From Bitcoin to Burning Man and Beyond

* Book: From Bitcoin to Burning Man and Beyond. Ed. by David Bollier and John Clippinger. 2014.

URL = https://www.researchgate.net/publication/274566666_Organic_Governance

Description

"This volume represents the contributions of eighteen different authors, many of whom have been involved with ID3 since its inception three years ago. The majority of the contributors attended a retreat last year in Jefferson, New Hampshire, where many of the topics discussed in this volume were discussed and debated. Out of that retreat emerged a shared sense of purpose and vision among the attendees that is reflected in a digital manifesto called The Wind-hover Transition, (see the Conclusion), named after John Clippinger’s nearby farm. From Bitcoin to Burning Man and Beyond is organized into three parts, representing three essential perspectives on how a new digital ecology might evolve.

Part I, “Charting the New Ecology of Data, ”provides an introductory framework for understanding the power of distributed computing, the growth of mass participation and the rise of Big Data as a standard element – all of which are converging to create new sorts of institutions, governance and even human identity.

One of the most important innovations to arise from these trends is explored in Part II, “Digital Currencies as Instruments for Social Change.” This part of the book describes the importance of complementary currencies, the significance of Bitcoin, and the other potentially transformative currencies that are now emerging, including the Ven, the proposed Impala for Africa and Green Coins to foster environmental improvements.

Finally, Part III, “Open Architectures for an Open Society,” explores some of the conceptual and technical design issues that must be addressed in building an open, stable, civically robust and innovation-friendly future. The essays of this section build on the logic of the first two sections by explaining the importance of holistic system design (“holonics”), the lessons of self-governance for common-pool resources, and the ways in which Open Mustard Seed – the new software platform developed by ID3 – seeks to empower users to control their own data and build their own trusted governance systems."

Contents

"While traditional Enlightenment notions regard the rational in-dividual as the basic unit of a democratic polity and the economy, Professor Alex “Sandy” Pentland of the Human Dynamics Group atthe M.I.T. Media Lab has found in his empirical research that socialaction and choice have other sources, effectively challenging and dis-crediting many core Enlightenment assumptions.

Using data analytic and machine learning methods to analyze voice, text, and face-to-face interactions on mobile social networks,Pentland shows in Chapter 1 that human learning and collective action are more often than not influenced by one’s peers and colleagues than by “rationality” or “individual choice.” Pentland is currently pioneering a new discipline, “Social Physics,” whose goal is to identify the rules and “laws” the govern collective behavior and learning. These issues are especially timely because the world has seen a remarkable proliferation of peer-to-peer software, services and other activities.

As I outline in Chapter 2, “Why Self-Sovereignty Matters, ”there is a new breed of services and protocols that I call The ODESS Stack, with ODESS standing for “Open–Distributed–Emergent–Se-cure–Self-Reflexive. ODESS modes of software and services are immensely popular because they do not require external institutional authorities – i.e., corruptible human third parties – to function effectively. Rather they are “self-reflexive” in that they contain within themselves the necessary mechanisms to host, verify and clear trans-actions, and to audit themselves and self-correct errors and breaches. Their very design prevents them from violating their own operational policies, and as a result, they are highly resistant to outside manipulation and intrusion.

This theme is explored further in David Bollier’s and John Clippinger’s essay, “The Next Big Internet Disruption: Authority and Governance,” in Chapter 3. The crux of this piece is the insight by David Reed, formerly of the M.I.T. Media Lab, that on open networks such as the Internet, greater value is generated through groups that are progressively more coherent and collaborative – or what Reed calls “Group Forming Networks,” or GFNs. While the lowest level of value-creation occurs through a broadcasting model based on “best con-tent,” and a higher level of value can be generated through a network of peer-to-peer transactions based on collectives with the “most members,” the most valuable networks, says Reed, are those that facilitate group affiliations. If we apply the logic of Reed’s thinking to contemporary circumstances, it is clear that the best way to unlock enormous stores of value on networks is to develop tools that can facilitate GFNs. As Bollier and Clippinger write: “This will be the next great Internet disruption. But to achieve this, we must develop a network architecture and software systems that can build trust and social capital in user-centric, scalable ways.” A good way to help the Internet achieve its true growth and value potential is to adopt new mechanisms for authentication and governance. As a starting point, Bollier and Clippinger point to the eight design principles for managing commons-pool resources that the late Nobel Laureate Elinor Ostrom identified after decades of studying such forms of governance. This theme – the principles of self-governance, or “decentralized autonomous organization” (DAO) – recurs in other chapters in the book.

It is seen most notably in Peter Hirshberg’s history of the Burning Man festival, in Chapter 5, and Jeremy Pitt’s and Ada Diaconescu’s essay, “The Algorithmic Governance of Common-Pool Resources, ”in Chapter 12.

Any successful commons, according to Ostrom’s de-sign principles, must be able to define the boundaries of its community and governance; align the governance rules with local needs and conditions; and ensure that those affected by the rules can participate in modifying the rules. People must also be able to monitor compliance with rules, sanction free riders and vandals, and provide low-cost systems for resolving disputes – among other principles. As these opening chapters suggest, the new environment of open networks places a premium on relational patterns among people instead of simply transactional ones. In a more transparent, fluid environment, the character of a community’s culture takes on much greater significance.

In Chapter 4, Maurizio Rossi argues in “The New Mestieri Culture of Artisans” that “each individual is becoming a peer in a larger community – a personal producer and entrepreneur who uses a variety of platforms to carry on a variety of relationships– not just among humans, but with machines. ”Rossi sees this as contributing to a revival of artisan culture, the Mestieri, which still thrives in his home country, Italy, through its emphasis on craftsmanship and high design. He sees artisan culture becoming “supremely efficient, not to mention customer-friendly, because its design, production and retailing will take advantage of the modularity made possible by open networks.” Rossi also sees branding itself as changing, becoming less propriety and closed, and more open – something that is not owned exclusively by a company, but belonging to the “collaborative community of artisans, companies, suppliers and customers, all of whom participate in the shared eco-system.” He contends that “open brands will have a social authenticity – a credibility and depth – that is rarely associated with branded products today. ”The importance of culture in the new modes of self-governance is underscored as well by Peter Hirshberg in his fascinating profile of the Burning Man festival in the Nevada desert. Now twenty-eight years old, the annual Burning Man gathering attracts more than 60,000 people from around the world for a week-long encampment, celebration and participation in a “pop-up city.” Hirshberg chronicles the evolution of Burning Man from a somewhat chaotic, “Mad Max” kind of anarchy to a robust, thriving transformational community that is influencing all sorts of “real world” innovations in urban design and self-governance. “Once we eliminated firearms, invented the Greeters, repurposed and reorganized the Rangers, created a street grid, regulated traffic, increased population densities, and gave everyone an address,” said founder Larry Harvey, “people could more freely interact; theme camps tripled, villages thrived, entire neighborhoods began to come alive .”Though a decentralized and anarchistic community, Burning Man also learned the importance of intense centralized planning and shared culture as ways to enable the flourishing of decentralized participation. Burning Man’s Ten Principles offer valuable guidance to those who wish to build the world anew, by declaring the importance of radical inclusion, a culture of unconditional gift-giving, an ethic of decommodification and non-commercialism, radical self-reliance, radical self-expression and civic responsibility, among other principles. Digital Currencies as Instruments for Social Change

In Part II, we shift gears by focusing on the dramatic proliferation of digital currencies in contemporary life. This is exemplified most vividly by Bitcoin, but it can also be seen in many other digital currencies, from Ripple to Ven to the M-Pesa. While the new currencies may be disruptive and in some instances troubling (such as the money-laundering capabilities of Bitcoin),they are also pioneering some new, more efficient and socially constructive mechanisms of exchange.

In Chapter 6, “The Internet of Money,” Irving Wladawsky-Berger, a veteran of innovation and strategy at IBM who is now Strategic Advisor to Citi, provides an excellent introduction to the phenomenon of digital currencies and the regulatory and business issues they raise. The new currencies are remarkable in their capacity to “decentralize trust” with advanced cryptographic techniques and distributed architectures; the money does not require third-party authorities to vouch for the security and integrity of the currencies themselves. But this also creates vexing policy issues because the new currencies are an unprecedented new kind of asset class – digital assets – that can be valued and exchanged on a global scale. Regulators are challenged as to how to classify digital currencies. On the one hand the Internal Revenue Service has classified Bitcoin as a kind of property and asset, whose increases and decreases in value have to be accounted for and taxes paid on. Given that Bitcoin has been rather volatile in its history, this classification makes it impractical to use as a payment currency. The office of the U.S. Treasury Department, which regulates money, on the other had, classifies Bitcoin as a currency, which thereby requires that it comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. It seems that Bitcoin occupies the worst of both worlds! It will take time and ingenuity for existing systems of money to accommodate the newcomers, but as Bernard Lietaer reminds us, we should welcome a diversification of currencies in the world economy.

In Chapter 7, Lietaer makes the important observation that efficiency in complex flow systems like money must be balanced with resilience, defined as the capacity to adapt to changes in the environment and survive serious disruptions. This is the essence of sustainability. Seen in this holistic perspective, a monoculture of currencies is dangerously unstable because “an excessive focus on efficiency will tend to create exactly the kind of bubble economy that we have been able to observe repeatedly in every boom and bust cycle in his-tory....” If we regard the global monetary system as a “complex flow-system,” Lietaer observes, then we can see that its sustainability is based on “the emergent properties of its structural diversity and interconnectivity.” For the monetary system, this suggests the need for governments to move away from “a monoculture of a single type of money,” and begin to accept other types of currencies, besides conventional bank-debt national money.

Three additional chapters explore the fascinating capabilities of specific currency innovations. Jonathan Ledgard, Director of Future Africa at the Swiss Federal Institute of Technology, and Africa correspondent-at-large for The Economist, proposes the creation of a pan-African digital currency that would use peer-to-peer technology to enable low-value transactions via smartphones.

As Ledgard explains in Chapter 8, the currency could be adapted to local contexts but inany case would help users build credit histories to secure micro-loans for schooling, healthcare and housing. It could also be used by governments and aid agencies to verify their disbursements of money in more accurate, inexpensive ways.

In Chapter 9, Stan Stalnaker, the founding director of Hub Culture and Ven currency, describes the origins of Ven, the first real digital currency – founded in 2007 – and now an Internet reserve currency. As a commodity-backed currency, Ven are notable for their stable value, global reach, security and support for green initiatives.

In Chapter 10, the idea of a green currency – Green Coins – is proposed by former FCC Chairman Reed E. Hundt who is now CEO of the Coalition for Green Capital, and his associates at the Coalition, Jeffrey Schub and Joseph R. Schottenfeld. Working through the nonprofit Coalition for Green Capital, the authors are exploring how a solar cryptocurrency based on some of the design principles of Bitcoin, especially a distributed ledger, might be used to incentivize the adoption of solar power, especially among homeowners.

The final section of From Bitcoin to Burning Man and Beyond con-templates the design architectures on open networks that are needed to improve institutional performance and enhance individual free-dom while bolstering the entire system’s stability and resilience.These issues are examined in some of the preceding chapters, especially Bernard Lietaer’s chapter on complex systems and currencies, but here the authors focus on system protocols and software design.

Holonics theorist Mihaela Ulieru opens Part III by introducing the logic of holonic systems in Chapter 11. She writes: “A recurrent problem is our failure to understand that human endeavors are part of holistic, living systems, natural and constructed, whose constitutive elements are mutually defining, expressive and constantly evolving. In actual circumstances, the individual cannot be cast as against, below or above the group; the individual is in fact nested within dynamic forms of social organization. Living organisms have subjectivities, inter-subjectivities and behaviors that are nested within larger living systems. ”Once we accept this general scenario as real, it has profound im-plications for the (misleading) Newtonian conception of the universe and its cause-and-effect logic and crude narratives. Ulieru’s mission as a holonics scholar is to jolt us out of our conventional understandings of physical and human dynamics, and point us to the complex, dynamic rules and laws of self-organizing systems. She helps us to understand the limitations of organizational hierarchies and to appreciate institutions as living systems embedded in larger social and ecological contexts. By adopting this perspective, we can begin to blend multiple scientific and humanistic disciplines and focus on the role of the holarchy to understand how emergent, self-organized agents can collaborate in advancing a common purpose. Ulieru is giving us a richer theoretical understanding of what happens on the World Wide Web every day. The challenge is how we might use these principles to build more effective organizations, foster ecological stewardship and unleash more generative human relationships. Jeremy Pitt and Ada Diaconescu, computer scientists at Imperia College London and Telecom ParisTech, respectively, offer a fascinating analysis of how they are applying Elinor Ostrom’s design principles for the allocation of common-pool resources to the design of software. Their engineering goal is to provide “an algorithmic basis for governance of common-pool resources in electronic social systems.”

In Chapter 12, Pitt and Diaconescu explain their interest in blending the capabilities of software platforms with the dynamics of living social systems, resulting in “socio-technical systems” that embody the ODESS principles (Open–Distributed–Emergent–Secure–Self-Reflexive) described by John H. Clippinger earlier in the book.

This is not an easy challenge, but it is a direction that is validated by Professor Ostrom’s study of common-pool resources, people’s actual behaviors on open platforms, and the value proposition of networks described by theorist David Reed, as noted. So how to devise an information-communications technology framework that can implement Ostrom’s rules? Pitt and Diaconescu argue that we need to devise algorithmic frameworks as a “meso-level of governance” that can mediate between micro-levels of self-organized governance and macro-level outcomes that may be incoherent or undesirable. This could be the basis for a new kind of “social ergonomics” on self-governance platforms. Open Mustard Seed, or OMS, is a bold attempt to fulfill many of the principles outlined by Ulieru, Pitt and Diaconescu, among other theorists. OMS aims to become a versatile platform for people to develop their own ODESS-based social ecosystems on open networks .The centerpiece of OMS is its capacity to let people share all their personal data within a legally constituted “trust framework” and self-initiated “personal data stores” (PDS) that can securely store and process data about themselves.

The general technical framework of OMS is outlined in Chapter 13 by Thomas Hardjono, Technical Lead and Executive Director of the M.I.T. Consortium for Kerberos and Internet Trust; Patrick Deegan, Chief Technology Officer of ID3 and Lead Architect of OMS; and John H. Clippinger, Executive Director and CEO of ID3and Research Scientist at the M.I.T. Media Lab Human Dynamics Group. Hardjono et al. describe how the various elements of the trust framework – open authentication, storage, discovery, payment, auditing, market making and monetized “app store” services – all work together in an integrated fashion. What makes OMS so distinctive is its “privacy by design” principles – that is, absolute privacy, security and trusted exchange are built into the very design of the system.

In Chapter 14, Chief Technology Officer of ID3 Patrick Deegan takes us more deeply into the theoretical and operational principles behind OMS. In “The Relational Matrix,” Deegan notes that the Internet’s initial architecture made no provisions for a secure, viable identity infrastructure or the means by which individuals could assert control over their personal data. He argues that because the current infrastructure cannot be simply uprooted and replaced, any envisioned “authentication, privacy and sharing layer” has to grow organically on top of the existing layer. Fortunately, this is now possible by combining technologies for the self-deployment and administration of services with new encryption, identity authentication and access controls technologies and protocols. The Open Mustard Seed (OMS)platform represents an open source effort to enable such an architecture on a global scale. To assure that these new types of self-organized governance can take root and blossom on the Web, Harry Halpin argues that the logic of digitization and open networks requires a “new grammar” of open standards to assure that freedom and innovation can flourish. Halpin is Research Scientist at the World Wide Web Consortium (W3C/M.I.T.), where he leads efforts in cryptography and social standards. Halpin writes that an open social Web is critical to the future of self-organized behaviors and secure digital identity: “To pre-vent the centralization of our data in the hands of a neo-feudal digital regime and all the dangers that this entails, we urgently need to construct a new ecosystem of open standards to allow secure forms of digital identity that everyone from individuals to institutions can deploy without being ‘locked-in’ to existing players.”

In August 2013, ID3 invited fifteen leading thinkers, programmers, tech experts and entrepreneurs to meet for a three-day retreat in Jefferson, New Hampshire, to try to name, capture and distill the logic of the digital culture now emerging. This book is one result of that convocation; another, far more succinct result was The Wind-hover Transition. This statement was an attempt to describe the broad, general contours of the transition that we are now experiencing and issue a call to step up to meet its promise and challenges. This book concludes, therefore, with that manifesto. It is our hope that the Windhover Transition statement and this book will help reframe some of the conversations about the future and stimulate new initiatives to actualize the vision that so many of us see. The details of the emerging paradigm and many of its elements are not entirely clear. Yet the deeper principles and prevailing trends seem quite powerful and demonstrable, and lead us to the major question: How soon will we recognize these deeper currents and reorient our energies and imaginations to take advantage of them?"

(https://www.researchgate.net/publication/274566666_Organic_Governance)

Part I: Charting the New Ecology of Data

1. Social Physics and the Human Centric Society. By Alex Pentland.

Why Self-Sovereignty Matters. By John H. Clippinger.

The Next Great Internet Disruption: Authority and Governance . By David Bollier and John H. Clippinger.

The New Mestieri Culture of Artisans. By Maurizio Rossi

Burning Man:The Pop-Up City of Self-Governing Individualists. By Peter Hirshberg

Part II: Digital Currencies as Instruments for Social Change

The Internet of Money. By Irving Wladawsky-Berger

Why Complementary Currencies Are Necessary to Financial Stability: The Scientific Evidence. By Bernard Lietaer

Africa, Digital Identity and the Beginning of the End for Coins. By Jonathan Ledgard.

Ven and the Nature of Money. By Stan Stalnaker

Green Coins: Using Digital Currency to Build the New Power Platform. By Reed E. Hundt, Jeffrey Schub and Joseph R. Schottenfeld

Part III: Open Architectures for an Open Society

Organic Governance Through the Logic of Holonic Systems: By Mihaela Ulieru

The Algorithmic Governance Of Common-Pool Resources . By Jeremy Pitt and Ada Diaconescu

The ID3 Open Mustard Seed Platform. By Thomas Hardjono, Patrick Deegan and John H. Clippinger

The Relational Matrix: The Free and Emergent Organization of Digital Groups and Identities. By Patrick Deegan

The Necessity of Standards for the Open Social Web. By Harry Halpin