Talk:P2P Energy Economy

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I don't believe that we can improve human nature with logic.

I believe we can improve our logic using our better nature.

MarcFawzi 01:59, 2 March 2009 (PST)

Synopsis for a New Model

There are two things in software (as open content) and software development (as open content production) that need to be traded without throttling by artificial "price" which is what Patrick is getting at, IMO.

In the model I'm evolving those two things are the "man hour" cost in human energy (for producing the software) and the "cpu hour" cost in computational energy (for running and replicating the software)

[start of somewhat irrelevant section]

The "cpu hour" cost for running the software or replicating/downloading it is relatively very low. In case of replicating/downloading via P2P the bandwidth is some fixed sunk cost, e.g. $40/mo, which, for the sake of simplicity, does not factor into the replication/downloading cost. This way, anyone using my machine for x cpu hours to download some software will let me use theirs too for x cpu hours at any time in the future and for whatever cpu-consuming purpose, e.g. running some web service. That's much better than the bandwidth-exchange model in BitTorrent which will be used too but does not factor in the 'cpu hour' exchange which is of more interest since 'cpu hours' are usable at any time and for any purpose (so they work more like a currency)

[end of somewhat irrelevant section]

If developer spends a total of 2,000 man hours building the software and recoups those 200 man hours, in virtual "man hour" tokens, from the users (assuming the users are other developers) he can then have 2,000 man hours (of other developers' time) to apply to his software, to enhance it. If he doesn't recoup the 2,000 man hours he spent his productivity is not likely to grow (or if it does then it's at the cost of something else unless he is funded and the funding grows as he makes progress, which is how it works in the commercial and free software business), i.e. he'll have the same 2,000 man hours to put in, so his productivity stays constant. But if he does recoup the 2,000 man hours as "man hour tokens" then he can trade the tokens in return for 2,000 man hours of other developers' time (again, assuming the users or participant in such economy are also developers) and puts in another 2,000 man hours of his time, so now he has 4,000 man hours invested in the project, which he can recoup (in "man hour" tokens) and then trade for other developers' time while again putting 2,000 man hours of his own time, so now he has 6,000 man hours invested in the project, which he can recoup (in "man hour" tokens) and trade for other developers' time while again putting 2,000 man hours of his own time, so now he has 8,000 man hours invested in the project, and so on...

I would imagine what replaces P2P Bank in the new model is another P2P Orchestrator (sounds paradoxical but it's just an open, automated process that is driven by demand-supply events from peers) that puts out requests for man hour and cpu hour replenishment based on predicted demand, including the total demand for cpu hours generated by P2P downloads.

In other words, by recouping my man hours in "man hour" tokens" and trading them for other developers' time, I can continuously grow my software project, faster than just giving it away for free, without major corporate donors.

I have figured out how to create the "man hour" and "cpu hour" tokens such that they are linked to (or are the result of) higher productivity not just created with a magic wand. More specifically, they are created based on the increase in the flow of man hours and cpu hours from peers with surplus to peers with deficit. This way, they represent spent human and computer energy so money becomes equal to work, or an enabler of production, not an enabler of scarcity or ownership, which are two sides of the same exact coin based on the way I see it.

When it comes to "billing" for open software (as downloaded content or as P2P-based SaaS) "cpu hour" billing is easy because it relates to use of a cpu which is measurable based on cpu spec. When it comes to billing for open software development, "man hour" biling requires consensus between the developer and their peers (other users of the economy, who are also developers) on how many "man hours" a given task should take, ideally speaking and on average. Obviously, anyone not using the P2P trading app can go and download the software from some external torrent, to circumvent having to pay the ridiculously low cost in 'cpu hours' and 'man hours' (where the cost to the producer is divided by the predicted number of downloads (assuming downloads are monitored by P2P Orchestrator for predictive "cpu hour" inentory-ing) This is because unlike cost of "electric energy" in the P2P Energy Economy where the energy to be exchanged is finite and thus priced based at its work value (which is also the currency's value in that model), software can be replicated/downloaded infinite number of times, so the cost in man hours and cpu hours for software can be spread over the total number of downloads. The difference from the P2P Energy Economy is that the software, unlike energy, is not the currency in this new model.

The "cpu hour" currency has the same quality as the joule token (the currency in P2P Energy Economy) in one way: fixed work value, but it has a decreasing use/exchange value over time (which is similar to the existing international currency)

The "man hour" currency is based on a loose standard (in the software industry) where people generally know how many man hours a given development task will take. It's been called "mythical" because software project estimation is normally done for staged development processes where the plan goes to hell the minute programmers run into unexpected issues. Estimation based on SCRUM style sprints tends to be more accurate. But in any case, the "man hour" as currency allows price variability based on estimation of time it take the average developer to accomplish some task, not based on demand and supply. If the supply is large then the man hour estimate will not go down. If the supply is limited the man hour estimate will not go up. Thus, in the latter case, it does not enforce scarcity. And it promotes abundance in human productivity by allowing the flow of work capacity from people with surplus to people with deficit.

I hope to produce this new "dual currency" model for open software and open software production fairly soon and then a P2P app for trading "cpu hour" and "man hour" can be built based on that, or at least the spec for it can be developed now and coded over time...

Who has surplus man hours? :-)


Abundance sustaining universal currency like the joule tokens can exist (see P2P Energy Economy) but the Joule Token as a currency, which is a universal currency for goods and services that meet the conditions for sustainable abundance (i.e. universal in context of abundance sustaining currencies) exist only as long as common everyday goods and services meet the conditions of sustainable abundance, which they don't at this time.

Today, the only "common everyday resources" that a meaningful economy can be based on and that meet the conditions of sustainable abundance is human energy (and more exactly creative energy is what we see an abundance of) and machine-computational energy (which I believe continue to double at the single node level every 18 months)

So then if nothing else meets the conditions of abundance why the overhead of designing a universal abundance-sustaining currency? Why not start from the special case and then generalize. If you want to debate this last point, I suggest we debate mathematical induction. So while mathematical induction as defined commonly (the weak case) may be an over simplified analogy it is basically the same exactly logical process.

Joule tokens, which is a case of trying to derive the generalized/universal solution through direct axiomatic deduction was leading down a path of increasing complexity. I figured the whole approach to arriving at a universal abundance-sustaining currency should be rethought and so I'm starting out now from the special case.

What "cpu hour" tokens and "man hour" tokens enable is the equitable trading in human and machine work energy such that we can have a sustainable abundance in digitally produced goods and services (like open software, open CAD models, open Spice models, open Matlab models, open music, etc, anything that is both open [since openness is part of the conditions for sustaining abundance] and is produced by people on a computer)

Today, most if not all popular open software is highly and critically dependent on major corporate donors, which is not sustainable. Think Firefox, Linux, KDE, Gnome, etc. All are funded by major corporations directly or indirectly (e.g. by employing lead developers, funding startup ventures involving those lead developers, or directly funding them as Google has done with Firefox) This is not "sustainable" since if the economy melts down (as it has but to worse degree) and those corporations cease to exist then who will fund those projects that each have hundreds of millions of users? The users of course, but only a tiny portion of users fund those projects today. So then we need an abundance sustaining p2p economy that allows the equitable exchange of man hours and cpu hours between equally empowered peer producers to enable true sustainable abundance.



I think the question of "why do we need to back money with anything" is very important question (although it's not applicable to the kind of money creation I have developed) The question keeps popping up so I need to address the response to all those on the relevant lists, so I don't have to re-answer it on all lists.

I'm looking at the economy as a programmer working with a model made up of several algorithms, running at various times, concurrently, for each participant, and in this view of the economy complexity at the level of the whole economy arises from a starting set of basic rules.

If I said "let there be money" and waved a magic wound and let the resulting system run then I would have lost the ability to model the system's behavior, deductively and would have the kind of system that can only be modeled numerically, which isn't bad for the whole economy, if the constraints on money creation assure long term stability, but I couldn't then guarantee each given participant that if they follow the rules of the game that they would do well. I have a problem with that.

In other words, unless I link money creation to higher productivity, I would not be able to predict deductively what an increase in money supply would do, i.e. what is the money being linked to? In the case of the joule tokens and the "cpu hour" and "man hour" tokens, money (tokens) is created based on the increase (delta) in the flow of man hours and cpu hours (two different tokens) from peers with surplus to peers with deficit (which represents a definite future increase in productivity as those surplus man and cpu hours are spent rather than being idle), so this linkage allows me to deductively predict the outcome of new money. I would not be able to deduce what new money would do to productivity if it's not linked directly to it.

The money is not "backed" by energy (or in this new model human and computer energy).. It's "linked" to productivity.

So the right word is "linked to" not "backed by."


On Tue, Feb 17, 2009 at 11:32 AM, Kevin Carson <[email protected]> wrote: > >> Reply re: "Flexible universal currency" vs "specialized currency" > >> Today, the only "common everyday resources" that a meaningful economy >> can be based on and that meet the conditions of sustainable abundance >> is human energy (and more exactly creative energy is what we see an >> abundance of) and machine-computational energy (which I believe >> continue to double at the single node level every 18 months) > > I don't understand why it's necessary to have any such backing for a > currency system. The accounting/warehouse receipt functions don't > require any backing: just a secure network and an accounting unit > that can't be counterfeited. I expect the producers in local > economies will be creative in working out barter arrangements through > LETS systems and the like, on an ad hoc "let a thousand flowers bloom" > basis, when the FRN suffers a catastrophic loss of value and the > official banking system collapses. And the free market mechanism will > result in inter-exchangability between such local systems for > long-distance trade, or for working out units of exchange for > networked production. As for pricing particular goods and services, > why not just let the producers set their own price in whatever > arbitrary unit is being used, and adjust it depending on how many > takers there are at a given price--IOW a market price system, but > absent the artificial scarcities currently built in for privileged > classes? > > -- > Kevin Carson


Re: Hierarchies

That's actually the right word for it.

A "process hierarchy" ...

Thank you David.

I do recognize that such hierarchy when applied to human production systems has its moral/social/economic pros and cons which depend on context, so the label does not make it "better" than structural hierarchies in all contexts, just in certain contexts, such as the example I gave, which Michel noted (afterward) is morally/socially adequate only in cases where the producers are themselves empowered by a set of special coveted skills, i.e. not general laborers who one could argue benefit from from a structural hierarchy that permits accrued trust, which seems to emerge naturally in all human production systems, including so-called "peer production," unless specifically disallowed (by the process.)

My thinking has matured further since I wrote the last draft of P2P Energy Economy ( which specifically disables/disallows structural hierarchies (i.e a proactive purist approach to peer production per the ideal of equal empowerment.)

At the present time, I realize that while I have disagreement with Michel over the efficiency and scalability of he generalized exchange model, my approach to equal empowerment (through actual disabling of structural hierarchies in the said model's meta-process) is, like Michel noted, only morally/socially adequate in case of open software production systems, not any human production system that relies on general labor (where producers are less empowered.) So I have moved in the direction of designing a more specialized economy and a more specialized kind of currency where I plan to leave my own moral/social presumptions at the door (because I'm more of an engineer than a sociologist or psychologist) and focus solely on maximizing efficiency and scalability of the exchange model in the specialized context (which happens to be open software and open software production.) More on that here:

MarcFawzi 12:33, 20 February 2009 (PST)

Old comments on P2P Energy Economy:

The section Energy Price Regulation says (shortened):

This value of Peer Dollar is regulated relative to the value energy, so that as energy becomes abundant its price will drop ... while preventing speculative boom and bust cycles from making the price of energy ... drop too low (in periods of low demand) as to make energy production economically unfeasible.

By "economically unfeasible" are you talking about Profit?

If so, would you consider an alternate view - where Price can safely approach and even equal Cost indefinitely without the organization needing to close?

Thanks, Patrick Anderson AGNUcius 12:32, 12 December 2008 (PST)

In the section Peer Energy Bank you say:

New money is only created by "Peer Bank" when the P2P energy production capacity becomes larger than the currency in circulation (i.e. more energy than there is money.)


At the start of the economy (as a process), Peer Bank would create new money in return for energy supplied by the participating peers, so it creates new currency that it gives to those peers. Then peers start trading using that currency, and when new energy surplus exist then new money will be produced.

This seems to say that there should be times where the Peer Bank issues new money in return for energy it buys and times where instead it doesn't. If I understand correctly, at startup of the system, enough money needs to be created to "fill the pot" so economic exchange between peers can happen. Then, there should be a time when Peer Bank only issues money for "surplus" energy.

What are the criteria for knowing when Peer Bank should issue new money and when it shouldn't? Ref: Money is only created by "Peer Bank" when the P2P energy production becomes larger than the currency in circulation.

How will you measure 1) How long the first period should last (creating enough money for the economy to run on) and 2) when to issue more money as energy production is larger than currency in circulation.

What would be the objective criteria for this, which the system can implement?

Thanks - Sepp Hasslberger --Sepp 02:53, 27 December 2008 (PST)

Please allow others to access this original work by making your modifications/remixes on a different wiki page.

Does this mean that I can not add anything on the original page? ( like I just did by adding at Category + related links ? ) Thanks, User:Dante

Patrick: energy price regulation does not exist anymore

Dante: it means you can add anything outside of the main text of the page...

Sepp: Sorry for the delay. This is the first time I look at the discussion tab :-) There is a better description of how money is created. It's in sync with increase in electric energy flow from peers with surplus to peers with deficit, and the money is created only for increase in the flow. It can be further explained with a diagram, which I plan to add.

MarcFawzi 13:06, 16 February 2009 (PST)