incentive-based dividend network with secondary applications
by Johan Nygren, @resilience_me
Resilience, as I call my technology, is something new. There are no metaphors for it. It´s part welfare system, part co-operative dividends. Part state and part market. It blends those two narratives together, and obsoletes the dichotomy between the market and the state. Think of it as a decentralised, free market, welfare system.
Co-operatives that provide dividends for their costumers have been around forever, in one form or another. When the Swedish Co-operative KF was at its peak in the 1960s, it held as much as 25 percent of the entire Swedish market (1). The co-operative business model has been proven successful. RESILIENCE is a new web-standard for dividend co-operatives like KF. These co-operatives still use 20th century technology, and RESILIENCE attempts to bring co-operative businesses into the 21st century and the digital age.
The RESILIENCE protocol hopes to establish a new standard for co-operative dividend networks much in the same way that the Ripple protocol has established a new standard for value exchange. The RESILIENCE protocol evolves the co-operative model, and hopes to establish a form of dividend network 2.0, that would provide all its members with a steady stream of income. This network would scale to the entire human population.
Dividend co-operatives in the 20th century
"The dividend scheme makes it more advantageous to be a loyal Coop member. As more people realize the economic benefits, the idea is that more people will become members, more people will shop at Coop and that casual customers will transform into regulars and consolidate their purchases to Coop. This will make Coop more profitable, making it possible to further improve the stores and offers to members. "
-@CoopSverige, In Brief, 2010
"The idea of co-operative trading revolutionised food retailing with the dividend, often known as "divi", and the "divi number" became a part of British life. The way in which co-operative retail societies are run for the benefit, and on behalf of their members sets them apart from their modern-day competitors. The dividend is a financial reward to members based on each member's level of trade with the society. The distribution of profits on the basis of turnover rather than capital invested is a fundamental difference between a co-operative and most private sector enterprises."
-The Co-operative Group, Wikipedia
"Cooperative businesses may retain their earnings, or distribute part or all of them as dividends to their members."
Bitnation and Decentralised Autonomous Organisations (DAOs)
RESILIENCE is an internet-protocol for an incentive-based peer-to-peer dividend network. This dividend network could potentially scale to the entire human population, and would support each human with a steady stream of income, in proportion to each humans unique interactions with co-operatives around the world.
RESILIENCE also has potential as an alternative to nation-state-based coercive taxation. The dividends could replace parts of traditional social security, and RESILIENCE also provides a framework for secondary applications, social services such as minimum guaranteed income, healthcare and schools.
The RESILIENCE protocol
*RESILIENCE is the standardized dividend framework that the Bitnation DApp Basicincome.co is built on
*the videos in this paper are concept-videos for the RESILIENCE application Basicincome.co
The core components of RESILIENCE are the dividend pathways that grow the network, and the incentive layer that replaces coercive force.
Peer-to-peer dividend pathways and the mycelial archetype
Every time you make a transaction with someone else inside the network, you create a dividend pathway. This pathway then connects you to that node, and also to everyone who´s connected to that node, and so on.
These pathways create the basic architecture of the network. Through them, you connect to your own unique network, that potentially scales and interconnects with a much waster network. These pathways are similar to memetic pathways that convey the spread of Ideas.
The internet as a metaphor
The TCP/IP protocols of the internet have transformed the way we communicate. Information used to travel through a centralised network. We had to send our messages through a voice that could be heard, like the jungle drum, or the national media outlet. Social media has transformed that, and we now communicate pretty much peer-to-peer, and Ideas spread through a distributed network (c) rather than a centralised one (a)
The co-operative dividend-model has been designed for 20th century technology, and dividends are still shared based on a centralised design (a). The RESILIENCE protocol does for the co-operative model what social media did for communication, it brings it into the 21st century and the peer-to-peer model (c).
Using memetic pathways and biology as a metaphor for dividend pathways
The way content spread on the internet is through peer-to-peer pathways. You might follow an individual who´s caught up in broadcasting content that inspires you, and that individual is in turn following a network of people who inspire him or her. Through each new connection you make, you connect to a much wider web of Ideas and Story. Every new relationship you create connects you not only to that person, but to the friends of that person. In F2F (friend-2-friend) theory as well as memetics, the concept 'your friends are my friends' applies. Through your new friend, you receive not only his or her Ideas, but also Ideas that he or she has received through his or her friends. Every new relationship you create opens up connections to a network that extends beyond your friend.
Your attention shifts as your life unfolds. People and Memes that you have followed in the past will gradually fade and wither, to be replaced by new connections and new webs of Ideas. These memetic pathways are always changing as your life unfolds, and this pattern applies to many organic systems.
“In my Basic Income #DApp, your safety net emerges from the sum of your financial interactions, allowing you to live and evolve as a global and mobile citizen. Basicincome.co transforms the stage upon which we unfold.”
*Basicincome.co is an application that runs on top of the RESILIENCE protocol
A living digital network
These pathways are organic in the sense that they grow and wither naturally. Pathways you create are not static, they emerge and they disappear. If you create a pathway to a new node, at say $100, then you´ll receive $100 via that pathway and then it fades.
Think about organic systems, think about your own nervous system, think about mycelia and think about any self-organizing living system. These pathways behave like that system, you might grow thousands of pathways in one place, like if you live in Sweden, and then if you move somewhere else, you´ll create new pathways while your old ones gradually fade.
The Incentive Layer
Attraction by incentive rather than coercive force (Incentive-centered design protocol)
The incentive layer that RESILIENCE uses is simple, yet powerful: if a person or corporation consumes from someone outside the network, they get disconnected. Only temporarily. If they buy for $100 from someone outside the network, they get disconnected for the duration it takes for $100 in dividends to flow through them.
This is very meta and recursive because if a node gets disconnected, all their consumers also get disconnected, and so on. Which means that staying connected will make a node extremely attractive to others who want to stay connected.
Decentralized taxRate governance (every node sets their own taxRate)
The incentive-structure enables a peer-to-peer governance method were each node sets their own taxRate. Using the same logic as the incentive layer, a node who consumes from a node that uses a certain taxRate is then locked to that taxRate for the next x-$ she receives. This creates the same sort of meta-ripple effect, where nodes who set high percentages will be attractive. Using @CoopSverige as an example, if @CoopSverige becomes so successful that other food-stores have to join RESILIENCE to compete, then @CoopSverige might increase their dividends, to maintain a competitive edge.
Works with any currency
Think Ripple, Bitcoin, Ethereum - any platform that has an open API can be connected to RESILIENCE.
The early versions will connect to currencies through a bit of a hack, reading ledgers, calculating pathways and dividends, and then relay that data to the users who sign payments, manually or through a client that automates the process.
Future versions will be more optimized, similar to how Ethereum attempts to optimize many computational processes that underlie basic transactions.
The idea behind resilience is to empower co-operatives who have a social conscience, and to give them a tool that they can use to support their community. RESILIENCE is a framework through which they can go beyond the limitations of the current model.
The question is really if there are enough co-operatives out there who would be interested in this, and I believe the answer is yes. Humans are wonderful, altruistic, and kind hearted.
RESILIENCE also provides a framework for secondary applications, through which the users can choose to donate part of their dividends to different causes. The idea here is that if corporations find it in themselves to support their community, then perhaps the members of the community will find it in themselves to support the less fortunate, or to support community services such as a minimum guaranteed income, schools, and healthcare.
"prompted by the Cooperative Societies Law which requires cooperatives to allocate a portion of the dividend for common welfare purposes such as public health"
Grassroots Social Security in Asia: Mutual Aid, Microinsurance and Social, 2011
Donation-based social service applications on top of the RESILIENCE protocol
The incentive to pay tax to RESILIENCE is very different than traditional coercive-force-based incentives. RESILIENCE has potential to create a global scale dividend network through completely voluntary means.
RESILIENCE also has potential as a platform for secondary applications. The dividend-revenue that passes through the network might be made accessible to secondary applications. There might be a lower threshold for a person to choose to give away part of his dividends through voluntary means, then for that person to choose to give away his earnings. The dividends might be perceived as a form of reward, and the threshold to choose to give part of them to social services such as schools, healthcare or unconditional basic income (UBI) might be lower than the threshold to, voluntarily, pay taxes to those services directly. The dividends network also serves as a sort of map. The dividend pathways are unique in that they very closely resembles the real human interactions that underlie them. The interactions between people and their technology and surrounding environment, that are played out in real time, are mirrored almost perfectly.
Your dividend pathways would be a form of map of your life playing out, and who and whom you shared your unfolding with. Any persons dividend pathways are an accurate representation of their social relationships, and any person might have dividend pathways that stretch all over the world. Each of these pathways tough exist in financial proximity to a network of its own. For example, if you live for just a short time in India, and create $2000 in dividend pathways, then these $2000 might be taxed as you receive your dividends through them.
If the RESILIENCE protocol works, it might be the ideal platform to use as for donating to social service applications. It would have a dedicated user-base that have joined through personal incentives, it would interface every financial platform online, and it would be built on a database that stores an (ever evolving) map over the state of the world.
Basicincome.co - basic income through donated dividends
Basicincome.co is an application that runs on top of the RESILIENCE protocol. Users within the RESILIENCE framework may choose to share their dividends with those in financial proximity to their dividend pathways. You would only donate to those who could be seen as part of your society, those who you have shared a financial and social proximity to.
Through connecting Basicincome.co as an application, your dividend pathways would be made accessible to the application, and parts of your dividends would be used to fund an UBI for those in financial proximity to your pathways. Users who use Basicincome.co to receive UBI 'reach out' to dividend pathways that they are inter-connected and enmeshed with, and receive a boost so that their dividend yield reaches the amount that Basicincome.co has computed would cover basic needs.
Conclusion: How to Create Resilience
There needs to be more interviews in general because it will help people understand the project but at the same time a use case will help as well. All of these similar innovations go through this sort of phase where people don't know what to make of it. Bitcoin went through that phase too.
Lastly, here´s a message from Jason Silva. Jason has made it his mission to popularise the most mind-expanding Ideas on the internet. He´s made a name for himself from the medium that he and NotThisBody, a media-duo that described their work as digital parkour, invented together. His shots of awe are an evolution of Timothy Leary´s early attempts at broadcasting Ideas trough increased immersion and sen-surround. He´s a modern-day philosopher who - like philosophers of the past - spreads Ideas through the most immersive mediums he can find.
Here´s how Ideas spread,
1. The Cooperative Business Movement, 1950 to the Present, page 244
Incentive-Centered Design for Information Security