Monday, August 24, 2009

Jasper Jars

Mickki needs pictures of her special little man. And this blog is the current transport from my phone.

Tuesday, May 12, 2009

Differences Between "Open Source" and "Open Currency"

[Cross posted from New Currency Frontiers]

Alan’s last couple of posts have attempted to address confusion Openness and what we mean when we talk about that with respect to currencies or the new economy. Responses from various folks indicate that more clarification would be useful.

Let’s start by talking about Open Source Software.

Basically this means the source code of a software program is available and licensed in a way that would allow people to download it and adapt it for their own use, and possibly republish modifications for others use.

Open Source is a HUGE BREAKTHROUGH in terms of an Information Age gift economy. Software developers have learned that we can actually produce better software which evolves and adapts more quickly by freely sharing the product of our labor and asking others who use it and adapt it to also share their changes back to the community.

This is a huge strategic advantage over closed and proprietary software applications. In the currency space, Cyclos is probably the most feature-rich and mature example of an Open Source application. It continues to evolve and grow because of the Strohalm Foundation and a supportive base of users and geeks. However, it is built in the traditional siloed computing paradigm.

Traditional Siloed Computing

The traditional approach in pretty much all computing and information technologies is to separate applications into very distinct silos. This means, we run our applications in a very controlled environment (whether the original source code is open or closed). We keep our applications secure by limiting access to our server and databases.

If somebody penetrates the "castle walls" which protect our applications, they can wreak all kinds of havoc: change permissions, modify source code, delete files or records, modify data in the database, change accounts or passwords, etc.

This whole approach creates an inherent power imbalance between a very clearly defined "us" and "them." There are those who control the server, applications and settings, and then there is everyone else (such as users of those applications). The people who can go inside the castle walls control everything, the people outside the walls don’t.

Currently all software applications, whether open source (like Cyclos) or proprietary (like Paypal, banking software, the Visa Network, ACH or GETS) operate inside this siloed approach.

Why We Need Open Computing

What we are undertaking with the Metacurrency project is no small feat, because we are talking about a whole new architecture for software applications and information technologies. And this is why we’re spending so much energy clarifying what we mean by OPEN.

What happens if you want to write a check against your bank account, but there is a discrepancy between what you believe your balance is and what the bank says? Who is the authority? Who decides whether the check clears? Who decides what fees you’ll be charged if it doesn’t? What interest rates you’ll earn or pay? What other random fees and charges may happen? What the rules are and when they change? How much you can withdraw from an ATM in a single day? Etc…

The short answer: THEY do. Your only option is to move to another bank. Another bank where you'll be in the exact same position again. One group of people holds all the cards, makes all the rules, sets all the policies. And you have no authority to represent your own account, your balance, the rules you’ve agreed to, etc.

So, I ask you... If we are making a whole new model for currencies, do we want to repeat that pattern? Are we going to just trust that well-meaning, community-minded folks will never abuse the inherent power imbalance built into that approach to computing?

There's a reason for the saying: "Power corrupts. Absolute power corrupts absolutely." Currencies are extremely powerful tools. If we want to break the pattern of humanity serving currencies and instead have currencies serve us, then we must break the architectural pattern of power imbalance which gives one group ABSOLUTE POWER and withholds it from the bulk of participants. It is an inherently corruptible structure. If we build the new economy on this inherently corruptible foundation, can we expect any outcome other than corruption?

Exactly how naïve are we?

We need a whole new model of computing which allows BOTH individuals and communities to be sovereign entities and maximizes the freedom of independence of both for a truly Open Economy.

Currencies Are Like Games

We find that currencies operate very similar to games. Currencies are a shared set of agreements about value, counting and transacting with each other just like games function by a shared set of rules, scorekeeping and making plays. Players choose which games they want to play, their strategies, their own moves and they should be able to see the part of the game relevant to their play. Each player is sovereign.

The rules may evolve, but players should not be able to change them willy-nilly. The rule-changing function operates at a different layer of governance than players making plays. BOTH levels need to have their own sovereignty. College football and professional football leagues can and do make different rules. And it’s important for players, spectators and referees to know the rules the game is being played by at any time.

If you want to play football with a group of friends in the park, you all can make your own rules deciding to play touch football instead of tackle. Each community of play is also sovereign. But a player on the field never make decisions via community governance, they choose for themselves where to run, throw or block.

Should the game of currencies provide any less? Under the current system, you are playing a game of earning dollars, but for most of the players, the rules are not visible, the state of the game is not visible and they are not even an authority able to represent plays they’ve made or their current status in the game.

Imagine trying to play chess where the rules change without your knowledge or consent, you can’t see the state of the board, you don’t know what plays your opponent is making, you aren’t even authorized to represent the plays that you yourself have made, and you're not allowed to quit the stupid game. Does that even sound fun?

Our Approach to Open Computing

We identify three core components for an open, distributed, and decentralized approach to computing and currency architectures:

1. Open Transport: A protocol which can be used for participants to directly interact with each other and for any currency to interact with any other currency.

2. Open Rules: A means of representing the rules so players know what game they’re playing, what plays are valid to make, how those plays are handled and how any game/currency interacts with other games/currencies.

3. Open Data: A tamper-proof way of distributing data so there is no centralized point of failure nor power imbalance between the participants and the management/governance of a currency.

Digging Deeper into Open Data

Alan has mostly spoken about items 1 & 2 (using the metaphor of HTTP and HTML). This metaphor falls a bit short because, generally speaking, web pages don’t alter the state of other web pages, but connected games or currencies do. As mentioned, this certainly includes the ability to have universal IDs, but that is fairly negligible part of the problem we're addressing (so we don’t even mention it in our list). We can use something like OpenID for now, but in the long run we need a completely un-enclosable namespace with no central or top authority. [But that is a conversation we’ll reserve for another time.]

I believe that the most groundbreaking part of the model has to do with item 3 – Open Data. Instead of managing data integrity and security through exclusion and obfuscation, we need an inclusive architecture THAT BUILDS INTEGRITY AND SECURITY INTO THE STRUCTURE OF THE DATA ITSELF. (Sorry for shouting, but I want to underscore that last point.) That is the only way to transcend the technological power imbalance between admins and users which is inherent in siloed computing architectures. [See previous post about Open Data]

The mechanisms for doing this involve new technologies that have never been assembled in this manner before. It means having a distributed, segmentable data engine which can store chains of linked, digitally-signed transactions. You can sort of think of this as using the digital signature validation that GIT uses for source code repositories, but for a distributed database application. It would also be helpful to the means to run signed instances of distributed applications and embed them in this distributed data engine.

This enables you to validate any play (via its digital signatures and copies from various players, governance bodies or 3rd party notaries/auditors) and to see the state of play for any player. However, this does not necessarily mean complete transparency of all data. You can encrypt secret data into the transactions, or couple private entries in your own private data store to transactions via their transaction id as a foreign key. This is just like how in some games, you receive cards that are face-down, for that player’s eyes only. Other players can see that they’ve received a card (that a transaction was made), but cannot see the content of that card.

If the governance of a currency gets bogged down in bad politics, makes bad decisions about rules, or even gets shut down, the players can pick right up where they left off with their own tamper-proof account statuses by selecting an old rules version (or forking with a new version) and deciding to continue the play. In this kind of true peered architecture, there’s no way to force a game to shut down as long as there are players that want to keep playing it.

Twollars as a Open System

Twollars gives us a glimpse of this power. You can define a new currency and anybody can use it via a public transaction medium (Twitter). Everybody can keep their own records (or record ALL transactions in the currency), transactions are transparent in the twitterstream, and if the twollars tools went away, you could keep using twitter on your own and track the transactions yourself.

Twollars have an open transport, and completely transparent transactions, Unfortunately, they still rely on centralized Twitter servers, the method for defining rules is rudimentary and not transparent to users, the data is not distributed, there is no accommodation for privacy (cards face-down), you have to compete for names in a limited twitter-account-namespace, and the currencies don't interact with each other.

Even so, it's a beautiful step toward an open transaction architecture. Through it, you can begin to imagine new types of currencies and easy ways of transacting which don't involve too much effort for the start-up team or currency participants.

Final Conclusions about Open Currencies

Open Source Software in siloed architectures still creates closed games with a clear division of us/them between system managers and players.

Openness is NOT the same as Transparency. Privacy can still be accommodated as appropriate to the rules of the game being played.

New platforms and data structures are required to for truly Open Currencies, and we’re busily building them.

I hope this helps with the outstanding questions. :)

P.S. Not to confuse matters, but we are also releasing all of the Metacurrency tools and platforms as Open Source Software. We also believe that is still an important part of Openness.

Monday, May 04, 2009

We use currencies to keep records of currents...

I originally posted this to the Complementary Currencies discussion group on Skype in response to a question from Christoph Hensch. But it probably merits inclusion here.

Christoph, I believe we are in the lazy habit of thinking that the flow of the currency itself is the one that matters instead of the actual flow of goods, services, resources, knowledge or participation which flows COUNTER to an exchange currency.

Those real-world currents shaped and enabled by currencies are what make them so valuable and powerful.

The currency itself is actually just a flow of information. But there are two reasons we myopically focus our attention on the currency flow as if it is the one that matters.

1) We are big-brained, symbol-using creatures, and it's much simpler to us to deal with those nice clean symbols than the actual sloppy flows (dollars are easier to account for than time, various units of various things and other stuff which doesn't even unitize well (such as the state of relationships)) and

2) The REAL flow is an event which happens in a moment and is gone. If you were NOT there to witness the service being performed, the good being exchanged or the participation of that person, then once that moment has passed, the only consistent way we have of knowing what occurred is the record we keep of the event. We use currencies to keep records of currents.

I believe this is the single MOST CRITICAL CONCEPT for currency practitioners to grasp. It allows us to break out of bad habits of thinking about currencies in very outdated ways (such as believing they have or should have intrinsic value because precious metals were once used as coins). This allows us to see currencies for what they truly are: formal systems which shape, enable and measure currents which allow communities to interact with those currents.

Let me paint a more concrete picture. Imagine being out for a walk in the snow, and you see a set of small animal tracks where it bounded out from under a hedge and crossed a field toward another shrub. Then you see them end in a sudden deep indentation, with some wingtip marks on extending out from either side. These tracks tell a story -- a flow of resources and relationships that took place in that field.

Of course, the story itself has passed. All we have left are the tracks. But the tracks can tell quite a lot to the right set of eyes: what types of animals were involved, how long ago it happened, which direction the bird flew off, etc. This is the role that currencies play in our economy. Actual currents of resources and relationships occurred and currencies are the tracks they left behind. The tracks are very informative to the right eyes, so we use them to make business and policy decisions.

Different currencies leave different tracks. The design of the currency makes certain things visible and leaves others invisible. It also determines who has what ranges of movement and track-laying powers.

LETS and Time Dollars have flows of currencies as units are transferred from account to account even if they are a mutual credit currency with a NET total of zero units at all times. Individual account balances are not necessarily zero, and the changes of these balances tell a story about relationships and resources as they moved within the community. It is those counter-flows which the currencies enabled and also the different mobility and track-laying powers that they gave to people who may be disenfranchised from dollar access.

The real power that we gain from these insights is that MONEY is not the only kind of CURRENCY. There are many other currencies that we use. We know that we use currencies as a medium of exchange, but also as units of account or measure, as stores of value, and even as tokens of status, worth or reputation.

Our real power as currency practitioners comes in understanding how we currently use these tools in our communities to lay value-tracks and all the ways that currencies can (and should) be used to track our stories of value.

We value excellence in a chosen domain. For many, winning an Olympic Gold Medal stands as the ultimate symbol of achievement within a sport. But it is not the gold that makes it valuable. In fact, different gold medals have been traded and sold. Their price has been determined by who won it when and how noteworthy their accomplishments were. Olympic medals are a token of status currency which tell us a story about races which have long been run.

Even though they can’t be traded, the points, scores and times achieved in each Olympic competition are also currencies which tell a more detailed and nuanced story of participation which has passed. The possibility of winning a Gold Medal shapes the flow of participation of millions of athletes all over the world. Scores are our official way of keeping TRACK. There is a formalized system of agreements about what counts and how it is counted. Certain people or roles are the ones allowed to ISSUE scores and medals. You cannot issue them yourself.

Anyway, I don’t want to wax at length about the various non-monetary currencies we actually use and why they are in fact currencies, there will probably be disagreement enough over this one example.

But let me leave you with one thought. There is incredible power in this model of understanding currencies which is largely untapped. Money is so powerful, because it is a currency, not just because it is a medium of exchange. Currencies are the means by we collectively interact with real flows of real resources. Healthy design and implementation of truly powerful currencies at all levels of endeavor gives us so much more than we get from money substitutes.

I look forward to partnering with you all in that context.

Tuesday, April 28, 2009

The Tangled Web We Weave

We used big balls of colored embroidery floss, so the web is a bit fine and hard to see with my camera phone pictures. You may need to click on the picture to see a zoomed in version.

The web extended its reach beyond the living room, into the kitchen, dining room and front and side halls! Timothy is very proud of our work together.

Sunday, April 26, 2009

Currencies as DNA of Social Organisms

I just posted a reply to a post about currencies as the DNA of social organisms on New Currency Frontiers Blog and wanted to cross-post it here.

Many people seem to struggle with the "social organism" metaphor. I think that might be a function of two things: 1) loose boundaries which make it difficult to see social level organisms in the usual way we see "things" and 2) wanting to be individually more important than we are.

Boundaries: We are in the habit of seeing the world as objects and identifying objects by their boundaries. Normally, you're sitting across the table over there, and I'm sitting over here, and the boundaries seem pretty obvious and inviolable. Of course, that's an illusion. We're breathing the same air, drinking the same water, eating from the same biological food supplies. We might even go so far has to have a blood transfusion or organ transplant.

Because of the level on which we participate in them, it is hard for us to see the boundaries of social organisms. We are like air/water/bacteria/nutrients or at best like cells with the capacity to move between social organisms. Even more confusing, is the fact that we participate in MULTIPLE social organisms. Surely, my cells are in an exclusive relationship with me, aren't they? (No, in fact they are not.)

Importance: To really see this picture, makes us feel small. To see a company as a social critter, and its departments as organs fulfilling different functions to keep the critter alive, and people as replaceable cells who may come and go with little effect... Surely, that's not right. I'm more important than that!

Unfortunately, this leads us to some very bad ways of thinking. We labor under the illusion that changing the people changes the organism. That good people, will run a company responsibly... or that electing a different President will magically create change.

The only way that real change (other than death/collapse) happens in a social organism is when its structure or DNA is significantly modified. Sometimes a new leader actually does that, but frequently they don't. And what's worse is that some of what needs the most changing is deeply embedded in our assumptions about how things work.

Think of it this way. No matter how creative and enlightened a CEO is, his company is still fueled by the same money as all the other companies. Without the ability to change the fundamental lifeblood of the organism, how much change is actually possible? How much does the structure of that lifeblood force certain responses and behaviors?

Until we embrace our capacities as DNA-constructors of the social organisms we inhabit, they will continue to run amok, be diseased, collapse and deplete our planet.

It's time for us to step up.

Tuesday, April 14, 2009

Monday, March 09, 2009