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The REPDEV Network Eco Transformation Strategy

economics

(Michael Hrenka) #1

Note: This was originally published on 2015-05-30


This is the second post in the following series:

Presenting the REPDEV Network

In the last post I presented the main goals of the REPDEV Network. But how are those goals achieved? To answer this question, I propose a strategy for finally transforming the economic ecosystem and creating a flourishing reputation economy: The Eco Transformation Strategy. This strategy involves several overlapping phases:

  1. The theory phase
  2. The networking phase
  3. The software development phase
  4. The research and exploration phase
  5. The economic ecosystem phase.

Keep in mind that these phases actually do overlap and that multiple activities are pursued in parallel. What is different in each phase is the focus of activity. Also, please note that the Eco Transformation Strategy is the initial strategy pursued by the REPDEV Network. Like all strategies, it needs to evolve over time by adapting to the actual circumstances, and by being worked upon collaborative by the members of the REPDEV Network.

Phase 0: Theory Phase

There is a reason why this phase has the number 0: It has basically been completed by me having finished the second version of the Quantified Prestige documentation in 2012. Yes, that was three years ago! So, what happened in the meantime? Well, I tried turning my theoretical reputation economy system into a web application, but I had to fight two problems: The first, minor problem, was that I didn't have sufficient programming experience to pull that off easily. In theory, I could have solved that by learning how to program well by using all the learning resources out there. Unfortunately, the second problem was a real show-stopper at that time: I was suffering from ME/CFS, a still badly understood chronic disease that minimized my energy levels. Under those circumstances I couldn't finish my software project. And I decided that it was necessary to focus on regaining my health. Otherwise I wouldn't be to help a reputation economy based on Quantified Prestige come into being.

Now, I’m not really cured, but at least I have learned to manage that disease so well that it has been reduced to a rather moderate problem. So, what was the theory phase all about? In late 2011 I developed the first version of Quantified Prestige (which was called “Repo Fluido” back then). In 2012 I’ve released the second version of the documentation, which is still the current version, even though it has some minor insignificant mistakes that force readers to read carefully! :wink: I’m planning on releasing an improved third version of the QP documentation in July 2015. This third version will have some minor modifications which are mainly aimed at making it easier to turn QP into a working piece of software. There won’t be huge changes regarding the core theory (apart from the wording), because the second version is already sufficiently advanced when it comes to the theoretical basics of a reputation economy.

I haven’t spread the QP documentation widely during the previous years, because I was still quite anxious and energy deprived at that time – and because I was unsure about how to proceed with setting up a reputation economy. Only recently, I developed the Eco Transformation Strategy that presents a rather clear path towards a real reputation economy ecosystem.

Phase 1: Networking Phase

This is the current stage of the REPDEV Network Eco Transformation Strategy. It is the stage in which REPDEV really get set up as functioning network of people and organizations. The networking phase is all about creating awareness and recruiting supporters for REPDEV.

Creating awareness

Thus far, "reputation economy" hasn't been much more than fuzzy buzzword. People need to learn what it really means, and which promises lie behind a fully mature reputation economy. Awareness needs to be raised about:
  1. The concept of a reputation economy
  • The prospects of a reputation economy realized with Quantified Prestige or similar reputation systems
  • The REPDEV Network
  • The Eco Transformation Strategy
  • How the world would be better if there was a mature reputation economy ecosystem
  • How people can profit from a reputation economy personally

Once many people understand what’s really at stake here, they can be motivated to become active supporters for a broad reputation economy movement driven by the REPDEV Network.

Recruiting supporters for REPDEV

Of course, many people can achieve much more than few people – at least everything else being equal. The more supporters REPDEV has, the more the REPDEV Network is taken seriously, and the easier it will become to get more people and organizations on board. This is because the idea of a reputation economy hasn't caught very much publicity, yet. People won't join a network when they don't know what it's really about. Once the reputation economy idea has become popular, or even viral, many people and organizations will want to come on board; both because it's a cool idea that is worth working towards, and because it promises personal profits for those who develop or use it.

During the networking stage it is most important to spread the word. So, everyone can become a valuable supporter of the REPDEV Network simply by talking with others about REPDEV and the advantages of a reputation economy. No special skills are required for that, although the following skills and activities would be particularly valuable:

  1. Being able to develop a deep understanding of a possible reputation economy
  • Pitching the idea of a reputation economy to others (we need good “idea marketers”)
  • Reaching a wide audience and engaging with it actively
  • Explaining to others how a reputation economy works
  • Inspiring and motivating people to join the REPDEV Network

Phase 2: Software Development Phase

Hopefully soon after the initial networking phase, different teams will start developing software implementation of Quantified Prestige, and possibly similar reputation systems. For brevity's sake, I will refer to both options by "QP".

Now, why is there a need for different teams? Why wouldn’t one single team suffice for all matters QP software? Because QP needs to be everywhere, and not only in one single company, or on one single web platform. Remember: The goal of the REPDEV Network is to have a reputation economy ecosystem, not merely a monolithic reputation economy system. Ecosystems are much more robust than singular entities living within those systems. A flourishing reputation economy needs to be widely spread and robustly embedded within the global economy. There must not be a single point of failure that could be attacked or subverted. The reputation economy should remain highly functioning even in the case that some critical supporting organizations fail.

When it comes to developing QP software, the key question is “what kind of software?” The most important consideration is not what programming language it is programmed in, but what architecture it is based upon. There are three different basic architectures:

  1. QP as “reputation module” within other applications
  • QP as standalone application that is centralized
  • QP as decentralized application

Reputation module

There are many kinds of applications out there in which QP could be integrated to have an internal reputation system or an internal reputation economy:
  • Social networks
  • Community sites
  • Intranets
  • Online games
  • Virtual worlds
  • Blogs
  • Bulletin boards
  • Wikis

In all of those applications, people interact with each other on a regular basis and might profit significantly from having a possibility to see and influence the quantified reputation of other users. It wouldn’t be very hard to add QP as modules to such applications, because they already have the basic architecture to support peer to peer reputation networks.

The advantages of this approach would be quick development, and already having a relatively large user base. It’s good for experimenting with reputation systems and reputation economies on a small to medium scale.

An obvious disadvantage of QP merely being implemented as module is the dependence on the underlying software. Having a reputation economy that is restricted to one specific application is not the best idea. Sure, such “local” reputation economies could be a really good thing, but they can’t serve as true basis for a global reputation economy.

Centralized application

A centralized standalone QP application could enable a global reputation economy. Other application could interface with the central QP application, so that there could be one big reputation network that spans multiple sites and applications. It would have a central reputation database that could be used by anyone who has access to the application.

However, centralized applications come with serious problems. One major issue is that users would have to trust those who are in charge of the QP application. Even if that kind of trust is granted, it could easily be abused. The reputation system could be manipulated or hacked.

Nevertheless, centralized QP applications could be useful in cases where that trust is justified, or where proper functioning and integrity of the system can be enforced and verified.

Decentralized application

During the last years there was a boom of decentralized applications. Many of them are crypotocurrencies like Bitcoin, but there have been substantial efforts to develop decentralization technologies that allow much broader applications, most prominently Ethereum and SAFE Network. QP might be built on those decentralized app platforms, or it might run as some kind of standalone decentralized application.

Clear advantages of decentralized applications are that they are much harder to manipulate. They also cannot be easily controlled by one single malicious agent or group of agents. This enables a degree of security that is truly appropriate for economic applications.

Having multiple global decentralized reputation economy applications would be the final goal of the software development phase. At that stage, a supremely robust and flexible reputation economy ecosystem could flourish (see phase 4).

Phase 3: Research and Exploration Phase

Once the first QP applications are created and being actively used, the dynamics of those reputation systems could be explored. It will be the right time to apply science to it! Many researchers, for example economists, sociologists, and psychologists would have the opportunity to learn how humans actually behave in a reputation economy.

There are many places in which QP could be used on a more or less experimental basis:

  • Within innovative companies as supporting reward system
  • In academia as a peer-to-peer rating system of scientific publications and contributing scientists
  • As economic mechanism within massively multiplayer online games
  • In simulations of a real reputation economy, with AI based agents, or even with human participants
  • As replacement for simple karma systems in online communities
  • Within various organizations for granting reputation-dependent rights and privileges
  • As additional system for rating products on eCommerce platforms
  • And many more places in which advanced reputation systems could be real game changers

Some experiments will go wrong, and in those cases the system would have to be changed – or used in a different way. Ideally, the data of these experiments will be released out into the open, so that researchers can analyse it and draw their own conclusions. This experimentation and research phase will hopefully create greater media attention for QP, so that more REPDEV supporters are attracted, which could then help to accelerate the development of QP and its introduction into the economy.

The results of these research and development efforts would then trigger the next phase of the reputation economy:

Phase 4: Economic Ecosystem Phase

Before this stage, some minor reputation economies already exist, but they are not deeply interfaced with the "real" economy of goods, services, and money. Legal regulation will need to be developed in order to ensure the legal operation of the organizations carrying the reputation economy.

Several organizations may start focusing on the reputation economy entirely, using innovative business practises which were hardly possible in the previous economy:

For-reputation organizations

Once reputation incomes are established and sufficiently high, they may be able to sustain at least some small innovative organisations. These organisations could become "for-reputation organizations" that provide goods and services for free, or at least for very low prices, in order to gain a large amount of positive reputation, and solve certain problems that current organizations can't solve in an optimal way. Their positive reputation would then generate a reputation income that could sustain the organization on its own!

The more the reputation economy gains traction, the more organizations will be able to become at least partial for-reputation organizations. This will radically transform the dynamics of the economy:

  • Services and goods, especially digital goods, could be provided much more cheaply, while still having great quality
  • The quality of goods and services would increase, too, because only really good products can generate highly positive reputation
  • Organizations would become less corrupt, less criminal, and treat the environment and their employees better, because otherwise their reputation (incomes) would suffer severely
  • Cheaper products would increase consumer demand, and vitalize the economy
  • People could have more influence on how for-reputation organizations operate, even if they are not direct customers
  • Eventually, the economy would serve the people more directly, and for-reputation organizations could quickly and effectively solve problems that classical organizations are less able to deal with.

The rise of reputation currencies

In the first part of this series I presented the Fluido, a theoretical electronic currency generated by positive reputation. In general, there could be several such reputation currencies, which are electronic currencies generated by reputation. Would reputation currencies be more than mere token systems? Yes, because they are intimately coupled to an important indicator of value: Reputation. That makes them intrinsically more useful as indicator of value than regular currencies which have no intrinsic connection to actually relevant value! Also, reputation currencies could have all the basic advantages of advanced electronic currencies:
  • Minimal transaction fees
  • Very high transaction speeds
  • Debt-free money creation
  • Reliable cryptographic security

Additionally, reputation currencies would be democratic/meritocratic: The people decide who gets most of the reputation money for their efforts!

By design, Bitcoin has a simple mechanism against monetary inflation, but at the same time this simple mechanism will likely cause price deflation in the long run, because in a growing economy the fixed money supply would increase in value. In contrast, Fluido has a different, more sophisticated, mechanism against monetary inflation that at the same time avoids the pitfalls of price deflation by conditional reputation-dependent devaluation. Therefore, Fluido is a currency that would be quite suitable to be used in the actual economy, while Bitcoin is more like the equivalent to gold within the electronic currency ecosystem.

Finally, note that the Fluido is a continuous reputation currency that allows for continuous money transfers which would be much more practical to handle than discrete money transfers in which money is transferred all at once at once specific time!

So, reputation currencies like the Fluido can be very innovative forms on money that could supplant other forms of money over time. Eventually, nations might even adopt reputation currencies as official currencies, because of their superior properties.

Economic Ecosystem Transformation

With all of these innovations in place, with a multitude of for-reputation organizations, using different reputation currencies for customized purposes, the economic ecosystem is transformed completely. The old dynamics of the financial markets and doing business will be replaced by a much more directly democratic economy that rewards those who can maintain a positive reputation.

I’m not claiming that this will be a perfect economic system, but it will provide much more options and opportunities for everyone, and thus more freedom. A reputation economy ecosystem will have its own problems and pitfalls, but it will avoid many of the massive issues of our current economic paradigm. Higher levels of wider distributed prosperity are possible in a reputation economy ecosystem than in the centralized, restrictive, and crisis prone economy of today.

And in this new flourishing reputation economy ecosystem the role of the REPDEV Network will be to secure the basis of economic activity, and to help people and organizations to use the best tools and practices for taking advantage of the reputation economy.

Please read the final part of this blog post series: The REPDEV Network Operating System. It presents the highly innovative operating system of the REPDEV Network that should allow it to bootstrap its own growth and the deployment of a reputation economy ecosystem relatively quickly, while at the same time also rewarding its supporters in unprecedented ways.


What is the REPDEV Network?