http://bitcoinmacroeconomics.com/2016/02/16/ethereum-cooperative/f you want an invite to Ethereum Cooperative Slack, leave email down below in comments or send to
btcmacroecon@gmail.comhttps://docs.google.com/document/d/1qx-RttmzDWiqpg2eyAVcX2KbmlxKkCBdb78QsTEDkJQ/editEthereum Cooperative White Paper
By Brent Woods
Credit: Rocky (@rfikki)
The purpose of this Ethereum Cooperative White Paper is to discuss the possible formation of an Ethereum Cooperative. The overall mission is to create power in numbers. I wish to thank Rocky (@rfikki) from the Ethereum Gitter for joining in the first ad hoc Google Hangout for the Ethereum Cooperative. The suggestion was made to clearly and concisely devise a white paper to discuss the overall mission to see if this warrants advancement. So thank you Rocky! And it was nice to meet you!
Mission Statement: To create value and incentive for members of the Ethereum Cooperative by creating smart contracts through membership, to generate membership, to generate purchasing power, to generate alliances, to create cooperative marketing efforts, and to incentivise the membership with direct pay to members through revenue streams which will include future membership dues and administering of programs (bulk buys) and future projects. Secondly this cooperative can serve as an example for implementation of smart contracts, leading by example, and to provide educational material to show others how cooperative efforts can take this technology of Ethereum and be utilized in real world applications. Further membership and funding can be utilized for future programs or projects within the Ethereum Cooperative.
As stated, the overall mission is to generate value and incentives for members. In order to do this and allow trust to play out in this space, it is necessary to relinquish individual control that of humankind and utilize the technology. It will be necessary to establish multi signature authorization to eliminate the negative or outright theft. This will require interaction with developers that can implement and write this code or contract, but this should set others at ease by utilizing the beauty of Ethereum. In the process this will be a learning experience for the community and that is a great part of it.
Membership: In order to establish an Ethereum Cooperative I propose consensus method for decision making. But in order to move towards decentralization, it will be necessary to start somewhere. It is my intention to propose in the infancy of Ethereum and in this white paper, via smart contract, that all who join in the first year from the date of inception, members who donate any amount they feel comfortable with be it a fractional amount of wei, to a full ether, or more if they so feel comfortable, but ANY donation allows them not only membership in the Ethereum Cooperative, but to become a member for life. The limit will be at one year.
There must be incentive for members. I am proposing that beyond that 1st year (to be determined) that any new members that join, must pay a fee in Ether to join the Ethereum Cooperative. The reason for this is to create an incentive structure for existing members and an incentive for members to remain in the Ethereum Cooperative. I would propose that beyond the first year that there is a membership fee structure and dues structure in place, and I say this as it will only be seen if there is value and incentive in membership. But this is a great opportunity for (1st year) new members in the first year of inception, and all it would take is a donation of any amount (and there would be no fees or dues ever for 1st year members).
Incentives: Via smart contract, it is possible to automatically generate payment per agreement and in this scenario it is proposed that a percentage (as agreed by vote or consensus method via Ethereum) is paid back to EACH member who donated any amount they felt comfortable with when they joined. It is proposed that this is an annual incentive and again automatically paid per address and it must be administered properly and correctly and written as such up front.
Since founding members (1st year) are incentivised and each member has equal vote, it will be necessary to create via consensus method an incentive for future members, as I dare not propose beyond 1 year, but examples could be paying members (2nd year and beyond) are on same incentive structure as founding members, or perhaps in order to create more strength that their incentive is at 2 year mark or even 5 year mark as an incentive for members to remain and help strengthen the cooperative.
Fund: It has been discussed the incentivizing of members. It will be necessary to recognize this contractually as originating from the “Fund”. The Fund is a balance of all (1st Year) donations from members. Though a donation is voluntary for (1st Year) members, each get equal voting status for consensus method, however the Fund will also have funding available through (2nd year and beyond) membership dues, as voted in by members via consensus. Through cooperative purchasing and administration of the programs, additional funding can be generated for the administering of the project for members. This funding will be added to the “Fund” and distributed to members per agreement and smart contract. Though there will be membership fees (2nd year and beyond) these fees will go to the “Fund” yet (2nd year and beyond) members will have equal voting power for consensus method.
Bulk Purchasing or Cooperative Buying: It has been discussed funding for administering bulk purchasing or cooperative buying rounds, and it is proposed that members get additional value by their strength in numbers, that of pure purchasing power, and that is what this Ethereum Cooperative can and will do. The possibilities are endless but also supporting members should be first and foremost if at all possible, but for example, say we had enough people that would commit contractually to buying an Ethereum Cooperative T shirt (or just Ethereum) – that we all enjoy the price break (hopefully if we had a T shirt manufacturer/ screen printer member that accepted Ethereum) from a combined bulk order as opposed to buying just 1 T shirt. This does not mean buying at cost, but for example and simplicity, it is proposed that a percent of the bulk purchase goes to the the “Fund” for administering this for the cooperative. We need someone that will accept this arrangement and will agree via smart contract to ship 1 Ethereum T shirt and ship it out via an agreed upon carrier, or better yet, we find a carrier that is a member. This is but an example of how to establish bulk purchasing and how to generate revenue or funding for the “Fund”.
A general mission with this Ethereum Cooperative is to create educational material for members but by educating by doing. In this mission, the cooperative will serve as a model if not provide the tools to members, further increasing the value to the Ethereum Cooperative. Let these examples serve as templates and instructions, in a step by step fashion. Perhaps we can get assistance in a cooperative fashion because of the incentives for the members or perhaps we find a way to pay out of the fund for projects, that is to be determined and voted upon. The other general mission is to help instruct others with educational material, but by being the model to show others how to carry out consensus, voting, and how it works via smart contracts, but this Ethereum Cooperative will serve as that conduit for members.
Future Projects: It is yet to be seen if there is power in numbers, but if there is, it is proposed that future projects are funded from the “Fund”. So we have discussed annual incentives which will be automatic as per contract. We have discussed the multisig nature of the handing of the accounts for absolute integrity of the project. But what is left can be determined via smart contract and voting to determine use of the “Fund”.
Power in numbers, annual incentives, membership for life by way of donations (1st year only) and funding have been discussed. Bulk Purchasing or Cooperative Buying has been touched upon. Voting and consensus method has been touched upon. But what has also been touched upon has been providing the templates and models for members to be the model for others for the technology and blockchain capabilities of Ethereum. The question comes down to is there value and incentive enough for the justification for others to create that power in numbers?
It was brought up to me that via a basic search of Ethereum Cooperative (search words) that there are other cooperatives forming in the Ethereum space. From what I have seen, there is not one in this aspect of membership, however what was seen are potential members of this cooperative. What has not been discussed is potential cooperative advertising efforts, if allowed and agreed upon, or a place where members can network with others for further development or ventures in this space. This cooperative could form as a resource for others for networking or it could be sought after for incentives by being a member (1st year, joined by way of donation) or (2nd year and beyond) future members. It cannot be looked at as a Ponzi scheme, as the transparency of the blockchain and the smart contracts will be the proving ground, it’s just that this project will require developers to assist in it’s implementation, and roll out (as smart contracts require). Of course this needs to be discussed, improved upon, as much is unknown including development of smart contracts themselves or incentive structure, etc.
It has already been discussed WeiFund but it was premature to sign up, besides it is not right to input an Ethereum Address in this regard, as this would require multisig and governance beyond one person. I put this proposal out before others to see if there is any interest in forming an Ethereum Cooperative and see if there could be help in writing the contracts to mesh with the blockchain in order to be workable and viable. Yet to be discussed was any requirement of incorporation or non profit status, or for profit status, or perhaps if there is any way to work under the umbrella of an existing entity.
This white paper was written on February 16, 2016 and is subject to revision and input from the Ethereum community. This has been written in Google Docs for transparency and for proof of work purposes.
