Rethinking Blockchain: How to design the future of the commons

“Are you still a believer?” – That’s a question I get commonly asked nowadays when meeting people in the blockchain space. The massive crash of the entire cryptomarket fuels fear, not only to the general retail investor but also within the blockchain space itself. Be it developers, token engineers or all the others involved in one of the many blockchain projects out there. Most of us are raising the same question: Are we still heading into the right direction? What has happened and what can we learn to progress?

 

From inflated expectations back to reality

To get a clearer picture of the current state of things it is beneficial looking at them retrospectively. Doing this for 2017, we can tell that this has been the year in which blockchain technology has made its first steps towards mainstream. Especially Initial Coin Offerings (ICO), an innovative way of early stage venture funding, have attracted a lot of media attention as they played a key role within the speculative hype reaching its peak in December 2017.

Blockchain as a topic has been covered in the news and in an unfolding number of talks, seminars and workshops. Also a huge number of projects and entrepreneurs jumped on the bandwagon, sometimes taking profits just by marketing their ventures as being blockchain related rather than really working on a genuine blockchain protocol.

Many projects and the ecosystem in its entirety have received tremendous amounts of money from investors, who in turn expected world-changing protocols and high returns on their investments. These expectations where clearly overblown. At least on a short-term basis. But it has also been a time of necessary experimentation and trial-and-error. Now we realize that most of what has been announced and funded through ICOs makes little to no sense to run on a blockchain.

In combination with a market psychology driven by the sentiments of the masses, the situation has turned upside down by now. The fear of capital loss has led to a dramatic decrease in value of crypto assets and people tell you Bitcoin is dead (and mean blockchain in general). For those that are new to the space – Bitcoin has been declared dead for many times throughout the years. So where are we now?

 

Bye, bye easy money – welcome social impact

Here is the good thing – while those looking for a quick buck are leaving the space as gold-rush mood is over, there is a lot of real work done across the entire ecosystem. Projects and ventures continue to create and fine-tune their products. Even more exciting is that intellectuals from a variety fields are starting to get seriously interested in the technology.

I experienced that for instance at Revision, a conference recently held in Berlin on blockchain and social change. Philosophers, sociologists and economists met with computer scientists to collectively explore the transition to a more “purpose-driven and human-centric future in the digital age”, considering blockchain technology a fundamental piece to facilitate all that. It was great to take part in sophisticated discussions tackling the question on how we can design systems that really make sense, that have societal impact and change the way we collaborate and distribute wealth for the better. But what exactly does that actually mean?

Roundtable at Revision Summit 2018

The potential of blockchain for social good

The potential blockchain technology holds for social impact is manifold. Initiatives directed towards blockchain for good range from innovative solutions for healthcare, peer-to-peer electricity networks to transparent global supply chains [PDF]. Such application-oriented approaches try to transform specific industries by adding an extra layer of security and transparency to specific procedures. This is great and can make the world more equitable in many ways. The revolutionary potential of blockchains though, lies in providing us with a tool to coordinate effort to achieve a collective goal. Peer-to-peer production based on a dedicated token economy allows for rewarding and compensating contributors according to the work they do for the community. Instead of a central authority controlling and owning the network, we will have open and decentralized infrastructures in no one’s possession, where everyone can contribute and benefit from.

While open software and peer-to-peer production isn’t exactly something new, the game changer is the incentive layer (= tokens) we can now add to it. If designed and set up correctly it guarantees a fair distribution of the value created within the network by basing it on individual merits and commitment rather than formal and informal, social and cultural hierarchies. Such systems, designed as digital cooperatives, give back decision power to the people using them. We can be consumers, owners and creators at the same time.

 

Integrate as many perspectives as possible

But there are still some steps to take before this will become a reality. And I am not talking about the technical issues like scalability, interoperability or poor user experience that currently prevent further adoption of blockchain technology.

In order to build elaborate architectures for our global and digital future, it is now time to reimagine, rethink and learn from the design flaws that are inherent to most systems that were conceptualized and developed during the last two years. When the hype was omnipresent, it seems, everyone just hurried up in order to not lose the train of easy funding.

But now we should take the time and thoroughly discuss where we are and were we want to go. Therefore we need to include as many disciplinary perspectives as possible and start drafting concepts and system designs that acknowledge the complexity of human motivations and commitments (there is no homo oeconomicus!). It is about taking into account the observable patterns of social and economic systems instead of blindly following simplistic theoretic assumptions of the human nature.

 

Switch mindsets – from business to commons

Another aspect still receiving less attention in the blockchain space than in other technological environments, is that we need to reflect our biases when crafting technological infrastructure. It is necesary to bring in more diversity to the early stages of concept design in order to not widen the gap between genders or North and South. Tech is not neutral. It always reflects its creator’s attitude, mindset and social standing. This is not only true in the development process of AI but also for Blockchains. What does that all mean?

It means that we need to open up the discussion and collectively try to understand what it means to actively design our digital commons. Relying on a Business Model Canvas will not be enough for that task. It lacks to account for consumers being the creators and owners of their own product, for communities collectively steering their shared vision and deciding on the next steps to take. We need new reference points to understand these new constellations. Can we establish best practice patterns for these challenges? A Commons Model Canvas?*

 

Identity, Economics and Governance

One thing is for sure – exciting times lie ahead! We see the potential of blockchain for good closely tied to three concepts that need to be further developed. These are self-sovereign digital identity, token economics and distributed governance. Why those three?

  • Self-sovereign identity as it fundamentally impacts the way we manage our data and may allow us to recapture a self-determined digital life. We need free ourselves from being constantly tracked and nudged into corporate interests and build up a democratic digital infrastructure that allows everyone to act in his or her own best interests.

 

  •  Token economics as they form a basis for any ecosystem that aims to be built upon a network of individuals that want to transfer economic value between each other and incentivize behavior that adds to their shared goal.

 

  • Distributed governance as flourishing of an ecosystem depends on dedicated participation and identification of the many. We need to give them the ability to shape the future of what they are committing themselves to.

 

At betterplace lab we do research where innovation and the common good meet and strive for a digitization that benefits humanity. Distributed governance in particular is a field to which we as betterplace lab feel naturally linked as it overlaps in many ways with our internal governance structures.

Around four years ago we have collectively decided to change our organizational framework to a holacracy model. Instead of having a boss, we rely on competence-based hierarchies, self-management and peer-based structures to organize ourselves and get great things done.

We are always eager to connect to others entering unknown territory, share experiences and think about to what the world of tomorrow might look like. We are especially excited to explore and contribute to the future of blockchain technology and will happily share our findings.

But in the meantime – why not have a look at some of the great projects that inspired this blogpost? For example at Jolocom or Taqanu for identity solutions or Colony, DaoStack and Rchain for cutting-edge concepts in distributed governance and platform cooperatives.

 

* I would like to thank Andrea Bauer for a stimulating discussion on the topic and kicking off that idea.

Rethinking Blockchain: How to design the future of the commons

“Are you still a believer?” – That’s a question I get commonly asked nowadays when meeting people in the blockchain space. The massive crash of the entire cryptomarket fuels fear, not only to the general retail investor but also within the blockchain space itself. Be it developers, token engineers or all the others involved in one of the many blockchain projects out there. Most of us are raising the same question: Are we still heading into the right direction? What has happened and what can we learn to progress?

 

From inflated expectations back to reality

To get a clearer picture of the current state of things it is beneficial looking at them retrospectively. Doing this for 2017, we can tell that this has been the year in which blockchain technology has made its first steps towards mainstream. Especially Initial Coin Offerings (ICO), an innovative way of early stage venture funding, have attracted a lot of media attention as they played a key role within the speculative hype reaching its peak in December 2017.

Blockchain as a topic has been covered in the news and in an unfolding number of talks, seminars and workshops. Also a huge number of projects and entrepreneurs jumped on the bandwagon, sometimes taking profits just by marketing their ventures as being blockchain related rather than really working on a genuine blockchain protocol.

Many projects and the ecosystem in its entirety have received tremendous amounts of money from investors, who in turn expected world-changing protocols and high returns on their investments. These expectations where clearly overblown. At least on a short-term basis. But it has also been a time of necessary experimentation and trial-and-error. Now we realize that most of what has been announced and funded through ICOs makes little to no sense to run on a blockchain.

In combination with a market psychology driven by the sentiments of the masses, the situation has turned upside down by now. The fear of capital loss has led to a dramatic decrease in value of crypto assets and people tell you Bitcoin is dead (and mean blockchain in general). For those that are new to the space – Bitcoin has been declared dead for many times throughout the years. So where are we now?

 

Bye, bye easy money – welcome social impact

Here is the good thing – while those looking for a quick buck are leaving the space as gold-rush mood is over, there is a lot of real work done across the entire ecosystem. Projects and ventures continue to create and fine-tune their products. Even more exciting is that intellectuals from a variety fields are starting to get seriously interested in the technology.

I experienced that for instance at Revision, a conference recently held in Berlin on blockchain and social change. Philosophers, sociologists and economists met with computer scientists to collectively explore the transition to a more “purpose-driven and human-centric future in the digital age”, considering blockchain technology a fundamental piece to facilitate all that. It was great to take part in sophisticated discussions tackling the question on how we can design systems that really make sense, that have societal impact and change the way we collaborate and distribute wealth for the better. But what exactly does that actually mean?

Roundtable at Revision Summit 2018

The potential of blockchain for social good

The potential blockchain technology holds for social impact is manifold. Initiatives directed towards blockchain for good range from innovative solutions for healthcare, peer-to-peer electricity networks to transparent global supply chains [PDF]. Such application-oriented approaches try to transform specific industries by adding an extra layer of security and transparency to specific procedures. This is great and can make the world more equitable in many ways. The revolutionary potential of blockchains though, lies in providing us with a tool to coordinate effort to achieve a collective goal. Peer-to-peer production based on a dedicated token economy allows for rewarding and compensating contributors according to the work they do for the community. Instead of a central authority controlling and owning the network, we will have open and decentralized infrastructures in no one’s possession, where everyone can contribute and benefit from.

While open software and peer-to-peer production isn’t exactly something new, the game changer is the incentive layer (= tokens) we can now add to it. If designed and set up correctly it guarantees a fair distribution of the value created within the network by basing it on individual merits and commitment rather than formal and informal, social and cultural hierarchies. Such systems, designed as digital cooperatives, give back decision power to the people using them. We can be consumers, owners and creators at the same time.

 

Integrate as many perspectives as possible

But there are still some steps to take before this will become a reality. And I am not talking about the technical issues like scalability, interoperability or poor user experience that currently prevent further adoption of blockchain technology.

In order to build elaborate architectures for our global and digital future, it is now time to reimagine, rethink and learn from the design flaws that are inherent to most systems that were conceptualized and developed during the last two years. When the hype was omnipresent, it seems, everyone just hurried up in order to not lose the train of easy funding.

But now we should take the time and thoroughly discuss where we are and were we want to go. Therefore we need to include as many disciplinary perspectives as possible and start drafting concepts and system designs that acknowledge the complexity of human motivations and commitments (there is no homo oeconomicus!). It is about taking into account the observable patterns of social and economic systems instead of blindly following simplistic theoretic assumptions of the human nature.

 

Switch mindsets – from business to commons

Another aspect still receiving less attention in the blockchain space than in other technological environments, is that we need to reflect our biases when crafting technological infrastructure. It is necesary to bring in more diversity to the early stages of concept design in order to not widen the gap between genders or North and South. Tech is not neutral. It always reflects its creator’s attitude, mindset and social standing. This is not only true in the development process of AI but also for Blockchains. What does that all mean?

It means that we need to open up the discussion and collectively try to understand what it means to actively design our digital commons. Relying on a Business Model Canvas will not be enough for that task. It lacks to account for consumers being the creators and owners of their own product, for communities collectively steering their shared vision and deciding on the next steps to take. We need new reference points to understand these new constellations. Can we establish best practice patterns for these challenges? A Commons Model Canvas?*

 

Identity, Economics and Governance

One thing is for sure – exciting times lie ahead! We see the potential of blockchain for good closely tied to three concepts that need to be further developed. These are self-sovereign digital identity, token economics and distributed governance. Why those three?

  • Self-sovereign identity as it fundamentally impacts the way we manage our data and may allow us to recapture a self-determined digital life. We need free ourselves from being constantly tracked and nudged into corporate interests and build up a democratic digital infrastructure that allows everyone to act in his or her own best interests.

 

  •  Token economics as they form a basis for any ecosystem that aims to be built upon a network of individuals that want to transfer economic value between each other and incentivize behavior that adds to their shared goal.

 

  • Distributed governance as flourishing of an ecosystem depends on dedicated participation and identification of the many. We need to give them the ability to shape the future of what they are committing themselves to.

 

At betterplace lab we do research where innovation and the common good meet and strive for a digitization that benefits humanity. Distributed governance in particular is a field to which we as betterplace lab feel naturally linked as it overlaps in many ways with our internal governance structures.

Around four years ago we have collectively decided to change our organizational framework to a holacracy model. Instead of having a boss, we rely on competence-based hierarchies, self-management and peer-based structures to organize ourselves and get great things done.

We are always eager to connect to others entering unknown territory, share experiences and think about to what the world of tomorrow might look like. We are especially excited to explore and contribute to the future of blockchain technology and will happily share our findings.

But in the meantime – why not have a look at some of the great projects that inspired this blogpost? For example at Jolocom or Taqanu for identity solutions or Colony, DaoStack and Rchain for cutting-edge concepts in distributed governance and platform cooperatives.

 

* I would like to thank Andrea Bauer for a stimulating discussion on the topic and kicking off that idea.