Web Content and Currencies

January 8, 2010

Imagine that the process of creating a currency brand is analogous to establishing a blog or web page. In addition, issuing currency units or a budget is similar to putting content on the web page, and that using the currency or budget is similar to having that content read by someone else.

What if there is a requirement to have someone else approve your content before you could put it on your web page? This requirement presents a burden to the author’s provision of content, and is analogous to having an unnecessary approval process for issuing one’s own currency brand. The proper approach that we see on the web is to let anyone write what he or she wants, and others do not have to read or visit that web page. Similarly, let anyone issue their own currency – if you don’t believe in what that currency brand represents, don’t accept it. 

Additionally, the pre-approval requirement presents an unnecessary burden to the content reviewer as well. Let us say that I agreed to be the reviewer. Instead of worrying about the quality of my own content, I also have to worry about reviewing and approving someone else’s content. This concern is analogous to: Instead of worrying about my own budget, I also have to decide what someone else’s budget should be as it relates to me. Let each currency issuer worry about setting its own limits and others could decide on the acceptability of a currency brand later if it gets offered as payment.

What if there is a requirement that registration with a certain web page is necessary before you could read its contents? While this requirement is understandable in a social network context where privacy is an important issue, it does not make sense in requiring co-membership if the purpose of publishing a web page is to share information.

Such a mentality of restricted usability also does not make sense when it comes to currency and budgets, which should be used based on perceived needs and not on having preconceived agreements to share and use a particular currency with others. This flexibility and openness is an important aspect of entities that cater their products and services based on goals to serve the general public or market. For consumers, currency that is limited to a particular community leads to limited market access. For providers, limiting service to pre-specified beneficiaries implies a conscious decision to limit potential sources of revenue.

The mentality that is advocated in satconomy is to minimize the barrier for an entity to independently issue its own currency brand. Issuing currency should be as simple as issuing unused expense and revenue budgets.  A fledgling entity should not have to determine beforehand who is going to accept or reject its currency brand, but should work steadfastly to establish a good brand reputation and increase its likelihood of being accepted by other entities. If an entity’s currency brand is found acceptable as payment, its unused expense budget and the unused revenue budget of the other entity is reduced by the same amount.

Some of the implementation concerns involve the technology for providing reliable and auditable information related to currency brands. There should be accounting conventions when currency is issued as budgets – this concern is addressed by the ocaup accounting model. Payments should be facilitated between accounting systems of different entities – this concern is addressed through the evolving protocol that is now tentatively called Inter-entity Payment Protocol (IPP). Finally, just as a search engine helps a reader decide which web resource to visit, a currency brand index should also be available to help entities decide whether to accept or reject another entity’s currency brand. The hope is that, just as there has been an explosion in the number of web resources due to the ease in which web pages, blogs and profiles are set up, there would also be a surge in the number of independent currency brands that are established using easy to use accounting software, uniform payment protocols and effective currency brand indexes.

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Posted by Edgar

Information Driven Market Ecology

July 22, 2008

A market entity may be viewed as a species that performs a ‘niche’ role in an ecological system. So, for example, a farmer cooperative perfoms the role of food producer, while a clinic or hospital seeks to address the market’s health-related needs. Since each market entity has a particular niche or specialization, it is only reasonable to expect that none could become completely self-sufficient since, in this scenario, everyone is only able to concentrate on addressing a limited set of human, social or market need. In short, the general goal of a market entity is not self-sufficiency within itself and exclusive of others. Rather, an entity seeks to cultivate a self-sufficient market by contributing to the diversity of product choices in it and by influencing how resources are used for the production of ‘desirable’ products.

Of course, no one can summarily dictate what products are to be offered by market entities, or which products are desirable for whom. It is simply hoped that goods and services would naturally be produced by entities who see a need for them, and market participants would self-determine those products that they need and the choices that they prefer. It would seem that this expectation could lead to resource exploitation and unmet needs, and there might even be support for that viewpoint with the current state of market economies where, for example, one person could live in a 40 bedroom estate while hundreds are homeless on the streets.

However, the satconomy market framework is designed to offer active feedback to a market entity through the acceptance or rejection of its currency brand by other entities. This is different than current market situations where sellers blindly accept ‘generic’ currency regardless of how that money was earned. In satconomy, currency is traceable to a specific market entity and its activities. If market sellers are not willing to accept an entity’s currency brand due to its reputation, members of that entity are likely to run out of product choices, and without employees or members, that entity is destined to failure or extinction. Therefore, each and every entity in a satconomy framework is expected to actively regulate itself against public opinion in order to promote and maintain its market reputation. Please note that there is a similarity between this expected form of self-regulation and the current stock-price-oriented management of a publicly owned company.

In order for this feedback regulation in satconomy to work as expected, market participants must have reliable access to timely and accurate information that they could use to evaluate whether or not to accept someone’s currency brand. Even now, companies regularly update investors with financial results and ‘stewardship’ performance. Market entity information is also currently available as a constant ticker of stock symbols and price fluctuations. All that needs to happen in order to implement satconomy on a wider scale is to adapt existing information technology to serve the need for performing currency brand evaluation. I am not implying that it will be easy, only emphasizing that all of the ingredients are already available – we just need cooks in the kitchen. Or, perhaps more appropriate in the current analogy, new entity species simply need to evolve and take on a niche in this market ecology – its easier to establish a new currency brand before more competition arrives.

Leave a Comment » | Analogies, Brand Evaluation, Implementation, Self-Regulation | Permalink
Posted by Edgar

Implementation Analogies: Boundaries, Bridges and Towers

December 3, 2007

To illustrate the overall implementation strategy in satconomy, it is worth comparing and contrasting it with the strategies that could be inferred from mutual credit and Ripple currency systems.

The implementation strategy in mutual credit currencies might be likened to building boundaries. Members are allowed inside the boundary and could trade with one another, while non-members are invited to join this mutually beneficial community relationship where the currency stays within common boundaries. Satconomy is not concerned with erecting community boundaries where the members trade with one another. Rather, satconomy promotes the creation of entity boundaries where members work with one another to provide products to the market in general. Entity-issued credits and products, rather than being restricted from flowing outside each entity’s ‘boundaries’, are meant to flow between entities in open market transactions.

The implementation strategy in Ripple might be likened to building bridges between nodes or islands of market participants. The unique payment routing feature in Ripple is intentionally restrictive in that only the directly connected participants are allowed to cross the bridge between them. If participant A does not have a direct bridge to the island of participant C, but B has direct but separate bridges to both A and C, then Ripple enables a transaction by requiring an IOU to ‘cross’ from A to B and a separate IOU to ‘cross’ from B to C. In this sense, B acts as an indirect relay person that converts the payment between A and C. Participant A’s payment does not reach C directly. In satconomy, there is always a direct payment between market transactors, causing the immediate cancellation of credits and debits between the involved entities. In contrast to how Ripple offers a manual settlement option for the cancellation of credit-debits pairs after a market transaction, satconomy requires an automatic cancellation-settlement of credit-debit pairs at the completion of the transaction itself.

The implementation strategy in satconomy might be likened to building towers, through which market participants could assess the value that each entity brings to the market. If an entity is deemed to provide benefit to the market, then the currency brand that it issues would be perceived as acceptable in a transaction. If the news or perspective from the ‘tower’ is not favorable towards a certain entity, then its currency brand would also lose favor in the market. In an effective implementation of satconomy, this metaphorical ‘tower’ facilitates access to highly transparent, up-to-date and verifiable information about market activities, entity account reports and analyst opinions.

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Posted by Edgar

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