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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Originally published in Longreads.com

Photo by Ars Electronica

The post Blockchain Just Isn’t As Radical As You Want It To Be appeared first on P2P Foundation.

Complex Systems and the Energy Commons

In this article, we look at the future of the Energy Commons, and how using a complex adaptive systems lens can lead to effective solutions. As an example, I’m going to demonstrate how this method can lead us to a solution I call “swarm micro-solar.”

Complex adaptive systems as a lens tells us that the dynamic energy solution of the future should:

• be made up of many small components
• be fluid and flexible, utilizing component diversity
• be aware of and respond to its environment, by being mobile

From a complex systems perspective, we can predict the properties of a future solution even though we do not yet know the details. We can know that a marble in a bowl will settle at the bottom even when we cannot predict the specific path it will take. We can know that a percentage of a population will become adults even when we cannot know which ones will survive.

Similarly, we can understand that “small pieces loosely joined” should be more efficient even though we do not yet know precisely how. The reason this works is because all complex systems exhibit instances of deeper patterns found in the universe.

Disaggregate the Solar Panel

Our first understanding above was:

1. be made up of many small components

So, take, for instance, the solar panel. A single solar panel converts solar energy into usable electricity but suffers from the loss of some of that energy as heat. Solar panels don’t work when they exceed their tolerance thresholds for heat buildup.

Heat radiation occurs on the edges of the solar panel, so more edge length means more radiation and a cooler system. It just so happens that an array of smaller panels:

• covers nearly the same area, and so generates about the same amount of energy, and
• has significantly more edge length and so radiates heat more effectively and can run for longer.

In addition, these smaller pieces can be individually enabled not only to produce energy but also to store it, using individual mechanisms (such as batteries). Energy could be “uploaded” into larger storage networks when the individual units are in range of an upstream connection to the Energy Commons. Since the swarm components are connected horizontally, only one component would have to be in range in order for the entire system to communicate upstream.

Decenter the Solar Array

Our second understanding above was:

2. be fluid and flexible, utilizing component diversity

So the next step would be to detach the entire solar array from it’s “center” and instead connect the parts directly to each other. There are two ways to operationalize this:

• connect them together physically into a “mesh” or “net”
• connect them together virtually into an information network

Physically connecting them could be advantageous if you needed them to exist as a single unit for some reason. More useful however would be to connect them digitally into a “swarm.” A swarm of panels could communicate information about the sunlight they are converting, local conditions, etc. Moreover, you could even have the units send energy to one another to balance the energy storage. In other words, a unit that has more storage available could store energy for one that has less storage available.

The effect of horizontal connectivity is to make the entire system function like a brain. The swarm could essentially “rewire” itself by monitoring inequalities in the system and balancing its members’ behavior accordingly.

Detach the Swarm

Our third understanding was:

3. be aware of and respond to its environment, by being mobile

Solar panels need sunlight. The earth rotates. The complex adaptive systems lens suggests that the system should be able to perceive its environment and adjust its collective behavior accordingly. For example, slime molds exist as individual cells, but when changes in resource conditions demand, those cells come together to form a multi-cellular organism, which is mobile, and can move elsewhere to a better resource environment.

So, too, can our solar array. If it is a flying drone array, then it could be positioned in the sky as an actual swarm.

• It could move away from clouds or other obstacles, and even orbit the planet in order to avoid ever being on the dark side. A swarm of swarms, all autonomous but capable of cooperation and communication, could effectively perceive their environment and adjust accordingly to target better environments.
• Also, the diversity of the units would enable them to behave differently as individuals. Each unit could angle itself into the sun, or adjust to wind conditions, etc. Because every component adjusts its own behavior in response to every other component, individual behaviors would create systemic effects. Just as a swarm can fly around obstacles without a leader, so, too, could a micro-solar swarm dynamically adjust to changes in its environment.

D-words and Micro-Solar Swarms

This article has demonstrated how using complex adaptive systems as a lens can lead to an innovative solution in the Energy Commons. We focused on a language of:

1. Disaggregate
2. Decenter
3. Detach

There are many other facets to a fully-developed and organically evolving Energy Commons. There are other solutions, and there are also other commons (food, things, etc.).

We gain a significant advantage when we realize that solutions across these commons exhibit the patterns seen in complex adaptive systems, and when we focus on a “pattern language” for those future solutions.

I hope this article contributes to that effort in some small way.

Read More:
If you would like to learn more about robot swarms, take a look at:
https://www.weforum.org/agenda/2016/06/the-bees-of-the-future-that-can-pollinate-and-save-disaster-victims

To engage with the original please go to Solving the Energy Commons with Micro-Solar Swarms by Paul B. Hartzog

The post Solving the Energy Commons with Micro-Solar Swarms appeared first on P2P Foundation.

Coopshares is an emerging example of a ‘cryptoequity’ platform, launching during the Ouishare Fest (where FairCoop was nominated for the Collaborative Finance award).

I have been in touch with Enric Duran, the founder of FairCoop, and he has explained to me the intention behind the project: basically the idea is that each investment (which can be made in a combination of Faircoins (the FairCoop’s own cryptocurrency) and Euros, or Faircoins alone), will be rewarded with P2P Equity Tokens, designed to pay a dividend based on both the predicted rise in the Faircoin value, and any profits made by the Fairstarts cooperative projects. If a project is for the commons and will not produce any financial profit, reputation points will be awarded instead.

The overall plan is to attract investment to secure both the long-term future of FairCoop, add liquidity to the financial ecosystem within the FairCoop, and help kickstart individual cooperative projects which will be launched under its FairStarts incubator programme.

From the Coopshares website:

Coopshares will be a P2P equity crowdfunding platform focused on cooperatives, social enterprises, and P2P production projects. It will be endorsed by FairCoop and based on Faircoin.

Coopshares will facilitate investments in cooperative projects without the gambling component of asset trading that usually exists in the wider cryptocurrency environment and in the equities markets

The stakes in CoopShares are tied to the Faircoin price, which allows investors to obtain profits with the growth both of Faircoin, and of the entire ecosystem of cooperatives linked to FairCoop, without compromising cooperative values and principles.

Also, Coopshares will use blockchain technology to provide tools to cooperatives for decentralized organizing so that they can encourage the participation of all stakeholders, from workers to investors.

There is some overlap between this Coopshares initiative and another ‘cryptoequity’ platform, Swarm, launched by Joel Dietz and friends recently, and in fact Coopshares is also one of the projects features on the Swarm website.

After the Occulus Rift affair (let’s call it), where the crowdfunders who literally kickstarted the virtual reality project failed to see any sort of return (other than their reward from the original crowdfunding campaign) after the company was sold to Facebook for two billion dollars, there has been an awareness that while ‘traditional’ crowdfunding is fine in the case of a one-off project like a book or music album, where the project is an enterprise which is likely to generate ongoing profits, ‘crowdinvesting’ would be preferable, rather than leaving the venture capitalists to clean up on the back of the community’s well-intentioned original investment. And also, with cooperative projects, very often it is simply not acceptable to receive VC funding and submit oneself to the accompanying difficult moment when large returns on investments are demanded, often at the cost of warping the principles which inspired the cooperative in the first place.

Both Swarm and Coopshares are hoping to avoid this situation by allowing smaller investors to get involved and by putting cooperative principles before pure profit. Thus it becomes a combination of a crowdfund where the investors merely wish to support worthwhile projects, and a traditional equity investment which pays a dividend.

The proposed addition of voting rights and reputation systems, both based on blockchain technology, within what are called DCOs or ‘Distributed Collaborative Organizations’ could turn this sort of cryptoequity system into something genuinely innovative, potentially allowing a cooperative to give many many stakeholders a voice in its running, and possibly outperforming traditional hierarchical companies in the process.

Right now both Coopshares and Swarm are in the early stages and need investment and participation to get started. If they are successful, it could be an exciting new development in the way in which cooperative projects are initiated and funded.

(Disclaimer: I am an unpaid volunteer member of the Ecosystem Council of FairCoop – addition to the disclaimer: it’s open to everyone so come and get involved!).

The post FairCoop, Swarm, and “Cryptoequity” Funding appeared first on P2P Foundation.

Bitcoin has taken quite a beating for its libertarian design biases, price volatility due to speculation, and the questionable practices of some currency-exchange firms.  But whatever the real or perceived flaws of Bitcoin, relatively little attention has been paid to its “engine,” known as “distributed ledger” or “blockchain” technology.  Move beyond the superficial public discussions about Bitcoin, and you’ll discover a software breakthrough that could be of enormous importance to the future of commoning on open network platforms.

Blockchain technology is significant because it can validate the authenticity of an individual bitcoin without the need for a third-party guarantor such as a bank or government body.  This solves a vexing collective-action problem in an open network context:  How do you know that a given bitcoin is not a counterfeit? Or to extend this idea:  How do you know that a given document, certificate or dataset — or a vote or “digital identity” asserted by an individual — is the “real thing” and not a forgery?

Blockchain technology can help solve this problem by using a searchable online “ledger” that keeps track of all transactions of all bitcoins. The ledger is updated about six times an hour, each time incorporating a new set of transactions known as the “block” into the ledger.  What makes the blockchain so revolutionary is that the information on it is shared by everyone on the network using the Bitcoin software. The ledger acts as a kind of permanent record maintained by a vast distributed peer network, which makes it far more secure than data kept at a centralized location. You can trust the authenticity of a given bitcoin because it’s virtually impossible to corrupt a ledger that is spread across so many nodes in the network.

What does all this have to do with the commons? you might ask. A recently released report suggests that blockchain technology could provide a critical infrastructure for building what are called “distributed collaborative organizations.”  (One variation is called “decentralized autonomous organizations.”)  A distributed organization is one that uses blockchain technology to give its members specified rights within the organization, which are managed and guaranteed by the blockchain.  This set of rights, in turn, can be linked to the conventional legal system to make those rights legally cognizable.

The report that explores this frontier is entitled, “Distributed Collaborative Organizations:  Distributed Networks & Regulatory Frameworks.” (pdf file) It was published by the Coin Center, with contributions from folks associated with Swarm, the Berkman Center at Harvard, New York Law School and the MIT Media Lab. (I gave some comments to an early draft of the report.)  You can download the report from Scribd or here.

It’s important to recognize that blockchain technology is not confined to digital currency applications.  It can be applied to a wide variety of circumstances in which a community of players – in markets, commons or other circumstances – want reliable systems to manage their inter-relationships on network platforms.

As Sydney Ember reported in the New York Times a few days ago, there is a new generation of Bitcoin 2.0 projects attempting to take blockchain technology to new places:

Entrepreneurs worldwide are now working to harness that technology for use beyond Bitcoin transactions. The block chain, they say, could ultimately upend not only the traditional financial system but also the way people transfer and record financial assets like stocks, contracts, property titles, patents and marriage licenses — essentially anything that requires a trusted middleman for verification.

“There’s a race going on to extend the block chain’s capabilities,” said Adam Ludwin, a co-founder of Chain.com, a start-up that seeks to help developers build Bitcoin applications.

While many blockchain applications involve finance and money, there are many other businesses that want to use the technology to verify the authenticity of documents such as patents, title deeds and financial data.  Former FCC Chairman Reed Hundt has proposedusing the block chain technology as a way to create distributed networks of solar power on residential houses.  The ledger would keep track of how much energy a given homeowner has generated and shared with others, or consumed, and it would enable the efficient organization of decentralized solar grids.

Hundt and two colleagues recently wrote:  “A decentralized, disaggregated ledger-powered currency could be converted to renewable energy credits and other government-driven subsidies.  It could even serve as a medium of exchange within solar microgrids or networks, and the network effects created by a robust ecosystem of green currency could organically drive adoption [of solar panels].”  Transactions would be near-instantaneous, and transaction costs would be minimal.

Naturally, the mainstream world is mostly focused on the blockchain as the foundation for a lucrative new generation of dot.com startups.  But the commons-based applications are quite rich, too – if we are astute enough to seize the opportunities.  In a comment to a blog post a few days ago, Primavera de Filippi, one of the leading tech/legal thinkers about blockchain technology, wrote:

My research focuses on the new opportunities offered by blockchain technology, in particular with regard to community governance. It is my belief that the blockchain can help implement new forms commons-based governance that could greatly benefits the CBPP ecosystem.

For a long time, commons-based communities have been institutionalized around centralized or federated structures, which might bring a series of trade-offs in terms of democratic governance, flexibility, and ability to evolve. These institutions were built, for the most part, to facilitate the coordination of disparate groups of people that would otherwise have had a hard time coordinating themselves, because of either scale or lack of proper coordination mechanisms. They also served the purpose of establishing trust among groups that did not engage into sufficiently frequent and repeated interactions.

Today, traditional issues related to shared common-pool resources—such as the free rider problem or the tragedy of the commons—could be addressed with the implementation of blockchain-based governance, through the adoption of transparent decision-making procedures and the introduction decentralized incentives systems for collaboration and cooperation. The transparent and decentralized nature of the blockchain makes it easier for small and large communities to reach consensus and implement innovative forms of self-governance. The possibility to record every interaction on a incorruptible public ledger and the ability to encode a particular set rules linking these interactions to a specific transactions (e.g., the assignment of cryptographic tokens) makes it possible to design new sophisticated incentive systems, which might significantly differ from traditional market-based mechanisms.

Decentralized blockchain technologies bring trust and coordination to shared resource pools, enabling new models of non-hierarchical governance, where intelligence is spread on the edges of the network instead of being concentrated at the center. Flexible decentralized organizations could entirely replace the hierarchical format of current centralized formations, enabling commons-based communities to operate in an more decentralized manner. Instead of relying on traditional top-down decision making procedures, the blockchain allows for such procedures to be entirely crowdsourced, delegating to the community’s collective intelligence the responsibility to monitor and evaluate its own achievements.

While online communities will probably be the first one to experiment with these new apparatus, as the ease of creating these organization decreases through standardization, online communities could be easily brought offline to create and build new organizations that operates in the physical world.

Thus far, while commons-based peer-production communities have flourished in many fields of endeavor, they have had a hard scaling up, without turning into more bureaucratic and centralized institutions. It is my hope that, with the new opportunities provided by blockchain technologies, we can come up with new applications that can support the operation of these communities (both in the digital and physical world) in a more distributed and decentralized manner.

This is the vision, at least.  I happen to agree with Primavera that new generations of blockchain technologies could overcome many collective-action challenges that cannot be easily solved by conventional institutions today. After all, it is hard to overcome entrenched bureaucratic power, inequalities of power and the organizing of large-scale collective agreement in offline contexts.

In addition, the trustworthiness of even “reputable” third-party guarantors can be problematic, as we saw during the 2008 financial crisis (e.g., the unreliability of the SEC, ratings agencies and other oversight authorities).  Who guards the guards?  Blockchain technology represents an advance over many of the corruptible institutional systems that we labor under today by providing less-corruptible algorithmic ways to manage interactions within a group.  (Ah, but how shall the designed-in biases of any algorithms be assessed by the community that labors under them, especially when such algorithms cannot be easily understood by the non-techie?  A worthy question!)

Blockchain systems should not be seen as a magic bullet in the sense that human wiles and trickery are not going to go away. Yet blockchain technology does offer more formidable tools for better protecting the perimeter of the commons and for empowering commoners to decide their own fate. Imagine a future of distributed collaborative organizations whose internal relations could be improved through software-enabled “smart contracts, reliable deliberation and voting mechanisms, community currencies and other co-operative systems. Far more versatile and secure than Web 2.0, blockchain-based social networks could be new infrastructures for commoning at a much larger scale than today.

I could imagine distributed collaborative organizations — commons — leapfrogging over some of the dysfunctional politics and bureaucratic treachery that is rife in conventional institutions. Not a techno-fix, but a new, less “gameable” platform for competitive politics. In a world that is increasingly mediated by network platforms, blockchain technology could help us build some refreshing, effective and socially progressive types of commons. This world is still a way off, but it is a rich horizon worth exploring.

The post The Blockchain: A Promising New Infrastructure for Online Commons appeared first on P2P Foundation.

Image from OpenSource.com’s article “Don’t Build a Better Mousetrap. Change the Business Model.”

One chilly morning last winter, I reconnected with an old friend, Joel Dietz, on a video chat. We hadn’t seen each other for years, and we’d each had several starts and stops in our lives since. He began telling me about his latest undertaking, Evergreen, a digital currency system that he described as “organic” and “without additives.” I was doing all I could to understand it, and he was struggling to fund it in a way that suited his vision. He needed money, and quickly, but he didn’t want to sabotage his ideals in the process.

“I’m working to find a steady economic base,” he said. “I don’t really want to put it into the hands of the VCs.” Venture capitalists, that is — the go-to source of quick and easy money for clever tech entrepreneurs like him. He’d get cash, but they’d get the reins. “I’ve considered this before, but it always leaves me feeling a bit dirty.”

A few months passed, and we traded emails about our various projects — including some dead ends. By mid-May, though, he’d alighted on something new, something that seemed to address the problem that had been burdening him before. I was skeptical. He was soon writing to me from the domain name of his new company,Swarm, the world’s first experiment in what he was calling “cryptoequity.”

Swarm would be a crowdfunding platform, using its own virtual currency rather than dollars; rather than just a thank-you or a kickback, it would reward backers with a genuine stake in the projects they support. Entrepreneurs could sidestep the VCs by turning to a “swarm” of small investors — and maybe supplant the entire VC system. By the end of the summer, he’d raised more than a million dollars in cryptocurrency. The legality of the model is uncertain, but the feds haven’t come knocking yet.

Dietz is part of a subtle insurgency taking place, one of bylaws, financing schemes, and ownership structures. The details can seem abstruse, but the craving is everywhere. High hopes for a liberating Internet have devolved into the dominance of a few mega-companies and the NSA’s watchful algorithms. Platforms entice users to draw their communities into an apparently free and open commons, only to gradually enclose it by tweaking terms of service, diluting privacy, or charging fees for essential features. Thanks to users’ unpaid labor of friending and posting, tech companies can employ far fewer people, and extract five to 10 times more profit per employee, than businesses in other industries. Fiduciary responsibility to their investors requires that they turn on the people who made them successful.

Those people are turning on them back. Oculus Rift raised $2.4 million from fans on Kickstarter, then enraged backers by selling to Facebook for $2 billion. Users frustrated with an increasingly ad-friendly Facebook started flocking to Ello (whose “manifesto” eschews advertising and selling user data) and Tsu (which pays its users for their contributions) — but when Ello took venture capital, its boosters started to flee. Reddit’s finicky users have succeeded in preventing the company from turning profitable with intrusive ads or selling data; it’s now in the process of setting up a Swarm-like digital currency scheme to share 10 percent of new equity with users.

The line between workers and customers has never been so blurry. Online platforms depend on their users, and pressure is mounting all over the Internet. People are tired of seeing their communities treated like commodities, and they’re looking for ways to build platforms of their own.

Sharing was the new owning

VC-backed sharing economy companies like Airbnb and Uber have caused trouble for legacy industries, but gone is the illusion that they are doing it with actual sharing. Their main contribution to society has been facilitating new kinds of transactions — for a fee, of course, to pay back to their investors. “The sharing economy has become the on-demand economy,” laments Antonin Léonard, co-founder of the Paris-based network OuiShare, which connects sharing-economy entrepreneurs around the world.

The notion that sharing would do away with the need for owning has been one of the mantras of sharing economy promoters. We could share cars, houses, and labor, trusting in the platforms to provide. But it’s becoming clear that ownership matters as much as ever. Whoever owns the platforms that help us share decides who accumulates wealth from them, and how. Rather than giving up on ownership, people are looking for a different way of practicing it. OuiShare, for instance, is starting to prioritize supporting new projects that bake new models of ownership — that is, real sharing — deep into their business model.

Léonard and his collaborators are part of a widespread effort to make new kinds of ownership the new norm. There are cooperatives, networks of freelancers, cryptocurrencies, and countless hacks in between. Proposals are being made for a driver-owned Lyft, and Amazon Mechanical Turk workers are scheming to build a crowdsourcing platform they can run themselves. Each idea has its prospects and shortcomings, but together they aspire toward an economy, and an Internet, that is more fully ours.

“Society needs a new narrative about the world,” Léonard thinks, “and that narrative has to be different from the one Uber is offering.”

One kind of narrative is that a more collaborative, less unequal future will happen almost by itself. Jeremy Rifkin, a futurist to CEOs and governments, contends that the Internet-of-things and 3-D printers are ushering in a “zero marginal cost society” in which the “collaborative commons” will be more competitive than extractive corporations. Investor Brad Burnham of Union Square Ventures has predicted that a new crop of grassroots “skinny platforms” will spell trouble for behemoths like Uber. Sharing economy expert Arun Sundararajan expects that once the VC-backed sharing companies clear away regulatory hurdles, local co-ops will be poised to swoop in and spread the wealth.

These stories are certainly possible, even plausible. But they’re also a bit like expecting Amazon to usher in a renaissance of local bookstores; big companies seeking big profits for the investors who own them tend to get their way in this economy. People are recognizing that doing business differently will require changing who gets to own what.

“We’re moving into a new economic age,” says Marjorie Kelly, who spent two decades at the helm of Business Ethics magazine and now advises social entrepreneurs. “It needs to be sustainable. It needs to be inclusive. And the foundation of what defines an economic age is its form of ownership.”

Cooperative intelligence

When the Occupy movement spread to Wellington, New Zealand, in 2011, Ben Knight says, “It seemed like the perfect social movement.” Before that, he had been studying cognitive science, working with primates to understand the evolution of group learning — and he saw group learning take place in the movement’s consensus-based assemblies. “It was the collective intelligence angle that got me really, really interested in the beginning,” he recalls.

Soon, Knight went from the perfect movement to the perfect tech company. He and fellow Occupiers took the best of what they’d seen in Occupy’s kind of direct democracy and made it available to the world in the form of an app — Loomio, they called it. And they built their organization to reflect Occupy values as thoroughly as they could: It’s a worker-owned cooperative that produces open-source software to help people practice consensus — though they prefer the term “collaboration” — about decisions that affect their lives. Only after Loomio incorporated did its team notice that it was the only worker-owned cooperative registered in New Zealand.

They were not, however, working in a vacuum. From the start Loomio was part of Enspiral, an “open value network” of freelancers and social enterprises devoted to mutual support and the common good. Through Enspiral, its team had a place to work, an Internet connection, and a receptive community. Before long, Enspiral was using Loomio tomake decisions collaboratively, and members began building a companion tool, CoBudget, to help them allocate resources together. Loomio is now being used by governments, organizations, and schools; a significant portion of the current usage comes from Spain’s ascendant political party, Podemos. Still, Loomio’s ideals have kept its revenue flowing slowly. The team members recently had to come to terms with the fact that, for the time being, only some of them could be paid for full-time work  They called the process “participatory downsizing.”

The resurgent co-op model

The worker cooperative is an old model that’s attracting new interest among the swelling precariat masses — youthful and idealistic, but with dwindling chances of finding an old-fashioned job. Co-ops help ensure that the people who contribute to and depend on an enterprise keep control and keep profits, so they’re a possible remedy for worsening economic inequality. And they can take many forms. Loomio and other tech companies, for instance, are aspiring toward the model of a multi-stakeholder cooperative — one in which not just workers or consumers are voting members, but several such groups at once. It’s the ideal model for an Internet that doesn’t draw clear lines between employees and users. But it’s easier said than done.

Loconomics is a San Francisco-based startup designed, like TaskRabbit, to manage short-term freelance jobs; but unlike TaskRabbit, administrators and freelancers alike will be members with equal voting rights. The Sustainable Economies Law Center is advising the project, and others like it, on the strategy and the paperwork. As Loconomics prepares to begin operations this winter, it’s running out of the pocket of the founder, Josh Danielson — a far cry from the millions that TaskRabbit raised from investors in its early years.

The ambition of a cooperative Facebook or Uber — competitive, widespread, and owned by its community — still seems out of reach for enterprises not willing to sell large parts of themselves to investors. Organizations like The Working World and the Democracy Collaborative have been developing models of financing suited for co-ops, but they’ve tended to focus on local or industrial businesses, not so much the lean-and-leveraged strategy of a tech startup. A cooperative tech economy might require very different ways of operating.

“When you talk about cooperatives with entrepreneurs, they’re super afraid,” says Antonin Léonard. “They’re like, ‘Are you crazy, man? Cooperatives in the digital age just don’t work.’” His fellow OuiShare founder Benjamin Tincq is concerned that too much fixation on a particular model will make it hard for well-meaning ventures to be successful. “I like the idea that we don’t need to have a specific legal status,” he says. “It’s more about hacking an existing legal status and making these hacks work.”

No blueprint

Few have been so successful at turning hacking into sharing as Casey Fenton. In 2003, he founded CouchSurfing, one of the original sharing economy platforms, which built relationships around the world by connecting travelers, free of charge, with the spare couches of trustworthy strangers. But the community-driven heyday didn’t last. After the IRS failed to recognize CouchSurfing’s activities as charitable, it transitioned from a non-profit to a for-profit B Corporation in 2011. In that form, it raised millions in venture capital, but saw a precipitous decline in vibrancy. Much of the once-loyal user base turned against the company.

Fenton’s new undertaking, Sovolve, proposes to “create innovative solutions to accelerate social change,” much as CouchSurfing did, but it’s doing the innovating cautiously. All work is done by worker-owners located around the world. Sovolve uses an internal platform — soon to become a product in its own right — through which contributors decide how much they want to be paid in cash and how much in equity. They can see how much others are earning. Their virtual workplace is gamified, with everyone working to nudge their first product,WonderApp, into virality. In the process, they’ve invested more than $1 million worth of unpaid work — $1 million less that Fenton needs to seek from traditional investors.

“I think we’re finally coming to the point where we have complex enough tools that we can start to do this stuff,” he told me over lunch and a can of Rockstar — “complex enough legal instruments and complex enough software.”

Loomio’s members use a similar system, which they call Loomio Points. But Sovolve is no cooperative; contributors are not in charge. “I wanted to give more people ownership to create more alignment,” Fenton says. “But we don’t want to have a whole bunch of people making decisions every day. I’ve tried to do that. That’s like some kind of democracy.”

It’s also like Sensorica. For the past four years, Tiberius Brastaviceanu has been trying to build a truly open-source business model from a shared lab in Montreal. He was troubled that many leading open-source projects, like WordPress and Arudino, rely on unpaid labor and are managed by a closed, traditional company. As it designs and builds high-end scientific equipment, Sensorica is an experiment in another approach. “You have to break the walls down and create a more permeable membrane,” Brastaviceanu says. But doing so is no easy hack. “There’s no blueprint for the kind of organization we’re trying to build.”

Open-source software and share-alike licenses have revived the ancient idea of the commons for an Internet age. But the “commons-based peer production” that Sensorica seeks to practice doesn’t arise overnight. Just as today’s business culture rests on generations of accumulated law, habit, and training, learning to manage a commons successfully takes time.

Like Sovolve, Sensorica pays workers for their contributions to the product. Unlike Sovolve, they participate in the company democratically. Everything from revenues to internal criticism is out in the open, wiki-style, for insiders and outsiders alike to see. The whole company, not just the product, is open source — sharing not just code but profits. Progress has been slow, though. Only one device has been sold, and the 3-D modeling and printing business barely supports one person. At the same time, Brastaviceanu is getting more and more calls from people interested in adapting the model Sensorica has pioneered. He believes a change along these lines is coming. “It’s inevitable,” he says.

If this is true, one reason may be Bitcoin. It is becoming increasingly clear that the technology underlying the digital currency — a secure network that doesn’t rely on any central server or authority — is good for a lot more than currency. It makes possible decentralized autonomous organizations, or DAOs, which exist entirely on a shared network. While a conventional corporation, for instance, exists because of documents held by the corporation itself and a government, the code that defines a DAO is shared across the network. On this kind of open-source platform, an organization like Sensorica actually starts to seem more sensible than closed-source alternatives.

The most ambitious successor to Bitcoin, Ethereum, has raised more than $15 million in crowdfunding on the promise of creating such a network. With it, proposals have been made to develop decentralized social networks, Airbnb-like rental services, Dropbox-like file-sharing systems — even an entirely new Internet — all with technology that makes collective ownership a lot easier than a conventional legal structure. A project calledEris is developing a collective decision-making tool designed to govern DAOs on Ethereum, though the platform may still be months from release.

For now, the burden of reinventing every wheel at once makes it hard for companies like Sensorica and Loomio to compete. In tech culture’s rush for making all things new, it may be overlooking older approaches to the challenges of community ownership and financing. People have been trying, after all, to build alternatives to concentrated wealth and ownership for a long time. For instance, Cutting Edge Capital specializes in helping companies raise money through a long-standing mechanism called the direct public investment, or DPO, which allows for small, non-accredited investors. It involves neither Swarm’s Bitcoin-like technology, nor the murky new crowdfunding investment provisions in the 2012 JOBS Act that AngelList is relying on lately. Cutting Edge Capital is trying to bring the DPO into the digital age with a new online marketplace for investors, but few of Cutting Edge Capital’s clients have been tech companies. Part of the problem may be that DPOs require state-by-state registration, which makes it hard to cast a wide net for funders. CEO Jenny Kassan suspects it is also partly a matter of culture — in many people’s minds, tech culture is synonymous with fast-and-furious venture capital.

“Everyone knows that the model is broken,” she says, “but it still has this prestige factor.” And, for the moment, easy money is hard to beat.

Where the money is

Swarm has competition. During its early months, when Joel Dietz was first trying to get his idea off the ground, he talked with a lot of people about it. Many of them liked it. Some of them liked it so much that they found investors, and persuaded them to like it, and to finance a company of their own. Venture funding may be in competition with Dietz’s cryptoequity vision, but it provides a fearsome head start.

For those hoping to mend the inequality of the existing economy, Swarm’s competition makes it hard not to notice the inequalities built into the models vying to disrupt the status quo. Bitcoin’s micro-economy holds the dubious distinction of being more unequal than the global economy as a whole. On a sharing platform, who owns, and who just rents? In an economy of cooperatives, who gets to be a member, and who gets left out? And in a workplace like Sovolve built on sweat equity, some people can afford to work for less cash upfront than others; those who have some already will be poised to end up with a lot more than those with less.

Devita Davison, co-director of FoodLab Detroit, a network of local food entrepreneurs, finds that new kinds of sharing economies can be hard to embrace for those living in poverty. “People who have been without for a long time,” she says, “often operate with a mindset that they can’t share what they have, because they don’t know when that resource will come along again.”

Sooner or later, transforming a system of gross inequality and concentrated wealth will require more than isolated experiments at the fringes — it will require capturing that wealth and redirecting its flows. This recognition has been built into some of the most significant efforts under the banner of the so-called “new economy” movement. They’re often offline, but that makes them no less innovative.

Building on the model of the Evergreen Cooperatives in Cleveland, the Democracy Collaborative helps seed new cooperative enterprises by connecting them to large anchor institutions in their communities; hospitals and universities with deep pockets can help a new enterprise become viable much more quickly than it can on its own. In France, OuiShare supports new collaborative business models through partnerships with its own set of anchor institutions — including MAIF, an 80-year-old mutual insurance company, and the public train operator SNCF. A less consensual strategy was employed to fund the Catalan Integral Cooperative in Spain; over the course of a few years, one activist borrowed around $600,000 from Spanish banks without paying any of it back.

Government is an important source of support, too. Perhaps more than some go-it-aloners in tech culture might like to admit, a new economy will need new public policies to level the playing field between traditional corporations and collaborative enterprises. In Jackson, Mississippi, Chokwe Lumumba was elected mayor in 2013 on a platform of fostering worker-owned cooperatives, although much of the momentum was lost when Lumumba died just a few months later. This year in New York City, for the first time, co-op advocates secured public funds to support training programs that will help the sector grow — and other cities are taking similar steps. Governments already subsidize business as usual, and they need to be pressured to encourage more just alternatives instead.

This is not the first time people have longed to replace owning with sharing, to forgo property through community. In the Middle Ages, say: The early followers Francis of Assisi at first sought to do away with property altogether, to use without having to own. It may be an ambition worth pursuing. But to ensure their autonomy, and to protect their growing movement in the feudal world in which they lived, the Franciscans ended up having to hold communal property, though they managed it very differently than the neighboring lords did.

There are many ways to own. Simply giving up on ownership, however, will mean that those who actually do own the tools that we rely on to share will control them. People who want an economy of genuine sharing are coming to recognize that they must embrace ownership — and, as they do, they’re changing what owning means altogether.

The post Owning is the New Sharing appeared first on P2P Foundation.