Blockchain for Global Inclusion: Enablement or Precarization?

Overall we expect that the benefits will outweigh the costs of blockchain distributed ledgers. (A blockchain (distributed ledger) is an accounting ledger (an account of who owns what) running on a distributed network, operated by cryptographic protocols, without any centralized control.) However, we should design this new class of information technology being mindful of both sides of the equation and address identifiable risks to the extent possible ahead of time. Here are some possible risks and benefits when considering blockchains for global inclusion, and the enablement or precarization that might result.

Benefits of Distributed Ledgers
Distributed ledgers could be the next important leapfrog technology for enabling human potential. Blockchains might be used to deliver peer-based services that support financial inclusion, identity-credentialing, and health inclusion. 

Globally, there are

• 2 billion under-banked (PWC, 2016) 
• 1.1 billion without an officially-recognized identity (UN, 2017)
• 70% of the world lacks access to land registries (Heider and Connelly, 2016)
• 400 million without access to essential health services (World Bank, 2015) 

It does not make sense to build out brick-and-mortar bank branches and medical clinics to every last mile in a world of digital services. Instead, eWallet banking, identity credentials, property registries and deep learning medical diagnostic apps might be used to deliver these services.

Risks of Distributed Ledgers
On the other hand, one risk of global blockchain services is that perhaps liberty is diminished if all persons worldwide are explicitly or implicitly forced to join blockchain systems. Precarization may be heightened if everyone must join the global labor market, if that means that one is subject to a constant sense of be measured and controlled by computational algorithms over which one has no control. Individuals are marketized, financialized, and precaritized.

Is a blockchain just a worse version of a FICO credit score? A blackbox over which one has no control? 

The risk would be losing the plethora of diversity in value systems, ways of solving problems, and orchestrating our daily lives if we are all subject to monolithic blockchain systems that do not support this diversity. Another risk is that economically, with blockchains more tightly integrating the economic sector, risk may become even more concentrated that it already is. At worst, distributed ledgers operated by algorithmic smart contracts might essentially turn the global economy into one giant HFT (high-frequency trading) vehicle, where there would not be any form of uncorrelated risk.

References

• Heider, Caroline, and Connelly, April. 2016. Why Land Administration Matters for Development. https://ieg.worldbankgroup.org/blog/why-land-administration-matters-development 
• Pricewaterhouse Coopers. 2016. The un(der)banked is FinTech's largest opportunity. DeNovo Q2 2016 FinTech ReCap and Funding ReView. https://www.strategyand.pwc.com/media/file/DeNovo-Quarterly-Q2-2016.pdf
• UN. 2017. http://id2020.org/ 
• World Bank. 2015. http://www.who.int/mediacentre/news/releases/2015/uhc-report/en/

PSD2 Open Banking Initiative and Blockchain Economics

Compulsory upcoming implementations of the European Union’s Revised Directive on Payment Services (PSD2) supporting the Single Euro Payments Area (SEPA) could spur blockchain adoption for two reasons. First, the shared ledger technology provided by blockchain is a crucial underlying functionality for real-time payments. Second, blockchains offer not only real-time payment capability, but also identity confirmation, so that risk management and fraud prevention may be improved for banks.

The objectives of PSD2 dovetail nicely with the capabilities of blockchain. One of the most obvious kinds of functionality to facilitate real-time payments is having a shared ledger of account balances. User identity and balances are confirmed and known in banking blockchains, and reside in a secure and immutable ledger waiting for upcoming transactions. Blockchains render the preliminary validating phase already complete, and therefore qualifying transfers can be executed automatically. Blockchain is the perfect infrastructure for real-time payments.

Regarding blockchain innovation and the development of new payment processes and systems, one implication of the PSD2 requirement for banks to open up their APIs to third parties is that the payments business could become more like a utility. On one hand, this could have banks scrambling to focus on higher margin customers and services. On the other hand, the technically-savvy might see PSD2 as a means of reaching new markets with technology-based solutions. The economic structure is different with blockchain in that the cost of offering services is reduced, while security is improved at the same time through blockchain-based identity confirmation. Banks could use low-cost eWallet solutions to offer light banking services on-demand to customer tiers that were previously unattractive from a credit and margin perspective. Lightweight banking services delivered by eWallet could be the analog to prepay phone services. A surprise benefit of PSD2 could be supporting financial inclusion as a policy result.

One effect of PSD2 is inviting agile fintech companies into the market. These vendors are well-versed in contemporary fintech solutions using Ripple and blockchain-based digital ledgers. This is important because it is not clear that more established payments systems such as SWIFT have the infrastructure to support real-time payments initiatives, despite their efforts to consider blockchain technology as a front-end overlay.

Digital ledger technology like blockchain facilitates payment and also compliance. Future payments regulation such as PSD3 could almost require the technical capabilities afforded by digital ledgers. For endusers, payment services could be more seamless than cash. A further effect of rethinking payments with blockchain could be rethinking other monolithic financial models such as how debt, loans, and capital are structured.

Status of Blockchain Adoption
PSD2 underlines that the industry is becoming more of an institutional investor and enterprise software market. The big source of investment in the sector is existing financial and governmental institutions who are developing private blockchains (where user identity is known and approved with KYC/AML practices; like a VPN).

Private enterprise blockchains could serve as a counterweight to worries about money laundering and other illegal uses of public blockchains. It is not that public blockchains should be banned or heavily regulated. Digital ledgers should be recognized as a new and complex digital venue where illegal activities may be taking place alongside bonafide activities, such that regulatory agencies are called upon to become savvy about the risks presented by the new technology and operate within this domain (anonymity does not mean lack of forensics). This is a small detail against enterprise blockchains as the bigger trend in the digital ledger space at present.

Blockchain Fintech: Programmable Risk and Securities as a Service

Access instead of Ownership
One of the most radical and potentially disruptive ideas for the near-term blockchain financial services market is Securities as a Service. Consider the music industry, where in the past, it was quite normal to purchase and own records and CDs, but now music is often accessed through digital media services like Spotify. There is access to music, but not much thought of ownership. “Listening to music” is the consumable asset, which is priced per network models for its access and consumption. Autos are in the middle of a similar transition now, where the asset “transportation” may be more readily fulfilled by services such as Uber, including by autonomously-driven vehicles. In the future, securities and other hard assets could be similarly presented to the market as a service. Securities could be the kind of asset where the “access to the benefit provide by the asset” is the consumable good, not the ownership of the asset. Financial services could thus have a shift from transaction-based pricing to services, as has been the case in other industries. The key point is focusing on the economic conditions under which securities as a service would start to make sense. The only reason securities ownership is required now is because the future value of assets is highly uncertain. The only way to feel comfortable about the future value of assets is by owning them. However, if the future value of assets were more assured, or really the access to the benefits conferred by assets were assured, then ownership might be obviated, and the benefits of securities ownership could be delivered as a service.

Future of Finance: Decentralized Blockchain Smartnetworks
One of the deeper philosophical implications behind the fintech innovation of blockchain is that all economic and financial concepts might be questioned and rethought. This includes risk, value, uncertainty, probability, resources, assets, liabilities, interest, time, transaction, and exchange. The current economic and financial systems are just one way that we have thought about organizing access to resources, and responding to the assumed problem of the protection of the future value of assets, but there could be others, including those that are non-hierarchical and decentralized. One salient question is what risk might mean in decentralized financial networks. The idea that risk would somehow become decentralized too (i.e.; more manageable and predictable, and possibly even decreased or evaporated) since assets can be settled instantaneously via blockchain, is perhaps facile. It is more likely that risk is shifted to other dimensions that need to be articulated. The notion of risk needs to be rethought in a different conceptualization that involves network ecologies. Risk is just one effect of decentralized networks. Other parts of the overall financial services structure are changing too, and also mindset paradigms. There are already some key mindset shifts starting to occur at the systemic level to support a transition to decentralized networks. In economics, these include shifting from labor to fulfillment as the object of productive activity in the economy, scarcity to abundance, and centralization to decentralized network models. In finance, these include moving from ownership to access, point values to topological ranges, and insufficiency to assurity.

Rethinking Risk: Greater Correlation in Blockchain Financial Markets?
One of the key risks of blockchain technology that is not yet being discussed is the implications for systemic risk. With blockchain making the financial sector more tightly integrated, markets and trading instruments might be even more correlated than they already are. The fear is that at worst, it could be that distributed ledgers operated by algorithmic smart contracts could essentially turn the market into one giant HFT (high-frequency trading) vehicle. Already, without current fintech advances, black swan events in markets indicate that what might seem to be diversified portfolios are not, and that regional markets, asset classes, and time frames are much more correlated than imagined. Systems-level complexity simulations of market behavior would be useful. One perspective is that more tightly-correlated financial markets could be seen as progress. As finance moves into the automation economy as itself an automated operation of efficiency, it could behave more like a utility than a margin-rich business. This could trigger significant disruption in the structure of financial and investment services industries. This would be fine if overall risk were also declining, but corresponding steps to reduce global risk such as orchestrating an orderly transition to the automation economy do not seem to be contemplated.

Very-large Potential Impact of Blockchain Fintech
Decentralized networks like the Internet have been one of the most powerful technological arrivals in the contemporary era. Whereas the first phase of the Internet allowed the transfer of information, the next phase focuses on the secure transfer of value such as money, property, securities, and hard assets, particularly via blockchain technology. Blockchain’s secure value transfer functionality provides a significant opportunity to transform some of the last remaining sectors not yet re-engineered for the Internet era such as economics and finance. The status of blockchain fintech adoption is companies re-inventing the financial services value chain around money and data transaction touchpoints. Any organization conducts operations in a network of money, information, and data coupling points, mostly in repetitive processes. There are two levels to business processes: 1) decision-making and 2) execution and administration, the latter of which might be securely automated with blockchain-based smart contracts. Currently, the most successful financial industry implementations of blockchain fintech are those companies who are already addressing how to fundamentally re-engineer their business models for new opportunity, not merely update their operations for efficiency. In a blockchain economy, financial asset-related (and indeed all) value chains could become increasingly streamlined and automated, obsoleting many current intermediary functions such as custody, titling, and insurance. These functions could be replaced by algorithms and smart contracts. Companies across the financial landscape are realizing that blockchain is not a separate industry as much as a new underlying technology with applications in every sector. Internally, this can mean applications for cost-savings, for example in quality assurance, test, audit, compliance, sales quoting, finance, treasury, accounting, and expense management. Externally, developing a leadership edge can include offering blockchain-based services to clients, and leading industry-wide blockchain initiatives for digital value transfer across the network value chain.

Singularity Global Summit Slides: Blockchain Smartnetworks: The Future of Finance and the Automation Economy

Melanie Swan is speaking at the Economist’s Disrupt Finance conference in New York on October 13, 2016. She is a philosopher and economic theorist at the New School for Social Research in New York, and committed to the beneficial use of technology for global impact. She has an MBA in Finance from the Wharton School of the University of Pennsylvania, and is the author of the best-selling book: Blockchain: Blueprint for a New Economy.

Defining the Blockchain Economy: What is Decentralized Finance?

The aim of this article is to explore the intersection of blockchain technology and finance from a practical, theoretical, and conceptual standpoint.

1. Practical Blockchain Finance
Financial services is one of the last sectors of the economy to become modernized by the Internet and the possibilities of digitalization. Broadly, the first main phase of the Internet can be seen as enabling the transfer of information. However, additional features are necessary in economics and finance for the secure transfer of value, and to avoid the double-spend problem. Whereas it is possible to make an arbitrary number of copies of a digital file sent in email for example, money should only be spent once. Now in what could be the second major phase of the Internet, blockchains have arisen as a crucial enabling technology to allow the secure transfer of value, and thus for economics and finance to uplift into the modern Internet era. This could be a rapid move given the computational and infrastructural network resources already in place.

Blockchains allow the digital payments layer the Internet never had, and more broadly contemplate an era whereby all forms of secure value transfer could take place via the Internet. This could include all monetary assets (the cash or spot market), and all assets and liabilities over any future time frame (the futures and options market, mortgages, debt and equity securities, treasury issuance, and public debt). The implication is that there could be a digital future of cryptographically-activated assets and actions, where 1) all physical and intellectual property might be registered and transacted via blockchains as smart property, and 2) all agreements, contractual relationships, societal record-keeping, and governance might be enacted through code-based smart contracts. For maximum resiliency and adoption accustomation, the two systems would likely run in parallel until there was gradually enough comfort in the digital system to drop the analog system.

Global financial institutions are rapidly adopting the single-ledger technology of blockchains, which is essentially, having one database of securities transactions instead of many proprietary versions that need to be reconciled. The benefit is that the time to clear securities transactions may be reduced significantly from days to hours, which confers a tremendous decrease in risk and cost from the time savings. These cost savings could be passed on to the customers of securities trades. The need for independent custody functions and other costly aspects of the securities value chain could also be greatly reduced in having a single asset registry of securities, including because ownership can exist in an open and readily-confirmable mode as opposed to having to be researched and verified in every transaction.

Crypto-synecdoche
A valuable property of blockchains for the digital automation economy is synecdoche (where a part represents a whole). Blockchains simultaneously connect many layers or levels of detail in that in the connected database tree, any one items calls or refers to all other levels, so it is easily possible to drill up and down levels of detail. For example, with a hard-currency dollar bill, there may be twenty levels of aggregation upstream from the actual unit of the bill, all of which could be rolled up at the click of a mouse. Another case of the crypto-synecdoche property in action is in the idea of hospital inventories (including controlled-substance pharmaceuticals) instantiated as blockchain-based smart property, where a hospital, county, state, or nation’s inventory could be viewed at any instant. The crypto-synecdoche property could be used to roll up the whole of an economy for an on-demand real-time assessment (essentially automating NBER). As in all industries, in finance too, blockchains are a next-generation technology that enables the secure, trackable, automated coordination of large-scale projects with arbitrarily-many detailed items.

Blockchains, HFT, and Smartnetwork Automatic Markets
Beyond digitalizing money, payments, economics, and finance, blockchains are a next-generation information technology and a new form of general computational substrate. Blockchains solve a long-standing computing challenge called the Byzantine General’s Problem, which entails how to securely update far-flung nodes in a distributed computing network. The issue is knowing whether Byzantine generals out in the field are defecting and colluding, or remaining loyal and fighting; i.e.; how to determine if network nodes have become befouled. By enforcing integrity and security in distributed computing, blockchains dramatically extend the scale and scope of what might be possible in networks into a whole new tier. HFT (high-frequency trading) is already one of the most automated computational network activities, and could become even more so if instantiated in blockchain-based smart contract DACs (distributed autonomous corporations (i.e.; packages of smart contracts)). A heightened speed-up in concentration, processing power, and returns in HFT might be available in the short-term (until extirpated). The bigger point is that more of our human activity and patterns might be instantiated in smart contract DACs that look like HFT financial instruments (not in the sense of securities requiring regulation, but in the sense of automated pricing and execution behavior). Real-time bidding networks for advertising are already a kind of financial instrument in this sense, and more human-intervened processes could be implemented in the automatic markets format. Energy, logistics, fulfillment, and transportation (autonomous driving Uber-nets) could all be automatically orchestrated by tradenets and smart contract DACs, unobtrusive and backgrounded to the consumer. Pricing as an external heuristic (currently assessed and imposed by human agents) is no longer needed to price the resource in smartnetworks because the most effective pricing is when the resource prices itself. In this fit-ordered model, the underlying resource determines its own real-time minute-to-minute value, prices itself as a smart resource on a smartnetwork, and might enter into future contracts for its availability too.

2. Theoretical Blockchain Finance
As economics has been traditionally conceived with scarcity as its basis (the production and consumption of scarce resources), so too has finance been conceived as the control or prediction of the future value of assets and liabilities. However, the scarcity view of economics no longer holds in an era of digital services, non-rival goods, and complementarity. Likewise, the controlled future value of assets view of finance also no longer holds in an era where all of the variables concerning assets, capital, and investment might be changing. In economics, three crucial mindset shifts are moving from scarcity to abundance, labor to fulfillment, and hierarchy to decentralization. In finance, three similar mindset shifts could be moving from ownership to access, point values to topological ranges, and insufficiency to assurity (cognitive easing). Already there are indications that a significant transformation to autonomous driving might be underway, turning transportation into a fungible on-demand resource with a focus on access as opposed to ownership. Cars could become like air, a resource that one does not generally (on terrestrial Earth) have to think about owning, or expounding cognitive effort towards its ongoing attainment. Other examples in the emergence of the blockchain economy include the centralized version moving to the decentralized alternative: OpenBazaar to eBay, datt.co to Reddit, and LaZooz to Uber. Many decentralized versions have been conceptualized, even if they are not yet fully available.

Kickstarter, Crowdfunding, and Ambient Finance
One of the most rooted assumptions in economics is that any large-scale project requires financing, which would necessarily be in the form of debt capital. There is really just one mode of undertaking large-scale projects now, and that is to raise a chunk of capital that is spent down over time. This is a tremendously inefficient process at every step of the value chain, but there has been no viable alternative so far. The inefficiency of capital is highly visible in the case of startups (in the recent failures of Clinkle and Color). Institutional capital in public and corporate projects likely has greater inefficiency, and much less transparency, particularly regarding the degree of corrupt appropriations.

Now available: Configurable Smartmoney 
The immediate benefit of blockchains is that they have the capacity to bring greater transparency, accountability, and monitoring to the effective use of capital. The more profound contribution of blockchains is that they invite a new class of thinking about all financial matters including capital. Currently, there is just one mode of capital-raising for projects and it is narrowband; the “big chunk of capital” method. Other methods such as pledged capital calls have traditionally failed because monies are not escrowed and thus unavailable when needed. Blockchain-based smart contracts can change all of this, and vastly open up the range and type of financing choices that might be available. At minimum, pledges can be confirmed and escrowed. At a higher level of resolution, a whole new mode of finance might be implemented whereby capital is an available on-demand resource disbursed continuously in real-time per the assessed level needed. This more ambient version of capital as a resource can fluctuate with greater correspondence to objectively-determined and objectively-monitored underlying project needs.

Capital budgeting becomes an on-demand resource assignation process like just-in-time inventories or Uber rides. 

As smart resources automatically price themselves on smartnetworks, so too could smart contracts automatically call from escrowed pledges and “drip” capital into projects as needed. Some of the technical modes of effectuating this are Ricardian contracts and Hash Time-Locked Contracts (such as on the Lightning payment network); essentially ways to escrow-pledge capital and secure bi-directional payment channels without cheating.

Long-tail Economics and Ambient Capital
Kickstarter and the legalization of crowdfunding have already been a shift towards alternative more resilient network models of ambient finance. The greater effect of blockchains is that we might now have additional trustable cryptographic methods to administer capital commitment calls in greater correspondence, ambience, and monitoring with the underlying project needs. Most essentially, finance concerns credit, and credit concerns trust. With the creation of algorithmic trust and other blockchain-type mechanisms, the possibility is that the long-tail of economics and finance can meet. Like eBay for investors and projects, any two long-tail parties can meet and transact in a secure blockchain-based environment without having to know each other. The effect could be that many more projects and micro-starter projects might be able to receive the funding needed to advance. In the abundance economy of the future, credit to explore one's project ideas could come to be seen as a basic human right, in a sort of singularity-class financial inclusion operation of blockchains.

3. Conceptual Blockchain Finance
There may be two nodes in the adoption of any new technology. Initially the innovative idea, such as blockchains, might be grasped in its capacity as a “better horse;” as an improved version of something familiar. Most simply, blockchains are merely a modernizing information technology. Blockchains might help to do everything that we are already doing better. Blockchains streamline and modernize the operations of the financial services enterprise. In the second moment, after having implemented a new technology in its “better horse” applications, a new tier of possibilities, perhaps anticipated at the outset, can come into view more strongly, with the new technology now being conceived as a “car;” as a transformative and novel paradigm that completely reconfigures the former operation. At present, “better horse” implementations of blockchain technology are underway, modernizing the existing financial services industry with single-ledger technology, private ledgers (known confirmed identity of transaction-submitting parties) that are still centralized. In the second moment, “car” implementations might be the longer-term future. Digitalizing money, payments, economics, and finance renders all of these factors infinitely more composable, malleable, fungible, distributable, automatable, and configurable in a plurality of ways and novel applications that has not been possible before. With blockchains, the implication is not just that all modes of financial activity could be modernized, but that the very foundations of the concept of finance could be rethought.

Raising a Trust Bond: Using financial structures to expand into the economy of the future
In one potential near-future world of having transitioned to an automation economy, successful economies may be attending to the production and consumption of intangible social goods like autonomy and recognition, in addition to materials goods (where all needs might be met via GBIs (guaranteed basic income initiatives) or other measures). The same financial system could be used to deploy the new intangible social goods economy, for example, for community initiative X, there could be a trust bond. For example, the government might need to raise trust (as an intangible currency) to launch a certain program, such as a digital identity system. The same financial structure can be used, but instead of raising capital, trust is the commodity required to be raised or amassed for this particular initiative. Another example is raising the intangible social good of agency for personal health and fitness care-taking. These were two examples using the familiar financial structure with the alternative currencies of trust and agency. Another example using familiar financial structures for alternative “future finance” purposes could be simply the decentralized version. This would be the same capital-raising supply chain for example, but now populated by Kickstarter-like crowdfunding sources. In another example of similar concepts in a decentralized structure, Medici has been envisioned as a decentralized public capital market for stock and bond offerings.

4. Conclusion: The new finance – Cognitive Easing
Blockchains are a new form of cryptographic information technology that allows the digitalization of money, payments, economics, and finance. The stakes are high – blockchains could be instrumental in orchestrating an orderly transition to the automation economy (the outsourcing of unelected labor to technology). There could be two core objectives to such an orderly transition to the automation economy. One is material easing (less efforting required to attain material sustenance requirements), and the other is cognitive easing (less mental efforting required to attain tangible material goods and intangible social goods such as autonomy, recognition, and trust). Beyond the modernization of economics and finance, successful implementations of blockchain technology could point themselves towards the broader societal goal of cognitive easing over cognitive efforting for resource attainment in both the present (economics) and the future (finance).

Melanie Swan is a philosopher and economic theorist at the New School for Social Research in New York, has an MBA in Finance from the Wharton School of the University of Pennsylvania, and is the author of the best-selling book: Blockchain: Blueprint for a New Economy.

This post is dedicated to Lee Corbin, a reader of this blog and always-thoughtful interlocutor.

Blockchain Crypto-economics: The Actualization Economy of Immanence

Phase I: P2P Economies
There is considerable room for exploration in defining what the new possibility space of personalized, self-defined, emergent economic systems might comprise. Opening up economic systems could have different stages and phases. The first position could be having the same structure of current economic systems, but opening up the parties, interaction types, and business models. The idea of ‘decentralized reddit’ is an example of one such first position. It is still the same Internet pipes, providing the same news items to consumers. What could be different is the hosting, pricing, and business model. The web property reddit could be hosted in a decentralized manner, p2p-hosted by community peers, as opposed to being centrally-served by the company, reddit, Inc. Once the content is hosted by peers, the business model too can change. Instead of indirect advertising-supported centralized models coordinating the serving of eyeballs to vendors, direct pay-for-consumption or freely-contributed content models could go more naturally with a p2p-based content community. This means perhaps leaner economic models with greater price rationalization and value assessment of consumption by users.

Phase II: Rethinking Economic Systems as Coordination Systems
However, what is possible is not just different economic systems from a business model perspective, but something more fundamentally radical, a blueprint for a new economy. All of the first position, ‘decentralized reddit,’ no matter how decentralized, is still in the same structure, in the traditional structure of how economics has been conceived – of some parties producing goods of value consumed by others for some price (including for free in gift-economies). Extending this, the fully-fledged second position challenges and redesigns what is meant by economic systems, and claims that the purpose and value of economic systems is much broader. Markets have been the only application of economic systems, but the concept is more extensive.

Economics is a coordination system, of resources, but more broadly, of reality. 

Economics is a mediating and coordination system of our interactions with reality. Elements of economic theory might still make sense, like inputs, outputs, and resources, within this broader conceptualization of mediating reality. Resources could be more expansively defined, such as 'what resources are needed as inputs to brains being able to have ideas' as opposed to 'number of units of lumber sold.' Economics, instead of being defined as the production and consumption of scarce goods and services, could be reconceived more generally as a facilitation response to reality, concretized as a discovery and interaction process where something is discovered and valorized by a party, possibly in acknowledgement, interaction, and exchange with another party.

Phase III: Crypto-economics Facilitates the Shift from the Labor Economy to the Actualization Economy
Reconceiving economics as the more generalized form of (ontologically) what it is, a coordination system, allows its purpose to be substantially opened. The primary focus of what economics is about can shift. The locus of focus can change from how scarce goods are produced and distributed to instead, something much more generalized, to what our experience of reality is, and therefore to what kinds of responses to reality we would like to facilitate and enable. The notion of reality mediation design is so greenfield that the first question is 'what is important?' Economics can become a greenfield design frame about what might be possible in general in the world.

Yes-and! Abundance Economies of Immanence expand Reality
There are arguably two levels of ‘what is important’ – sustenance and actualization. First, certainly one dimension that is important is a post-scarcity situation for the material inputs required for healthy, flourishing human lives. The blockchain automation economy is making great strides towards this. Second, once basic needs are met, the focus can become one of immanence: open-ended expansion up from baseline survival to actualization in terms of growth, learning, creativity, collaboration, and contribution. True abundance is having these two levels; not just having survival-level needs met but also and more importantly, entering more fully into an existence of immanence, of open-ended upside potentiality - the actualization economy - and spending more cognitive time in this space. Abundance Theory Studies recognizes both of these dimensions: the immanent potentiality upside of existence, together with the baseline-attaining post-scarcity situation for material goods. True Abundance Economies focus on expanding the position of yes-and improvisation energy directed to self-expression, creativity, and novelty; expanding reality in ways that matter.

A New Kind of Economic Philosophy: Network Economies of Abundance

Blockchain technology, as revolutionary as it is, is perhaps most revolutionary in exposing the corner of a whole new philosophy of economics that can be formulated as a Network Economics of Abundance. Not just a new economic theory, but a new philosophy of economics is required because the entirety of existing economic theory has been constructed around the assumption of scarcity, and reconfiguring our economic thought around abundance instead as a central parameter requires rethinking economics so profoundly as to be a new philosophical position that is outside the field of economics. Thus, it is timely to articulate a Philosophy of Abundance. Many different pieces have been emerging in the world that can be assembled into a description and future vision for this Network Economies of Abundance (Figure 1).

Figure 1: Network Economies of Abundance: A transformational philosophy of economics.

Click for a bigger chart.

Shifting from the Labor Economy to the Actualization Economy
First considering Paradigms, two positions can be articulated. First is Traditional Economies. We are familiar with traditional economic models where the organizing parameters are scarcity, control, hoarding, hierarchies, and relationships of power being held over others. The definition of economics concerns the production and consumption of goods and services, and success is measured by output (GDP). The goods and services that are valorized and measured in the formal economy are produced by monetary-based labor.

A second position is Network Economies of Abundance where the organizing parameters are completely reversed. This economics is based on abundance, access, availability, yes-and collaborative willingness, and power shared with others. Network Economies of Abundance are measured in fulfillment; though actualization, connection, purpose, and meaning. In a full, liberation economics, the measurement metrics are self-chosen by individuals and groups. The definition of economics has shifted, away from transactions, even if game theoretic, to interactions. Economics can be seen as a facilitation mechanism rather than a transaction mechanism. Economics becomes a discovery and exchange process, one of interaction, acknowledgement, collaboration, and creation.

Evolving Positions in Network Economies of Abundance

Network Economy: Already in the current world, distinctly different economic models have arisen and co-exist alongside the traditional model. This has always been true regarding the informal sector, and is now more recognizable. One feature that characterizes network economies is a free flow of information, and engaging and interacting with that information, and more generally active participation. Another feature is that there is a mindset shift to access rather than ownership, or at least an attunement to different ownership models, and the notions of rights, responsibilities and stewardship attached to each. There are peer-produced commons goods like Wikipedia, sharing economy properties like Uber and Airbnb, and there is a multi-currency society where other currencies such as attention and intention are monetized. Societal shared trust stems from individual identity being known by others.

Resource Grid Economy: This is what is starting to unfold now, the idea of Ubiquitous on-demand Resource Network Grids, which is fundamental in the mindshift to abundance. More and more resources are becoming fully dynamically available, lurking in the background as a resource blanket, to be called forth on-demand for use at any moment. For example, mind-controlled personalized drones could deliver on-demand items from an intention picked up by personalized QS EEG neuro-hacking rigs or smarthome personalized robots like Jibo, or the Nest. Ubiquitous resource grids are practical, and contribute to the ongoing mentality shift from scarcity to abundance. Time is freed for other higher-level cognitive engagement and enjoyment when resources are always-available on-demand, instead requiring cognitive effort to plan for availability. A simple example is having to know the bus schedule (keeping it loaded in memory) versus walking outside, opening up an app and seeing what bus is next. Societal shared trust is a function of agent reputation.

Crypto-Economy: The emerging crypto-economy uses blockchain technology and cryptocurrency tokens like Bitcoin to automate and facilitate human (and human-technology) interaction patterns. Decentralization as a new organizational paradigm extends our capabilities beyond hierarchical organizational models (both practically and values-wise (e.g.; more autonomy for all agents)) into trustless very-large scale models for coordinating world-scale activity. A million cryptocurrency tokens could bloom as the community token of individual cryptocitizens and groups for coordinating local post-monetary economies like basic income initiatives and demurrage programmable currency redistributions. Cryptographic ledgers could coordinate spot transactions (cryptocurrency) and t+n interactions with smart contracts and autonomous dapp, DAO, DAC, DCO, and datt.co entities and all physical and intangible assets registered as smart property. Societal shared trust is instantiated though smartnetwork consensus, independently non-totalizingly (integrity-preservingly) signed.

Needs-based Economy: A final position in the Network Economies of Abundance could be one in which the focal point is needs, where the needs of all entities readily surface and can be met. A needs-based economy focuses on the most important aspects and deeper level of what occurs in economic transactions. Each entity (person, group, community, country, technology entity) has needs. Some of the most important needs for humans tend to include acknowledgement, connection, contribution, meaning, and action in the world. Economics is a strategy for getting these and other needs met. Smartnetwork code entity DAOs/DACs could unobtrusively orchestrate patterns of interaction among biocryptocitizen agents to maximize needs-meeting, including by registering needs as smart assets to which token is posted to indicate degree of met-ness (basic income smart needs). Another example could be secure user-permissioned cloudmind collaborations with other human and technology entities for the purpose of problem-solving and creative expression. Societal shared trust is a priori, based on agent capacity, in digital society smartnetworks of the future.

Reference: Swan, M. (2015). Blockchain: Blueprint for a New Economy. O’Reilly Media.

Personalized Economic Systems: Self-Determination and Economic Theory

In addition to blockchain technology, another clear node of current innovation is in self-determined economic systems. Increasingly, as individuals, we are consciously examining the economic systems into which we were born by default, and questioning their validity, utility, and reach; and proposing alternatives. In some sense capitalism is the new feudalism and there is a finally starting to be the conception and realization of a viable postcapitalist position. The new sensibility could be that economic systems are determined at the level of the individual as opposed to the level of the nation-state, and further that different economies might be appropriate at different levels of scale in an overall world of economic multiplicity. Further, economics means discovery and exchange more generally and conceptually as opposed to exclusively transactionally. As individuals we have become our own selection node for the news, information, and entertainment we consume. The same could happen with economic systems and governance systems: downscaling the locus to the level of the individual as another context for personalization and right to self-determination.

Personalized Economic Systems: Platforms and Features
There could be a new world of ‘let a million economies bloom’ (in an esprit of self-blossoming not socialism). As every individual might have their own social media platform with a channels like a blog, Twitter feed, YouTube channel, and Instagram stream, so too as individuals we might have our own personalized economic platform, with our own personal currency and economic system. A common set of feature functionality could coalesce in these programmable economic systems. The core feature set could include token issuance, exchange, and conversion mechanisms; transaction validation, confirmation, and tracking; identity and reputation management systems; bounty, reward, and appreciation systems; consensus protocol; node on-boarding/off-boarding; and basic income systems mechanism including with redistribution (demurrage) parameters.

How these features are implemented in different individual and group economies could be via a combination of pre-specification and emergence (including via community prediction market voting) through the ongoing operation of the economy. Some emerging platforms for personalized economic systems for individuals and communities include datt.co (a decentralized reddit for any user-content created community), Ethereum CIRCLES (personal economic coinplatforms for creating user-specified self-determined economies), HyLo (social network based on intentionality of asset-mapping, intent-casting, and crowd-resourcing), and those integrating direct democracy with economic empowerment like D-CENT, LiquidFeedback, and Citizen Code.

Qualitative Economics: Registering Values as Smart Assets
Blockchains are not essential but are the obvious and contemporary information technology to include to facilitate personal economic systems and enable new kinds of functionality. For example, qualitative parameters such as group values and group needs could be registered as blockchain-based smart assets to which community coin is booked, spent, or voted to indicate the level to which the group values and needs are being met. This could be an integrated and minimally-obtrusive feedback mechanism for awareness of how community values are evolving, and the extent to which they are being embodied. There could be multiple community tokens: quantitative coin for the usual basic exchange, and qualitative coin for tracking ideas, inspiration, and other values, benefits, or needs of the community registered as smart assets. Overall this is what is meant by ‘the new economic theory’ as being a means of acknowledging and attributing value in a relevant context like an individual, group, or community.

Rethinking Risk with Automated Blockchain Macroeconomic Indicators

Progress is underway to investigate and migrate many different parts of the banking, securities, and insurance industries to public and private blockchains. These operations include settlement and clearing, smart property digital asset registration and transfer of stocks, bonds, derivatives, private equity, and other instruments, and the structuring of more predictable insurance payouts. One next step is articulating how blockchains might be used more broadly across industries and economies for automated risk management and macroeconomic indicator generation. This could help meet the need for real-time knowledge about the health of financial systems, especially given their interdependence and global nature.

Automatic Macroeconomic Indicators
The pseudonymous property of blockchains could be a valuable parameter of transaction data structures that automatically relay meta-data as a semi-private input to large-scale open risk models [1] at the entity and macroeconomic level. Risk measurement and macroeconomic indicators could thus be produced automatically in real-time with tremendous aggregate transparency. The functionality could be built into fintech blockchains as a standard, with other organizations (like smart contract DAOs) to blend the data into macroeconomic statistics. Fintech standards bodies analogous to IEEE working groups could recommend protocols. Transaction meta-data aggregation could also engender a new class of economic indicators granularly measuring sophisticated parameters such as interlinkage, complexity, value-at-risk, and country-level inflows/outflows, and prediction markets and derivatives could run over these.

Hayekian Market Signaling
For automatically generated macroeconomic indicators, there would need to be a willingness to disclose exposure, whether pseudonymous or not, and whether on public or private blockchains. This could be compelled by regulatory entities, or better, volunteered as a market-signaling technique, just as the smart contract industry may fork into legally-compliant and a-compliant contracts. Prediction markets could be a further layer to elicit anonymously-voted opinions regarding data quality. This could facilitate the concept of markets as discovery in the Hayekian competitive currencies model and address systemic collusive tendencies and the predictive avoidance of collapses.

Immanence Philosophy of Risk
One effect of having granular, precise, real-time automated economic indicators and risk measurement systems is that it could enable more fundamentally our definition of risk to shift. As traditionally conceived, we have what is conceptually and emotionally a scarcity relationship with risk. Risk is something to measure, avoid, manage, and control, as exemplified by traditional finance and insurance models. There is the begrudging position of ‘no risk, no reward’ and ‘nothing ventured nothing gained,’ but this view is conceived in the scarcity of trade-offs, not in the abundance of making new bigger spaces for opportunity. Instead, risk could be reconceptualized as ‘taking a step,’ taking a step into an unknown of immanence, from an unknown yet supported downside and into a completely open upside. Immanence risk models could be realized through societal shared trust and the willingness to share information in comfortable ways to create the underlying layer supporting the open upside. A concrete example of this could be deploying open source FICO scores and decentralized credit bureaus with blockchain-based reputation structures where the global shared information trust model facilitates the local open upside possibility.

[1] Open Source Risk Model resources:
Hwang, J.H. Proposal for an Open-Source Financial Risk Model
Papadopoulos, P. OpenRisk.eu, Open Risk API (White Paper, Github)

CryptoSustainability: Reinventing Economics

The new ‘Sensibility of the Cryptocitizen’ is about a rethinking our relationship with authority, and political and economic life design. It includes personal digital security practices like backing up our money, and more profoundly is not just about rethinking relationships of authority and power, and economic resources and exchange, but reinventing the models by which we use them. Perhaps never before has there been such a creativity that we are bringing to designing and trying different models and modes of life; prototyping as a life practice.

True autonomy is setting our own rules, economic, political, social, etc.; in every domain; setting our own rules for life per our own purposes and value systems. We are inventing new models that more directly address our local individual needs rather than accepting status quo models from the structured world.

Part of the ‘reinventing economics’ mindset is thinking more modularly and portably about resources, and where and how everything can be accomplished more fungibly and effectively, with a new responsiveness to meet needs dynamically. What if every resource had the Uber-like conceptualization of immediate resource delivery on demand? Not just food, transportation, products, and valet services [1], but more foundational resources too that involve space like lodging, showers, team coworking space, and office meeting space; on-demand pod space; portable mobile resource use.

There are some exciting examples of fungible, distributed autonomous space. Distributed autonomous mobile space includes the concept of a mobile AirBnB, embodied by the Blackbird Bus, which uses city streets as a commons for on-demand locational parking of a 68-passenger school bus that has been converted into a luxury mobile office/living space for a startup company, and offers co-housing nights via AirBnB. For example, there are Houslets, modular, portable, reconfigurable, and open-source living structures which can be fixed or mobile or anything in between. Another example is using space and economic designability to competitive advantage, such as autonomous political/judicial zones within countries, like the Zones for Economic Development and Employment (ZEDEs) in Honduras. Existing space-on-demand offerings like Liquid Space (hourly, daily, weekly, monthly booking of office space) could be further extended and enhanced by delivering mobile office pods to locations.

[1] The plethora of eDelivery services: Amazon Prime. Munchery. Postmates. Seamless. EAT24. GrubHub. Safeway.com. Whole Foods. DoorDash. Washio. TaskRabbit. FreshDirect. Homejoy. Uber. Google Express. Alfred.

Top 5 Immediate Money-Making Applications of Blockchain Technology

The right question is not whether Bitcoin is over or under-valued, or over or under-hyped, but what the biggest potential money-making applications might be. While we wait for consumer-ready cryptocurrency applications to be presented to us by the financial services industry and other trusted providers, in the progression of ATMs, online billpay, eStatements, and Apple Pay, there are many other opportunities to be explored.

Blockchains could be the last piece of core infrastructural technology needed to facilitate the machine learning revolution in the same progression as the industrial revolution, only quicker.

1. Banking 2.0: The first and most obvious application of blockchain technology is the opportunity to reinvent the banking and financial services industry. The current monetary system is far too slow - it takes days and weeks to transfer funds, where cryptocurrency transactions are received immediately anywhere in the world. Sending a payment to a software development team in India means people receiving money instantly, and at a fraction of the traditional transaction cost. This could mean a tremendous speed-up in the velocity of money, and a way to allow legacy banking systems to interoperate, reorganize themselves, and make the whole way they do business more efficient. 
2. Financial Markets. In financial markets, one clear application of blockchain technology is algorithmic trading and back office operations. High-frequency trading could be taken to the next level implemented in smart contract DACs (decentralized autonomous corporations) and executed by semiautonomous agents with the ability to act more quickly and better crawl information sources for price, news, and sentiment changes. Similarly, whole tiers of back-office operations like clearing currently handled by people-agents could be handled by blockchain-agents. The automation economy is well under way, and blockchains provide the final required checks-and-balances feature of accountability. Blockchains instantiate a robust technology record of all transactions in a universal ledger system that is available for future lookup on-demand at any moment. Financial services businesses like the mortgage industry could implement smart property via blockchains as a universal asset registry and transfer system, and smart contracts for payment automation, interest rate resets, and securitization packaging. 
3. RTB and BI Automation. In the same vein as smart contract-based algorithmic trading, blockchains are also well-suited for implementation in other automated high-frequency markets like real-time bidding for advertising and business intelligence. These are already heavily machine algorithm-based markets that could be easily facilitated by being instantiated in blockchains. Again there is quicker, better, more-trackable, more-efficient, permanent, universal worldwide execution, together with record-keeping, monitoring, and tracking. The RTB market is billions of dollars at present and estimated to grow to $42 billion in the next three years. Likewise automated business intelligence is big business, and big data, for example, domain name hosting services use machine learning algorithms to continuously obtain competitive data points for standard services such as the cost of 1-year hosting with 2 GB of storage.
4. Blockchain IOT and M2M. We think cryptocurrencies might make our human lives easier, and they do, but even more so, they are for the machine economy. Cryptocurrencies are the economic layer the web never had, and can facilitate not just remuneration, but also the communication, coordination, and tracking of all machine-to-machine and machine-to-human interactions. While two thirds of people are estimated to be online in five years (from the current one-third), 25 billion things are forecast to be online by 2020. A corresponding Internet-of-Money is needed to organize this Internet-of-People and Internet-of-Things, for example seamlessly facilitating a connected car’s progression from smarthome IOT network to smartcity highway to automated city center parking. IBM's Adept announcement at CES is an early example of the idea of smartnetwork IOT coordination using blockchain technology.
5. Blockchain Thinkers. Not only is blockchain technology a potential means of enacting Friendly AI, it is more broadly a new concept and tool for instantiating intelligent computing operations in a blockchain architecture. This could have implications for both the development of artificial intelligence and human cognitive enhancement. DeepMind's Neural Turning Machines as an external memory for machine learning algorithms is an example of this kind of instantiation structure in artificial intelligence. For cognitive enhancement too, a blockchain could be the tool that makes lifelogging useful, recording every thought as a transaction in a blockchain memory, for search and recovery later, for example in the cases of Alzheimer's disease and stroke rehabilitation. One implication of Blockchain Thinkers is Blockchain Advocates. Blockchain Advocates are blockchain-based smart contracts as a new form of independent third-party advocate that can act on your behalf in future time frames. Right now you can set up smart contracts to monitor your smarthome IOT network, for example pinging you if the security system goes offline. In the future, your smart contract advocates could confirm that your digital mindfile is still running and being backed up appropriately, doing future real-time oracle lookups. “You’re still running on the current standard, Windows 36” your smart contract butler informs you. (More information: Blockchain Thinkers: The Brain as a DAC and Cognitive Applications of Blockchain Technology).

Bitcoin and blockchain technology could be just the first application of decentralization as a new form of information technology. 

Overall, blockchains are a new class of decentralized information technology for the potential execution of any kind of administrative task more efficiently, from all applications of money and finance, to government to health. Blockchains are a global-scale coordination mechanism - quicker, more transparent, more participative, and more accessible. Blockchains are a supercomputer for reality in the sense that they are a management tool for any system that can be quantized or divided into discrete elements or constituent parts. Bitcoin as the current ‘legacy’ cryptocurrency with more entrenched network effect adoption than other cryptocurrencies might not be the final or enduring cryptocurrency. Likewise the blockchain architecture as currently instantiated with questionably expensive and wasteful proof-of-work mining operations might not be the final architecture. However, it is harder to argue that decentralization as a new concept and class of information technology is not here to stay given the liquidity and penetration reach of the Internet. Focusing on end-user applications could help Bitcoin shift from its nacency into a more mature phase of cryptocurrency industry development, becoming a value currency, not just a development currency or speculative currency.

More Information: Swan, M. (2015). Blockchain: Blueprint for a New Economy. O'Reilly Media.

Enterprise Bitcoin and the Brain as a CryptoCurrency Network

If Dell, New Egg, and TigerDirect now accept Bitcoin, and Paypal's CEO contemplates the same, eBay and Amazon might also accept Bitcoin in the not too distant future, and this would start to really push cryptocurrency into the mainstream. Faster still if Google Wallet were to join. Bitcoin seems to be 'going enterprise' (= key step to mainstream) as fast as the Internet-of-things (Enterprise IOT: Microsoft, Ernst & Young, etc. offering connected POS (point of sale) networks and all 'devices' as an IOT service to businesses). However, even though Bitcoin in its entirety is a radically new concept, from a vendor standpoint, accepting Bitcoin is not a big deal - it is analogous to accepting any other kind of payment mechanism. Anyone (individual or enterprise) receiving, or wanting to pay out in Bitcoin can easily convert national currencies via Coinbase, bitpay, or other sites, or now the purported (as of July 2014) 33 worldwide Robocoin Bitcoin ATMs. Conceptually, Bitcoin is a payment mechanism for vendors, but for money businesses like banks, it is much more critical to develop explicit Bitcoin strategies and policies.

However, there is still much risk in Bitcoin and cryptocurrencies. Bitcoin as a currency is still new and volatile, and it is not clear if it is a faddish or persistent transformation, although the concept may have considerable resiliency even if specific cryptocurrencies do not (i.e.; Baconcoin). Also, there is only about $8 billion USD in Bitcoin now, and it would need to be on the order of $50-100 billion USD to receive more serious financial consideration. The currency does have a number of important features that could propel acceptance including architecture (psuedo-anonymous and trustless), openness, low-cost (eliminates currency exchange costs), and fungible worldwide availability. As Kevin Kelly points out, Bitcoin is not just a payment mechanism, it is a revolutionary way to enable collaboration at an unprecedented scale. Bitcoin is the reinvention of the institution of capital. Further, in the automation economy, Bitcoin is automated and open accounting; a transparent ledger. The concept of Bitcoin and its architecture and operation is a new model which is not unlike the brain, where (at minimum) many functions are handled automatically, and there is a certain modular aspect to function. Bitcoin might be a universal mathematical model of nature that human intelligence is just now discovering.

Prediction Markets Round-Up

Prediction Markets are a tool for collecting group opinion using market principles. The price is usually based on a conversion of an opinion of the percent likely an event is to happen (i.e., the probability), for example there is a 40% change that Candidate X will win the election. The premise is that there is a lot of hidden information that can be sharable but there are not mechanisms to share it because information-holders either cannot or do not wish to share it (for example that a current work team project may not finish on time). Some research has found that prediction markets may beat polls or experts in terms of forecast accuracy [1].

Figure 1. Prediction Market Example

To aggregate hidden organizational opinion and expertise, Prediction Markets are in use at 100-200 large US organizations as of June 2014: Paypal, HP, BestBuy, Electronic Arts, Boeing, Amazon, Harvard, GM, Hallmark, P&G, Ford, Microsoft, Chevron, Lockheed Martin, CNN, Adobe, American Express, and Bosch. There are several enterprise Prediction Market vendors for enterprise idea management: Consensus Point, Inkling, Spigit/Crowdcast, Bright Idea, and Qmarkets. The main applications of Enterprise Prediction Markets are revenue forecasting, demand planning, and capital budgeting; innovation life cycle management (rate, filter, and prioritize ideas), and project management and risk management.

There are Enterprise Prediction Markets and also Consumer Prediction Markets for event prediction such as politics: election results; economics: box office receipts, product sales; and health: pandemic prediction. Some of the leading markets are Iowa Electronic Markets (and Iowa Electronic Health Markets), the Hollywood Stock Exchange (film box office, TV shows, celebrities), simExchange (gaming: video game consoles, video game launches), CROWDPARK (general), and LongBets (futurist). A new market, SciCast, has recently launched for detailed science and technology predictions.

Markets are typically real-money, reputation-based, or anonymous. In the wake of Intrade’s regulation-forced closure, Bitcoin Prediction Markets are enjoying a surge of trading activity; markets like Predictious, Fairlay, and Bitcoin Bull Bear.

More Information: Prediction Markets @ Singularity University

[1] Trepte, K. et al. Forecasting consumer products using prediction markets. MIT. 2009.

Axiologie: An Economy 2.0 Understanding of Valorization

Axiology is a third major branch of philosophy dealing with the study of the nature, types, and criteria of values and of value judgments. Axiology includes valorization, the according of value (or lack of value) to things, and aesthetics, relating to the beauty or pleasing appearance of things. Axiology is often overlooked in favor of its higher-profile philosophical cousins metaphysics, dealing with the nature of existence, and ethics in the 1.0 sense, dealing with rules of behavior based on ideas about what is morally good and bad.

Axiologie (e.g.; Axiology 2.0)
Axiology 1.0 needs to be extended to Axiology 2.0 or Axiologie in a technology philosophy sense to denote the new kinds of valorization that are present in the shift to Economy 2.0. Economy 2.0 is a world where economic transactions are highly-automated, affinity-based, multi-currency, unobtrusive, and on the way to post-scarcity for material goods.

One of the most visible aspects of the transition to Economy 2.0 is the multi-currency dimension - individuals are increasingly accumulating value in alternative non-monetary currencies such as reputation, authority, attention, intention, time, ideas, creativity, and health.

The multi-currency Economy 2.0 is also called the gift economy, the reputation economy, the attention economy, and the intention economy.

Science fiction has already envisioned future economic worlds where reputation points are the only currency and vary dramatically up and down like video-game points, typically viewable in virtual reality goggle Heads-up-Displays like Cory Doctorow’s whuffie-driven economy in ‘Down and Out in the Magic Kingdom.’ Technology philosophy’s Axiologie deals with the acknowledgement, valorization, visibility, invisibility, modes of understanding, transferability, storage, investment, and use of alternative currencies.

Part of an ongoing series of Technology Philosophy Conceptology

Broadcasting Preference in the Intention Economy

One key dimension of the future is the presence of multiple currencies. A multicurrency society is already starting to develop where traditional monetary-related currencies are being supplemented with other currencies like reputation, attention, intention, ideas, affinity, preference, health, and resource access.

A book published in May 2012, Intention Economy: When Customers Take Charge, suggests mechanisms to make intent as a currency more explicit, monetized, and implementable. The book extends the author’s previous ideas about vendor relationship management (VRM), which is how consumers might more effectively manage their relationship with vendors.

The issue is that corporations and other entities spend $1.5 trillion per year on marketing to create ‘a bad model of you’ and your purchasing intent (‘50% of marketing dollars are wasted but we don’t know which 50%’). On the other hand, you as a consumer may have trouble defining your demand, and finding and tailoring products and services in the midst of fending off unwanted publicity and inaccurate personalized advertising.

One potential solution for decreasing friction in the narrowband way that vendors and consumers currently interact is having consumers directly communicate their interests and intent. Intent communication could be accomplished through fourth party exchanges, websites like EmanciPay, where consumers may escrow their intention to buy with a down payment of funds to the site (fourth parties are truly independent intermediaries and advocates for the consumer as opposed to current third parties which are more of an accessory to second parties (e.g.; vendors)). Short of making a financial pledge, many other fourth party sites could accommodate less-defined customer specifications for desired products and services.

The Intention Economy then, is where consumers intentcast (e.g.; broadcast their intent) for products and services, even and especially at inchoate and automated levels, so that vendors can be responsive and continue their expertise in constructing solutions that anticipate consumer demand. Some companies are getting onto this bandwagon, like IBM with their "Chief Executive Customer" program, but like any important change and successful implementation, mindset shifts may be required, and tools must be extremely easy to use – where is Twitter for VRM?!

Crowd Models Become Pervasive Across Society

Crowd-based models are becoming so pervasive that almost no major segment of modern life is left untouched by them. The concept of digital crowd models refers to the coordination of large numbers of individuals (the crowd) through an open call on the Internet in the conduct of some sort of activity.

Not only are crowd models an efficient at-scale alternative to former methods that the Internet now affords, but at another level, crowd models are also a node of progress for humanity, both individually and en masse. An inherent property of crowd models is greater autonomy, decision-making, and action-taking by the individual. This means greater individual agency whilst simultaneously enabling group collaboration projects at previously unimaginable scales, for example, possibly ultimately coordinating and employing the cognitive power of millions of human agents.  

Crowd Models by Sector

• In economics, there are crowdsourced labor marketplaces where simple tasks and professional services requests can be posted and fulfilled, crowdfunding websites for financing projects, and group purchasing mechanisms. 
• In politics, crowd models mean the use of big data and social media to organize opinion and action, conduct direct marketing, and affect change. 
• In the social venue, blogs, social networks, and online dating sites are examples of crowd models. 
• In entertainment, there are massively multiplayer online games and virtual worlds. In education, vast eLearning networks are populating the landscape. 
• In health, there are health social networks, digital health collaboration and experimentation communities, crowdscience competitions, and new movements such as the quantified self. 
• In the legal venue, digital public goods have arisen through crowd contributions such as the Wikipedia, online health databanks, and other data commons resources.

Crowdsourced Labor, Digital Marketplaces, and the Future of Self-Actualized eWork

The third annual CrowdConf on changing the future of work through Internet-based crowdsourcing labor models was held in San Francisco on October 23, 2012. The field is much larger compared to prior years (2011 and 2010), both practically and intellectually, as a range of industry vendors and other ecosystem members (e.g.; research organizations, foundations, financial community) attended the conference. Participation in crowd-based models has been increasing this year. Crowdfunding (raising money to back projects through an open call on the Internet) platforms like Kickstarter and indiegogo have been used to raise millions of dollars for projects (although both of these sites have announced that they will not be launching a new development, equity crowdfunding). Crowdsourced labor marketplaces too have been growing significantly.

What is Crowdsourced Labor? 
Crowdsourced labor is sourcing human workers via the Internet for any variety of tasks or work product, with or without remuneration, usually including an online system for bidding, quality tracking, and reputation feedback. There are digital labor marketplaces for general tasks, both short activities (e.g.; to recognize images, validate information, create electronic forms, read handwriting, classify data, tag images, transcribe audio, translate languages, and verify business listings) and professional services engagements at sites like CrowdFlower, CrowdSource, oDesk, ClickWorker, Mechanical Turk (from Amazon)) mobileworks (including real-time task-routing to the best candidate online right now), and vocational specialties such as software programming (TopCoder, Elance, vWorker (was Rent a Coder) and Guru), graphic design (99designs, crowdSPRING), writing, editing and proofreading (CloudCrowd, Soylent), document processing (microtask), and customer relationship management (LiveOps). Mobile phone-based task completion is an important category of crowdsourced labor with projects making use of time-cycles while on the go, and sites like Gigwalk ('hire your smartphone army') offering location-specific tasks.

Figure 1. Real-Time Barometer of CrowdFlower's Digital Labor Market (source: CrowdFlower)

Crowdsourced labor also includes uncompensated work in the volunteer, gift, and reputation economies in examples like Twitter’s localization service, the Wendy Schmidt Oil Cleanup X Challenge (a $1.4 m X Prize for solutions to accelerate oil spill cleanup), and crowdscience games and competitions for protein folding prediction, and genetic and other science data analysis at sites like foldit, EteRNA, Phylo, and Kaggle.

The digital marketplace concept extends more generally to that of resource allocation, allowing supply and demand to meet in real-time on the Internet in other models such as a labor markets for physical-world tasks (e.g.; TaskRabbit and Zaarly), and resource allocation (e.g.; AirBNB (apartment rental) and Uber (private driver ride service on-demand)).

Microtask Design 
Crowdsourced labor is starting to be seen as a general resource that any individual or business can tap on demand. To do so, it is helpful to know how to design a microtasking project, which can be done either independently or through third-party vendors like CrowdFlower and CrowdSource. At the conference, YP (Yellow Pages) shared best practices from a photo moderation project: they used Mechanical Turk’s Master’s Pool of photo reviewers (96% accuracy vs. 80% for unqualified task-completers), had a batch size of 40 photos (more produced worse quality), 8 buckets of keep-suppress gradations for evaluation, and a price of $0.04 per batch (1/6 the price quoted by a third-party vendor).

The Future of Work 
The conference considered more broadly the future directions of work, labor, and organizations. One analogy is that similar to the cash register being a decisive node that allowed business to explode from small family-owned, trust-based activity to large-scale enterprise, crowdsourced labor could be a similarly explosive node. Productive enterprise is no longer confined to physically-based organization-internal corporate structures. Management has been a technology, and crowdsourcing and algorithms are disrupting it. The new challenge becomes how to build and structure work for large-scale crowdsourcing, for many kinds of productive enterprise. There are new capital streams (e.g.; social, political, intellectual, and affective) available to be directed for productive construction on a global, flexible, fungible, and accountable basis. Workers and more generally humans can be put together in new ways, likely in increasingly automated ways to direct individuals to projects in areas of personal interest, for example rated on a self-actualization and contribution scale.

Key challenge of our era: health and preventive medicine

Delivering health care and keeping populations healthy is a key problem of the current era. Health expenditures currently comprise 17% of U.S. GDP and are growing; simultaneously health in the U.S. is in decline, with a new CDC report estimating that by 2030, 42% of American adults will be obese, compared to 34% today and 11% will be severely obese, compared to 6% today.

The Realization of Preventive Medicine
A key part of addressing health challenges is the realization of preventive medicine. Preventive medicine and health maintenance consist of identifying and managing conditions in the 80% of their life cycle before they become clinical, ideally avoiding clinical onset. Workable models for the execution of preventive medicine need to be developed. By definition, a broader ecosystem than the traditional medical establishment will be participating in all steps of the value chain ranging from health research to clinical delivery. More flexible regulatory models are needed that preserve the core ethical principles of the traditional models, but are geared towards the internet era and an expanded notion of health and health maintenance with a larger ecosystem of service providers and participants. The payments ecosystem needs to adapt in parallel, allowing for a wider range of payment mechanisms including out-of-pocket payments, H.S.A. dollars, patient advocacy group funding, and traditional (and increasingly diminishing) insurance payments.