Scaling the Global Commons Through Distributed Ledgers

* Article: Challenges and Approaches to Scaling the Global Commons. By Felix Fritsch, Jeff Emmett, Emaline Friedman, Rok Kranjc, Michel Bauwens et al. Front. Blockchain, 01 April 2021 | [1]

URL = https://www.frontiersin.org/articles/10.3389/fbloc.2021.578721/full

Contextual Citation

"The emergence of blockchain ushers in a second phase of digital networks: that of an internet of peer-to-peer transactions. If the first wave propelled stigmergic cooperation through mutual signaling, DLTs potentially create shared accounting ledgers around which open collaborative supply networks can organize the production of both material and immaterial goods and services."

- Michel Bauwens et al [2]

Abstract

"The re-emergence of commoning over the last decades is not incidental, but rather indicative of a large-scale transition to a more “generative” organization of society that is oriented toward the planet’s global carrying capacity. Digital commons governance frameworks are of particular importance for a new global paradigm of cooperation, one that can scale the organization of communities around common goals and resources to unprecedented levels of size, complexity and granularity. Distributed Ledger Technologies (DLTs) such as blockchain have lately given new impetus to the emergence of a new generation of authentic “sharing economy,” protected from capture by thorough distribution of power over infrastructure, that spans not only digital but also physical production of common value. The exploration of the frontiers of DLT-based commoning at the heart of this article considers three exemplary cases for this new generation of commons-oriented community frameworks: the Commons Stack, Holochain and the Commons Engine, and the Economic Space Agency. While these projects differ in their scope as well as in their relation to physical common-pool resources (CPRs), they all share the task of redefining markets so as to be more conducive to the production and sustainment of common value(s). After introducing each of them with regards to their specificities and commonalities, we analyze their capacity to foster commons-oriented economies and “money for the commons” that limit speculation, emphasize use-value over exchange-value, favor equity in human relations, and promote responsibility for the preservation of natural habitats. Our findings highlight the strengths of DLTs for a federated scaling of CPR governance frameworks that accommodates rather than obliterates cultural differences and creates webs of fractal belonging among nested communities."

Excerpts

Federated Scaling

Rok Krancj et al.:

"The concept of scale that underlies this vision is distributed – in this paper we propose the concept of “federated scaling.” Instead of either scaling up one central approach, as would be resembled by a UN-mandated global initiative against climate change, or scaling out one “best practice” approach to a coalition of nation states, federated scaling is conceived as a process of integrating heterogeneous forms of collective action into a framework that allows them to collaborate while acknowledging their interrelations and differences, and to formally account for them through shared expressions of value and structures of mutual stake-holding. It shares this inclusivity with the notion of wide and deep scaling (Moore et al., 2015; Olsson et al., 2017), which proposes a shift away from the global dominance of the cultural exports of a handful of U.S. tech companies and toward agnostic protocols that facilitate the peaceful coexistence of heterogeneous cultures and the resolution of conflict through community-based dispute resolution tools. In this light, we position federated scaling as a broader social and political economic transformation project that conceptualizes the commons and their value orientations as an example of counter-hegemonic prefigurative politics. In so doing, it recognizes the questions of scale, scaling and scalability hinting at a much broader range of questions, namely, the assumptions, theories, strategies and mechanisms – in essence, the politics – of and for change." (https://www.frontiersin.org/articles/10.3389/fbloc.2021.578721/full)

Synthesizing Approaches to Scaling the Global Commons

From the conclusion:

"As pointed out earlier, the non-capitalist or distributed socio-economic markets envisaged by crypto-commonists differ from crypto-libertarian conceptions of markets with regards to their orientation toward aims external to the circulation of exchange value as well as their use of a non-speculative “money of the commons” that minimizes ecological costs. Interestingly, the preclusion of legal privilege of some over others, identified as a central trait of capitalist capture of markets, is eschewed by both libertarians and commonists. The projects at hand abide to these criteria to differing degrees in the conception of markets they espouse.

While all three projects inscribe external values beyond profit-sharing into market interaction, they vary considerably in how they relate to commons in the physical and digital realm. The Commons Stack taxes market transactions and leaves the use of common funds to the discretion of the community, granting more flexibility vis-a-vis unforeseen events, but requires active governance. Both other projects instead inscribe external conditions into exchange value ex ante, thus allowing users to effect change by choosing appropriate currency structures for their everyday economic interactions. Holochain’s Commons Engine does so through asset-backed complementary currencies that help communities track, modulate, and extend access to universal human basics as well as through non-monetary reputation currencies and impact assessment tools. While ECSA’s commodity tokens are likewise asset-backed, external aims are also inscribed into economic activity more explicitly through its measurement against multi-dimensional performance indices that can be staked upon.

All three projects decentralize power over infrastructure insofar as they automate control over monetary policy and liquidity provision in accordance with closely monitored, actual economic capacity, thus removing both from the discretionary politics of central banks. For the mutual credit system used by the Commons Engine, where credits are minted and destroyed at the moment goods or services are rendered, external provision of liquidity is irrelevant and monetary policy (credit limits) are subject to collective management experiments. ECSA likewise renders external liquidity provision unnecessary as it allows peers to mutually issue credit against collateralized stake in performances, facilitated by a credit clearance protocol. However, credit limits are not subject to system-wide decisions but are determined decentrally by what peers accept as collateral. On the other hand, liquidity provision in the Commons Stack using bonding curves is more reminiscent of the algorithmic monetary politics of Bitcoin, which are likewise transparently inscribed into immutable code and thus entirely removed from the discretionary politics of its constituents. Notably, all approaches grant each economic participant the same potential action repertoire – including the right to issue tokens and fork and alter protocols – and thus removes any notion not only of overarching sovereign power, but also of enforced standardization beyond a shared computational foundation.

Notwithstanding these commonalities, the projects differ considerably in their stance toward speculation. The Commons Stack is the most liberal, as it actively inscribes speculative profit potential into the pricing structure of governance tokens in order to generate more traffic as a base for taxation. It furthermore remains agnostic toward the potentially speculative nature of assets accepted as collateral. Holochain-based currencies, on the other hand, are actively designed as anti-speculative as their dynamic supply is tethered to the productive capacity of the network and availability of liquidity in-kind. While ECSA’s distributed offer matching and liquidity issuance enable a network of multilateral exchange that replaces the need for a centrally issued “money,” its emphasis on mutual risk-taking through the exchange of stakes in the performance of economic actors likewise entails a speculative dimension marked by the trade of risk positions.

In our review of technical versus social notions of scale, we have suggested that DLT-based commons frameworks can leverage common responses to global problems through federated scaling. This form of scaling accommodates rather than obliterates heterogeneity while accounting for interlinkages and consciously shared value judgments. The permissionless issuance of tokens as well as, more generally, the modular and forkable nature of the protocols in question provide flexible infrastructure for the emergence of highly contextual communities that are value sovereign in their definition of internally shared aims. While accommodating heterogeneity, the complex interlinkages between communities require further measures to be accounted for. The case studies discussed in this article approach this challenge through mutual financial stakeholding, nested governance structures and reputation based on self-sovereign identity.

The formalization of mutual stake in tokenized assets highlights interdependencies and incentivizes cooperation between heterogeneous communities holding stake in each other. ECSA’s implementation of stakeholding in the economic performance of others along mutually agreed performance indices is a generic framework that allows individuals, but also wider communities, to express commitment to common aims by sharing the risks involved in their pursuit. The Commons Stack’s bonding curve likewise allows communities to formalize their interdependencies with others by accepting their governance tokens as collateral, which results in webs of nested communities that each hold stake in one another. As these governance tokens not only reflect financial stake but also grant influence in collective decision-making, such networks not only align interests but also nurture coordination through the continuous signaling of preferences enabled by Conviction Voting. While Holochain’s Commons Engine does not explicitly suggest frameworks for mutual stake or governance processes, it is explicitly oriented toward making interlinked CPRs technically interoperable, so that eventually, a Holochain user/group can directly trade electricity for food, for example. The self-sovereign identity required here as a prerequisite for carrying reputation-based metrics across multiple CPRs is a crucial facet of interoperability across Holochain application spaces and creates a reliable foundation for communities’ own determination of governance processes. Table 2 below examines the three case studies along a range of metrics, to summarize some of the main similarities and differences between them.

At the outset of this investigation, we noted that these projects are at least partly situated at differing levels of abstraction, take varying approaches and focus on different aspects of commoning, which results in each case study having varying strengths and blind spots. Nevertheless, each of the considered attempts to inscribe external values into market activity remains a reformist approach that piggybacks on profit-driven market exchange, reminiscent of social democratic attempts to tame capitalism through redistributive taxation while retaining profit as the driving motive of economic activity. It is only in combination that the reviewed interventions to capitalist mechanisms of accumulation can develop their full potential to incrementally transform the dominant economic paradigm into what can still only be ambiguously referred to as “post-capitalism” (Arvidsson, 2019). Such a combination is eased by the fact that both ECSA and Holochain are situated at the protocol layer, while the Commons Stack is building modules on the application layer, that is, on a higher level of the tech stack. The direct inscription of common values into the economic calculus as well as the orientation of money supply toward the variable productive capacity of different physical commons enabled by the former two projects can thus potentially be combined in fruitful ways with the more community-oriented tools the Commons Stack devises. The emerging synthesis of democratic engagement in all spheres of a commons, embedded in socioeconomic market structures consciously geared toward the shared values of its participants and mediated by money-forms that discourage extractive speculation and retain informational breadth, appears as a beacon on the otherwise gloomy horizon of capitalist realism.

Future Research Directions

At the outset of this article, we argued that the relationship between human societies and planet Earth can be seen as oscillating between polarities of extraction and regeneration, and that the commons play a crucial role in the regenerative phases. In this context, we have further argued that the recent re-emergence of commoning is not incidental but indicative of a large-scale transition toward a more “generative” organization of society that orients its goals around the planet’s global carrying capacity. Digital commons governance frameworks are of particular importance in this current historical conjuncture of accelerating rates of change threatening ecosystemic breakdown. This is because they enable scaling the organization of communities around common resources and goals to unprecedented levels of size, complexity and granularity.

Initially, digital commons and the communities producing them found themselves in a temporary alliance with a new class of “netarchical” capitalists (Bauwens, 2005), who prospered from the enablement and exploitation of participatory digital networks. The emergence of DLTs as distributed backbones for the practices of digital communities constitutes, a recognition of the hindrance of this alliance to the development of autonomy and capacity of such communities. The emergence of DLTs has already involved the creation of new spaces, grammars, leverages, tools and pathways of social and economic interaction such as universal basic services, contributory work schemes, socio-ecological accounting currencies as well as more autonomy in interdependence. All of this is made possible only through an eschewal of central intermediators extracting surplus and narrowing interaction to exploitable forms. This new generation of commons-oriented economies, protected from capture by distribution of power over infrastructure, spans not only digital but also physical production as it provides reliable organizational means to equitably produce and distribute resources in accordance with the shared values of productive communities. We introduced the notion of “federated scaling” as one way to mitigate, both technologically and socially, the tension between the need for large-scale, global cooperation demanded by the problems of our historical moment, and the commitment to egalitarian self-determination that is at the core of commoning itself.

This exploration of the frontiers of DLT-based commoning considered three cases that we deem exemplary for this new generation of commons-oriented infrastructure. While the projects differ in scope as well as in their relation to physical CPRs, they all share the task of redefining markets and money to be more conducive to the commitment to and maintenance of common value(s). This approach makes their undertaking both more risky and potentially more rewarding, as a successful redefinition of markets that retains their coordination capacity while directly pursuing social values beyond the extraction of profits constitutes the holy grail of post-capitalism. These projects diverge notably from past efforts of commons management in that they innovate upon market relations, money forms, digital identity, and governance processes to bridge to nascent post-capitalist styles, rather than oppose market relations altogether. Our discussion has highlighted the strengths of DLTs for the federated scaling of commons management tools that accommodate rather than obliterate differences by maximizing the degrees of freedom the foundational protocols of interaction leave for context-sensitive use27.

While we have provided a glance at the kinds of post-capitalist transition pathways opened up by the affordances of DLTs for commoning, we nevertheless have to caution against any deterministic interpretations: the emerging effort to “re-decentralize” the web is still struggling over the design of foundational protocols. It remains a contested political space in which diverse interests compete for adoption of vastly different interpretations of a post-corporate, distributed economy. The rift between “crypto-commonists” and “crypto-libertarians” has become more accentuated only recently, and the consequences for the development of the wider DLT environment are yet to be seen.

Just as technology itself is not neutral, academic engagement with emerging technologies is never just a “neutral” inventory thereof but always also contributes to narratives and imaginaries that impact back upon their further development. Aware of this feedback loop, we want to actively encourage further research on what we perceive as key gaps in commonist visions of DLTs as well as in academic engagement therewith: First off, the role of the state as foreseen by the architects of distributed economies has hardly received in-depth academic attention, as have the variegated reactions of states to the emergence of these economies. This is an interesting oversight in that both the crypto-libertarians, whose vision of scaling tends toward developing decentralized replacements for functions traditionally associated with the state, and crypto-commonists, who tend toward developing autonomous pockets of community resilience, each must contend with the constraints and requirements of the state jurisdictions in which they operate. The outcomes of this reckoning have substantial effects on how scaling is understood and how it proceeds in practice. Secondly, in order for a more consistent approach to commoning on DLTs to emerge, we believe that an active and structural application of theories of change to the multiple levels of intervention can provide crucial guidance and orientation through this uncharted territory. Finally, strategies will be required for the active anticipation and avoidance of inconsistencies arising from a multiplicity of heterogeneous voluntary protocols that are not necessarily well-matched in order to harness the full potential of this exciting new class of technologies.

With the development of convivial tools and processes for collective sensemaking, social signal processing, peer-to-peer mutual credit issuance, self-sovereign identity management, reputation tracking and impact assessment – and their rapid testing and validation through simulation and modeling – commons-based collaboration stands at the cusp of huge advancements in the establishment of group coherence and real time steering of our local/global institutions toward mutually beneficial outcomes. Their realization will be all the more likely if the fundamentals of scalability, in particular the interoperability of community-based structures and protocols, are forged cooperatively along holistic design principles. The ethos of intentional instantiation of collectively held values and cooperation applies not only to technical protocols, but also to the ways by which participation and understanding are galvanized. With novel technological means to communicate heterogeneous values, purposes and intentions, commons-oriented DLT projects have in front of them the laudable task of merging patience, care, and inclusion with leading-edge technological capacity to unlock new potential in human collaboration. Nothing short will suffice as a foundation for the fractal, interoperable, and scalable global commons that could offer massive new opportunities in dealing with pressing global challenges." (https://www.frontiersin.org/articles/10.3389/fbloc.2021.578721/full)