Talk:P2P Energy Economy

Synopsis for a New Model

Digitally produced goods and services exist in a world of their own that can be thought of as separate from our physical world in that it's almost infinitely more efficient.

For example, building a house in Second Life takes dramatically less in work energy than building a house in the physical world and the gap makes the difference between abundance now and abundance in 200 years.

A house built in the physical world using a high degree of automation, e.g. with robots and open architectural plans can be sold at the cost of work energy it takes to build it (assuming it's made from renewable materials and its production process meets the conditions for sustainable abundance) but when will we have such high physical production efficiency?

There is a lot that needs to happen in terms of dramatically increasing production efficiencies for physical goods _before_ we need an economy to sustain and enhance the abundance.

When it comes to digitally produced goods and services, we can start with an example of why a new kind of economy and currency is needed.

If I can get 10 "cpu hours" a day from my PC, i.e. 10 X (1 gigaflops processor running for 1 hour, as assessed by the Linpack benchmark [Rmax]), and if it costs me less than 0.2 "man hour" a day on average to maintain my PC (general PC maintenance) then I have 10 cpu hours and e.g. 7.8 man hours a day (based on an 8 hour work day) to produce some digital goods (e.g. open source music, open CAD designs, open Second Life models, or open software etc) and if I invest in faster and/or more efficient PC I will have more CPU hours and/or more man hours to make more digital goods.

So given that I'm limited in my resources it's not sustainable for me to give away the digital goods I produce or exchange them in expectation of a potential return (in other digital goods) that may or may not happen or that may happen only partially with a net loss to myself. If I don't get any return (in cpu hours or man hours or both) I can not produce more digital goods, so my production will be limited and that cannot lead to abundance.

I can sell both surplus cpu hours and surplus man hours I have in return for cpu-hour tokens and man-hour tokens and I can also lend and borrow both cpu-hour tokens and man-hour tokens. I can also invest more man-hour tokens, i.e. hire someone with the tokens, or invest my own man hours, and cpu-hour tokens, i.e. use someone else' machine (or my own PC's cpu hours) to create more efficient production processes for my digitally produced goods and services so that I get back more than I put in when exchanging those digitally produced goods and services for cpu hour tokens and man hour tokens. That's the only profit that can be made and it drives the whole economy toward higher and higher efficiency, i.e. otherwise, i get back roughly the same as I put in in cpu hours and man hours.

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This model synopsis below is far less ambitious but far more effective than the P2P Energy Economy that I've been working on. While it taught me a lot as far as the principles of a sustainable economy, the P2P Energy Economy, in attempting to apply itself to the physical world outside of the computer, was aiming at a future when we have physical abundance in essential resources.

For now, it seems that the only abundance we have is in computational power and our own creative energy.

A lot of the ideas from the P2P Energy Economy (e.g how currency is created) are directly applicable and will be reused but the model will become far less complex as it changes trajectories from aiming to reinvent the world decades or centuries ahead of the world naturally getting there (see prior comment on the current "efficiency gap" between the digital world and the physical world) to aiming at fixing the inequitable exchange model for digitally produced goods and services.

One key difference between this model and the P2P Energy Economy (besides the absence of an electric smartgrid) is the existence of two currencies: the cpu-hour token and the man-hour token. Like machine money and human money.

Neither type of currency is meant to enable ownership. Both are meant to enable production, not ownership.

So, I'll take the P2P Energy Model apart and compress it/remold it into this new model that can be applied today to give us a sustainable abundance economy in digitally produced goods and services.

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In replying to why a currency is needed

<< We need to recoup the cost of production in order to produce more.

In order to recoup, some one needs to give us something back and that something should allow us to produce more, so if it's "man hours" that we need to recoup we'd get "man hour" tokens back (so we can trade them for man hours, i.e. work, from a producer who has a surplus of man hours, i.e. a lot of free time) and if it's "cpu hours"we need to recoup then we'd get back "cpu hour" tokens and we can pay them to someone with "cpu hour" surplus (a server that's not fully utilized) to use their machine as part of our production (over P2P)

Money paid for digital goods and services does not lead to ownership. It simply enables further production.

The way the tokens are created and managed is the same way as in the P2P Energy Economy, i.e. based on increase in the flow of "cpu hour" and "man hour" from peers with surplus to peers with deficit. No change in the algorithm or how money is created but now you have two types of tokens, one for paying back humans so they can recoup and produce more (by hiring other humans with surplus man hours) and one for paying back machines so they can produce more (by utilizing other machines with surplus cpu hours)

My intent is to build P2P trading software to enable sustainable abundance in digitally produced goods and services (open software, open music, open CAD models, open SL models, open Spice models, open Matlab models)

So to summarize, you need to recoup the cost of production in man hours and cpu hours so you can produce more. Trading with "Cpu hours" and "man hours" as currency let's you do that for digitally produced goods and services such that producers don't need a Donate button and Big Corporate sponsors. >>

The joule token scheme in P2P Energy Model, while being much more universal, is a climb up a very steep hill, in that it's hard for people to imagine measuring human work in joules or measuring computational work in joules, and while both are very possible the complexity of the model needed to enable universal energy token for all types of work is far bigger than the complexity (or lack of) when using specialized currencies such as the "man hour" token and the "cpu hour" token for human and computer work, respectively, and not just any kind of machine work.

The "cpu hour" currency has the same characteristics as the joule token: fixed work value and increasing use value over time, which promotes a trend toward higher computational efficiencies over time, i.e abundance in compute power.

The "man hour" currency is based on a loose standard (e.g. 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 digitally produced goods and services 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? :-)

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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.

MarcFawzi 11:20, 17 February 2009 (PST)

Old comments:

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)

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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.)

and

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)

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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

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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)