The gift economy vs "crowd sales": reciprocity based value exchanges

[luckybit]

I prefer contract free economy. 

I think the gift terms confuse people and things start to sound like some kind of commune full of hippies that will put many people off.

A contract free system simply means that no agreements are legally binding and every my do what they want at any time.  Reputation and transparency combined with smart contracts drive people to honor their agreements.  The key mindset is to avoid the temptation to expect recourse in the event someone fails to behave as you expected them to.

DACs are disruptive to traditional industry frameworks, but this is disruptive to the entire traditional business model. As this concept is so integral to participant expectations, and to attracting funders and developers from their more familiar traditional environments, I think it deserves a whitepaper of its own.

We could write that whitepaper if we could get input from Dan, Stan, and other Key Players.

I'll get the process started right here right now: https://docs.google.com/document/d/1--0P9Ed0jgIKEB2ox_FIQP3ruZVIseTKesoRMzL5ofo/edit

Anyone can start adding to that outline of a whitepaper. The text can be compiled from our discussions and then we can collectively comment, edit, and review.

[donkeypong]

"BitShares: Above the law"

 

[starspirit]

I prefer contract free economy. 

I think the gift terms confuse people and things start to sound like some kind of commune full of hippies that will put many people off.

A contract free system simply means that no agreements are legally binding and every my do what they want at any time.  Reputation and transparency combined with smart contracts drive people to honor their agreements.  The key mindset is to avoid the temptation to expect recourse in the event someone fails to behave as you expected them to.

DACs are disruptive to traditional industry frameworks, but this is disruptive to the entire traditional business model. As this concept is so integral to participant expectations, and to attracting funders and developers from their more familiar traditional environments, I think it deserves a whitepaper of its own.

[luckybit]

I prefer contract free economy. 

I think the gift terms confuse people and things start to sound like some kind of commune full of hippies that will put many people off.

A contract free system simply means that no agreements are legally binding and every my do what they want at any time.  Reputation and transparency combined with smart contracts drive people to honor their agreements.  The key mindset is to avoid the temptation to expect recourse in the event someone fails to behave as you expected them to.

This kind of forward thinking is what makes me excited about this project. There's a lot of need to make this more clear among even this community.

How about we call it a contract free zone? I think when we are dealing with issues within the community we don't need any contracts because we'll have our own technological mechanisms to deal with most of it.

I think for situations where we have to form partnerships with external entities then we will require contracts. So there has to be a way to distinguish between internal custom based enforcement and external partnerships which will require we abide by the laws of the land that recognizes the partnership.

A cooperative could form legal partnerships and this would require contracts of some sort. So a cooperative could benefit from using contracts when dealing with institutions. Individuals in the community who want to give shouldn't be giving anything more than a no strings attached gift to support the cause though.

It's really up to the community what we decide to call our customs, our traditions, our way. Academic literature calls it the gift economy but I can see that the gift economy has been co-opted by political partisans who have an anti-money outlook while we don't necessarily have that particular outlook and don't want to be confused with them. If you have money to give and you give money then money is really just another gift.

[godzirra]

I prefer contract free economy. 

I think the gift terms confuse people and things start to sound like some kind of commune full of hippies that will put many people off.

A contract free system simply means that no agreements are legally binding and every my do what they want at any time.  Reputation and transparency combined with smart contracts drive people to honor their agreements.  The key mindset is to avoid the temptation to expect recourse in the event someone fails to behave as you expected them to.

This kind of forward thinking is what makes me excited about this project. There's a lot of need to make this more clear among even this community.

[bytemaster]

I prefer contract free economy. 

I think the gift terms confuse people and things start to sound like some kind of commune full of hippies that will put many people off.

A contract free system simply means that no agreements are legally binding and every my do what they want at any time.  Reputation and transparency combined with smart contracts drive people to honor their agreements.  The key mindset is to avoid the temptation to expect recourse in the event someone fails to behave as you expected them to. 

[xeroc]

Unfortunately human nature has become really greedy. You all saw what happened with the current allocation of the new BTS shares. Everyone complain about the allocation % and there have been enormous discussions about that when in reality new BTS shares was just a "gift" to AGS-PTS shareholders based on their shares (patron points). Everyone gets blinded with $$ signs and we miss the bigger picture.

Fully agree here ..

[mf-tzo]

http://sacred-economics.com/

 

 

That's the spirit that the bitshares cooperative should have. A gift economy among "friends" who one help each other however they can without expecting something in return. Patron points (reputation points) should also be included. We have this amazing technology, let's use it to make something right. There is no community if people don't give their extra as gifts to others.

Unfortunately human nature has become really greedy. You all saw what happened with the current allocation of the new BTS shares. Everyone complain about the allocation % and there have been enormous discussions about that when in reality new BTS shares was just a "gift" to AGS-PTS shareholders based on their shares (patron points). Everyone gets blinded with $$ signs and we miss the bigger picture.

I will find out whatever I can about the legal issues of the cooperative and the accounting. I have some concerns but once I consult some lawyers I will give feedback. There are some aspects that need caution. In any case though we should work all together to overcome any issues and make this happen.
 

[James212]

http://sacred-economics.com/

 

[matt608]

If we want to form partnerships with corporations, governments, banks, non-profits, then we need a unified Bitshares Cooperative. That cooperative could also distribute the benefits of these relationships to its owners in the form of vouchers, discounts, special deals, gifts of any sort, donations, or whatever.

But if you don't have that cooperative then how do you take advantage of the supposed "network effects" the SuperDAC is supposed to bring? If it's all a bunch of scattered delegates distributed around the world without a legal organization for centralized institutions to partner with then how do we interact with those centralized institutions?

Those institutions instead would approach each of our delegates individually and pull them in all different directions. Additionally the rest of the community might not benefit at all from this process. Having a Bitshares Cooperative will mean the Cooperative itself could receive government funding, or funding from corporations in the form of partnerships in a way which would benefit every member.

The secret to success is to have a network which can actually form partnerships with other networks. Centralized networks need a way to form partnerships with DACs in a mutually beneficial relationship so why not make it easy for them?

The above point you make about BTS needing a legal definition to be able to interact with centralized systems sounds like a very good point to me.

As for the details of how the web of trust would work I don't really understand, but I get the 'gist'.  I am fascinated in general by the idea and would be glad to learn more about it.

[luckybit]

Do you think this idea of a gift network in being promoted simply for the sake of keeping BTS outside of all regulatory nets, or because it is genuinely believed it is more productive than the current legal system that protects rights related to private property, freely entered contracts, mutual obligation etc?

As we see with AGS whether it be called a gift or an investment it would still have had the same effect. The only difference is that when you call something a gift you waive your SEC protection because there is no expectation of ROI. If you don't want to deal with securities, the SEC or any of that then don't accept investors into your ecosystem.

It just seems we are giving up a lot of things that have worked for centuries along with just the bad things we think these new network technologies can improve upon.

Actually the gift economy has worked for a lot longer than the securities. People were trading gifts and running gift economies before there was a such thing as corporations. Gift economies existed before there was a such thing as fiat currency.

Even if we did form a legal Cooperative as you suggest (and with good reasons I might add), would it have any teeth to meet its commitments to outside parties, from their perspective?

I'm not sure what you're asking here. If you're asking if a gift economy can work then I can show you this research paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2465455


As you see, all file sharing is based around the gift economy. Bittorrent, Napster, all of it was based around the gift economy and it worked just fine. In order for an economy to work you just need enough of a network effect and an ability to enforce cultural norms.

You do not actually need an SEC in a gift economy. In a gift economy every accepts the rules and their honor is on the line. If honor is something everyone values then the SEC becomes irrelevant because you wont need an SEC if you've got a self enforcing mechanism for your self funding ecosystem.

I don't see why there is any reason to do things in the box when you can accomplish the same result doing it outside the box with a lot less risk. It's simply more economically efficient to not deal with investors, the SEC, securities, or any of the rules associated with it, when the only goals are fund raising and cooperative ownership. If there has to be securities then why not do that later when many people in the community are high net worth individuals?

[starspirit]

This is my main concern on this model right now:

If a gift network were large enough such that the opportunity cost of not being part of that network is very high, of if it were closely connected enough, certainly I agree the social expectations of the community would promote co-operative contributive behaviour. But if the network is distributed, small, and opportunity cost low, the social contract can be easily broken by selfish players who take advantage of the community and then move on. If this happened, or even on the possibility that it might, participants would be discouraged from making large contributions of time or capital, and would only work with minimal amounts at a time. This is turn would hold back the system from ever growing large enough or important enough where it can effectively remove the incentive for bad or irrational actors. So it seems to me first we need clear rules and expectations initially in certain areas (such as developer commitments when granted BTS, or entitlements of large investors), and as critical mass is reached a more voluntary approach can take over.

There seems to be evidence that it is already large enough. Why are developers following the social consensus? Why is a SuperDAC being formed? If you don't trust the developers then you shouldn't sponsor them with donations but if you do then you get Patronage Points for sponsoring them which would be non-transferable and exist on the blockchain (like AGS) and the developers can only get their Patronage Points by following through on their promise to abide by cultural norms and traditions.

If I were looking at the evidence then we already at are the size where network effects are beginning to form. All we would have to do is form a legal Bitshares Cooperative and then the network effects would be even greater because you'd have a legal entity to promote the gift ecosystem and moral traditions of the community. If one of our most sacred traditions is to gift those who came before us then AGS and PTS will always get the 10% or else the reputations of the developers would suffer.

Additionally by having a Bitshares Cooperative then developers who have a bad reputation could be kicked out and lose all the benefits to get dividends from it simply because they didn't abide by the social consensus. So you could literally turn the social consensus into something legal between members of the cooperative and the cooperative or you could just only allow people to remain members by adhering to the agreed upon principles.

These are things a DAC cannot do. A Bitshares SuperDAC can only code it's principles in code while a Bitshares Cooperative could code it's principles in the form of a membership agreement backed by the law of the land while also being able to fully benefit from the source code of the Bitshares SuperDAC.

Put simply the Bitshares Cooperative could take the Bitshares SuperDAC into meatspace.

Do you think this idea of a gift network in being promoted simply for the sake of keeping BTS outside of all regulatory nets, or because it is genuinely believed it is more productive than the current legal system that protects rights related to private property, freely entered contracts, mutual obligation etc? It just seems we are giving up a lot of things that have worked for centuries along with just the bad things we think these new network technologies can improve upon.

Even if we did form a legal Cooperative as you suggest (and with good reasons I might add), would it have any teeth to meet its commitments to outside parties, from their perspective?

[luckybit]

This is my main concern on this model right now:

If a gift network were large enough such that the opportunity cost of not being part of that network is very high, of if it were closely connected enough, certainly I agree the social expectations of the community would promote co-operative contributive behaviour. But if the network is distributed, small, and opportunity cost low, the social contract can be easily broken by selfish players who take advantage of the community and then move on. If this happened, or even on the possibility that it might, participants would be discouraged from making large contributions of time or capital, and would only work with minimal amounts at a time. This is turn would hold back the system from ever growing large enough or important enough where it can effectively remove the incentive for bad or irrational actors. So it seems to me first we need clear rules and expectations initially in certain areas (such as developer commitments when granted BTS, or entitlements of large investors), and as critical mass is reached a more voluntary approach can take over.

There seems to be evidence that it is already large enough. Why are developers following the social consensus? Why is a SuperDAC being formed? If you don't trust the developers then you shouldn't sponsor them with donations but if you do then you get Patronage Points for sponsoring them which would be non-transferable and exist on the blockchain (like AGS) and the developers can only get their Patronage Points by following through on their promise to abide by cultural norms and traditions.

If I were looking at the evidence then we already at are the size where network effects are beginning to form. All we would have to do is form a legal Bitshares Cooperative and then the network effects would be even greater because you'd have a legal entity to promote the gift ecosystem and moral traditions of the community. If one of our most sacred traditions is to gift those who came before us then AGS and PTS will always get the 10% or else the reputations of the developers would suffer.

Additionally by having a Bitshares Cooperative then developers who have a bad reputation could be kicked out and lose all the benefits to get dividends from it simply because they didn't abide by the social consensus. So you could literally turn the social consensus into something legal between members of the cooperative and the cooperative or you could just only allow people to remain members by adhering to the agreed upon principles.

These are things a DAC cannot do. A Bitshares SuperDAC can only code it's principles in code while a Bitshares Cooperative could code it's principles in the form of a membership agreement backed by the law of the land while also being able to fully benefit from the source code of the Bitshares SuperDAC.

Put simply the Bitshares Cooperative could take the Bitshares SuperDAC into meatspace.

[starspirit]

This is my main concern on this model right now:

If a gift network were large enough such that the opportunity cost of not being part of that network is very high, of if it were closely connected enough, certainly I agree the social expectations of the community would promote co-operative contributive behaviour. But if the network is distributed, small, and opportunity cost low, the social contract can be easily broken by selfish players who take advantage of the community and then move on. If this happened, or even on the possibility that it might, participants would be discouraged from making large contributions of time or capital, and would only work with minimal amounts at a time. This is turn would hold back the system from ever growing large enough or important enough where it can effectively remove the incentive for bad or irrational actors. So it seems to me first we need clear rules and expectations initially in certain areas (such as developer commitments when granted BTS, or entitlements of large investors), and as critical mass is reached a more voluntary approach can take over.

[donkeypong]

I do happen to have a legal background. But I'm not technical enough to set up a delegate. If anyone's interested in helping, let us know. I'll do my part if others are interested enough to do theirs!