Can Math Based Currencies Realign Ecosystems with Our Values?Using math based currencies we now have the ability to create digital models of our economies/ecosystems that can interface with or natural ecosystem to form symbiotic relationships. On an individual level the relationships will be user driven, while on a collective level the ecosystems will influence how the individual relationships evolve.
To achieve this objective lets look at what currency is, currency is an instrument that stores and transmits value. A currency is a function of confidence (if you have no confidence in it has no value), Put another way we can say, currency it is a mechanism to store and transmit confidence (if we have a $100 we are confident people will exchange goods and services to the value of $100).
Wile money is used to assist us in quantifying our individual values; it remains a means to an end, but is not the end itself. I.e. $5 might buy you a cup of coffee, but the $5 itself cannot give you the pleasure and nourishment that only the coffee can. This is important, money is merely a means to measure, compare and exchange our different values. What is so revolutionary about math based currencies is the accuracy and efficiency with which they can continually measure and transmit the values within the ecosystem. Up to now insight into the flow of money has been limited; it has been like adding drops of water to a glass, where does the drop go? With math based currency we now are able to see the water molecules, we can observe how the drops disperse and circulate in the glass. In this way currency units can be programmed as they coalesce or disseminate based on the ranking of users values. This is revolutionary it will provide the accurate means by which we can measure values and their impact in ecosystems.
While programmable currency offers superior efficiency over all traditional ones, there are still several criticisms that should be addressed.
The main criticisms of math based currencies are: -
• What backs the coins
• How many coins are issued
• How the coins are distributed
We would like to propose a system that addresses the issues above, while at the same time provide us with a protocol to measure the values that underpin the transactions occurring by measuring their impact on the ecosystem.
We would like to propose the use of IP (intellectual property) to back or currency.
Let’s refer to our coins as Trinity Coins for the following reasons.
• There are only 3 coins issued (the reason for this will become apparent later)
• The distribution is fractional and hierarchical
• The value of the coins is backed by the relationship of the nested ideas, their perceived values and their actual value to the ecosystem.
This is measured by flagging value attributes to ideas, assigning these to transactions that occur in the block chain and then measuring them. By recording and analysing the various flagged attributes it is possible to understand the relationships between individual and collective values and rank them according to their benefit to the ecosystem.
IdeaCoin is an approach to rewarding IP (Intellectual Property) Using math based currencies like BitCoin.
Challenges
1) How to encourage the sharing of ideas in an open source environment while still rewarding IP.
2) Lower the barrier to entry into the ecosystems without increasing risk/liability.
3) Measure the value of ideas, products and services, build models that reflect this fairly and reward the IP accordingly.
4) Avoid regulation by demonstrating the value in voluntary user driven models that respect, demonstrate and communicate the exchange of user values is more rewarding then those that don’t.
Opportunities1) Make tools that let ideas collaborate into concepts.
2) Crowd fund the concepts into products and services (this is the arena that Kick-starter and Bank to the Future now operate).
3) Reward ideas based on their downstream application and reflected values by the ecosystem.
4) By servicing the customer’s needs, we can do what Crowd funding is doing to the banking industry to the patent and copyright industries too.
The BitCoin economy makes this all possible via the block chain DNA. We can build apps to facilitate, capture, track and measure IP in meaningful ways, whatever sacrifices are made can be balanced by increased opportunity.
How do we do this?Implement a protocol that attributes flags to transactions in the block chain. Provide tools that allow users who choose to participate, to track selected transactions, by sharing this information with the ecosystem. As long as mutual benefit is derived from the services symbiotic relationships are induced and reinforced. If not, the user will simply opt out.
Proposed Modelling System for Ideas IPAn idea is conceived and captured by a user into the system, others who view the idea, can choose to: -
• Ignore it and move on to another idea
• Support It
o Add a supporting vote
o Offer to contribute
Offer supporting idea/ideas, these are in turn voted on, ranking and nesting them in hierarchical order.
A financial contribution
Offer to participate with materials or skills
• Disapprove it
o Add a disapproving vote
o Offer reason/reasons for your disapproval e.g. the idea already exists, this can be shown by pointing to a link of the other idea, if disputes arise appeals can be verified by consensus of other users and the time stamp of the block chain.
Each contributing offer is voted on by users whose preceding offers have already been accepted by. I.e. only offers that are going to enhance value will be adopted by others who now have a vested interest to see the idea progress into a product or service.
Once the ides become a product or service, all those who supported it can be rewarded. Those who only voted for it will get an improved rating (I will discuss user ratings in more later). Those who contributed can be offered shares in the resulting revenue according to the value of their contribution (The value of the contributions can be measured in the same way the ideas were, some principled values could be declared at the outset and the values will evolve with the Ideas).
In this way we can build opens source applications and measure the contribution, of individuals who contribute to its realisation. We can assign flags that represent these values to transactions related to the use of these applications, these are tracked, analysed and fed back into the system.
Let’s assume our idea has evolved into an open source software application. It’s a tool on our client’s BTC wallet that allows them to make micro donations to causes that most closely match their values (these values are declared in predetermined user saved profiles). By tracking and studying the relationships of flagged values on the block chain we provide useful reports to both the user and the ecosystem, furthermore we are providing financial support to objectives that match the users values. User’s participation is voluntarily, by adding the app to their wallet they always have the option to choose which profiles if any they want to associate with which transactions. When the user transacts a micro payment is made, a portion is given to support causes that match the user’s values the closest and a portion is paid to the system for providing the service. Both the user and the ecosystem benefit from the interaction and in doing so, they both evolve.
User RatingsUsers can be rated and rewarded according to the accuracy of their voting and success of their ideas or contributions. This will do two things it will improves the quality of the IP generated and in turn strengthen the ecosystem.
How TrinityCoins operate. It's a three part process: -1. Whenever a new idea is conceived, 3 “Trinity Coins” are issued. The Issuing.
2. For each subsequent related idea that is adopted, the coins get split in a weighted manner creating fractions of the three coins, i.e the dividing of the coins.
3. The final facet is the sharing of the revenue derived from the flagged transactions occurring in the ecosystem. A simple ranking measurement would be to measure the number of transaction that occurs during a heart beat of the block chain, in the case of BTC it is 10 min (I prefer to term it, the flip rate of the coins; ) The value is the number of flagged transactions that occur in a “coin flip” vs the total transactions that occurred. In this way the ranking of various flags is achieved. We now have a method to divide and distribute pooled transaction fees, ranked by the value of ideas and how they apply to ecosystems (measured by the number of matching Flags that occur in the block chain during a coin flip and how this changes over time). This is important because we now have true backing to our currency. Ideas and their value to the ecosystem are what back our currency. Put another way the Coins real intrinsic value is its ability to recognise, rank and match individual and collective values and ideas/IP.
How Ideas can be weighed and measured. The genesis idea is enhanced by the adding of supporting ideas that are ranked and nested according to the consensus of other users. Here is a simple example¹: -
A genesis Idea is given the value of one unit and is the principal position. Supporting Ideas are added in tiers. The size of tiers can be self determining based on their subordinate value. If an idea is dependent on a preceding idea requiring the parent Idea to first be accomplished, then it is subordinate, if not it is a pier and forms part of the same tier. In this way tiers will be self determining and grow in fractal patterns.
To simplify our illustration we will just use a fixed hierarchy, where each new tier consists of an extra idea: -
The first layer will have 1 idea, the second 2 ideas the third layer 3 ideas in typical pyramid fission.
How the coins can be dividedOnly 3 TrinityCoins are issued and then divided.
• The first idea is given 1 coin and is the principal position, the next two separate ideas form a second tier, the next three a third tier and so on
• The value of the second tier coins is calculated by dividing the coins value in the tier above, 1 ÷ 2 = 0.5
The value of the third tier coins is the value of the preceding tier’s coin 0.5 ÷ 3 =0.166666
4th tier is 0.166666 ÷ 4 = 0.04166666
5th tier is 0.04166666 ÷ 4 = 0.0083333333
What’s interesting here is the greater the number of ideas generated the smaller the fractions of the coins become. If the first idea’s value is 1 the sum of all the subsequent divided coins will never exceed 2 ensuring there is always a remainder. The more ideas that are nested the smaller the remainder will become. The remainder is important we shall discuss it later.
How shares in the coins are valuedAlthough the coins get divided into fractions as described above, the coins remain in the pool. Instead Shares to the pool are allocated, by rating the applications. Rating is accomplished by measuring the occurrence of transaction flags with each coin flip. In this way we can measure the value of goods or services to the ecosystem based on their value flags in conjunction with the transaction amounts and frequency with which they occur. In the fixed tier hierarchy the most valued entity will get 3.333% the second tiered applications will get 16.667%, third tier 5.556%, fourth tired 1.389%, and the fifth 0.278%. We immediately notice how steeply the decline in shares occurs as the tiers get lower. This is because a fixed hierarchy was used. If we allow tier sizes to be self determining based on their subordinate value. E.g. a computer cannot operate without power; therefore it is subordinate to power. We can potentially have multiple stand alone primary first tier apps. The reward motive will encourage new useful stand alone goods and services. When you compute the shares of the pool you will notice, the greater the number of nodes on any given tier the more even the share distribution will be. This is important because it encourages and rewards innovation in a compound way and is anti monopolistic.
The Remainder (
3 – the fractions)The percentage remainder of the sum will be held by the share holders of the product/service. The bigger/healthier the ecosystem/economy gets the less the founding shares holders share becomes. This is a positive consequence, as the ecosystem grows the delegation of responsibility and dilution of shares occurs. The system evolves towards autonomy. From some perspective it could be argued that this is a tendency to artificial intelligence. The decentralised nodes in the network firing off flags could be viewed as the firing of neurons, or the spread of symbiotic relationships could be compared to the growth of mycelia, the flow of coins or currency resembles nutrient flow in living organisms. By looking at flag patterns in relation to the macro evolution of ecosystems could be comparable to an MRI. Because the system is acting in a pier to pier fashion a dynamic fractalised exchange of vales will be occurring between the ecosystem and its inhabitants both benefiting in the process. Seen in this way its possible to imagine that math based currencies are possibly our bridge into the matrix where the communication that takes place between the ecosystem and ourselves, enables us to evolve more rapidly in ways that reflect our values with the ecosystem and what values the ecosystem responds most positively too.
FlagCoins will run on the TrinityCoin engine, their purpose is to allow transactions to be assigned flags, these will provide reference points when data mining the block chain DNA. Ranking engines will use them to establish hierarchical orders.
ValuesCoins are the “Flags” themselves; we are going to ascribe principle values to transactions in the block chain. Like the Jolly Roger, transmitted its vessels philosophy to other ships in the past, Impregnating the block chain with values flags will broadcast the philosophy of transactions and the ecosystems they circulate in. By analysing the influences and relationships they stimulate in our ecosystem, we can measure which values serve us best, both individually and collectively.
Driven by the TrinityCoins engine of nested hierarchy,
IdeaCoins will combine the other two coins to facilitate the collaboration of ideas, flagging them with user values will facilitate their evolution by matching opportunity and creativity. This will result in the symbiotic relationships we discussed earlier. As ecosystems grow so their IP will become more valued. Tools will be developed to articulate customer’s values into the economy and goods and services that best match them will be in highest demand. As the system evolves and values are recognised and met the need for regulation will diminish.
Logic is based in language but our instincts are based on emotions. Like repetition improves muscle memory, impulsive behavior can be reprogrammed. By understanding what triggers of our emotions. Building tools that broadcast values that improve the ecosystem will incentives the correction of negative behavior with reward. Building tools to study flagged transactions will stimulate positive emotional feedback by identifying and matching matching shared positive values. Applying this back into the ecosystem will help improve our individual and collective consciousness and reduce the need for regulation.
I have tried to give a conceptual explanation of how with programmable currency we can use intellectual property, with its matrix of ideas and values to develop a more rewarding and sustainable economy.
Values through ValuesI would now like introduce work by Jerry Schuitema ” Value through Values” the power of giving in creating wealth. The book was published it in 2007, in reaction to the problems he saw with corporate philosophy: - namely, putting the value for shareholders above the value of customers. His arguments were vindicated a year later. Unfortunately the situation has not improved much but I am hoping with the invention of BitCoin we can change this.
The book focuses on the relationship between transactions and values; there is a goldmine of conceptual models backed by filed studies and workshops. These models can be applied to the analytically tools that mine the block chain DNA. All we need to do is build the engine and the tools based on these models. Despite being written over 5 years ago its lessons and applications are more relevant today. Raymond Ackerman had this to say about the book:- “The way of the future, the whisper of tomorrow, this is what business colleges should be teaching …This pioneering work is not only timely but deserves to be read and studied by leaders and students in the years ahead”
Having spent over 25 years in economics communication, Jerry has consulted with leading corporations in South Africa; he has studied Economics, History and Political Science at a tertiary level, and management at the Oxford Centre for Management Studies.
I have had the pleasure of knowing Jerry for just over a decade. Jerry and I have been discussing how his work could be applied to math based currencies. I think the hardest elements have been accomplished, the publishing of his book with examples required modelling tools and the BitCoin protocol. I am looking for assistance in combing the two along similar lines to what we described above. I would be grateful for any support. I have a soft copy of his book together with his permission to share with anyone who is willing to assist.
Communication’s strength is in its developmental abilities, not in its ability to manipulate. Technology will only really serve us to the extent that we stay focused on the primary aim of interaction: the empowerment of the other. -
Jerry SchuitemaAlthough this post relates to this topic, I have posted it as a new thread to make discussion on it less cluttered.
https://bitcointalk.org/index.php?topic=424729.0
