine a tree-banking currency designed to invest in sustainable growth of tropical hardwoods — as long as there are humans building things, it is likely that hardwoods like teak will be valuable. Imagine converting to tree-banking credits which employ people to steward rainforest and replant zones and sustainably harvest hardwoods. There are many other kinds of examples where invested inputs grow in physical real-world value just by staying invested — these make optimal configurations for store of value currencies.

I have a Dream!

Imagine a world where cryptocurrencies have risen to new levels of common usage and integrity. Where global and local economies are rooted in peered value networks with peered governance, far outside the spheres of mainstream politics and easy access to mutual capitalization. Imagine easily transferring resources where they’re needed without being gouged by foreign transaction fees, ATM fees, wire fees, delays, and paperwork.

I think a major step toward this dream becoming a reality is networks of value-stable, asset-backed crypto-credits rooted in designs like I described above.

We’re working on some of these now, to be built on holochain.

Stay tuned!

This is part one of Arthur Brock’s three part series — Toward an Ethical ICO. Parts two and three will be available on Medium within the next two weeks. If you’d like to get them early, sent to your inbox, request the PDF.

The post Building Responsible Cryptocurrencies appeared first on P2P Foundation.

Michel Bauwens is a theorist in the emerging field of P2P theory and director and founder of the P2P Foundation, a global organisation of researchers collaborating in the exploration of peer production, governance, and property. He has authored a number of essays, including his seminal thesis, The Political Economy of Peer Production.

In the run up to the Open 2017 – Platform Co-ops conference in London, Oliver Sylvester-Bradley, from The Open Co-op explores some of Michel’s ideas.

Avoiding the exploitation of the commons and open source peer production

OSB: At The Open Co-op we believe that open source software is an essential component of the Platform co-op / solidarity economy. However, some of the developers I speak to are now less inclined to publish their code openly, since they have seen large corporations incorporate their code and go on to build multi million pound businesses… This makes me wonder if there is a need to move on from simply “open source” by creating a new licensing system, similar to the Creative Commons for artistic works, in order to ensure that developers can stipulate the ways in which their code may be used, and by whom, in order to ensure the commercial world does not exploit open source.

MB: This is of course a very valid concern. But we have to ask a few questions. First, we have to recognise that people have to make a living and free software developers, like others, can be paid for their work as employees or freelancers, independent of the ‘open’ nature of the code. 75% of Linux Core developers are paid for example, and the Fair Use Economy report calculated that one sixth of GDP and 17 million workers are making a living around shared knowledge economies. That’s not trivial.

My point is that work is a rival good, and has a price, but that knowledge is naturally abundant and thus privatising it is inherently problematic.

Which is why we propose a novel solution, one which combines both a full commitment to share knowledge, and a demand for reciprocity towards the commons in the case of commercialisation. This is what we call the ‘copyfair’ principle, and it avoids the reality of free software, which is that, ‘the more free the license, the more private the economy around it’.

To my mind, we thus continue to write shared code, but we create ethical business coalitions around it, and we re-introduce reciprocity into the private market mechanisms.  Examples of this are the practice of the FairShares Association, which has one CC non-commercial license for everyone, and a commercial license for those who pay a membership fee (this is their ‘reciprocity’ requirement).

The Peer Production License used by some publishers is another. I take this as an ethical requirement: while we all have to make a living, and I respect the freedom of everyone to use moderate IP protection as a free choice, I believe that withholding vital productive knowledge for humanity is not the right thing to do.

OSB: OK, some people get paid to write open code – others do not, but I believe for open code to flourish we need to actively encourage developers to publish openly and that is not going to continue to happen if their work gets blatantly exploited for financial gain by others.

Having read more about the PPL now I understand its structure and objectives and admire the way it aims to encourage reciprocation if a conventional capitalist business reaps financial dividends from the open source work. I also understand the valid objections to limiting the flow of ‘free knowledge’ and information.

However, I personally feel we are in a kind of battle here, to either fix, out-evolve or supersede the ‘extractive’ economy asap, if we do not want humanity to become extinct. And I do not see the elites that wield power today giving up on their vested interests any time soon so, to me it seems, we would be wise to place limits on how, and where, and in exchange for what, our work can be used.

As Nathan Schneider put it to me in a recent email:
“as long as there have been commoners, they have had to protect their commons from the greedy hands of the lords.”

We need to organise ourselves so that the ‘value’ of our work can be re-invested in our livelihoods, communities and resources. 

MB: We have to be defensive, but I think more importantly we need to organise ourselves so that the ‘value’ of our work can be re-invested in our livelihoods, communities and resources. This is why it can never be a purely defensive game, or even trying to get more of the piece of the pie, but it requires a reorganisation of our modes of production and exchange.

Our proposal at the P2P Foundation is threefold at the micro-economic stage: first, we need to build productive communities around our commons, and declare our value sovereignty; this means deciding to distribute value differently, ‘generatively’; this requires a second step, creating generative entrepreneurial coalitions, so that we are commoners adding to the commons, but also cooperators making a living. And this requires also of course building meta-networks, between them.

Obviously, this takes time, and it took capital 400 years to consolidate itself with all the institutions it needed. The problem of course, is: we don’t have that time, but perhaps, because of the acceleration of learning through mutual networks, we can achieve it in 40.

It’s clear from this, given the urgencies of climate change and ecological destruction, that we can never wait for these prefigurative processes to go on on their own. This is why we also need to ally the prefigurative forces with social movements and emancipatory political forces, and we need to infuse them with the models of the commons, and ‘liberate’ them from their exclusive reliance on private vs state.

By building such an alliance we can then also politically transform social and economic institutions and have them evolve in the direction of the prefigurative society that we are building. Free knowledge is hugely important in this context, because under capitalism, we treat rare resources as if they were infinite, and we treat abundant resources, as if they were scarce. So we destroy the planet, but withhold the knowledge necessary to solve the problems thus created.

Think of how patenting of solar and electric cars led to a 30 year stagnation of their necessary development. This is why we have to square the circle, continue to share code, but create vehicles for livelihood creation around it. We must also transform the institutions so that we can have a ‘partner state’ which can ’empower and enable personal and social autonomy’, just as the FLOSS Foundations are doing that at the micro-level. We need commons-based, commonified public institutions. Nobody said it would be easy.

Under capitalism, we treat rare resources as if they were infinite, and we treat abundant resources, as if they were scarce. So we destroy the planet, but withhold the knowledge necessary to solve the problems thus created. 

Can Co-ops create increased value?

OSB: I was inspired to hear you talk about the increased value that can be generated by co-ops and platform co-ops when members are all owners and value is not syphoned off, and away from the organisation, by third parties such as external investors. To me this is one of the main benefits of platform co-ops which I feel has not been adequately explained. Do you know of any real-world examples that prove this to be the case?

MB: Yes, I fully agree with that basic premise that we need platform cooperatives that are generative towards their community and commons and the resources they draw from. Cooperatives of course have a long history of proving they work and employ more people worldwide than the multinational enterprises, and we also know from studies that cooperative startups do a lot better than venture-based startups (who, for each unicorn they produce, destroy 99 other companies). This being said, platform cooperatives are very new and so it is still difficult to say with confidence how they will work. But Nathan Schneider’s Internet of Ownership site identifies more than 250 of them, and, to take just one of them,  Stocksy, a platform co-owned by professional photographers, seems to do quite well.

So, it needs to happen, and the established cooperatives and ethical and solidarity finance absolutely needs to wake up to the necessity of playing a vital supportive role. I stress another condition though, which is the concept of ‘open cooperatives’. My critique is that traditional coops end up working for their members in the competitive capitalist economy, and tend to slowly take over the practices of corporations, up to the point of being demutualised sometimes.

An open cooperative in contrast, would be multi-stakeholder, which means that a ride-hailing coop might be co-owned and governed not just by the drivers, but also by the users and other stakeholders; that it actively (through its own statutes and rules) is engaged in producing common goods (not just the platform itself, but say a commitment to open source code for example); and that it has an outlook and structure committed to achieving some social or environmental purpose.

Marjorie Kelly, in her book on the ‘Emerging Ownership Revolution’ has outlined five major characteristics of ‘generative enterprise’ that I think we should be heeding.

She writes that:

“In ownership design, there are five essential patterns that work together to create either extractive or generative design: purpose, membership, governance, capital, and networks.

• Extractive ownership has a Financial Purpose: maximizing profits. Generative ownership has a Living Purpose: creating the conditions for life.
• While corporations today have Absentee Membership, with owners disconnected from the life of enterprise, generative ownership has Rooted Membership, with ownership held in human hands.
• While extractive ownership involves Governance by Markets, with control by capital markets on autopilot, generative designs have Mission-Controlled Governance, with control by those focused on social mission.
• While extractive investments involve Casino Finance, alternative approaches involve Stakeholder Finance, where capital becomes a friend rather than a master.
• Instead of Commodity Networks, where goods are traded based solely on price, generative economic relations are supported by Ethical Networks, which offer collective support for social and ecological norms.”

I think that is an excellent summary of where we need to be heading.

Inter Co-op cooperation and decentralised, distributed currencies

OSB: Principle 6, co-operation between co-ops, seems to provide huge scope for recycling the value that is generated within the co-op community, but doesn’t seem to have been particularly effective to date. Do you have any thoughts on why that might be and how co-ops could improve inter-co-op cooperation?

Relatedly, in a recent article for oD I suggested that “Decentralised distributed currencies will change the way our economy works by re-routing flows of capital. For example, if I could earn “co-op coins” in one co-op and spend them in the next, as a co-op member I would be incentivised to do so, since I also receive a share of the profits.”

How practical do you think that idea is? And what role do you see for decentralised distributed currencies in a new, generative economy?

MB: Cooperatives that compete, with each other and other private companies, and for the benefit of their own members, have historically adapted to capitalist practices, and they had to, given that capitalist competition drives down the cost and prices of the products they need; this has made inter-cooperative cooperation difficult to achieve, with some exceptions. I don’t think it can improve in the same context. But making cooperation ‘commons-centric’ changes the logic, since such commons increase the productive capacity of participating cooperatives. This is why capital has moved massively to the platform models and why it has been such a historical mistake of the cooperative movement to have missed the boat in this shift.

I also believe distributed currencies may play a role in this shift. The way I see it is the following: cooperative commons coalitions need to declare their ‘value sovereignty’; this means that, even as they may be dependent on external capital logics, internally, they can change the mode of distribution of value according to their own value logics, using contributory accounting mechanisms. And within this context, they can express their own new value logics, using new types of currencies, like for example backfeed.cc aims to do. I recommend your readers to check out our latest report on ‘Value in the Commons’ which analyses developments in open and contributory value accounting, based on 3 in-depth case studies.

OSB: The terminology you use here is a little new to me. If I understand you correctly, you are saying that, even though a co-op may generate income in GBP, for example, they can derive their own methods of distributing value (above and beyond just the GBP) to their members and other stakeholders, using their own distributed currencies. Is that what you are saying?

MB: I am saying two things. First, coops indeed need sovereign currencies as income, which they can distribute not just as wages, but also as contributive income, according to their own rules. Second, and complementarily, they can also recognise other value than what is recognised as ‘commodity’ or market value by the external market, and create other tokens for that, which can be used in inter-cooperative networks. These tokens are similar to complementary currencies that are used locally, but in this case, we are speaking of ‘territories of value circulation’, that are not geographically determined, but exist through the network of value exchanges over the network.

OSB: I read with interest how Open value Networks present a viable model for profit sharing in which a ‘value accounting system’ computes equity in proportion to contributions automatically, removing the pain from the profit sharing process. Could that be another example of “declaring value sovereignty” you describe above?

MB: Sensorica is indeed an example of value sovereignty, and there can be other forms, and of course, that is the point of value sovereignty, that it can be diverse. Sensoria’s aim is to create a much more direct linkage between commons contribution and market income. My own preference though is to create cooperatives around the commons, as an intermediary institution.

Is the blockchain really the holy grail for distributed organisations and currencies?

OSB: backfeed.cc seems interesting, and especially powerful if it can be understood and deployed as intended, but I am not convinced that the blockchain is either required, or the best underlying infrastructure, for new forms of distributed currency. For example, the block chain goes to great lengths to anonymise transactions, so that trade made may be conducted anonymously but, as we have seen so clearly in our modern economy (and as the Prisoners’ Dilemma illustrates so well), people do not behave so well in one-time, anonymous transactions.

On the contrary, when transactions are with real people, that we grow to know, people tend to behave more co-operatively and even develop deeper, more valuable ties based on mutual aid and solidarity. Reputation seems like the key ingredient here, as opposed to anonymity. What do you think about the current obsession with basing all these types of new, distributed, organisations and systems on the blockchain? And what do you think about the idea of an alternative system, based on open identity and reputation being more suited (and potentially more valuable to) the p2p / collaborative economy?

MB: I agree with your critique. The blockchain, let’s not forget, comes from the design of the Bitcoin currency, which is an anarcho-capitalist, “austrian economics” inspired design. It represents ‘ultracapitalism’ if you will, the urge to commodify everything. It presumes atomised and isolated individuals that contract out with each other, and dislikes any collective governance. So, while I think the blockchain can be inserted in other designs that do not make these limiting assumptions about human nature and motivations, it is not absolutely necessary.

My own beef with backfeed is that it assumes human work needs incentives, but the key assumption I make is the opposite, i.e. that commons work is driven ‘intrinsically’, and so there is a danger, that incentivising may actually ‘crowd out’ commoning behaviour to replace it with competition for scarce tokens. But of course we need to experiment, and backfeed is versatile enough to allow for very different designs adapted to various communities.

Ownership is directly related to the real value of an organisation

OSB: I developed the diagram (below) during discussions with Douglas Rushkoff, which attempts to illustrate the direct relationship between ownership and “real” value of an organisation to society. How true do you think this illustration is?

MB: The graphic is fine for me, in my own language, which comes from Marjorie Kelly’s ‘Emerging Ownership Revolution’, which we discussed above, I distinguish ‘extractive’ from ‘generative’ approaches; this could be added to the graphic. For example, the VC model extracts value from human communities and natural resources, for the benefit of a minority of shareholders (example, Uber destroys the potential of ride-sharing to diminish the numbers of cars, by making drivers compete for customers); while cooperative models attempt to add value to the communities and resources they work with.

What is democracy and how can we make improve on the present, undemocratic system

OSB: You seem to be a fan of democracy, as am I, however, I’m not sure I have ever experienced it. What do you think real democracy is?

MB: I think there are two competing visions of democracy, one which is rule by the people directly, as in the Athenian model (though it was restricted to male citizens), the other is through a set of institutions which have the contrary aim of actually restraining such direct power, as documented in the book by Jennifer Tolbert Roberts, “Athens on Trial: the Anti-Democratic tradition in Western thought “.

My focus is on the first model. The problem is that after 200 years of the second model, the primary areas of our life, like school and work, are not democratic, and so the basic problem is that we expect democratic behaviour from people (citizens / residents) who have basically never exercised it. This is one reason I favour the commons model, because it is based on self-governing communities, so it is a training school for democracy like no other.

OSB: When you say ‘the commons model’ what exactly do you mean? Where can we see a commons model acting as “a training ground for democracy like no other”?

MB: I follow the traditional definition of the commons, i.e. a shared resource, managed by a community according to its own norms. There are plenty of physical commons in the Global South, i.e. 85% of Africans still depend on them, less so in the West, but there are in fact more than we think. In Galicia, Spain, one third of the land is still commons and run by commons associations. But today, we see the explosion of digital commons (shared knowledge resources are the basis of one sixth of GDP in the US economy), and urban commons. There has been a tenfold increase of citizen initiatives in Flanders in the last ten years, and a similar exponential explosion in the Netherlands, and many of these initiatives involve creating commons as part of their practice. Guy Standing’s book on the precariat, has documented the deep linkage of precarious workers with networks characterised by commons.

I do not believe a complex society can solely run on direct democracy, and it is not realistic to demand of people to be involved with everything.

The innovation of peer production moreover, which is now actively pursued in the Italian model promoted by LabGovand LabSus, is the realisation that not everybody has to decide on everything, we simply have no time to be involved in everything at the personal level, but to give privileged space to the already engaged citizens, with the appropriate control mechanisms by other stakeholders, including ‘society’ as a whole.

OSB: So do you favour liquid democracy, or any kind of delegative democracy?

MB: I favour a mixture, which needs to be experimented with. I do not believe a complex society can solely run on direct democracy, and it is not realistic to demand of people to be involved with everything. Thus we need to build new layers of deliberative democracy and participation, on top of improved representative democracies, which can also include new lottery systems for such presentation, as for example presented in Melenchon’s proposal for a newConstituent Assembly and 6th Republic in France.

Right now, we (the human race) are at the cusp of combining the old representative model, which is no longer functioning for different reasons, and an added layer of experimental more direct democratic models. See also what is happening in Voralberg, the Austrian region, with civic councils for examples; or the Bologna Regulation in Italian cities, which gives citizens direct policy power to instantiate commons governance projects.

I think the essence is now experimentation, and different regions/countries/cities might opt for different contextual mixes of collective decision-making. Of course, I am also very aware of potential counter-tendencies with an authoritarian capitalism under the leadership of right-wing radicals such as the Trump-ian forces. It’s going to be a context between the two models, while we know the status-quo is no longer functioning.

OSB: Since members of co-ops and platform co-ops get to vote on everything and anything by which they are affected, a society populated by a multitude of co-ops might provide an alternative system of governance.

A co-op of co-ops could perform organisational duties at any scale whilst ensuring democratic governance by pushing decisions down to the lowest possible levels. What do you think about the possibility of a completely new system of democracy, like the above, superseding the existing system?

MB: I think we should be wary of uniform systems, since, if anything goes wrong with it, there is no backup. This was the argument of Rosa Luxemburg against the abolition in Russia of the parliament (during the Russian Revolution), she realised that if anything went wrong with the worker councils, there would be no other power able to create a balance, and she was proven right. The model you describe is being experimented in Rojava I believe.

But the cooperative model has its limits in my view, in that it easily functions as private property or ‘worker capitalism’, in relation to the rest of society. This is why I stress the model of open cooperatives, in which coops are also directly aligned with the production of common good, in the form of ‘commons’, through their own statutory obligations. In general, I favour a pluri-form model of democracy, in which cooperative democracy has its place, along with others, to make sure there is institutional diversity.

OSB: So, would I be right in saying you think that the most practical way to expand democracy is for citizens to propose solutions and organise around areas of shared interest (or physical or digital commons), to make their voices known and to influence our existing ‘representative democracies’ in the hopes that our representatives make better decisions?

Democracy has to be first of all a practice that is integrated in our lives, not something just like an election, which is like electing which elite is going to govern us.

MB: No that is not entirely correct. On the one hand, democracy has to be first of all a practice that is integrated in our lives, not something just like an election, which is like electing which elite is going to govern us (election = elite, both words have the same roots, and the greeks saw elections as the aristocratic principle and the lottery as the democratic principle); the commons, defined as shared resources that are governed by communities according to their own rules and norms, are a good way to achieve this, i.e. as we learn and work, we practice democracy.

Representative democracy needs to exist to cover wider territorial and functional units, but we are at the threshold where mere representation is no longer enough, and so this is the time to augment it with new techniques, to be experimented with, and this may involve participatory, deliberative, liquid feedback type, lotteries etc.

 John Heron explains well what chance of change I believe we can achieve, he once wrote:

“There seem to be at least four degrees of cultural development, rooted in degrees of moral insight:

1. autocratic cultures which define rights in a limited and oppressive way and there are no rights of political participation;
2. narrow democratic cultures which practice political participation through representation, but have no or very limited participation of people in decision-making in all other realms, such as research, religion, education, industry etc.;
3. wider democratic cultures which practice both political participation and varying degrees of wider kinds of participation;
4. commons p2p cultures in a libertarian and abundance-oriented global network with equipotential rights of participation of everyone in every field of human endeavour.”

Heron adds that “These four degrees could be stated in terms of the relations between hierarchy, co-operation and autonomy.

1. Hierarchy defines, controls and constrains co-operation and autonomy;
2. Hierarchy empowers a measure of co-operation and autonomy in the political sphere only;
3. Hierarchy empowers a measure of co-operation and autonomy in the political sphere and in varying degrees in other spheres;
4. The sole role of hierarchy is in its spontaneous emergence in the initiation and continuous flowering of autonomy-in-co-operation in all spheres of human endeavour”

Visions of the future

OSB: Finally, I’d like to ask about your vision. We are often exposed to the vision of a world full of hate and extremism and scarcity but rarely hear about a positive alternative. If you were in charge, what changes would you make to help speed up the transition to a collaborative, generative, sustainable, economy?

MB: I have a rather tragic vision for change, i.e. change happens when we must. At this stage where we have a world civilisation which is based on extraction, where social inequalities lead to authoritarian right wing populism and the planet is endangered in all kinds of ways, humanity will do what it has always done, i.e. create popular and spiritual movements that aim to limit extraction and discipline the extractors.  Mark Whitaker, who has done a 3,000 year comparative review of how civilisations react to meltdowns shows a pattern. This means going to a system that stabilises social unrest. This is where peer to peer dynamics come in today, and that needs massive mutualisation ( = pooling, = commons) of physical and knowledge resources.

Thus any successor system will need to comprise revived commons as a way to drastically reduce the material footprint.

If the medieval monks mutualised knowledge and infrastructure through monasteries and feudalism re-localised production, so today we have free software / open design, the sharing / access based economy to mutualise idle resources and recycle / upcycle and distribute local manufacturing based on demand, to relocalise.

You know the analogy of imaginal cells in the caterpillar; the cells who identify with the caterpillar are in panic, because the system is dying, but the cells who identify with the butterfly and carry its DNA know that it is a transition. Similarly today, we see seed forms emerging to solve the systemic crises, and the P2P Foundation is dedicated to observing them, analysing them and to think through where this can lead us, and be a catalyst for that change.

OSB: That’s a great analogy. The Open Co-op has similar objectives and we will be discussing all of the above themes at Open 2017 in London In February. Thank you for your time and all your thoughts Michel, you are an inspiration and the P2P Foundation is an amazing resource for the anyone interested in the transition to a more equitable, sustainable society.

This post was originally published on OpenDemocracy.net. 

The post Representation is no longer enough – A Q&A with Michel Bauwens appeared first on P2P Foundation.

Technology is disrupting outmoded industries at an unprecedented rate. As the gyroscopic effects of the neoliberal model wobble out of control Paul Mason suggests the end of capitalism has begun and even the IMF is questioning whether their capitalist agenda was a 30 year long mistake. This article analyses how platform businesses disrupt industries and suggests how emerging technologies and ownership models are ushering in a fundamentally new, truly democratic economy.

The rise of disruptive platforms

Uber has become the most valuable startup ever and has completely disrupted the taxi industry in every country it has targeted. Similarly, Airbnb has disrupted the hotel and bed and breakfast markets, making massive profits by syphoning fees from customers and suppliers without producing any tangible goods or owning any physical infrastructure. So what are the key ingredients of their successes?

To disrupt an industry you can’t just launch an app, you have to remove pain, improve service or simply better the traditional process of transaction and both Uber and Airbnb have done this in spades. Uber have not only improved the traditional cab booking process but have relocated the payment process from the physical to the digital world. Gone are the days of struggling to find a local cab number, wondering if or when it’ll ever arrive and then fumbling to find the right change whilst you manhandle your luggage. With an Uber you just say thanks and walk away.

Similarly, renting a flat or a room was always tarnished by the payment process. No matter how much people trust others there’s something ‘dirty’ about asking people to pay you. With Airbnb payment happens upfront online so your host can simply drop their keys in your hand confident in the knowledge that payment has already been made.

People like simplicity. These new, disruptive startups have simplified peoples’ lives by utilising technology, which has helped them grow exponentially.

So disruption works. And works particularly well when the target industry is well established, but a bit ‘stuffy’. A bit ‘long in the tooth’ and populated by people that won’t realise what’s going on until it’s too late; by the time the new solution is well on it’s way to usurping the old.

Which makes me think of Whitehall.

Where else can you find such a superb group of ‘stuffy’, old fashioned, single-minded capitalists, who are a bit ‘long in the tooth’? Where else can you find an ‘industry’ that is operating on completely outmoded, outdated and outrageously ineffective processes that would benefit from a little disruption?

Capitalism has subsumed democracy and made it an industry

We don’t really live in a democracy. People argue that we do, but there’s no way it can be true. If we lived in a democracy, we would have a say in at least some of the decisions by which we are affected. But we don’t, not really, not like we should in a democratic society. No matter how hard I try. No matter how much I get involved. No matter how many times I write to my MP, or tweet at him, my opinion does not make any difference to the harsh reality on the ground. The social paradigm we live in is dominated by the interests of big business. Capitalism has subsumed democracy.

Let me give you an example. How, in a democracy, would something like TTIP be possible? For those of you that have been living under a rock for the last two years, TTIP is the best example of rapacious neoliberalism doing its best to gain even more power over the entire planet. The idea is to further empower giant corporates by letting them sue national governments for loss of profits caused by changes in legislation. The fact that this “idea”, which will affect everyone since it aims to gain the power to overthrow any environmental legislation which stands in the way of “free trade”, is being debated behind closed doors by the global elite, illustrates how undemocratic things have become. What happened to our vote? What happened to the voices of the millions and billions of people this legislation will affect? The people’s voices are not welcome in a debate ‘owned’ by big business.

To illustrate how far we have come down this road, let’s look at how big business plays dirty. Big business will use any means at its disposal to get what it wants and lobbying is one of its favourite tools. Neal Gorenflo describes how “death star platforms” like Uber and AirBnb combine lobbying with other influencing strategies to bend the market to their will:

Uber’s David Plouffe, formerly President Obama’s campaign manager, literally besieged Portland’s mayor, ultimately forcing him to create a favorable policy. Bloomberg’s “This is How Uber Takes Over a City” gives an eye opening account Uber’s strong arm tactics. As of this writing this, Airbnb is running an $8.3 million campaign to defeat a San Francisco voter proposition (Prop F) designed to limit Airbnb’s negative impact on the city’s skyrocketing housing costs. This lobbying activity is just the tip of the iceberg. Uber and Airbnb are using a good bit of their $10 billion+ collective war chest to hire a global army of lobbyists. In their language, they’ve put “boots on the ground in hundreds of cities.

The modern world of unfettered neoliberal capitalism is a far cry from the village market that once was… Gorenflo describes the new wave of “professionals” applying their collective aptitude to creating startups as “shock and awe entrepreneurship” in which the rules are being bent, broken and re-written for capitalism’s own benefit!

It’s like 1+1=10. The more money Death Star platforms raise, the more press and customers they get. The more they break the rules, the more press and customers they get, which enables them to raise even more money. Taxi drivers strike? Jackpot! And the cycle repeats. It’s a blitzkrieg. It’s shock and awe entrepreneurship. It’s the sound of a new hegemonic bloc coming to power.

Democracy may not be a traditional ‘industry’, but with campaign contributions at record highs, it’s more like one now than ever before. Democracy as it was and should still be defined, is no longer working as it was supposed to. It is no longer “government of the people, by the people, for the people” it’s more like “government of the people, by the elites, for big business”, with a token ‘vote’ to placate the electorate once every five years, and that is something we can disrupt.

How can we disrupt capitalist democracy?

As we have seen from the Uber and AirBnb examples, successful disruption requires fundamental changes to both the underlying agreements (the T&Cs you don’t read but agree to before using their platforms) and the processes and transactions (what you can do on the app and what happens in the physical world) of an industry.

Our entire economy, in fact the very concept of money itself, is nothing more than an agreement. The words “I promise to pay the bearer on demand the sum of…” which are still printed on UK Pounds Sterling encapsulate the basic “agreement” upon which our entire economy is based. Don’t get me started about how banks have run away with that idea but the basic point remains: money is an agreement. If we want a new monetary system we need to found new forms of agreement like Bitcoin, for example.

Similarly, companies are founded on agreements and, since 1976, Public Limited Companies’ agreements include a key objective to ‘maximise profits for shareholders’, which is the main problem with that agreement. It is one cause of the corporate psychosis which manifests as environmental destruction and exploitation whilst driving up inequality.

To disrupt capitalist democracy we need to create new agreements which usurp the present economic and business ownership models AND improve the processes by which ‘the people’ interact with these systems, to make them more attractive, more responsive and more user friendly than what’s on offer today.

When people can obtain the majority of goods or services they need from democratically owned and managed organisations, through decentralised crypto-currencies or other means, more easily than they can through the present system, capitalism will become a thing of the past. Enter the co-operative and it’s digital big brother, the platform co-op.

What’s a platform co-op?

Co-ops are organisations based on the well established Rochdale principles, which are by their very nature open, inclusive and democratically controlled by their members. They can take many forms, and be set up in different ways but the one essential feature that distinguishes them completely from ‘normal’ companies is the member-owned governance structure. Multi-stakeholder co-ops can be structured to be governed by various groups of stakeholders, ensuring that everyone who has a relationship with the organisation (for example, workers, customers, suppliers and investors) has a genuine say in how the organisation operates.

Platform co-ops are online organisations, normally involving a virtual market or meeting place which, just like co-ops, are owned and managed by their members.

Co-ops are not particularly revolutionary, they’ve been around since the 1800s, but what is new is the interest in the co-operative model and how it can be applied to online platforms. We’ve seen how well open source software has usurped proprietary alternatives and now the platform co-op model, which is itself open-source, is spawning a range of new, online, member owned and democratically controlled organisations who aim to usurp the corporate ‘Death Star’ platforms.

How can platform co-ops disrupt capitalist democracy?

The key word here is “ownership”. As Marjorie Kelly points out in Owning our future “Ownership is the gravitational field that holds our economy in orbit”. Traditional, extractive, publicly traded organisations represent 80% of global industrial output, but are controlled by the wealthiest 10% of society. The elite own the organisations which make up our economy and this setup allows them to extract wealth from us to them by design.

Platform co-ops on the other hand, which must always be democratically owned, are the building blocks of an ownership revolution in which power is transferred from the few to the many. Platform co-ops have a natural source of funding through the crowds which make up their networks, they are generative by design, incorporating shared values. Their purpose is to benefit their communities.

All members get a say in how platform co-ops are run and therefore, the things the co-ops do which affect them. Imagine that your local school, shop and pub or restaurant are all co-ops and you own part of each of them. You would be able to influence the things that affect your daily life in ways that are currently impossible through our existing ‘democracy’. You wouldn’t need to write to your MP in the vague hopes that you would get a reply. You would be able to propose ideas, debate others’ ideas and vote directly on matters that concerned you, making real changes in your local community and to your quality of life.

Co-ops also encourage the development of commons, by transferring knowledge from private to public ownership. Look at how Wikipedia has killed Encyclopaedia Britannica and how WikiHouse has enabled open source housing, or how WikiSpeed is working towards producing open source cars. These changes are fundamental to the structure of our economy, knowledge can never be re-appropriated into private hands once it is open source. This is the first element of a commons-based economy, the mutualisation of knowledge and ideas.

Only by redesigning the ownership models of the organisations we buy from, work for and rely upon we will start to disrupt the traditional capitalist model. As Mason notes:

The logical focus for supporters of postcapitalism is to build alternatives within the system; to use governmental power in a radical and disruptive way; and to direct all actions towards the transition – not the defence of random elements of the old system. We have to learn what’s urgent, and what’s important…

Changing ownership models alone will not be enough

As with the Uber and Airbnb examples, disruption requires a combination of new agreements and changes to the processes and transactions of an industry. The co-operative ownership model presents a viable alternative to the ‘agreements’ on which the majority of businesses are founded, but new agreements alone will not disrupt much. To truly disrupt an industry, especially one as complex and insidious at capitalist democracy, we also need to change how business is conducted, to make the co-op model the default instead of the exception.

For disruption to really work, founding and running co-ops has got to become much easier. Technology can and is being applied but there’s still much work to be done to deliver an Uber-esque experience which encourages the swarm to defect from limited companies and make co-ops the prevalent organisational form.

Out-evolving such a well established system is not going to be easy and such a multitude of challenges require numerous technical innovations. Enter “the open app ecosystem”, a suite of interoperable open source apps designed to facilitate distributed collaboration. The open app ecosystem does not exist entirely yet, but Sandstorm is a good example of current progress and several of the other apps required to run cooperative organisations online already exist elsewhere. Take Loomio for example, the decision making app developed by Enspiral, a co-op from New Zealand, which lets hundreds and thousands of people make collective decisions collaboratively online through a simple web based interface. It’s just one of a suite of apps which we need to run platform co-ops. Combine Loomio with similarly ‘open’ project management software, task management, accounting and fundraising software, websites, shopping carts, and donation systems and the process of running a co-op would be much more Uber-esque. But it still won’t disrupt the norm.

Loomio for voting on decisions.

For co-ops and platform co-ops to become ubiquitous, and the default model for startups worldwide, we need to strip out the bureaucracy and legal barriers and make founding co-ops as easy as catching a cab. The biggest barrier to the formation of collaborative partnerships is nearly always the agreement process. How many times have you seen a good idea between friends, or between small businesses, develop only to see the potential collaboration stall at the ‘partnership agreement’, or ‘joint venture’ agreement stage? We need a process for converting new ideas into real collaborative projects which explicitly avoids ownership issues and allocation of profits, which tend to be the biggest barriers to co-operation. For this to work we need to combine the idea behind One Click Co-ops, with a range of versatile, off-the-peg, and easily understandable organisational options. Ultimately, there are only a few models for sharing profits; by splitting them between stakeholders, according to time and/or resources invested, so cookie-cutter models should work for most new organisations in the first instance. Open value Networks present another viable model for profit sharing in which a ‘value accounting system’ computes equity in proportion to contributions automatically, removing the pain from the profit sharing process.

To disrupt capitalist democracy, founding and running a co-op needs to be as easy as:

1. Logging on to a web service or app and defining who your stakeholder groups and founding members will be

2. Defining if you will want to make profits, raise share capital or perform other financial transactions

3. Picking a model from suggested ‘cookie-cutter’ legal forms, depending on your location and objectives

4. Naming your organisation

5. Picking your required web apps from the Open App Ecosystem

6. Customising and setting up your apps (website, fundraising / payment, project / task / people management / decision making / rewards systems etc) to enable your new organisation

The above process should probably be free too. The above might seem like a fanciful wish list but, with a concerted effort from the open source community, and/or a suitable sponsor, it could probably be delivered a lot quicker than we imagine.

The vision

So, say we have the tech, which enables us to found and run new organisations based on new agreements, how is this really going to disrupt capitalist democracy? There are a few simple elements to this vision, which platform co-ops create.

Decentralised distributed currencies (much like the internal currencies used by multi-nationals to transfer funds between companies and across borders to avoid paying duties and taxes) will change the way our economy works by re-routing flows of capital. For example, if I could earn “co-op coins” in one co-op and spend them in the next, as a co-op member I would be incentivised to do so, since I also receive a share of the profits.

The creation of commons will encourage the shift from scarcity to abundance. Access to information is becoming cheaper, if not free, which is changing the nature of our society, but platform co-ops also enable the development of material (shared ‘stuff’) and economic commons (shared ‘access to finance’). For example, if trade in co-op coins was taxed (at a democratically agreed rate) to form a ‘commons fund’ to which co-op members could apply, we would have a democratically controlled source of funding for new co-operative service.

Liquid democracy will change how communities are governed, from the local to the global.

Since members of co-ops and platform co-ops get to vote on everything and anything by which they are affected, a society populated by a multitude of co-ops would provide an alternative system of governance. Imagine having the option to vote, digitally, on what you liked when you liked according to the voting schedule of the co-ops of which you are a member. This would create a radically different community of interaction and feedback to the ‘one vote every five years’ idea of ‘democracy’ we have today. If you don’t like voting, don’t have time or don’t know about the issue/s, no problem, just delegate your vote to someone else you trust or to someone else who has a good reputation on the subject which is being debated.

A co-op of co-ops could perform organisational duties at any scale whilst ensuring democratic governance by pushing decisions down to the lowest possible levels. If organisations like this existed it is hard to imagine why we would need our current ‘representatives’ and if it was easier to have, and see the result of, your say by voting through the co-operative system why would we need the existing system at all?

To top it off, co-ops are not driven by the extractive, profit making motive, making them less prone to boom and bust. Instead they are normally designed to benefit communities with the long term objectives of sustaining life and increasing well-being through the emerging values of sustainability and fairness which allow life to flourish.

This vision is the simple application of existing technology to an outdated industry which is ripe for disruption. But the only way it will happen is if we the people stop arguing, complaining and campaigning against the present system and get on with designing and building the technology, the agreements, the processes and the ownership models of the generative economy in a concerted and collaborative way.

To stay up to date with the latest news about platform cooperatives and the new collaborative sustainable economy follow @open_coop and join the mailing list (form in the right hand column) and buy your tickets now.

Cross-posted from The Open Coop
Featured image courtesy of encyclopediadramatica.se

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Citing major transitions of the past – from nomadic communities to clans; from clans to class-based, pre-capitalist societies; from pre-capitalism to capitalism – Bauwens said, “We’re in a period of history in which a marginal system of value is moving to the center of value-creation.” 

For those who don’t have an hour to watch the video, below, a review of Michel’s key points:

Unlike traditional leftist visions of revolution, which require a social movement to seize state power and then install another system, the emerging world of peer production is based on another vision:  build an alternative economy outside the circuits of capitalism, or at least insulated from its exploitation, and then develop its own functionalities and moral authority.

The point is not so much to displace or smash capitalism, he said, as to make the commons the new, more compelling “attractor” for activities that create value.  Rather than try to use private labor to produce value, which is then captured by privately owned corporations and sold in markets based on artificially created scarcity, the peer production economy proposes a new model:  abundance based on an ethic of sufficiency.

Instead of allocating surplus value through the market or hierarchical systems, the peer production economy creates value through open, voluntary contributions and “massive mutual coordination,” said Bauwens.  The goal is to create commons through social systems and the sharing of resources.

The credibility and power of this paradigm is confirmed by the massive shift of capital towards social sharing – a system that Bauwens calls “netarchical capitalism.”  It’s an open question is whether this new realm will be made subordinate to traditional capital (think Facebook, Google and Uber), or whether it will be able to emancipate itself and assert a new value proposition, independence and cultural logic (think Wikipedia, Loomio, Enspiral).

A lot will depend on whether new types of “transvestment” can occur – the shifting of investment capital from one mode of value-creation to the new modes of social collaboration, along with adequate legal means of protecting the commons from private appropriation.

While companies like Airbnb and Uber may be convenient, they are ultimately predatory on social relationships.  They extract value from our social interactions (e.g., personal data) and do not reinvest in the trust and cooperation of social communities.  This often results in massive social precarity as companies obtain benefits – educated workers, attractive communities, or free software code (open source software) – for which they do not necessarily pay anything.  Bauwens calls this a kind of “hyper-neoliberalism.  You don’t even have to pay people any more!”

By contrast, generative commons are emerging that conduct economic transactions in socially mindful, ethical ways.  Bauwens cited Enspiral, the New Zealand “open value network” that built the open source decisionmaking platform Loomio and Co-Budgeting, a platform that lets a virtual community allocate the surplus value that it generates.

As these new circuits of social support and livelihood emerge, said Bauwens, they are giving rise to new sorts of “neo-nomadic work” among young people acting as designers, programmers and entrepreneurs.  They are shunning the extractive, exploitative economy and embracing new systems for mutualizing finance and social support.

Of course, for the mainstream press focused on the traditional economic indices – market capitalization and tech billionaires – such experiments in platform co-operativism are decidedly less sexy.  But consider how, after the City of Austin rejected Uber’s demands for minimal public accountability, it created its own nonprofit mobile app for ride-hailing.

The key challenge ahead, said Bauwens, is finding ways for commoners to make a living from supporting the commons, rather than just volunteering their time.  The model for commons-based peer production has been proven in such open source innovations as the Wikispeed car and the Wikihouse design plans.  But people still need to earn a living and “capital for the commons” still needs to be raised to finance collaborative production.  This is the next frontier.

Bauwens believes that new schemes for sharing equity may help provide answers.  “Fair shares associations,” for example, could give a one-fourth share of equity to four different groups – the founders of new enterprises, the funders, workers and users.

Or “double-licensing” schemes could be used that let anyone use and share the knowledge and designs made by a community unless a given user wishes to commercialize that knowledge.  In such cases, they would have to pay a licensing fee or become members of the association.

Another model is the for-benefit association to manage the infrastructure of cooperation, said Bauwens.  It may look like a conventional nonprofit, but it doesn’t think in terms of scarcity and its own institutional boundaries; it thinks in terms of abundance and more readily shares what it has.

The ultimate vision for a new society, said Bauwens, is one of “stable commons allied to a social economy.”  This would enable civil society to become productive in its own right (and not simply an adjunct to the market and state).  The economy itself can become ethical and generative because it genuinely seeks to support ecosystems and social life (and not simply feed the demands of capital and settle for a tolerable “sustainability.”)

In such a vision, the state becomes “an enabler of personal autonomy,” and not simply a bureaucratic control system or a service-provider, as today’s market/state functions.

To be sure, peer production does not solve many existing inequalities and social unfairness in the system, especially involving race and gender.  But it does institute a new system of value-creation that transcends the pinched and exploitative logic of conventional capitalism.  That is likely to open up new spaces for a more gender- and race-friendly society than our current system, which is invested in pitting insurgent social movements against each other.

Cross-posted from bollier.org

Photo by josemurilo

The post Bauwens Explains the Great Value-Shift of Our Time appeared first on P2P Foundation.

Perhaps it was a killer app, or 3D print design. Maybe you heard a complaint repeatedly and imagined a service to solve the problem. Or you had a vision of a song, a film, or a book.

Your friends liked your idea. A few of them assured you your idea would make you rich. Others volunteered to help you make your idea a reality.

So, you investigated.  What would it take to convert your idea into a fortune? You could

• set up an account on Fivrr,
• create a shop on Apple or Google Play,
• negotiate crypto-exchanges on Tor
• pitch at SXSW

But these venues all have the same weakness.  And that weakness is money. You’re either trying to raise money, or exchange for money.

What if you could trade your idea for other forms of value?  What if could exchange your idea for:

• products you use, or
• services you need, or
• access to groups you aspire to, or
• expert advice, or
• places to stay
• social validation?

What if your idea, or talent, or service, or product could make you wealthy without “money”?

That is the value proposition of Community Exchange system.

Extracted from: https://www.community-exchange.org/home/

Extracted from: https://www.community-exchange.org/home/how-it-works/

How It Works

The Community Exchange System (CES) is a web service that provides the tools for communities to set up and manage exchange and trade in their areas without using money. It also provides communities with a network that permits them to trade with other communities, wherever they are in the world.

The main object of the CES is to facilitate trade and exchange by providing a range of non-monetary exchange methods. This helps to build community by connecting people and providing a local support network.

By ‘trade’ we mean the normal activities of providing goods and services by ‘givers’, ‘producers’, ‘sellers’ or ‘providers’, and the receiving of these by ‘buyers’, ‘customers’, ‘clients’, ‘patients’, ‘consumers’, ‘receivers’, etc.

The CES serves two basic functions:

• it is an online exchange system that facilitates exchange in a number of different ways
• it is an online ‘marketplace’ where users advertise their skills, offerings and requirements

Photo by thetaxhaven

Photo by brizzle born and bred

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