Open Protocols

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Description

Jem Bendell and Matthew Slater:

"A protocol is like a language, convention, or standard and as such, use of it cannot be restricted, prevented or monetised any more than use of a word, gesture, or social code. The Internet is essentially a set of protocols (such as TCP/UDP, http, HTML), which leads to a fundamentally more democratic infrastructure. That need not have been so: in a parallel universe, Microsoft R&D invented the web and now every page is a visual-basic-enhanced word document, MS Office is the only tool for authoring them, and it costs $5000 for a licence and still look wrong on Firefox! The open protocols avoided that particular dystopia and in the early days provoked a great deal of optimism about how the new freedoms implicit in the Internet would be the basis for a new kind of society." (http://matslats.net/sites/matslats.net/files/Bendell%20and%20Slater%202017.pdf)

Discussion

Open Protocols are needed for Platform Cooperatives to Thrive

Jem Bendell and Matthew Slater:

"The proper function of an institution is not to crunch algorithms or own infrastructure that could be common, but to manage trust and social relations. In this context drivers might aggregate into cooperatives to present a trusted brand appealing to those who wanted, say, flash cars, women only drivers, criminal record checks, insurance, etc. Moving beyond ridesharing this protocol approach has many domains. Airbnb could be replaced in the same way. Real Estate agency could also change. Why should you have to commit to a single Estate Agent to sell your house and troop around many estate agents to find a house? There could just be a protocol for advertising and searching for residential property. Why is it still necessary in 2017 to advertise a second-hand bicycle on a centralised, censored, platform like craigslist, freecycle or the local supermarket or newspaper? Why isn't there simply common space for that? Open protocols would help pave the way.

The history of open protocols shows they enable efficiencies and economies of scale (e.g. the USB and x86) which reduces prices and waste. Open protocols also wrest control from individual firms with the relevant intellectual property and thus enable competition from new entrants. However, they do not prevent new monopolies from emerging over time. With the internet, capitalist interests, as manifested by venture capital and then investment banks, backed those enterprises that worked out how to build services, private territories and gateways on top of the internet’s open protocols and to build the notion of private property and the means of production into the internet. Only then could companies like Facebook and Google/Alphabet start monetising value for investors, even while the lower layers remain free as designed. The importance of network effects to the value of any platform, whereby they are as useful to the extent they are ubiquitous, it is hard to imagine any platform like minds.com competing head-to-head with Facebook succeeding to become similarly large and influential.

One recent protocol that threatened to democratise everything was Bitcoin. As described earlier, Bitcoin is a protocol for different 'wallet' programmes on different computers to share a common ledger and thus agree how much is in each wallet. It enables a global payment system without the need for a central institution to keep the definitive ledger, and so it allows a money system without states or banks. Bitcoin has turned out to be flawed in that its mass adoption led to an unintended form of centralisation, where computing power is decisive. Better algorithms have long existed, although so far Bitcoin retains its first mover advantage. (Torpey, 2014)

To summarise, we see that platform cooperatives have limited potential unless new open protocols are introduced to enable multiple entrants into a single ecosystem. In absence of benevolent monopolies, utility will be sub optimal unless open protocols enable interoperability. Open software protocols mean that it is more difficult to maintain a monopoly position so, forcing entrepreneurs and investors to focus on competition rather than attempting to monopolise a whole market. . As many new entrants will fail, if there are open protocols, what they have created while failing can add to the ecosystem, rather than adding to the mountain of junk code or leaving users stranded." (http://matslats.net/sites/matslats.net/files/Bendell%20and%20Slater%202017.pdf)