Coops Based on Cryptonetworks

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A proposal by Jesse Walden, excerpts:

"What if there were a way for platforms to commit to continued cooperation? To support unabated, independent entrepreneurial activity — as well as an improved user experience — for all the participants who depend on the network?

While people have suggested everything from regulating networks as public utilities to mandating that they provide open APIs, we believe that cryptonetworks — what we call “community owned and operated networks” — could unlock a new paradigm for continued cooperation, while still sustaining strong network effects.

Cryptonetworks are a relatively new phenomenon, but there’s a useful analog to help understand why they work and where they’re going: cooperatives, or “co-ops”. "


When it comes to innovation, there are some structural issues that have worked against cooperative enterprises, from coordination costs to growth to governance. For instance, cooperatives are more difficult to bootstrap than corporations because they don’t have access to the same capital markets. Historically, it’s been a lot harder to coordinate investment from members with shared values than it is to raise funds with the singular goal of maximizing profits. There are also logistical challenges in everything from distributing information to bootstrapping the co-op so that it reaches a minimum viable threshold where it actually delivers utility to its members. Then, even once over the bootstrap hump, cooperatives can struggle to compete with more traditional entrants, who are often better funded."


Because cryptonetworks are information networks based open source code, shared state, automated “smart contracts”, and 24/7 international markets — all tools that allow participants to find one another, share information, and coordinate — these networks can more easily get past the bootstrap hump that cooperative enterprises traditionally face. By encoding commitments to continued cooperation in software, cryptonetworks can engender trust at new scales, both granular (due to cost efficiencies) and macro (due to social scalability).

Another dimension on which cryptonetworks can compete is growth: Networks that treat their users equitably may be easier and cheaper to grow, as early participants are incentivized to drive network effects, because they can participate in the value they help create. This trend aligns with a broader movement towards stakeholder inclusion." (