The sharing, collaborative and participatory economy: what are we talking about?

There is a lot of confusion between the sharing, the collaborative and the participatory economy. In fact, you can see it on this Wikipedia page. I will propose some distinctions from my experience with www.sensorica.co and from my knowledge about other peer production systems.

I conclude, from my informal analysis of currently used language, that the semantic separation between the terms sharing economy and the other two is greater than the semantic separation between collaborative economy and participatory economy. In other words, people tend to use the terms collaborative economy and participatory economy interchangeably, but sometimes in opposition to the current use of the term sharing economy. I also agree with this Harvard review, which states that sharing economy is a misnomer, and with their conclusion to replace it with the term access economy.

When we speak about the sharing economy we put the emphasis on assets (material or immaterial) that are "shared" (redistributed or circulated) among individuals and/or organizations, which in turn share information among themselves about needs and offers, about the location (physical or virtual) of these assets and about rules of engagement or terms of use. The term sharing is used somewhat abusively, not necessarily as a reciprocal relation. In this context, sharing can be a transfer (gift or barter, monetary exchange), or rent (payment for use). The use someone makes of these assets is, for the most part, irrelevant, as long as the integrity of the asset is preserved (when it is rented), and the transfer respects the basic rules of engagement. The use can be personal or part of a commercial activity and the provider can be an individual or an organization. Some applications/platforms that facilitate the access and transactions can be agnostic to that, some of them use strict rules to enforce p2p, b2b or a combination. Critics of the sharing economy propose alternative terms such as access economy or rental economy. These critics focus on the lack of reciprocity as well as on the lack of social externalities that are normally created through reciprocal sharing.

When we speak about the collaborative economy, the focus is mostly on the allocation of time for a common output. More concretely, we think about people producing something together through a process that minimizes exchanges. In other words, in its purest form, no one is paying anyone else to do something, and usually no one can monopolize the output. Classical examples are Linux, Wikipedia, open source hardware development, etc. There is a lot of cooperation in a traditional company setting, but everyone involved engages in an exchange process, trading skills/time for money. For this reason, this is not a collaborative economy example. 

There can be rules about how the output of a collaborative process can be leveraged by others to generate wealth. A good example is RedHat that offers consultancy, installation, and maintenance of IT systems built on Linux. These rules come in the form of licenses, which range from no restrictions at all, to non-commercial usage. 

This concept of the collaborative economy can be extended to other forms of contributions, which can range from financial (crowdfunding for example), to material (sharing a 3D printer with a group to prototype something). In this case, the use of these tangible and material forms of contributions is directly related to the common activity, it is project specific, unlike in the case of the sharing/access economy where the use someone makes of the "shared" asset is most of the time irrelevant. Moreover, these tangible resources used as contributions don’t necessarily exchange hands in the process, there is no transfer of ownership and they are not rented, these resources are shared within the group for common use, and are accounted for as contribution to the project. There can be rules related to the redistribution of potential benefits based on these tangible and material contributions, which can take the form of public recognition (ex: “a big thank to such and such for having contributed with the physical space and the 3D printer”), or equity - monetary compensations at a later point in time.  

The way I use the term participatory economy is by putting more emphasis on the process through which something is collaboratively created. This process is open, i.e. it has very low or no barriers to entry (ex. the Bitcoin open permissionless network). This is proper to the Open Value Network model developed and implemented within www.sensorica.co.
A classical co op can be the locus of collaborative production, making open source artifacts (material or immaterial), but access to participation in the process can still be invitation-based or conditioned by a strict filter. This is how the Enspiral network and las Indias operate. Co ops are not open or permissionless networks. I see the participatory economy as a set of relations that grant access to collaborative production processes to anyone that can deliver, no other questions asked.

By Tiberius Brastaviceanu   AllOfUs

Open value networks and global economic fairness

davidsluka

Disclaimer: This blog entry reflects the thoughts of the author and does not speak on behalf of the Sensorica OVN.

In February 2011, economic fairness became a real possibility with the launch of SENSORICA. The new economic model proposed by this network promised open access to economic activities for everyone in the world, with a system for fair redistribution of benefits, based on merits. 

SENSORICA is an open value network. People propose projects and develop them in collaboration with others. The affiliates use open project development methodologies and generate tasks that are made available for anyone in the world. The time, the cash and any material resource that are used during the execution of a task are logged. A contribution accounting system compiles all the input to projects and displays a profile of the economic activity. If the project becomes a commercial venture the revenues are redistributed to all the participants, without exception, in proportion to everyone's contribution. The venture belongs entirely to the participants, anyone can join, any time. We call these ventures open enterprises. SENSORICA is an incubator of many open enterprises. 

Since the inception of SENSORICA we spent a lot of time developing the open value network model, building infrastructure, designing new methodologies, refining the open governance, implementing a proper legal structure, and developing open new technologies. In 2015, SENSORICA is closer than ever to become an economic success, with a few projects to be crowdfunded during the summer and a few service offerings that have already generated revenue.

This post is not about revenue generation and sustainability. The main goal is to illustrate economic fairness, to show the world how we are fulfilling our promise. 

In January 2015 Atelier Barda, a group of architects and designers from Montreal, trusted SENSORICA with a contract to design an interactive imaging system, to be installed in Forillon National Park, in Gaspesie QC, Canada, which is administered by Parks Canada, a branch of the federal government. The project was executed in an open way. Three SENSORICA affiliates answered the call and delivered successfully, exceeding the client's expectations, who was a bit skeptical in the beginning, knowing that he was dealing with a new type of organization. One of these affiliates, Abran, lives in Pakistan. The project was coordinated using SENSORICA's new open service providing methodology, mediated by our virtual infrastructure.

In the end, the revenue was distributed according to everyone's contribution, and Abran was paid as if he was working and living in Canada. 

credit to Massimo Sestini—Polaris

Europe is now dealing with a major social problem caused by waves of immigrants coming from Africa. This crisis is exacerbated by the drama surrounding the death of a few hundreds of these unfortunate people, who are desperate enough to put their lives in danger by crossing the Mediterranean sea, using inadequate means, lead by human traffickers who are mostly interested in profiteering. A social problem coupled with a humanitarian crisis that keeps politicians on their toes and pushes them to use extreme means, to militarize the Mediterranean sea using UN forces. Are these desperate human beings invaders? Are they the new enemies of Europe? Or are they the result of colonialism and victims years of political interference and economic exploitation? Are guns the solution to this problem? Or more economic fairness?

While our western governments, who created the problem in the first place, make it even worse, we are developing infra-national economic structures, a peer to peer economy, to address the problem at its core.

 By AllOfUs

On how to conduct open and peer to peer ventures

In the Batman The Dark Knight Rises movie there is a scene, called the social experiment, where people in two boats need to make a decision to avoid an imminent catastrophic explosion. In one boat, they form a democratic system and they debate about the problem in order to make the best decision. The second boat is filled with prisoners and their guards, forming a hierarchical, army-like system. The movie shows these two situation in parallel, with a clear preference for the hierarchical situation, essentially trying to convince the viewers that in times of crisis, when things need to get done effectively, we don't have time for democracy. This movie was made during America's military operations in Afghanistan and in the Middle East, justifying the need to bypass democratic processes and even take illegal actions in the name of national security. We can now go back in time and judge if these decisions have had a more positive or negative impact on the US and on the world.
I live in Canada, a so called democratic country, where people spend most of their time in a totalitarian setting, the workplace, where they get things done. If we do the math, we spend most of the time executing or giving orders, depending where we are situated within the hierarchy, Once in a while, very rarely, we are called to vote on community or social issues, and even that is most of the times reduced to chose a representative from a short list that is presented to us, to delegate our decision making power.

Our concept of democracy is affected by our very reduced experience with democratic processes. We seem to appreciate our minimal involvement in shaping the social power structure. We demand transparency and accountability form those in power. But we don't seem to trust a wide open involvement of the public in making granular decisions. We don't even seem to understand how that can be done.

The multitude, or the p2p movement prescribes methods for wide open processes for problem solving (value creation) and decision making. This is known as open (source) development (peer production) and open governance. These methods have been shown to be very effective, but very few people are accustomed to them. Those who don't know them don't trust them, and find them risky.

I have participated in many collaborative projects in the past, which started with the intention to develop as open peer to peer projects and when the panic set in to meet the deadline many of these projects defaulted back to hierarchical/centralized and closed. The argument was always the same, we don't have time for openness, we need to deliver with the expected quality, and fast, which implies that open processes cannot be effective enough.

Can open and peer to peer processes be effective and efficient? I have been involved in such processes for over 7 years and I can say with certainty that they are. But we have to agree on what we mean by open and peer to peer. Gathering together on the basis of good will is not enough, without the proper infrastructure, methodology, governance, and culture. Like with any other process, we need structure or at least a proper environment for structure to emerge, as needed, in context. Open and peer to peer doesn't mean no structure.

We often hear that we need to let the process self-organize. That is fine, but the next question is self-organize into what? As soon as you ask that question another one pops up, how do you do that? How do you set up the environment to foster that self-organizing process so that the system transitions into a state that has the desired characteristic? Emergence will happen, but you might end up in an undesired state. Lock a bunch of people in a room and come back two days later. You may find them divided into two teams, playing a competitive game, or in a circle, trying to solve a problem in a collaborative way, or everyone else listening to one person giving a presentation, or everyone fighting against everyone else like in a bar scene of a classical western movie. All that is possible, and more. But if you give them some initial suggestions, or even some rules, if you put some boundary conditions on the system and prescribe some processes, you will restrict the array of possible outcomes. You can drive this group into a more collaborative or a more competitive state for example.

Groups that are setting up to do something in an open and peer to peer way, and that don't have the proper culture and knowledge about it don't know how to create the conditions to self-organize into a desired state, one that preserves the characteristics of openness and peer to peer. Some of the features of this desired state are to deliver solutions in an effective and efficient way (and yes, it works), along with empowering the participants, giving participants the opportunity to lean something new, increasing the level of participation, etc. As soon as the panic sets in, their familiarity with hierarchical and closed processes feels like a comfort zone for them, and that pulls them back into their default dynamics.

So what does it take to conduct projects in an open and peer to peer way, effectively and efficiently? There are various recipes that apply in different contexts. Scale is an important factor, which is about the number of participants. The type of project is another one, related to the type of resources needed, to the nature of the deliverable, to the type processes involved, ...

First, we need to evaluate if the initial group has the open culture. This post is not the place to describe what that culture is in detail. Let's just say that the individuals involved need to be comfortable with sharing early, working transparently, collaborate and even co-create, which involves being non-territorial and non-egoistical, accept and provide constructive criticism, be independent, be respectful, be inclusive, be helpful and attentive to others' needs, understand the value within the network or the community, protect and nurture the commons, have a sense of purpose, etc. The better the culture the less governance is needed, because people instinctively know how to conduct themselves. I have worked in groups with the proper culture and it feels like honey. Everything runs smoothly, people find their place rapidly, they know how to take initiative without stepping on anyone's foot, decisions are made effectively without alienating many, ... I also worked in groups with a poor culture. It feels like rolling a stone ball up the hill, dropping it from time to time and starting all over again. People are in for their individual benefits, they fight to occupy prominent roles, they are focused more on having their ideas accepted rather than having the best idea shaping up, they can't share early or collaborate and produce poor results for which they cannot take constructive criticism. When it comes to benefits, they would like to have it all. Instead of helping others they try to outperform them to gain more visibility, ... Sometimes we are forced by circumstances to work with people that don't have the proper culture, and in that case we need norms and rules, we need to install open governance.

Open governance is about decision making processes, conflict resolution mechanisms, norms and rules of conduct. There are many recipes for this too, and we are not going to provide a complete overview here. If you want to dig more, search ''peer governance'' on http://p2pfoundation.net
Examples are: define ''membership'', frame ''initiative'' and describe how to make incremental decisions, describe how broad scope decisions are made (see consensus building and lazy democracy for instance), describe rules for accessing, modifying, and sharing content, describe representation rules, describe expulsion rules, etc.

Third, we need to put in place methodologies, which describe how new members are integrated, how meetings and other tasks are conducted, how to deal with documentation, how to allocate different types of resources, how to conduct research and development, how to do outreach, etc.

Last, but not the least, we need to put in place some infrastructure, which is a system of tools used in processes. These are internal communication and social media channels, content management system, resource planning system, project management tools, perhaps a reputation system and a value accounting system, etc.

It is important to note that the tools and methodologies used affect the culture of the group. For example, if the content management system is a public wiki and the methodology around documentation is designed around this tool, the group will most probably inherit a collaborative and open culture. That is because the tool and its associated processes are inherently open and collaborative. First, they act as filters, attracting predominantly individuals with the proper culture, which will form a critical mass and induce a change in the not so accustomed minority, which will tend to conform. Second, being exposed to these tools and processes allows one to experience and learn the open ways, and perhaps to even appreciate them.

We also need to mention that the culture, the governance, the methodologies and the infrastructure need to form a coherent system. If the group adopts an infrastructure with limited access for the majority of its members, for instance if the content management system allows only a few members to edit content, these privileged members will effectively have at their disposal a lever of power by controlling the content. This situation can spoil other processes, but it can be addressed by putting in place rules for content management, allowing the group to democratically elect those who hold the key to the content and to remove them from this position in case of abuse. Small groups that also have the proper culture can probably function even without these rules, but the situation can be unstable.

Even before we put all this in place to increase the resilience of an open and peer to peer endeavor, there is still a big hurdle to pass. I can say that this is probably the hardest one, even for someone with a lot of experience. If the forming group doesn't have the proper culture, it might become very difficult to create the proper conditions for the project. That is because those with little experience with the open and peer to peer are not very good at recognizing talent and skills, and at stepping aside to let those with experience set it up for them. Most probably, you will find at least one in the group who, for various reasons, will oppose or marginalize those who show initiative and fine skills, who could set the ground for a successful venture. Sometimes, the initiatives of the skilled individual are rejected because they are simply not understood, and since in the beginning there is no governance in place to frame initiative or even to make decisions, the chance to even put that in place is reduced. In these situations, most often than not, the skilled individuals get frustrated and quit.

In conclusion, open and peer to peer ventures can be very efficient and effective. If you want to experience their benefits you need to understand that in order to run this types of ventures successfully you need people with the proper technical skills, experience and culture, which can create the proper initial conditions. If you succeed in attracting some of these people, make sure you keep them close and happy.

t!b!

By AllOfUs

Crowdfunding capacity for peer production

Last updated on July 23 2015
Your feedback will help me improve it. Thank you for your time. 
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They did it again!

In the spring of 2015, the SENSORICA network delivered another important proof of concept for commons-based peer production. We demonstrated that equipment for peer production can be endogenously crowdfunded.

Everyone today knows about crowdfunding. In case you are just returning from a trip to Mars, crowdfunding is a new way to raise funds which involves hundreds or even thousands of individuals, the crowd. If you need money for a venture, instead of going to the bank for a loan or getting venture capital you can now use websites like Goteo, Indiegogo, Kickstarter, etc. You present your project on one of these platforms and ask people from around the world to fund you. Crowdfunding is either a donation scheme, people help you to achieve something without expecting much in return for themselves, only a good feeling for having contributed to a good cause, or a pre-sale scheme, people give you money upfront for a service or a product that doesn't need to be finished before the crowdfunding, that you will deliver a few months later. There is also crowdfunding for equity, where people give you money in exchange of shares in your venture, but very few countries have permissive laws for it.

You can find a lot of stories about individuals or small groups who raised hundreds of thousands of dollars for their product ideas. This shows that crowdfunding democratizes innovation.

It didn't take long before companies caught up with this trend, realizing that they could not only finance the productization phase (transforming a prototype into a manufacturable product at a competitive price) but also get immediate and valuable feedback from the market (if people finance you before you even have a finished product that means that you have a market, and they might even tell you how to improve your product).

So, before we see what SENSORICA did different, let's review a few important features of crowdfunding in general.

Most crowdfunding is used as a pre-sale scheme, Kickstarter being the most popular platform. Goteo is more for open source projects, or for projects that have a social impact. Crowdfunding for equity seems to be adequate for financing infrastructure or capacity development, but it is still in its infancy. 

Almost all the crowdfunding mechanisms are dissociated from the ventures that are using them. They are centralized platforms owned by a classical organization that acts as a mediator between project initiators and their support crowd. 

The crowdfunding model is fueled by three types of actors: the project initiator who proposes the idea and/or project to be funded; individuals or groups who support the idea; and a moderating organization (the "platform") that brings the parties together to launch the idea.  [Wikipedia]

There are also a few examples of self-crowdfunding, where organizations run their campaign on their own platform. This practice is problematic though, because people see in it a conflict of interest. When a third-party that specializes in crowdfunding is used, people trust that the same rules will be applied to everyone and that the data displayed during the process reflects reality.

But things are changing very fast now. Within a year or so, crowdfunding will be implemented on p2p infrastructures based on block chain technology. This means that instead of doing crowdfunding on centralized platforms (the website lives on a proprietary server or cloud, Kickstarter for example) the process will become entirely p2p (the information will live in a bunch of interconnected machines, individually owned by everyone who uses the system). Simply put, the block chain technology (and who knows what will follow next) decentralizes funding even further. If traditional crowdfunding allows people to fund each other using a centralized proprietary platform, this new technology eliminates the need for a proprietary platform, the company in the middle, and  puts the same people in charge of the process. See more here.

Born in 2003, crowdfunding is already making a leap forward, leaving platforms like Kickstarter wondering about their own survival. The new p2p (or real) crowdfunding, based on block chain technology, can give much more flexibility to projects or ventures. The problem is that its time has not come yet. It is technologically possible, but the world around it hasn't advanced far enough for it to have a proper ground for implementation. This is where SENSORICA and its proof of concept comes in.  

SENSORICA is not a typical organization. It is an open value network. It is an open network that does peer production. It is a cluster of open enterprises. It is, in my opinion, the most audacious attempt to implement commons-based peer production of hardware, started in February 2011, one year and 3 months after Satoshi Nakamoto published his paper "Bitcoin: A Peer-to-Peer Electronic Cash System". It is the furthest humanity has gone into hard core peer production, building peer-run physical labs, peer governance and normative systems, methodologies for open product development, as well as legal structures compatible with all that. SENSORICA is the proper environment for p2p (or real) crowdfunding.  

Recent technologies like Ethereum, which also builds on the block chain technology, have made possible new types of economic entities, the so-called DACs, for Distributed Autonomous Organizations. The first implementations of DACs are quite simple, service based, see for example Peertracks. But this technology will very soon mature to fulfill the needs of p2p hardware innovation and production, which is very complex. This will most probably become the infrastructure on which open value networks like SENSORICA will be built in the not so far future.

All that to say that in parallel with the continuous development of crowdfunding there is also a continuous development of organizations, following the same philosophy, based on the same logic, enabled by the same technology. The two movements are about to merge into a coherent economic system, operating on new principles. We are already passed half way into the transition and we can already see what's on the other side.

So what did SENSORICA demonstrated? Sorry for holding it, I am trying to save you the best for the end  : )

SENSORICA used its network resource planning and value accounting system (NRP-VAS), in a context of peer production, to endogenously crowdfund a piece of equipment for the first time in its history. In other words, this is the first time a p2p network that is focused on hardware innovation and production has used a crowdfunding mechanism part of its own infrastructure, not as a service from an external platform, centralized or not.

We used the NRP-VAS to co-finance a $4,000 3D printer. 11 SENSORICA affiliates have contributed to this purchase. The example might seem insignificant for the untrained eye, but there is a lot more behind it.

First, there is the issue of trust. Most of these participant affiliates have never seen each other. Two of them live in the US, the rest live in Canada. Some of them are so far away that they will not even be able to use the 3D printer. We passed the trust hurdle. Participation was a bit slow in the beginning, but after we reached a critical mass it got easier. This is trust in a system, trust generated by processes, trust generated through openness and transparency, not so much trust in each other. This is what makes a system scalable and reproducible.

Second, there is the complexity that comes with co-purchasing. Who owns it? What's the agreement between the co-owners? Who can use it and under what conditions? Who is going to pay for maintenance? How are we going to deal with community use, and commercial use, and other types of uses? It is not simple, but this is what technology is good for, reducing complexity or hiding it behind user interfaces.

We created a co-owner agreement and we implemented new functionality within our NRP-VAS to handle the printer's use logging and to perform calculations to account for the material used in the printing process, usage time, technical assistance, etc. For example, is someone makes commercial use of the 3D printer the cost is split into:

• cost of the material used, 
• some % will go into a maintenance budget account for the 3D printer, 
• some % will go to a general infrastructure maintenance and development account,
• some % will go to pay back the co-owners (the agreement stipulates that once they are paid back plus 20% to cover their risk, the 3D printer becomes part of the pool of shareables), 
• some money will go to pay a technician, if needed.    

All that complexity is absorbed by the technology that we are developing.

NOTE: SENSORICA's NRP-VAS is not decentralized, it is not using block chain technology, because this new p2p infrastructure is not ready yet to handle all the complexity that the open value network is dealing with. This will probably come in two years from now. Moreover, when SENSORICA was created the block chain technology was still in its embryonic state. Therefore, it is probably difficult for the untrained eye to understand how this new SENSORICA proof of concept fits with new pure p2p processes. Think of SENSORICA as p2p at the socio-economic level, but not entirely at the infrastructure level. This is still a work in progress.

This crowdfunding endogenous to an open value network was implemented using the Custodian's financial tools, a Paypal account (open the webpage where the contributions where gathered). See definition of a Custodian. All the contributions were recorded into a virtual account on SENSORICA's NRP-VAS, specifically opened for the purchase of the 3D printer. Once the printer was purchased this account balance went back to 0$.

The lesson here is that an open value network is able to not only crowdsource and crowdfund innovation and production, but also infrastructure development. The tools used by SENSORICA, a p2p organization at the socio-economic level, are not entirely p2p, but we are building understanding and valuable experience, and we are anxiously waiting for the block chain technology to mature.


By Tiberius Brastaviceanu

By AllOfUs

The stateless economy, local economies, and the state

NOTE: This is the second draft. This post was motivated and informed by THIS discussion on Facebook. 

The Multitude movement enters a new era, where its processes can be supported by truly p2p infrastructures. Bitcoin is now a well-known symbol of a new breed of exchange systems, called cryptocurrencies, money without the bank, stateless money, a new currency that looks and feels like your ATM card, but it is entirely decentralized, under the control of those who use it.

Peer-to-peer is a new pattern that emerges in almost all the spheres of human activity, from culture, to governance, to the creation and the distribution of goods and services. It is the underlying pattern of the current leap in the emancipation of the multitude (see the multitude manifesto). Bitcoin is the poster child of p2p exchange systems, but the same technology is now expanding and promising much more:

From Ethereum project: Satoshi Nakamoto's development of Bitcoin in 2009 has often been hailed as a radical development in money and currency, being the first example of a digital asset which simultaneously has no backing or "intrinsic value" and no centralized issuer or controller. However, another, arguably more important, part of the Bitcoin experiment is the underlying blockchain technology as a tool of distributed consensus, and attention is rapidly starting to shift to this other aspect of Bitcoin. Commonly cited alternative applications of blockchain technology include using on-blockchain digital assets to represent custom currencies and financial instruments ("colored coins"), the ownership of an underlying physical device ("smart property"), non-fungible assets such as domain names ("Namecoin"), as well as more complex applications involving having digital assets being directly controlled by a piece of code implementing arbitrary rules ("smart contracts") or even blockchain-based "decentralized autonomous organizations" (DAOs). What Ethereum intends to provide is a blockchain with a built-in fully fledged Turing-complete programming language that can be used to create "contracts" that can be used to encode arbitrary state transition functions, allowing users to create any of the systems described above, as well as many others that we have not yet imagined, simply by writing up the logic in a few lines of code. (See the source). 

For those who think that all this technology is nothing if it doesn't live on its own support, on a p2p Internet, take a look at the MaidSafe project, FNF and many others like them. MaidSafe is special because it comes with its own economy, it's own ways to incentivize the development and maintenance of its physical infrastructure, and has a cleaver launch and growth model which takes advantage of the existing infrastructure.  

We are creating new economic processes with their own exchange systems that know no borders, no political boundaries, and no central authority (which doesn't mean no rules or chaos). We are creating a stateless economy. How states respond to it? How does it relate to local economies?

One of the most interesting observations in relation with this new pattern that deploys globally on p2p infrastructures is the emergence of a global multitude. It is a very diverse multitude. This diversity is rooted in values and principles rather than in local customs. We speak about it as different cultures of online communities. These new social structures transcend the state, which has no effective means to control them. We are witnessing the emergence of new social structures, that come with their own support mechanisms.  

Will states turn against these trends as a reaction of self-preservation? Yes, see for example a list of states that ban bitcoins. I predict that this opposition will grow stronger in the near future, but no state can bury an idea whose time has come. No state can oppose something that benefits a large percentage of its  citizens, especially when the current economic model is evidently unsustainable, morally bankrupt, openly criticized, in decline. What should governments tell their youth looking for a job? The answers can be read in the daily news in Greece, Spain, Italy, France, USA, ... and the list is growing longer every year. 

There is antagonism between the state and this new Multitude outburst, with its p2p practices. Do we see a solution out of this standoff? Institutions are not eternal. They have a life cycle as any other thing. Nation-states were created in the 19th century. The state is an instrument for local communities. People are above the state. The proof is that we, the people, have outlived all the social structures that have existed throughout our history. In the future we will form new social structures and will find new ways to sustain our local communities. How are local communities adapting today?  

The stateless economy is not in contradiction with the local economy

I am drawing my conclusions from my work on the Open Value Network (OVN) model within the SENSORICA community, a pilot project for long tail peer production. 

Forces and mechanisms behind the emergence of local economies

The impact of human activity on our planet is now visible, measurable, which makes us realize that our way of living is outgrowing the Earth's capacity. Pollution and degradation of natural ecosystems, the energy crisis, and an unstable geopolitical situation are aligning to favor the development of diversified local economies. New technologies for renewable energy, for new materials, automation, robotics, and 3D printing, make local production for local consumption economically viable.  

The relevance of proximity and its role in the self-organization of local economies 

The Internet allows coordination and collaboration at the global scale. Design and simulation activities have been virtualized. Engineers can now collaborate online on designs that can be virtually tested and simulated. Innovation has gone virtual, it has been delocalized. This allows the existence of new modes of innovation supported by a new socio-economic structure, the open source community. But making stuff (manufacturing hardware for example) requires local physical resources (materials, tools and equipment, space,...), uses local processes (digital fabrication, assembling, ...), relying on local know how (which cannot be formalized, externalized, and easily passed to others through a medium like the Internet). The Internet doesn't obliterate the need for locality and proximity when it comes to production and distribution of material goods. Locality anchors processes to a specific location, the need for proximity ties different processes into a local economy.  

From global commons to local economies.

This is how the new economy is shaping. It builds on another new reality: 

Knowledge is abundant, know how and capacity of production are scarce and require proximity.

Knowledge is abundant because one idea becomes available to the entire planet as soon as it is shared on the Internet. That single idea can be shared with everyone on the planet at once. There is no limited quantity or debit, it can be accessed anytime and people don't need to take turns to access it. Everyone can have it, together with other ideas produced by other people. That's abundance. Thus, the Internet is a growing repository of ideas that people use to generate new knowledge, which is itself shared, and so on. Sharing is part of the process because it makes the whole system more efficient. Sharing is also imposed by a minority of individuals who have a natural propensity for it. Since ideas usually pop up in different locations at small intervals of time, someone will eventually share something, which obliterates someone else's wish to keep it a secret. This global swarm of ideas and knowledge building is actually a new mode of innovation, open source innovation, supported by a new social-economic structure, the open source community. 

Open source communities, which are virtual and stateless, are now the most innovative organizations. 3D printing has been democratized by open hardware communities, which continue to lead in 3D printing innovation, despite a few corporate successes. The same can be said for automation and control systems, with Arduino being the most popular example. DIY Drones is where the innovation in UAV technology happens. The dominant mode of innovation is now global, decentralized, stateless, increasingly using it's own physical infrastructure (a network of fablabs, makerspaces, co-working spaces), increasingly using its own funding mechanisms (crowdfunding and peer lending). 

The abundance of knowledge goes hand in hand with the creation of a global knowledge commons. This global knowledge commons gets materialized into local economies, using local know how and local capacity of production. This materialization requires a special type of infrastructure and new economic models. Let's illustrate this potential with two examples: 

Transportation: 
Your local community needs adapted means of transportation? You can open a Local motors shop and grow a community around it to produce and distribute cars, locally. You continue to be plugged into the global Local motors community in order to benefit from the stream of open innovation that comes out of it. You can also join other similar communities like Wikispeed and the OScar in order to incorporate even more potential. There is no intellectual property around these car designs, they are open source and everything you build on top of these designs becomes open source by default, goes back into this global commons. Manufacturing a car, its distribution, and services around it forms a local economic activity. In order to make that happen, a tight and synergistic relation must be established between the global open innovation process for designs and the local production processes. This relation insures that the feedback (for product improvement, diversification) that comes from the consumer, in direct relation with the local manufacturer and service provider, is translated into technical problems and passed on to the global open source community of designers. The relation is established and maintained by channels of value between the local and the global/virtual layers. An example is a system of revenue sharing from the local to the global/virtual layer of innovation. This is what the Open Value Network (OVN) model is trying to achieve, with its contribution accounting system.  

Agriculture: 
You need to improve food production in your region? Join Farmhack, which provides open source solutions. Open source ecology offers tools not only for agriculture, but also for the construction of your farm and even for the construction of an entire village (see also Appropedia). There are similar online communities for indoor growing, automated greenhouses, hydroponics and aquaponics (see HAPI)... Name it, you'll find it. These sources for knowledge and designs are complemented by other tools and services for resource sharing and management, like landshare and shareearth (for land), neighborgoods (for tools and equipment), plantcatching (for plants and seeds), as well as more complex tools for mapping and economic modeling (localfoodsystems), etc. This new ecosystem needs to come tightly together into an open value network which allows resource flows between different nodes. Local food systems are reorganizing along a different logic. 


New types of organizations are needed in order to orchestrate and incentivize the development of the global commons and to funnel it into sustainable local economies. I bet on the Open Value Network (OVN) model and on organizations like SENSORICA, because in my opinion they take into consideration how innovation, production, and distribution are restructuring. 

Within OVNs a need (local or not) is translated into a problem, which comes with its own incentive system (monetary or others), to be solved by a global, stateless community of developers, into open source solutions. The solution is materialized into a product or a service at the point of origin of the problem, and distributed to those in need, in exchange of some form of benefit/revenue. The revenue gets redistributed to ALL the participants in proportion to their contributions, using a contribution accounting system (records contributions) and a benefit redistribution algorithm (turns contributions into benefits). Since the solution is open source, others can also distribute it as is, or as a modified/improved/remixed version, also giving back to the original contributors in order to buy their loyalty and to sustain the open innovation channel, in order to sustain the link between the local economy organized around production, distribution and servicing, and the global and virtual layer of open innovation.

New infrastructures are required to support these organizations and their processes. OVNs are supported by a network resource planning and contribution accounting system (NRP-CAS). These tools will move on truly p2p infrastructures like Ethereum. It is important to realize that these new economic systems would be dysfunctional if they were obliged to use classical means of exchange. Imagine a project with thousands of participants and a long tail contribution distribution. The redistribution of revenue to all the contributors for every market exchange (every sale), as prescribed by the OVN model, would require thousands of micro-payments across the globe. Also, imagine thousands of individuals crowdfunding a new equipment used in a project. This would also require thousands of cash transfers from all the contributors into a unique bank account, from which the purchase is made. Bitcoin and other currencies built on the blockchain technology improve the ability of OVNs to incentivize open innovation and to source its processes. 

Open source innovation has been proven to be the most effective mode of innovation. It is supported by open source communities, which are by nature open and decentralized, global and stateless. Innovation drives our modern economy, therefore open source innovation is here to stay, and the rest organizes around it. In order to close the cycle from idea to the market, new types of organizations have been created, based on the OVN model or others hybrid models (for more on these hybrid models see Open Source Hardware meets the p2p economy). New infrastructures have been created to tie everything together into self-sufficient value systems, into open value networks. These infrastructures are designed to support the p2p pattern, reducing the role of the state. Local communities have new alternatives for thriving, which require a radical redefinition of the state.  

Some states have banned cryptocurrencies, which reduces the ability of open value networks (tying global/virtual open source innovation systems to the local economy) to form and develop, which in turn takes away viable alternatives for local communities. 

Without embracing stateless p2p practices we don't actualize the full potential of the new digital technology in making our economy more effective, efficient, and sustainable. Without embracing stateless p2p practices we will see the collapse of our local communities, as the state gradually collapses. States that are fighting stateless p2p processes are essentially denying their local communities access to the p2p economy, an alternative that already shows clear signs to be effective.  

By Tiberius Brastaviceanu

AllOfUs

Governance and legal structure for commons-based peer production

Governance and legal structures for commons-based peer production (CBPP) are evolving very rapidly, but we are still far from having something that is fully compatible with CBPP practices, to make a coherent CBPP system.

CBPP communities that create exchange value (products and services to be distributed/exchanged on the market) are usually hybrid or mixed structures. The most obvious examples are ecosystems like Arduino, which are comprised of a classical structure (the Arduino company) in the middle of an open source hardware (OSHW) community. The Arduino company incorporates functions for production and distribution, but it also plays an important role of facilitation and coordination of the open OSWH network around it. The 3D robotics (the company) and DIY Drones (the community) form a similar ecosystem. See Open source hardware meets the p2p economy blog post.

Other CBPP communities are organized as cooperatives. This choice is justified by the more democratic nature of these types of organizations. I expressed my opinions on this structure in the Are Coops Outdated in a Network Age article.

The p2p era begins

By AllOfUs

Capitalism fights us now

This post was motivated by a documentary that you can watch on Youtube: Counterfeiting. 

First, they don't take you seriously. Later, they laugh at you. Then they fight you, and after you win. I think the new economy (call it multitude or p2p) is one step away from going mainstream.

When society reaches a tipping point, all the absurdities of the old system become apparent. This time around, our global society is undergoing profound transformations because the new technology introduces new possibilities, which in turn affect the way we produce and distribute value. But the conflict between those invested in the old system and the proponents of change opens along ethical issues and values. When did we start to call sharing of designs, counterfeiting?

If you read history books you will not be able to miss the importance of diffusion of technology across continents. Marco Polo is depicted as a hero, because he embarked on a 24 year long and very dangerous voyage from Venice to China and back, and enriched Europe with new technology from the East.  How can a culture consider Marco Polo a hero because he copied the Chinese, but at the same time consider the Chinese thieves, because they copy technology and designs from the west? There is nothing important to understand there, other than the fact that our modern society is undergoing a crisis, a major transformation.

Copying and sharing are essential to development. If an economy starts to vilify essential things like copying and sharing, it is just a matter of time before it collapses, because by denying essentials it will start to accumulate ineficiencies.

Why do we need a contribution accounting system?

First published on 3 January 2014 and last modified on 8 January 2018

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NOTE: Before 2017 SENSORICA used the expression ''value accounting system''. The current expression in use is ''contribution accounting system''. See more on the OVN wiki. The origin of this modification is a redefinition of value, inspired by Tibi's essay ''Scale of social structures''.

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With the advent of the Internet and the development of new digital technologies, the economy is following a trend of decentralization. The most innovative environments are open source communities and peer production is on the rise. The crowd innovates and produces. But the crowd is organized in loose networks, it is geographically dispersed, and contributions to projects follow a long tail distribution. What are the possible reward mechanisms in this new economy?

Our thesis is that in order to reward all the participants in p2p economic activity, and thus to incentivise contributions and make participation sustainable for everyone, we need to do contribution accounting: record everyone's contribution, evaluate these contributions, and calculate every participant's fair share. This method for redistribution of benefits must be established at the beginning of the economic process, in a transparent way. It constitutes a contract among participants, and it allows them to estimate their rewards in relation with their efforts. We call this the contribution accounting system.

For the rest of this article we will try to explain why a contribution accounting system is needed in a more decentralized economy, and unavoidable in a p2p economy.

What should we do with dark IP?

Answer: Open it! 

My friend Layne Hartsell sent me a link to an article on Yahoo news "Anti-Troll' Marblar Unites NASA Patents, Samsung to Crowdsource New Products".

Marblar CEO Daniel Perez said that although many companies' research and development departments spend millions of dollars on such patents, more than 95 percent of them sit unused.
"They're just kind of laying dormant," he told ABC News. "But what if people saw the patents for a special type of material from NASA or a unique laser from Oxford? What are some new ways that we can incorporate these patents into new products?"

I digested the text and put some comments on it, you can access it through Diigo HERE.

Marblar is a new tool for mining and valuing dark IP. What value Marblar brings to the market? They bring dark IP to the surface, from different sources, and they put in one place. The huge database of patents also gets sorted and refined using the users of the website (so they crowdsource that work too). They also ease licensing/royalties agreements between at least 3 parties: the owners of the IP (NASA for example), applications developers (the crowd), and companies that have the capability to put products on the market, (Samsung for example).

I see here old school mentality trying to adapt to the new. These are people who still value IP, who don't understand the open innovation game, who don't realize its potential, or who simply can't play it in their current setting. They have spent a lot of money developing all sorts of technologies and are now trying to value them in a different way. In other words, they feel that the IP they're sitting on surpasses their capacity to put it into practice, to develop its full potential, and they are essentially outsourcing (by crowdsourcing) applications development. This is already recognizing that they (closed corporations) aren't innovative enough. This is recognizing that the creativity economy will be driven by the multitude (the crowd, in their terms). But they are still holding on to their patents because they feel they should get a return on their investment and, most importantly, because they don't know how, or they can't play the open game.

If you ask my opinion, I would put all this dark IP into the public domain, especially the one developed with public funds. This will do a lot more good for the local economy!!

If I was a large company like Samsong, I would re-purpose my business core into a value network management group. Don't need intermediaries like Marblar. Samsong has the resources to become a locus of open innovation, an attractor of bright minds, by providing the space, the equipment, and the proper incentives for an innovative ecosystem to grow around their mission.

But I am not a large company and I am with the 99%, which is now merging into open value networks, powerful (I believe) economic entities, capable of bringing ideas to market. Watch the video below where I explain the open value network model.



Open value networks like SENSORICA also have strategies to mine dark IP. You can take a look at our approach in THIS document.

In my opinion, Marblar is only a transitory system. This model is missing something extremely important, the dynamics of open innovation, which is beneficial for society at large, but also for individuals who engage in it IF we give ourselves the proper tools, like a value accounting system, and a p2p production framework like the one proposed by the open value network model. Nonetheless, it is refreshing to see that Marblar implements a rudimentary value accounting system with their "marble" points, which has the effect to turn competitive product development into large scale collaborative product development. This is precisely the dynamics we're nurturing in entities like SENSORICA, to turn product development into a long tail process.

But systems like Marbler are setting up a candy economy (see THIS post for the definition) and are furthering the netarchical capitalism agenda. SENSORICA is setting up a commons-based peer production system, in which ALL revenue is redistributed in a FAIR way to ALL the participants. The Marblar scheme treats participants as resources, as the crowd, as a mass that can be organized to produce new ideas for the big guys to exploit and rip all the profits, giving a candy back to the crowd (see my post Why I don't like crowdsourcing). SENSORICA is empowering, see participants as equipotent peers, is inclusive, is fair. Which one feels better? Which one do you think will grow faster?

The new world will not be uniform or monolithic. As in the old world, there will be oppositions or antagonistic systems in the new world too. Netarchical capitalism, which is in fact a new form of feudalism is gradually defining itself and growing in opposition to peer production. Those who own our most important resources are looking for ways to transfer their assets into the new economy and to preserve their power. They are building platforms that they can control, and are hoping that the rest of us will get trapped in there or become dependent. The p2p or the multitude movement is building p2p infrastructures parallel (that fulfill the same functions) to these centralized and controlled platforms, with the hope to free the individual. We need to distinguish between being able to co-create value using a platform owned by someone, and being able to co-create value in an environment that is not owned or controlled by anyone, as autonomous and equipotent peers. In both cases we co-create value, we collaborate, but I prefer not having someone to randomly decide if I'm in or out...

By t!b!