Poll

Should we form a Bitshares Cooperative modeled after the Cog Cooperative?

Yes, this would be a good idea.
21 (61.8%)
No.
2 (5.9%)
I don't understand.
11 (32.4%)

Total Members Voted: 33

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Offline luckybit


I think the sooner we do this the better off we'll be.

The Cog Cooperative shows us how to do it and I think we should structure a Bitshares Cooperative based on the Cog Cooperative.
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How does this work?
The network effect. We’re all familiar with it. The internet, social media, and telephones are all networks at their core. As more members join the network, its value increases for all.

The same is true of COG. As COG’s numbers grow, its network becomes more valuable to advertisers. This revenue is then distributed in bitcoin to COG members. The more members in COG, the more revenue all members can potentially earn.

If we are going to have a SuperDAC then we should have a Bitshares Cooperative. Every shareholder would be a member of the Bitshares Cooperative. Decentralized reputation and trust, while also providing a legal entity for people to join.

If designed right people could join it pseudo-anonymously. Being in this entity would allow members to receive all sorts of revenue share benefits, and if the cooperative can own equity then the owners of the cooperative can as well.

Consider this idea and run it by your lawyers. I think a Bitshares Cooperative is a better institution than a bunch of separate non-profits or centralization around Invictus. A Bitshares Cooperative would basically represent the SuperDAC in the real world. It also would keep things decentralized  and pseudo-anonymous while allowing us to enjoy the full benefits of a decentralized reputation system.

Quote
COG is a cooperative that provides members with the best applications and services in the Bitcoin marketplace. COG members receive free access to world class Bitcoin applications, revenue sharing, and exclusive discounts with partner merchants.

Reference
Cog Cooperative: http://cogcoop.com/#/
« Last Edit: October 23, 2014, 08:00:42 PM by luckybit »
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Offline luckybit

If there is any confusion as to the model of Cog Cooperative then here are more details:

Quote
Learn how COG works & how to get involved.
In the digital age, many notable web-based companies have generated billions of dollars in yearly revenue from advertisements alone. These companies are able to earn this revenue because they control enormous networks made up of millions of users like you and I. Users provide value by signing in millions of times a day, but until now haven’t seen a dime of the revenue that they have played an integral role in building. COG is changing that. Our business model is centered on giving back to the people that are responsible for our success: you, the users that make our network valuable.

How does COG work?
COG members are part owners in the cooperative. All members are entitled to & will receive a portion of COG’s revenue in bitcoin. How much bitcoin you receive is based on the number of COG Patronage Points you earn.


Patronage Points are something Bitshares should adopt. For example the donors to AGS were patrons and the Bitshares Cooperative could reward these people with Patronage Points which mirrors 1:1 with AGS as we currently know it. These Patronage Points would also allow future DACs to ask for donations and the patrons (donors) would receive Patronage Points from the Bitshares Cooperative entity as well as receive whatever gifts on the blockchain.

Patronage Points could be used to track who donated, and then gift tokens could be rewarded to them. Additionally if members of the Bitshares Cooperative have Patronage Points they could get all the real world benefits as well.  To clarify I'm not a lawyer so check with them first but I see this as a way to bridge the gap and benefit the community by consolidating resources both on the blockchain and in the real world simultaneously.

Comments from Stan/Fuzz/Bytemaster/Toast and anyone else who understands what is possible are welcome. If these ideas are bad or flawed please let me know but in my own case study of the Cog Cooperative they successfully managed to get their app on Apple's IOS platform during a time when Apple banned anything Bitcoin. Apparently being a cooperative gives unique benefits to the users/owners of the cooperative.

Reference
http://cogcoop.com/#/education
« Last Edit: October 23, 2014, 08:17:10 PM by luckybit »
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Offline mf-tzo

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 +5%

I like seeing things going in the next level. Not sure how we take it from here and what's need to be done but I like it

Offline onceuponatime

+5%

I like seeing things going in the next level. Not sure how we take it from here and what's need to be done but I like it

Couldn't this be set up and run by you as a delegate? It would need zero fees, and would be easiiy voted in for that reason.

Offline mf-tzo

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+5%

I like seeing things going in the next level. Not sure how we take it from here and what's need to be done but I like it

Couldn't this be set up and run by you as a delegate? It would need zero fees, and would be easiiy voted in for that reason.

Please elaborate what exactly needs to be done and I will do it! Or were you referring to luckybit?

Offline onceuponatime

+5%

I like seeing things going in the next level. Not sure how we take it from here and what's need to be done but I like it

Couldn't this be set up and run by you as a delegate? It would need zero fees, and would be easiiy voted in for that reason.

Please elaborate what exactly needs to be done and I will do it! Or were you referring to luckybit?

Actually I was referring to luckybit. Sorry for the confusion. I assumed that he would know best how to go about it and be able to champion it.

Offline mf-tzo

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I thought so...Someone proposing me to be a delegate for something like that just didn't seem right..my skills are limited..lol..

Offline starspirit

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I'm not sure I understand the proposal completely. My initial thought is I want to focus on the purity of what Bitshares is trying to achieve, and I don't like being bombarded involuntarily with advertising. If it were a feature I could turn on and off as I please, and I earned something when it was on, then I don't think I could have any complaints.

Offline luckybit

I thought so...Someone proposing me to be a delegate for something like that just didn't seem right..my skills are limited..lol..
I'm not currently a delegate. Also I don't have the legal expertise to pull it off. We should at least elect someone who has gone to law school or who is a lawyer to set up the organization and that person would not be me.

I would support whoever sets the organization up though.
I'm not sure I understand the proposal completely. My initial thought is I want to focus on the purity of what Bitshares is trying to achieve, and I don't like being bombarded involuntarily with advertising. If it were a feature I could turn on and off as I please, and I earned something when it was on, then I don't think I could have any complaints.

It's not about advertising. It's about consolidation and efficient legal organization. It's also about mirroring ownership of the Bitshares ecosystem so that it exists on the blockchain as well as in cooperative form so that self governance becomes possible.

The Cog Cooperative makes revenue from ads and then it shares that revenue with the owners of the Cog Cooperative who are also the users. This makes the Cog Cooperative a sort of legal personification of a DAC but what they are missing is the technology.

Bitshares SuperDAC has the technology but it is missing the legal entity. This means you miss out on all the benefits of the law while you still have all the risks of being regulated, prosecuted, etc.

If you have a Bitshares Cooperative then you can do revenue sharing, profit sharing, etc. You can allow the Bitshares Cooperative to own equity such as stock and that Bitshares Cooperative could do things under US law which the SuperDAC by itself cannot do. At some point all DACs have to interface with traditional governments and a Bitshares Cooperative is a way to do things where it isn't likely to be regulated.

I'm not a lawyer so I don't believe I'm qualified to set it up. I also don't have the resources to ask a lawyer how to set it up. If any of you are a lawyer or a person with the means to hire one then you should be the person who sets it up. The Cog Cooperative is the example model that you can show your lawyer and then tell them that you want to set something up similar to it but have it work through Bitshares technology.

KeyID allows for decentralized identity and reputation. Bitshares VOTE allows for decentralized decision making. Bitshares X allows for the decentralized exchange so that gifts can be given to patrons who have enough Patronage Points. This way people who donate to certain efforts or who work for certain efforts can then be awarded in Patronage Points which would exist both on the Bitshares X blockchain as well as legally in the Bitshares Cooprative.

This way developers will have the incentive to work on projects, honor the social consensus because they can acquire Patronage Points, which can improve their reputation. They would be able to do all of this pseudo-anonymously through KeyID if it works as we hope it will and shareholders would be able to vote pseudo-anonymously. So you'd have everything you need to have the SuperDAC exist where the Bitshares Cooperative could focus on being the SuperDAC in legal form.

The idea of a Bitshares Cooperative is in my opinion a good one but it needs brainstorming. Suppose we had decentralized identity, reputation, Patronage Points, decentralized exchange, smart property, and trust? What could we do with a Bitshares Cooperative that we can't do with the Bitshares SuperDAC?


« Last Edit: October 23, 2014, 10:17:17 PM by luckybit »
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Offline luckybit

+5%

I like seeing things going in the next level. Not sure how we take it from here and what's need to be done but I like it

Couldn't this be set up and run by you as a delegate? It would need zero fees, and would be easiiy voted in for that reason.

Please elaborate what exactly needs to be done and I will do it! Or were you referring to luckybit?

I think what needs to be done is we need to figure out who among us has the resources to go through the legal process of setting it up. I think for a lawyer it wouldn't be the most difficult thing in the world but it's difficult for anyone who doesn't understand the law.

The benefit of a Bitshares Cooperative is more apparent when you consider that a Bitshares Cooperative should at least in theory be able to own assets, shares, stock, property, which means you could then gift that property to members who have the Patronage Points. A good reputation could result in acquiring a lot of Patronage Points which means more gifts in the form of smart property.

Again I don't know all the legal possibilities but here are some legal references:
http://www.co-oplaw.org/conversion/
http://www.sba.gov/content/cooperative
http://www.uwcc.wisc.edu/pdf/Cooperative%20Equity%20and%20Ownership.pdf
http://www.forbes.com/2010/05/13/cooperatives-co-op-leadership-citizenship-ethisphere.html
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With their shared ownership, cooperatives serve their members’ needs democratically. They offer each member-owner a vote in board elections and a say in the running of the business, thus establishing a greater degree of mutual responsibility and accountability than in investor-owned companies. Member-owners answer to one another rather than to outside investors, and that interrelationship tends to minimize fraudulent, deceptive and damaging behavior.

Investor-owned firms, on the other hand, operate with built-in conflicts of interest as investors dictate the direction of the business and often sacrifice quality or ethical standards to guarantee higher returns. This happened recently on an unthinkable scale in finance and housing. Yet the investors in companies like AIG have escaped with a clean conscience, because they don’t feel any direct connection to the foreclosures on people’s homes that AIG’s actions wrought.

This wouldn’t–and didn’t–happen with cooperatives. Co-ops don’t have an inherent conflict between their investors and the customers they serve. Their owners are the people who use their services. This personal involvement makes gambling with their fate much less attractive. The only way an individual’s fortune will grow is if the cooperative grows; a loss for the cooperative is a loss for each individual. Co-op executives don’t have the incentive to pilfer their businesses that executives at investor-owned firms do.
https://en.wikipedia.org/wiki/Consumer_cooperative
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Consumer cooperatives are enterprises owned by consumers and managed democratically which aim at fulfilling the needs and aspirations of their members.[1] They operate within the market system, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit.[2] Consumers' cooperatives often take the form of retail outlets owned and operated by their consumers, such as food co-ops.[3] However, there are many types of consumers' cooperatives, operating in areas such as health care, insurance, housing, utilities and personal finance (including credit unions).
In some countries, consumers' cooperatives are known as cooperative retail societies or retail co-ops, though they should not be confused with retailers' cooperatives, whose members are retailers rather than consumers.
Consumers' cooperatives may, in turn, form cooperative federations. These may come in the form of cooperative wholesale societies, through which consumers' cooperatives collectively purchase goods at wholesale prices and, in some cases, own factories. Alternatively, they may be members of cooperative unions.[4]
http://www.differencebetween.net/language/words-language/difference-between-cooperatives-and-corporations/
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Summary:

1.A corporation exists as a legal entity where it can sue or get sued while a cooperative does not.
2.A corporation has limited liability while a cooperative does not.
3.A corporation must deliver returns on investments while this is not a must for a cooperative.
4.A corporation is run by a centralized management under a board while a cooperative is run by the members.
5.Shares of a corporation are transferable while those of a cooperative are not.



Read more: Difference Between Cooperatives and Corporations | Difference Between | Cooperatives vs Corporations http://www.differencebetween.net/language/words-language/difference-between-cooperatives-and-corporations/#ixzz3H0gBTIlX

Shares of BTSX are transferable but shares of the Bitshares Cooperative would not be transferable. This means Patronage Points would not be transferable? And the only way to earn Patronage Points would be through the Bitshares Cooperative similar to how the Cog Cooperative does it.

Theoretically it might be possible someday for a Bitshares Credit Union to exist and be owned by the Bitshares Cooperative.
« Last Edit: October 23, 2014, 10:35:33 PM by luckybit »
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Offline mf-tzo

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Re: We should form a Bitshares Cooperative. Take the merger to the next level.
« Reply #10 on: October 27, 2014, 08:37:56 PM »
Luckybit, thank you very much for all the below information.

This is my first feedback.

1. In European countries as well in the US the law is pretty much the same for the cooperatives. In my country a bit more archaic compared to the US, but pretty much the same rules apply.

2. Once BTS is fully run we will need to have a detailed description of the business, its purposes, procedures, detail of how new capital injections from external partners is treated with shareholders agreements etc etc..KYC and AML is not much of an issue as long as we take the necessary precautions and measures.

3. We would probably need a white paper to properly explain all the details at some point. This can be then presented to a lawyer who will do all the necessary and form the company.

4. Lets see who else will want to be a member and how many from the community are in favor to be part of the cooperative. I don't see much participation from others so I don't think there is any point in making a cooperative with 5-10 people.

Let me know if you think there is anything else I should ask my lawyers or if there is anything else I could do at this point to make this happen. 

 


 

Offline luckybit

Re: We should form a Bitshares Cooperative. Take the merger to the next level.
« Reply #11 on: October 27, 2014, 08:46:09 PM »
Luckybit, thank you very much for all the below information.

This is my first feedback.

1. In European countries as well in the US the law is pretty much the same for the cooperatives. In my country a bit more archaic compared to the US, but pretty much the same rules apply.

This is a good thing. It means less work for lawyers and easier to make an organization which has an international base.
2. Once BTS is fully run we will need to have a detailed description of the business, its purposes, procedures, detail of how new capital injections from external partners is treated with shareholders agreements etc etc..KYC and AML is not much of an issue as long as we take the necessary precautions and measures.
I agree on this but I'm not a lawyer so I cannot say much more.
3. We would probably need a white paper to properly explain all the details at some point. This can be then presented to a lawyer who will do all the necessary and form the company.
This part is something we can do with community involvement. If the community thinks the benefits of having a cooperative are worth it then let's step forward with a whitepaper.

4. Lets see who else will want to be a member and how many from the community are in favor to be part of the cooperative. I don't see much participation from others so I don't think there is any point in making a cooperative with 5-10 people.
So far polls are in favor of it but a lot of people are confused as to why it would be needed or what it's purpose is. People don't understand what a cooperative could do or why it is needed.

But the same could be said about DACs or about Bitcoin. People have to do research into new ideas to determine if it is good or not. In my own opinion cooperatives are the only way to distribute dividends, rebates, vouchers and other incentives to bring a community together and build on network effects. I don't think you can do it entirely through a DAC because the law would set up barriers to entry but in a cooperative the law is on your side so you're not swimming against the current.
Let me know if you think there is anything else I should ask my lawyers or if there is anything else I could do at this point to make this happen. 
Thanks for your feedback.

You've done a great service. At this point we need a whitepaper, we need to figure out how to explain to the community what we could do with a cooperative and what problems having a cooperative can solve. It's really up to the community if they want to unify around a cooperative or keep everything on the blockchain but consider the fact that if each delegate does their own thing starting competing traditional corporations then all this talk about consolidation is pointless.

In a cooperative when individual delegates make partnerships, make deals, and profit, that profit would be shared with the entire ecosystem through membership in the cooperative. This seems like it would seem to make corruption of delegates more difficult because the cooperative is something many delegates could be a member of and could partner up with.

I think we cannot ask people if they'd want to be part of a cooperative before the cooperative or whitepaper exists.

I think it's more like if you want certain benefits you'll want to be part of a cooperative because it's the only way. If for example the person doesn't want to just be an anonymous user of Bitshares but they want to have a reputation, be an active supporter/participant, etc, then these people would be the first to join the cooperative. I also think certain features which a lot of people say they want may only be possible if they are a member of a cooperative due to legal reasons so these exclusive features would make people join the cooperative.

If you're talking about software then software could have cooperative exclusive features because certain things you just can't do without being a member of the cooperative. Like for example dividends? Ask the community how many would like to earn dividends from partnerships, or who would like to own actual stocks? What about insurance features (remember that Insurance DAC?).

It's possible at this point most people don't know what a cooperative is or what it can do. The poll says that a significant percentage of the community doesn't understand so it's something which would have to be explained in a whitepaper and presented both to the community and to lawyers.
« Last Edit: October 27, 2014, 08:58:15 PM by luckybit »
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Offline mf-tzo

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Re: We should form a Bitshares Cooperative. Take the merger to the next level.
« Reply #12 on: October 27, 2014, 08:52:21 PM »
Yes fully agree with everything that you say. Obviously we need a white paper first.

Offline luckybit

Re: We should form a Bitshares Cooperative. Take the merger to the next level.
« Reply #13 on: October 27, 2014, 09:14:43 PM »
Yes fully agree with everything that you say. Obviously we need a white paper first.

In the whitepaper I think the emphasis should be on the capabilities a cooperative could provide to the Bitshares userbase.

For example suppose you want insurance of some type? You could only do it by being a member of a flesh and blood cooperative. We could build the health DAC, the insurance DAC, the identity service, so I guess what the cooperative provides is like a centralization of trust for large institutions in traditional society to interact with. I don't think individual delegates will be able to negotiate with large powerful institutions.

Insurance cooperatives already exist: https://en.wikipedia.org/wiki/Health_insurance_cooperative
https://en.wikipedia.org/wiki/Mutual_insurance .
Bytemasters Mutual Insurance Society: https://www.youtube.com/watch?v=ouKj2Bh4YLo

And the only way to have these sorts of DACs is to have cooperatives. So if you have a Bitshares cooperative it would seem to make life easier for Bytemaster.

Now onto the whitepaper: https://docs.google.com/document/d/14k4zKjt8rkY1I5aYFVSdxiDqyHofhAmo0VQfLzDyKkE/edit?usp=sharing

Anyone who wants to contribute to the whitepaper can contribute to that Google doc. It can be commented on, edited, reviewed, by members of the community. We can start by compiling some of what we have from these forums into something coherent and cohesive.
« Last Edit: October 27, 2014, 09:16:40 PM by luckybit »
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Offline lovejoy

Re: We should form a Bitshares Cooperative. Take the merger to the next level.
« Reply #14 on: October 28, 2014, 12:47:01 AM »
I like the co-op model.

https://www.ncba.coop/7-cooperative-principles
Sounds like it fits us rather well.

Another advantage to structuring as a cooperative would be the ability to engage with brick and mortar cooperatives (specifically I'm thinking of coop groceries) and leverage their member base to support the adoption of BitAssets in their respective organizations, a huge opportunity as far as I'm concerned.  And the BitShares concept should really resonate with other co-op members.

I live in Minneapolis, where there is a substantial co-op grocery movement, probably the biggest in the country, and I have often thought of how the BitShares ecosystem could engage with them for mutual benefit.

Not a lawyer, and don't understand the legal ramifications, but I agree in principle that this is a promising direction to move in.

 

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