WHY A TOKEN COMMONS PROTOCOL
With the proliferation of crypto-tokens and decentralized platforms, there comes a need for a kind of “meta-protocol” or framework that provides access to all the requisite services to have a trusted and governable ensemble of services and tokens that meet not only the expectations of users, but regulators as well. In short, there need to be tokens that provide access to not just individual services, but a constellation of services that perform according to a predictable and enforceable social contract – and in some cases, are compliant with certain international financial and privacy regulations.
The notion of any kind of compliance is an anathema to the Libertarian roots of the Bitcoin and Blockchain protocols, and would seem to nullify one its most fundamental innovations, that is, its being “permission-less” and not yielding to nor depending upon any external authority. Rather than attempting to address this highly contentious issue here, (which will be covered in the following section), it is sufficient to note that some kind of inter-operability is needed among services and tokens in order for a fully decentralized token ecosystem to flourish. In effect, there will have to be a more general framework of the membership network, a kind of broad social contract, that reflects and protects the expectations and values of those who participate in or access it. For those that believe in the meritocracy of “free market mechanisms,” that invisibly select for more efficient outcomes, a minimum of oversight would be the rule. But for those that believe that governance and accountability are needed to avoid a concentration of powers and capture of resources, there will need to be a dynamic, adaptive and verifiable balancing of interests and token types. In which case a commons governance protocol becomes a necessity. Users should be free to “opt” into either protocol – a Free Market protocol” or a “Commons protocol, and other likely variants in the future.
What is being developed here is a protocol for membership and participation in a Commons network of peers that is NOT governed by ‘free market mechanisms” of transaction pricing, market clearance, anonymity, and private property. This work has its origins in the work of Elinor Ostrom, who received her Noble Prize in Economics for researching how traditional societies managed their commons of fisheries, water and woodlands to identify 8 principles for the governance of the Commons, and thereby avoiding Garret Hardin’s, The Tragedy of the Commons. When there is a Commons, all memebers are known to one another, and there is no need for the anonymous “mining “of tokens for financial reward nor complex puzzles to be solved to independently verify transactions with costly computation. The governance mechanisms of the Commons deployed here are derived from biological and ecological cooperative principles whereby all participants are known and mutually engaged to preserve a dynamic “homeostatic range” of value generation to the benefit of all members of the Commons. In contrast to traditional property rights, all members of a Commons have rights that are neither absolute nor private, but tied to the overall generative capacity of the Commons. For instance, a member of a Commons, could not erect a structure nor emit a substance that would adversely affect the overall beneficial generative range of the Commons. Although the goal of Commons oversight would be to allow for as much independence of action as possible by different actors, there will be cases, were that independence or freedom will be curtailed to maintain the overall generativity, equity and viability of the Commons.
PROOF OF STANDING
Participation in the governance of the Commons would be controlled by a Proof of Standing protocol that would be based upon how a member is directly affected by an action or decision AND their competency and experience in making a decision. The concept of “standing” is based upon long established principles of jurisprudence whereby the legitimacy of participating in or benefiting from a process is subject to a variety of tests. Unlike “a proof of stake” that is similar to providing a “bond”, collateral, or “backing” in providing a financial “test” or cost, a Proof of Standing is a more general test that is based upon evidentiary metrics of circumstance and competency. Hence, decision or participation rights are not given but earned, although the right to earn such rights are open to all members of the commons. Proof of Standing rights can also be algorithmic, based upon a combination of data evidence, and well established control principles such as the Law of Requisite Variety where “variety” or randomness of types is generated to in order to prevent a “lock in” of privileged interests, such as monopolies or elites.
Peer to Peer Terms of Service Agreement: P2P(TOS)
All members of a Commons would be subject to a Peer to Peer Terms of Service Agreement that establishes all members as peers – whether as individuals or entities. It further establishes the rights and duties of all members of a Commons where all would have their own self-sovereign identities and personal data stores. The goal of the Token Commons Foundation is to develop P2P TOS templates and other Commons Protocols that could also be compliant with EU General Data Regulations and other regulations such as ,KYC and AML. By providing selective interoperability with existing global regulatory frameworks, the Commons Protocol can limit the liability of legacy enterprises and governments to participate. The selection of specific governance protocols and issuance of tokens would be determined by different instances of the Commons Protocols, and in most cases, we expect different City Commons protocols to be implemented to reflect the values, traditions and circumstances of specific cities.
SELF-SOVEREIGN IDENTITIES AND PERSONAL DATA
PROSUMER ROLES AND PERSONA
DIVERSE AND AUTONOMOUS TOKENS
GRADUATED ENFORCEMENT SANCTIONS
OPTION OF KYC/AML COMPLIANCE
EU GENERAL DATA REGULATION COMPLIANCE
LOOSELY COUPLED INTEROPERABLE SELF-SOVERIGN NETWORKS
EMERGENT EVOLVABLE CONTRACTS AND AUTHORITIES
PROOF OF STANDING FOR MINTING OF TOKENS AND ALLOCATION OF DECISION RIGHTS
REQUISITE VARIETY: ADAPTIVE CONTROLERS FOR VARIETY & OPENNESS
COMMONS P2P TERMS OF SERVICE AGREEMENTS (CP2PTOS)
Token Commons Protocol
Tokens of Value & Utilization & Decentralized Exchanges Generation of access & utilization Tokens with Proof of Value Generation Utilizing Bancor Protocol & Adaptive Control Module
Trusted Tokens, Contracts & Oracles Algorithmic Digital Common Law contracts and oracles for verification, minting, and assignment of tokens for production, consumption and pricing of sustainable energy. Supply and circulation of Tokens is regulated by the Adaptive Dontrol Module
SSID Identity Network Each member of the Token Common generate a Behavioral & Biometric Root ID And Token Persona & Wallet and Data Container
P2P Commons Governance Protocol & APIs P2P TOS; Proof of Standing, SSID, KYC/AML, GDPR, Interop, Open, Adaptive Control Module, BC Agnostic, Legal Standing, Sustainability Design, Bancor Protocol, Liability Clarity, Cambridge Blockchain Open Protocols
WHY A “FAT” COMMONS PROTOCOL
Fred Wilson and his colleagues at Union Square Ventures were among the first to invest in and support decentralized services, bitcoin, and the blockchain. They were also among the first to see the significance of open protocols over applications. They pointed out that the majority of the value resided in the protocol “layer” rather than the applications layer. Hence, unlike traditional platforms where the applications layer was “fat” with value, now it was the protocol layer.
They also anticipated the proliferation of new token offering to support new infrastructure protocols to incentivize the build out of the ecosystem for decentralization applications and token.
Now, however, we have a new way of providing incentives for the creation of protocols and for governing their evolution. I am talking about cryptographic tokens. You can think of these like the tokens you might buy at a fair to get on a ride: different operators can have their own rides and set their own price in terms of tokens.
More generally, the evolution of these protocols will be governed by the decision of those who have adopted it to adopt a future version. This has the potential to provide a much more democratic process for changing protocols over time then the historic committee process. Just how democratic it will be, depends on a lot of factors starting with how concentrated the group of protocol operators is.”
This transition to a token economy with decentralized and autonomous authorities represents a fundamental re-ordering of financial, economic and social institutions, and business models. This epic and foundational re-ordering of financial markets and institutions, can go in one of two directions: the first as a kind of hyper capitalism that realizes of the original Libertarian vision of the Bitcoin founder where “free market forces” and a “power laws” prevail to create “a market based meritocracy”, and the second, and a very different direction, that of a Commons based post capitalism “multi-dimensional” token economy where economic, social and ecological tokens can be issued to preserve the dynamic ranges of different sources of value creation to preserve the overall health and generativity of a group or society. Whereas the mechanism of uniform market price signals is the prevailing model for the Libertarian view, which in biology is akin to unit selection, (the “selfish gene”) , the Commons model of multidimensional selection and harmonization is more akin to “group selection” models of adaptive regulation.
PERMISSION VERSES PERMISSIONLESS -
Today, a fundamental schism divides the blockchain community, pitting those that support a Public or “Permissionless Ledger” against those that support a Private or “Permissioned Ledger”. The former community is primarily comprised of the original Bitcoin and Ethereum communities, who espouse fully anonymized and decentralized blockchain services and tokens that no authority of any kind can control. That openness and lack of permission is seen as one of the fundamental if not THE fundamental innovations of bitcoin and the blockchain. Permissionless protocols are seen not just a countermeasure to old style socialism, collectivism and the self-interested and ineffectual powers of the state, but as an essential way of preserving individual liberties and the “free market”. This position is espoused not just by the original Bitcoin “maximalists” and crypto-anarchists, but by many of the most influential Libertarian styled VC firms. Naval Ravikand, a popular blockchain spokesman and investor, speaks for many in this community when he asserts that “permissionless innovation” is necessary for “market based meritocracy”.
Private or permission based blockchains, on the other hand, are almost uniformly embraced by enterprises, governments, regulatory authorities, and banks, who by statute and regulation are required to comply with KYC/AML, privacy, and other regulatory authorities. Moreover, permissioned blockchains also not only give enterprises control over who can join their consortium, and allows them to set and enforce the rules, but also it provides potential revenue streams that otherwise would be denied them. For governments and incumbent authorities and regulators, Permissioned Ledgers are one way they can keep their place at the table.
The empirical reality of the current state of the Bitcoin, Ethereum, and the crypto-token community in general is that it is NOT decentralized nor fully anonymous, and there no credible nor transparent modes of governance or oversight. At least 60% of Bitcoin mining is controlled by 3 mammoth mining foundries in China. Ethereum is equally concentrated and opaque in its governance and mining. Nonetheless, Bitcoin and Ethereum advocates continue to pursue the original vision of a fully decentralized, anonymous and permissionless network even though the current network is computationally costly, transactionally inefficient, and environmentally destructive. They point to new technologies on the horizon or just about to be released (Segregated Witness, Caspar, Lightening Networks, Proof of Stake, etc.) that will eventually provide scalability and preserve anonymity and permission free participation.
At the heart of the difference is a debate about what constitutes freedom and authority. At its core the Libertarian ideal of Bitcoin is the celebration of the uninhibited freedom and agency of the individual to incur and benefit from their own risk taking and efforts. The invisible hand of the market becomes the “natural” authority and arbiter of what constitutes the “meritocracy of the market”. Free market mechanisms and notions of “free individuals in a State of Nature” of are legacies of 18th Newtonian mechanics and Industrial Age. They do not apply to the digital, dynamic, and highly complex, self-regulating, interdependent and networked world of today. The more accurate metaphor is to regard society as a complex living organism where everything is entangled, mutually interdependent, and in nested networks of complex proteins, genes, organelles, vessels, bacteria, neurons, biomes, organs, and other species. There is no anonymity in nature, much less, permissionless freedom of action. There is no absolute freedom or independence of any entity, group, or even a species. Darwinian selection is an endless testing of the limits of permission for cooperation and competition, at every level of organization from virus to a complex ecology. The capacity to adapt, to achieve homeostasis, is a constant renegotiation to sustain life and order within a highly variable environment.
Most complex species from microbes to elephants are “eurosocial,” that is, capable of complex forms of repeated cooperation, mutualism and specialization. Nature is the opposite of permissionless participation, as phenotypic variation, typing, and signaling inform members within and across species as to the potential threats, and opportunities of cooperation, mate selection and competition. Biological and ecological systems are the ultimate in highly complex signaling networks that are forever modifying themselves to keep themselves alive and reproduce. They evolve, learn and replicate through combinations of signaling and adaptive strategies where memory and histories of past performance and experience are critical to whether to rely upon or reject a “trusted signal”. The immune system which literally defines what is or is not a specific organism is all about identification and certification, and its failure, resulting in auto-immune disorders, is indicative of just how fundamental that function is. Hence, Nature teaches us a harsh lesson about our own social ordering: there are no universally, immutable trusted authorities nor wholly honest signals; yet every living species depends upon trusted signals and authorities to survive. The challenge is to keep the process of testing and learning sufficiently open so that false and fraudulent signals can be corrected, and their damage minimized. Rather than limiting their options or “variety”, successful organisms and societies increase their options to create the “requisite variety” to adapt to the variety of their environments. This is to say that there should not be any such a concentration of resources, information, or powers that any one node or combination of nodes can suppress. (For an excellent and highly rigorous discussion of conditions and network typologies that effect Bayesian learning in social networks see, Daron Acemoglu†, Munther A. Dahleh, Ilan Lobel, and Asuman Ozdaglar, Bayesian Learning in Social Networks, May 11, 2008)
Hence, the issue is not whether should or should not be any authorities to grant or deny permission, but what kinds of authorities, what kinds of permissions, and how they are held accountable, and how they can learn and evolve to cope with complexity and dysfunction. The question is not WHETHER you should know your neighbor or intruder, but HOW WELL you can know them and to what extent certain credentials or tokens authorities can be relied upon and trusted. Under the free market scenario of a Libertarian permissionless consensus there is no learning within the network, as all the players are anonymous and there is a reset to zero after every transaction. In fact, it is worse than that because the learning is kept from the network and can easily be captured by a few large players, the bitcoin foundries in China and the “whale” traders, wherein Power Laws assert themselves. This is what transpired with the major social and search networks such as Google, Facebook, and Amazon, and it will continue into the future “decentralized” blockchain space if the Libertarian siren song “market meritocracy” of the of Silicon Valley VCs and free market proponent are followed.
If one thinks of the Commons as a living organism that is composed of many micro-organisms, that are mutually interdependent and which have to learn and adapt to one another, then one starts to appreciate the limitations of individual freedoms and mono dimensional pricing mechanisms. A living system or Commons must be open, free, and at the same time, be permission based in order to adapt and survive. If “permission” or an authority is required to verify the authenticity of a member of a Commons in order to verify assertions and achieve accountability in order to prevent any “unknown” entity from undertaking any action that would jeopardize the viability of all parties, then such permissions are not limiting freedom, but ensuring the preservation of the Commons. All members of a Commons are like organisms in a living body. They are free to innovate – mutate – vary - so long as they do not injure mutually interdependent members. In other words, there are high level principles that govern a Commons across different units to maintain certain ranges in variation that preserve its character, vitality and unique identity.
In short, the distinction between permissioned and permissionless is far too blunt an instrument to design governance protocols for autonomous decentralized token networks. Governance requires enforcement and accountability and that is not possible without authoritative – trusted – identification - certification and enforcement. The challenge becomes how to not make the different modes of authentication and verification themselves captive to particular nodes or interests. Where traditional capitalist models attempt to secure rights of free market exchange through private property rights and the unrestricted fungibility of such property rights, e.g. free markets, this inevitability leads to the concentration of market powers and wealth. The Commons is a means of countering that inevitable concentration and over exploitation of commonly created and shared resources. Within a Commons there is no absolute right of ownership or fungibility. Rather every member of a commons has equal access and utilization rights that are contingent on preserving the overall values or range of outcomes of the commons. Like a living organism trying to preserve body heat and oxygen levels, these rights or flows of value are dynamically adjusted to preserve the sustaining values of the Commons.
CITY COMMONS GOVERANCE PROTOCOL
A city is much more than its geography or its physical layout and composition. It has its own character, history, personality, and unique way of organizing itself to express, protect and advance the interests of its residents. Yet much of the governance and planning of a city is framed through zoning and the management of its physical resources and assets: – number and types units of housing, public transportation, open space, entertainment, culture, mix of or retail and commercial space, and new jobs and schools. Cities are still managed and planned according to a static industrial model, composed of independent sectors: housing, education, transportation, employment, and cultural. Each of the sectors are seen as independent entities – housing, transportation, energy, retail, commercial, education, human resources, healthcare, etc. Yet in reality, decisions in one sector affect all other sectors, they too are parts of an interdependent network whose interactions characterize the vitality, livability, innovativeness, and character of a city.
With the increased digitization of society, the collection and protection of personal information (citizen, resident, visitor, etc.) becomes a vital and necessary function of the city. In order to better govern the life and prosperity of cities, city governments will need to collect personal data to plan and manage virtually all sectors of the city – mobility, housing, energy, education, healthcare, employment, and public safety. In order to better allocate different kinds of resources for the benefit of the entire city, city governments will need to certify and issue tokens of value and trust for their residents. The choices city governments and their citizens make regarding density, diversity, energy and proximity can profoundly affect the sustainability and the quality of life of the city. Whether ride sharing services are privately owned or commonly accessed will affect the air quality and the congestion of the city. Whether housing availability is tied to density and diversity will affect the vitality and innovativeness of the city. A Commons City Protocol can provide the legal and governance framework for overseeing the city as a common pool resource where data can be collected and protected under the EU GDPR guidelines and tokens of trust (civic credentials) and tokens of value (Swytch and local access tokens) can be issued to incentivize policies and practices that benefit all the citizens of a city and preserve its character and further it sustainability. Hence, the City Commons is not just a means of governing physical assets but also preserving and rewarding certain forms of prosocial behaviors to the benefit of the city.
The above “City Scope” was developed by MIT Media Lab City Sciences Group to provide public engagement around how to design and govern city districts to achieve communitarian goals that preserve social well being, innovation and sustainability. The City Sciences Group is a partner in the Token Commons’ initiative to focus on cities as a locus of innovation in sustainable energy and decentralized, commons based services.
Swytch is a crypto-token of value that uses open source blockchain and a robust Proof of Production consensus to facilitate, accelerate, maximize, and verify investments in renewable solar resources worldwide. Swytch rewards renewable energy investments (rooftop solar, distributed utility, hydroelectric, wind turbine, and large-scale grid scale solar projects) with crypto-tokens that are issued through an independently verifiable algorithm.
From large-scale industrial power generation to small residential investments, Swytch tokens can be minted anywhere electricity is produced and consumed. Swytch provides geo-stamped credentials for production and consumption based on actual carbon reduction and displacement of fossil fuels. Swytch provides a tangible, and significant financial incentive to city governments, companies, and individual citizens to transition to solar energy production and consumption by paying producers in a token that has fungibilty with local complimentary currencies as well as other crypto-currencies and fiat currencies. It not only accelerates the transition from polluting fuels to clean and sustainable energy, but it provides the basis for a decentralized and more equitable local economy. As a non-dilutive and non-inflationary reserve currency with intrinsic value, it can become the basis for issuing local currencies through the Bancor Protocol. In order to enroll to produce or “mint” Swytch, every user must obtain an EU Data Regulation and KYC compliant identity credential and a “wallet” and container for their data. These credentials have the added benefit of giving citizens and civic identity and a token store that they can use to participate in the City Commons Protocol. Hence, in addition to providing requisite credentials for verifying the minting of Swytch, the Swytch platform can be used to generate access tokens of verified data to fuel City Scope and the adaptive modeling of alternative housing and mobility scenarios.
EVOLVABLE TOKEN COMMONS: TRUSTED MULTI-SECTOR HARMONIZATION
One of the pivotal differences between mechanical (free market) and evolvable Commons (adaptive control is that markets reward capture and concentration of value whereas an evolutionary models incentivize generation and propagation of value. The notion of “increasing returns,” first articulated by Brian Arthur of the Santa Fe Institute, argues that within digital networks, goods and services, are not rivalrous as the more they are shared, the greater their net value. In a Commons there is no need to offset the issuance of a token or currency against some form of debt instrument, as Commons tokens are not a rivalrous good. In other words, if there is socially recognized value creation, there is increasing returns for all. The supply of Commons tokens can be algorithmically governed to maintain a dynamic equilibrium of supply and saturation. Such an approach is impossible without full digitalization and evolvable algorithms.
10 MARKERS OF THE BIG SWYTCH
SWYTCH is a secure token for verifying the generation of sustainable energy to incentivize the spontaneous formation of open and decentralized global power infrastructures.
The SWYTCH mission is to accelerate decarbonization through a global transition from fossil fuels to renewables and to provide a decentralized, open and resilient commons infrastructure for the verified generation and exchange of tokens of value and trust.
WHAT IS A TOKEN?
“Take this as a token of our appreciation.” Something that is given to acknowledge the value of something that was freely given. A token is a unit of expression of value and a unit for the exchange of value. A digital token can be used to represent and exchange something of value between two or more parties. It is a marker of value that binds a relationship between two or more parties. This relationship can be formal – as in a contract – or informal as an implied obligation, a promise, or a gift. (read more)In most cases, a reciprocal and equivalent expression of value is expected, with the exception of a “gift”, which under many circumstances – but not all – is free from an expectation of reciprocity. An important aspect of a token is that it has “typing” in that it can be a “kind of thing” which determines how it behaves and is treated. Unlike typical “assets,” which though they may differ in type are all convertible to a common pricing mechanism, tokens may be nonfungible, that is nonconvertible into any fiat currency or even other token type. Hence, a token is a more general concept than a coin nor a specie, which are a form of authorized currency or money.
WHAT IS A TOKEN OF TRUST?
Tokens can be used to assert the provenance or authenticity of some attribute or assertion made about the bearer of the token. For example, there can be tokens asserting the age, residence, citizenship or educational credentials of a bearer. The trustworthiness or validity of those tokens depends upon the veracity of the credentials and the security of the processes that verify those assertions. If those tokens can be challenged and mathematically be shown to be complete, current and authentic, then they are trusted.
WHAT IS A TOKEN OF VALUE?
A token of value is a type of token that is minted whenever something of “value” is generated that has exchange value. The term “minted” is important in that implies that the type of value for the specific token can be verified by an independent and verifiable process. The more “foolproof” the minting process is, the more the provenance of the value of the token can be relied upon. The actual “value” of the token depends upon its use and exchange value for the holder or acquirer of that token. The value of a token can rise and fail depending upon its actual and perceived use value and its availability. The manner in which a value token is issued and redeemed naturally affects its value over time.
WHAT IS A COMMONS?
A Commons is a finite resource whose availability, quality and regeneration depends upon the collaborative behaviors of all those who benefit and contribute to it. Natural Commons, such as air, water, fisheries, forests, fauna and flora have evolved over millennia their own natural self-regulation and governance to sustain ranges of variation that foster life and diversity. Some traditional human societies have over time evolved norms and traditions for governing their common pool resources without depleting them, but for the most part, collective human behaviors have been destructive of the Commons resulting in planetary degradation, climate change and the Sixth Massive Extinction. (Read More)
WHAT DOES IT TAKE TO GOVERN A COMMONS?
No one can own a Commons. No one is “free” to exploit a Commons without limit. The rights of the individual are subordinate to the preservation and health of the Commons. The Commons is like treating a finite physical and biological resource as a living organism that can only regenerate and sustain itself if all its diverse components and members are in balance with one another. There can be no single point of control but only diverse points of control that dynamically adapt and adjust the behaviors of its diverse parts to preserve the integrity of each while preserving the integrity of the whole, the Commons. The Commons Protocol provides an evolvable and verifiable means for governing the Human Commons to avoid the Tragedy of the Commons. Elinor Ostrom, the only female Noble Laureate in Economics, was granted her prize for her eight principles on how to govern common pool resources.
WHY BEING DIGITAL IS HYPER TRANSFORMATIVE
We are in a new planetary era, rapidly evolving beyond the Anthropocene Era, where an entirely new digital sphere is emerging for the accelerated organization of life and matter. The virtualization of all aspects of human organization and the merging of the biological and the digital, and the incipient recognition of the realities of Quantum Physics has forever changed how see ourselves and our place in Nature. Invention and evolution are exponentially faster and friction free in the digital sphere, and it is as different from the biosphere as the biosphere is from the geosphere. For all extensive purposes, we are on a new planet.
WHY THE MATH MATTERS
Throughout human history one of the tragic constants of the human condition has been the failure to establish durable, trust worthy institutions. Civilizations rise and fall with predictable regularity as they succumb to the human need to control and subvert. Nowhere is this more apparent than the quest to find a universal asset of exchange value that is beyond human manipulation and upon which all humans can depend. Fiat currencies provide liquidity but are invariably subject to manipulation and abuse. Yet even gold is not up to the task as it has limited intrinsic value and supply, and is costly to transport.
As we transition to the digital sphere, societies need exchangeable, programmable, and verifiable tokens of value that can be neither controlled nor manipulated. Societies cannot trust what they cannot prove – unequivocally and openly. Math is the sole and intrinsically verifiable authority that cannot be manipulated nor subverted. A powerful sovereign or government cannot revoke nor subvert the principles of mathematics. It is an authority beyond ourselves – indeed, it is the operational equivalent of In God We Trust embossed upon US currencies. Hence, math combined with digital crypto-currencies provides a practical opportunity for providing something that has been missing throughout human history, a provable, incorruptible token of universal value exchange and trust.
John Henry Clippinger