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!

[luckybit]

I like the Cooperative and Points ideas. The Cooperative should run as a delegate. That would give it the necessary credibility in this sphere, plus it would provide income to encourage people to participate. I'm still not sure how the economics of the Points system would work, but that all can be hashed out in time.

Count me in. How can I help?

When people ask "who" is the cooperative, you're the cooperative.
The cooperative is whomever owns and operates Bitshares so that is like asking "who is Bitshares?". It's the owners and delegates. The cooperative however is based on reputation though while Bitshares is based on reputations for the delegates.

As far as who should start the cooperative? Any delegate can do that but it doesn't mean the cooperative is a delegate.

The best way to help is to add ideas of your own and perhaps explain the big picture to others. I'm not really good at explaining the big picture. Then after enough people understand it then someone from the community who has a legal background should offer to set it all up in exchange for becoming a delegate. Once it's all set up by the trusted delegate then we can take it from there and perhaps use the cooperative to form partnerships which can provide dividends to the members.

[donkeypong]

I like the Cooperative and Points ideas. The Cooperative should run as a delegate. That would give it the necessary credibility in this sphere, plus it would provide income to encourage people to participate. I'm still not sure how the economics of the Points system would work, but that all can be hashed out in time.

Count me in. How can I help?

[starspirit]

Patronage Points could work just fine and be distributed specifically by the cooperative. Patronage Points are not transferable but they represent reputation points you earn by giving gifts to others.

I'm intrigued, but still vague on mechanics. Who is the cooperative? How would the cooperative determine how to distribute Patronage Points in the case where gifts are not community based but between individuals or groups of individuals?

[luckybit]

Donkey you've connected the dots. Patronage Points could work just fine and be distributed specifically by the cooperative. Patronage Points are not transferable but they represent reputation points you earn by giving gifts to others.

No one is required to respect these points but if the cooperative decides to respect these points then there will be plenty of perks, rewards, revenue shares, and gifts, given to those who have these points.

Honestly you could do it in a number of ways but the general thing you need is some sort of reputation points to make it work. The one thing the vast majority of us care about is our reputation because that is what allows us to be a delegate, to be well received by our community, and only by giving can we expect to receive.

References
http://www.peoples.coop/cooperative-ownership/your-peopleshare-1/patronage-refund-system

How can I increase my dividend? Because you are receiving a portion of your spendings back, the more you shop at the co-op, the more you are eligible to earn in a dividend.   As an active Member-Owner, we track your purchases as patronage points to calculate your refund at the year's end.

[donkeypong]

As gifts are voluntary, the only way to enforce them is with a community standard of expectation. We have that with open source software, etc., where a product or developer in some software fields is blackballed if they don't play the game by the community's rules.

We have seen how gifting can work to the advantage in a decentralized organization like this one. The current SuperDAC merger/airdrop allows them to take a snapshot for voluntary gifting purposes. Each time there is such a layer of voluntary goodness, it puts this beyond the reach of another set of regulations.

I love the gift economy. We must trust one another and expect the same standard from everyone. But we must have some recourse, through a ratings system perhaps, to maintain honesty. We've certainly seen a big chunk of dishonesty in the crypto sphere in general these last couple of years: proof positive that not everyone lives by the same moral code.

[luckybit]

It would be very interesting to experiment with a network like this to see how it works and what could become of it. However, although a third-party DAC could do it and maybe should do it as an experiment from which to learn, I think it would be a huge economic risk for Bitshares to apply this generally at this stage, because it moves in the direction of obfuscating economic incentives.

For example, if somebody were trying to decide whether to contribute to somebody else, they will want to know how valuable that task is to the receiver, and how much they should contribute their scarce resources to it compared to other possible endeavours. Normally a price signal would help such calculation. In a gift economy, how would one get a signal as to how much other economic participants will value that contribution? Especially if it is made to particular parties, rather than to the community as a whole? Maybe some sort of voting system?

If the goal of forming a SuperDAC was "network effects" then you don't really benefit from that to the maximum unless you form a Bitshares Cooperative in the legal sense.

Am I the only one who see's this? We still expect Invictus to handle certain things when it could be handed over to the Bitshares Cooperative which we'd all work for and own.

You do know that I3 is going to be phased out right? After marketing funds etc are done they will be closed like BM has been saying. After which the people will be in power of funding etc etc.

I do know that. That is exactly why I'm having this discussion. Like I said 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 chief hurdle for any good or service which uses the network effect is to get enough users initially so that the network effects take hold. The amount of users required for significant network effects is often referred to as critical mass. After the critical mass is attained, the good or service should be able to obtain many new users since its network offers utility.

http://www.investopedia.com/terms/n/network-effect.asp

My take on this quote is that it's not just about getting "enough users" to expect some magical network effects to take hold. 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?

[jsidhu]

It would be very interesting to experiment with a network like this to see how it works and what could become of it. However, although a third-party DAC could do it and maybe should do it as an experiment from which to learn, I think it would be a huge economic risk for Bitshares to apply this generally at this stage, because it moves in the direction of obfuscating economic incentives.

For example, if somebody were trying to decide whether to contribute to somebody else, they will want to know how valuable that task is to the receiver, and how much they should contribute their scarce resources to it compared to other possible endeavours. Normally a price signal would help such calculation. In a gift economy, how would one get a signal as to how much other economic participants will value that contribution? Especially if it is made to particular parties, rather than to the community as a whole? Maybe some sort of voting system?

If the goal of forming a SuperDAC was "network effects" then you don't really benefit from that to the maximum unless you form a Bitshares Cooperative in the legal sense.

Am I the only one who see's this? We still expect Invictus to handle certain things when it could be handed over to the Bitshares Cooperative which we'd all work for and own.

You do know that I3 is going to be phased out right? After marketing funds etc are done they will be closed like BM has been saying. After which the people will be in power of funding etc etc.

[luckybit]

It would be very interesting to experiment with a network like this to see how it works and what could become of it. However, although a third-party DAC could do it and maybe should do it as an experiment from which to learn, I think it would be a huge economic risk for Bitshares to apply this generally at this stage, because it moves in the direction of obfuscating economic incentives.

For example, if somebody were trying to decide whether to contribute to somebody else, they will want to know how valuable that task is to the receiver, and how much they should contribute their scarce resources to it compared to other possible endeavours. Normally a price signal would help such calculation. In a gift economy, how would one get a signal as to how much other economic participants will value that contribution? Especially if it is made to particular parties, rather than to the community as a whole? Maybe some sort of voting system?

If the goal of forming a SuperDAC was "network effects" then you don't really benefit from that to the maximum unless you form a Bitshares Cooperative in the legal sense. This way you get even more network effects because the Bitshares Cooperative could form partnerships with all sorts of corporate, government, NGO and other entities while individual delegates running separate DACs cannot do this.

Am I the only one who see's this? We still expect Invictus to handle certain things when it could be handed over to the Bitshares Cooperative which we'd all work for and own.

So it cannot be done for a third party DAC. It has to be for the Bitshares ecosystem which means the Bitshares SuperDAC because a Bitshares Cooperative amplifies network effects. Imagine if Facebook existed but was owned by a cooperative of it's users who also worked or it.

Having a Bitshares Cooperative would allow us to build a decentralized social network if we want or anything else. Anything it would build we would own and get revenue shares from. That means income for all of us.

Do you see any problems with this Bitshares Cooperative idea or is it just too novel?

[starspirit]

It would be very interesting to experiment with a network like this to see how it works and what could become of it. However, although a third-party DAC could do it and maybe should do it as an experiment from which to learn, I think it would be a huge economic risk for Bitshares to apply this generally at this stage, because it moves in the direction of obfuscating economic incentives.

For example, if somebody were trying to decide whether to contribute to somebody else, they will want to know how valuable that task is to the receiver, and how much they should contribute their scarce resources to it compared to other possible endeavours. Normally a price signal would help such calculation. In a gift economy, how would one get a signal as to how much other economic participants will value that contribution? Especially if it is made to particular parties, rather than to the community as a whole? Maybe some sort of voting system?

[luckybit]

I believe aslong as its not a company issuing shares its all good.. since companies have monetary agendas and a blockchain doesnt.

Some of the ideas are kinda highlighted in this proposal.. was written fairly well: https://bitsharestalk.org/index.php?topic=10385.0;topicseen

So id say there is a way to raise funds and develop tech without needlessly inflating the supply.. infact there is some burning in this proposal.

But it uses the words "investor" and still uses the "investor" model. That is a sign that it is flawed and needs revision. Investor should be renamed to patron. A patron is just someone who donates to a cause without any expectation of a certain reward.

Whether it is burned or not is irrelevant. What is relevant is that we drop the words like "investors". Once you use the words "investors" then people buying the token expect something and can sue, call the SEC or whatever. People who donate don't have these expectations.

Now if you design the reputation system to reinforce reciprocity then you don't even need legal contracts. BitTorrent has no legal contracts.

Let's not focus on semantics.. wording can be easily changed once we figure out the right way fwd. I do get what you mean by relating BitTorrent and how it transformed the file sharing community using a gift economy but that would essentially turn us away from the business on the blockchain to more of a ... think about business in new light and hope it sticks. It is an interesting thought. I fail to see economic incentives for file sharing mechanisms like bittorrent other than ad revenue?

See what Pheeva Wallet creators and founders of the Cog Cooperative Lafe Taylor and Lamar Wilson are doing. They are going about it using gift economy methods, where the users of the app are the owners, but it's done in a much smarter way than I see anyone else doing it.

https://www.youtube.com/watch?v=J7qKzuQve-0
https://www.youtube.com/watch?v=7EtohgM7G_Q

They even have partnerships with companies like Gyft through the Cog Cooperative. If you can understand that Gyft cards can be traded easily over something like Bitshares X then you don't have to worry about monetary incentives but just incentives. Incentives exist in a cooperative but they are non-monetary incentives sometimes and other times direct revenue share. In either case you have a decentralized exchange in Bitshares X so money is the least of our problems really when we can create our own and the real question is just a question of incentive.

Not everything of value to people is money even if everything can be priced in or exchanged for money. So if you're in a gift economy you can accept gifts of any sort and those gifts have value. So for example suppose it's a gift card network where everyone trades them? Incentives will exist and money would go to whomever trades their gift cards for money such as BitUSD.

[jsidhu]

I believe aslong as its not a company issuing shares its all good.. since companies have monetary agendas and a blockchain doesnt.

Some of the ideas are kinda highlighted in this proposal.. was written fairly well: https://bitsharestalk.org/index.php?topic=10385.0;topicseen

So id say there is a way to raise funds and develop tech without needlessly inflating the supply.. infact there is some burning in this proposal.

But it uses the words "investor" and still uses the "investor" model. That is a sign that it is flawed and needs revision. Investor should be renamed to patron. A patron is just someone who donates to a cause without any expectation of a certain reward.

Whether it is burned or not is irrelevant. What is relevant is that we drop the words like "investors". Once you use the words "investors" then people buying the token expect something and can sue, call the SEC or whatever. People who donate don't have these expectations.

Now if you design the reputation system to reinforce reciprocity then you don't even need legal contracts. BitTorrent has no legal contracts.

Let's not focus on semantics.. wording can be easily changed once we figure out the right way fwd. I do get what you mean by relating BitTorrent and how it transformed the file sharing community using a gift economy but that would essentially turn us away from the business on the blockchain to more of a ... think about business in new light and hope it sticks. It is an interesting thought. I fail to see economic incentives for file sharing mechanisms like bittorrent other than ad revenue?

[luckybit]

I met a wise older man at a crypto meetup the other month that introduced me to the concept of a gift economy. He recommended a book to me called Sacred Economics: http://sacred-economics.com/

I haven't read it myself, so I can't personally recommend it, but perhaps it may be of interest to someone reading this thread. He spoke very highly of it.

The interesting thing you can do with smart contracts and blockchains is that you can have a gift economy where people voluntarily compete to give more because that's how they'll get more back from the system.

Give to receive basically. Although I would say study African tribes to get a better idea of how it can work while also using the tools we have. It's very easy to set up a DAC which funds it's construction  from charitable giving and then pays it forward. The people who gave would have the reputation so it wouldn't be any different from what happened for Keyhotee founders.

If you were a Keyhotee founder you gave a gift donation and received a gift back.

Here are some videos:
+Gift Economy: A Disruptive Business Model
https://www.youtube.com/watch?v=uvpVrTVdS14
https://www.youtube.com/watch?v=udvChk2KOZk
https://www.youtube.com/watch?v=VTUp1WJmVFQ

Sacred economics seems to be more of an anti-money book but it probably does have some knowledge in it. In my opinion a gift economy can include gifts of money. It's actually just about reciprocity.

[edilliam]

I met a wise older man at a crypto meetup the other month that introduced me to the concept of a gift economy. He recommended a book to me called Sacred Economics: http://sacred-economics.com/

I haven't read it myself, so I can't personally recommend it, but perhaps it may be of interest to someone reading this thread. He spoke very highly of it.

 

[luckybit]

I believe aslong as its not a company issuing shares its all good.. since companies have monetary agendas and a blockchain doesnt.

Some of the ideas are kinda highlighted in this proposal.. was written fairly well: https://bitsharestalk.org/index.php?topic=10385.0;topicseen

So id say there is a way to raise funds and develop tech without needlessly inflating the supply.. infact there is some burning in this proposal.

But it uses the words "investor" and still uses the "investor" model. That is a sign that it is flawed and needs revision. Investor should be renamed to patron. A patron is just someone who donates to a cause without any expectation of a certain reward.

Whether it is burned or not is irrelevant. What is relevant is that we drop the words like "investors". Once you use the words "investors" then people buying the token expect something and can sue, call the SEC or whatever. People who donate don't have these expectations.

Now if you design the reputation system to reinforce reciprocity then you don't even need legal contracts. BitTorrent has no legal contracts.

[jsidhu]

I believe aslong as its not a company issuing shares its all good.. since companies have monetary agendas and a blockchain doesnt.

Some of the ideas are kinda highlighted in this proposal.. was written fairly well: https://bitsharestalk.org/index.php?topic=10385.0;topicseen

So id say there is a way to raise funds and develop tech without needlessly inflating the supply.. infact there is some burning in this proposal.

[luckybit]

I see your point, I guess I was still thinking a bit more practical.

I've had a similar vision a couple years ago that instead of paying with money, we could just use a "Thank You!" currency.

i.e. you get "gratitude". It is in human nature to do good for the rest of society. Money is what makes scams possible, and then people instead of doing good, looking to cheat the system.

But if it is based on reputation as in. Many people find they are grateful about someone else, then that someone else would be treated better in the society. And those who are not may need different kind of help.

I mean it's a very interesting subject, but is also uncharted territory, and I suspect you need people with various backgrounds to analyze this idea. From psychological perspective, herd mentality, conflict resolution, etc.

It's actually not uncharted territory. File sharing apps have worked this way all along. We could share smart property or any assets which include stocks. Is there any rule which says a company cannot gift certain people with shares?

http://www.theglobeandmail.com/globe-investor/personal-finance/why-it-makes-sense-to-give-stock-to-charity/article4199585/

It’s no secret that when you donate publicly traded shares (or other securities that are publicly traded) you’ll be entitled to enhanced tax relief. You will, of course, be entitled to a donation tax credit for the fair market value of any shares you donate to charity. Depending on your province of residence, the actual tax savings will vary, but receiving tax relief approximately equal to 40 to 45 per cent of the value of your gift is common after factoring in both the federal and provincial tax savings.

But there’s more. It was the 2006 federal budget that fundamentally changed the tax relief when publicly traded shares are donated to charity. Since that time, any donations of publicly traded securities to a registered charity will cause any capital gain on the shares to be eliminated.

http://www.investopedia.com/ask/answers/07/giftofstock.asp
https://en.wikipedia.org/wiki/Leech_(computing)

Amongst users of the BitTorrent file distribution protocol and common P2P networks, such as the eDonkey network or Gnutella2, a leech is a user who disconnects as soon as he/she has a complete copy of a particular file, while minimizing or completely suppressing data upload.

However, on most BitTorrent tracker sites, the term leecher is used for all users who are not seeders (which means they do not have the complete file yet). As BitTorrent clients usually begin to upload files almost as soon as they have started to download them, such users are usually not freeloaders (people who don't upload data at all to the swarm). Therefore this kind of leeching is considered to be a legitimate practice. Reaching an upload/download ratio of 1:1 (meaning that the user has uploaded as much as he/she has downloaded) in a BitTorrent client is considered a minimum in the etiquette of that network. In the terminology of these BitTorrent sites, a leech becomes a seeder (a provider of the file) when he or she finished downloading and continues to run the client. He will remain a seeder until the file is removed or destroyed (settings enable the torrent to stop seeding at a certain share ratio, or after X hours have passed seeding).

Torrents often set themselves up so that there is a certain share ratio. If you're above 1.0 then you've given more than you received and are in good standing. If you've got less than 1.0 then you haven't given as much as you received. Reputation could be just how much you give vs how much you leech so that your ratio of giving to receiving determines your level of credit to the DAC itself.

There would be no rules on what sort of gifts you can give as long as it's an exchangeable crypto-token. So you could give any tokens in any combination and the DAC would have to figure out how to trade them for BitUSD which could be easy with something like a decentralized exchange.

A lot of things are possible and this thread is to get people to think of the different possibilities. BitTorrent didn't need a currency to get people to exchange valuable content. It had been designed so that the users could come up with their own ways of facilitating sharing. You don't really need currency, you just need to track reputation, credit, ratios, etc. So if you donated to the charity then you get credit from the charity.

[bitmeat]

I see your point, I guess I was still thinking a bit more practical.

I've had a similar vision a couple years ago that instead of paying with money, we could just use a "Thank You!" currency.

i.e. you get "gratitude". It is in human nature to do good for the rest of society. Money is what makes scams possible, and then people instead of doing good, looking to cheat the system.

But if it is based on reputation as in. Many people find they are grateful about someone else, then that someone else would be treated better in the society. And those who are not may need different kind of help.

I mean it's a very interesting subject, but is also uncharted territory, and I suspect you need people with various backgrounds to analyze this idea. From psychological perspective, herd mentality, conflict resolution, etc.

[luckybit]

That is exactly how I would go about creating my first DAC.

Instead of asking for funding, the DAC will have its own treasury, which will be used for development. In effect becoming fully autonomous. Votes will decide which proposals should get funded. In other words the collective mind of all stakeholders will dictate what the DAC wants and how it wants it done. It then in effect will hire contractors to do the development, which I'm hoping can be a non-profit, instead of a corporation. (Would love to hear from legal, if anyone has good lawyers in the space, send them my way)

Love it! And you get it!

Remember they are volunteers who agree to work for software which reliably gives gifts according to the smart contract. If you use the word "hire" then you also have to use the word "volunteer" because the tokens might end up being completely worthless. BitUSD has value but it's really just shareholders using a DAC to reward in gift tokens whomever develops the DAC. If the DAC is fully autonomous then the DAC itself could be doing it.

Either way it's a good idea if some DACs aren't Decentralized Autonomous Corporations but instead Decentralized Autonomous Cooperatives or Communities. The idea is that it might act like a corporation at times but it's actually not one.

I hope sooner or later all of us could own some DACs which are givers with the idea that the more you give to the community the more you can potentially receive from it. Competitive giving could be a culture we could adopt (this is what happens in African tribes):

The Moka is a highly ritualized system of exchange in the Mt. Hagen area, Papua New Guinea, that has become emblematic of the anthropological concepts of "gift economy" and of "Big man" political system. Moka are reciprocal gifts of pigs through which social status is achieved. Moka refers specifically to the increment in the size of the gift; giving more brings greater prestige to the giver. However, the reciprocal gift giving may be confused with profit-seeking, as the lending and borrowing of money at interest.[1]

A Big Man refers to a highly influential individual in a tribe, especially in Melanesia and Polynesia. Such person may not have formal tribal or other authority (through for instance material possessions, or inheritance of rights), but can maintain recognition through skilled persuasion and wisdom. The big man has a large group of followers, both from his clan and from other clans. He provides his followers with protection and economic assistance, in return receiving support which he uses to increase his status.

https://en.wikipedia.org/wiki/Moka_exchange

[bitmeat]

That is exactly how I would go about creating my first DAC.

Instead of asking for funding, the DAC will have its own treasury, which will be used for development. In effect becoming fully autonomous. Votes will decide which proposals should get funded. In other words the collective mind of all stakeholders will dictate what the DAC wants and how it wants it done. It then in effect will hire contractors to do the development, which I'm hoping can be a non-profit, instead of a corporation. (Would love to hear from legal, if anyone has good lawyers in the space, send them my way)

Love it! And you get it!

[luckybit]

A gift economy is defined:

A gift economy, gift culture or gift exchange is a mode of exchange where valuables are not sold, but rather given without an explicit agreement for immediate or future rewards.[1] In contrast to a barter economy or a market economy, social norms and custom govern gift exchange, rather than an explicit exchange of goods or services for money or some other commodity.[2]

Since crowd funds, crowd sales, and similar mechanisms have legal issues a way around that is to form a gift economy and gift culture. This thread is about how a gift economy can be formed around Bitshares so that reputation and generosity combined with smart contract technical functionality can result in a system which resists fraud while providing rewards for those who give.

Gift economies are built around the concept of the non-market exchange. An example of one of the first P2P apps to make use of a gift economy can be found here: https://en.wikipedia.org/wiki/GiFT

Description:

A gift is the transfer of a good without an explicit specification of a quid
pro quo. The good can be a tangible thing or money, but it also can be
intangible, as in the form of time, attention, information or knowledge. A
present is a gift and so may be the attention that one person ‘gives’ another,
or the time that a person donates to an art institute as a volunteer. Usually
a gift entails reciprocity: the giver expects something in return for the gift
given. Friends expect friendly gestures in return for their friendly gestures;
donors expect some form of appreciation or another; and those who
give presents at Christmas expect to receive presents in return. The key to
understanding the phenomenon of the gift is the nature of the reciprocity
involved.

BitTorrent is also a gift economy if it's set up so that the more you share the more you can receive from others. There is no promise, no guarantee, nothing more than the value of reciprocity enforced by social cultural conditioning and source code. So it is possible to establish a social contract which tracks the donations a person makes to certain projects and then give them a reputation rating according to that reputation of being a "giver". The opposite reputation would be that of a "taker". Givers could be encouraged to give by being rewarded unexpectedly by other givers in the form of gifts.

Psychological details:

The psychology behind it is the psychology of the variable ratio reward schedule. This mechanism would socially condition all participants into becoming "givers" over time rather than "takers" because the consequences of being a giver would reveal that "givers" have a higher probability of winning.

In sociology, social capital is the expected collective or economic benefits derived from the preferential treatment and cooperation between individuals and groups.

https://en.wikipedia.org/wiki/Social_capital

Technical mechanisms of enforcement:

Reciprocity could also be enforced in smart contracts which reward "givers" more than "takers" anonymously. Smart contracts could figure out how to regulate in favor of promoting reciprocity without any "investors" or promises made by any human beings. Just as in Bitcoin miners just expect that the reward schedule is determined by math, with smart contracts it could be something similar but the reward could be designed to go to whoever donated the most to specific charities, entities, or groups of individuals.

If it is a charity it would require that developers of DACs form non-profits from now own. Invictus could become an NGO. The NGO would be staffed by volunteers but those volunteers could be given gifts, perks, discounts, vouchers, etc so that it becomes a coveted role.

I was encouraged to think about this by Stan, Bytemaster, and by the individuals in the community who have been concerned about the actions of the SEC. Rather than let the SEC dictate free speech it would be better to simply stop thinking of DACs as "corporations", to stop having "crowd sales" "crowd funds" or anything like this, and to accept that all donations as well as the possible rewards in consequences are gifts. This means not every donation would result in a gift reward but since it's good for anyone's reputation to return a favor to a friend it would end up resulting in positive outcomes in situations where everyone is honest.

DACs probably could best be called decentralized autonomous cooperatives. The organizations which build them could be non-profits or NGOs. The individuals who participate in them could be "friends" and the network a F2F network with decentralized identity and reputation for security.