OPEN RULES

This post is part two of a four part series about OPEN CURRENCIES. In part one, I talked about the need for an "open transport network." For the purposes of this post I will assume that as a base.

So what happens after we have a transport network in which any currency is allowed to make transactions? That sounds great, but as we all know there are countless different types of currency. How can we make sure the transport network knows how to deal with them all?

CURRENCIES AS WEALTH-BUILDING GAMES

Before getting into how a transport network could interact with rules, I want to make an assertion. On this blog, we define currencies as "formal information systems that allow communities to interact with flows." Doesn't that sound a little like "keeping score?" When we keep score, we measure a flow of something that happened in a game. We then base our game play on the record of those flows. With this in mind, we make the assertion that the rules that define a currency share a deep structure with the rules that define a game. A currency is a game we play together to build wealth (thanks Eric for that insight). Our community decides to count things in certain ways that make visible the things that our community values. From this point of view, monetary currencies make up only a tiny part of the currency spectrum (thanks Art for that analogy). The currency spectrum includes everything from voting, grades, diplomas, Fair Trade Certified badges, movie tickets, etc.

So why go into a rant about the expanded definition of currency here? Because, what really makes all these currencies interesting is how they interact. My credit score tells the bank how much and under what terms to lend me money. Two currencies interacting in a formal structure. So let's consider this in the light of OPEN.

The first aspect of OPEN RULES is that the users should know the rules of the games they are playing. Do you know how your credit score is calculated? I don't. I didn't agree to that game, and I don't even know the rules. In fact, how could I legitimately consent to play a game, unless I knew the rules?

Consider this: there are two types of games. One is where knowledge of the rules is not expert knowledge, and mastery comes from understanding the patterns of the game. Chess is one such example. The rules are pretty simple, but mastery is not. The other type is when the rules of the game become so complicated that mastery of the game is synonymous with mastery of the rules. Are these fun or even fair games? This how bankers (and lawyers) gain their power. They know more about the rules than the rest of us.

So, the first part of OPEN RULES is the premise that in order for people to legitimately consent to be part of any social game (or currency), the rules must be readily available and relatively easy to understand (not in legalese).

GAMES EVOLVE

Let's return to the analogy of chess. Chess did not always have the same rules. In fact, it has been evolving in stages since the 6th century. It wasn't until the late 15th century that the rules of chess, as we know them today, came into being. Consider how this evolution happened. Did a monarch decree that all chess must be played a certain way? No. Did an official "chess committee" form, research the best possible rules, and then impose them on the rest of us? Clearly not. Instead, the players themselves were constantly experimenting with new rules, and sometimes these experiments caught on because they made the game more fun. Chess has open rules. I am free to use a chess board and make up any rules I like. If enough people like my new rules, they will play the game that way. The game of chess is still evolving to this day. Check out these modern experiments: four-player chess, 3d chess

Currencies need to be able to evolve in the same way: not controlled from a central committee, but emerging from the creativity of the users. Open source software allows programmers to "fork" a piece of software if they want to change something. If the changes are liked by the community of users, they are adopted. Open Rules in a currency allow users to "fork" a currency in the same way. If I don't like the rules of a given currency, I can start a new currency with rules I do like and invite others to play with me. If those rules allow us to build more wealth, they will catch on in the same way that new rules of chess caught on. It might also be the case that the currency evolves to fit two separate niches, and that's fine too. There will be an endless variety of currencies that fill specific niches.

Another reason why Open Transport is paramount is to ensure that new experiments aren't excluded. But how can an Open Transport network accommodate an endless stream of new rule sets? There clearly needs to be a standard (and extensible) language in which we can express rules. This is analogous to HTTP and HTML. HTTP transports resources, and HTML is the language browsers understand that tells them how to display resources. We need a "currency browser" that gives users the ability to play in any type of game they choose. This "browser" or client, could live on a cellphone or a computer, but wherever it was, it could interact with other clients. Think about it, I can use my iPhone to post a picture to Facebook, and Firefox on my laptop allows me to see the picture later.

This language for expressing currency must not be owned by anyone. It must be completely open to all, so evolution in the language itself can proceed in the same way as evolution in the currencies that are expressed within it.

The MetaCurrency project is germinating just such a language. For more information click here.

In short, we believe allowing people to self-determine when generating, choosing, and adapting rule sets will unleash an unprecedented wave of social creativity. We clearly need new and creative approaches to counting, valuing, and exchanging resources if we are to solve 21st century problems. We must not shoot ourselves in the foot by making closed rules that don't allow for evolution. The "complementary currency" community must not make the mistake of turning itself into a specialized class who exclude new approaches from closed systems. We need to let in any and all rule sets and trust that durable solutions will emerge over time. We need OPEN CURRENCY NOW!

To be continued...

OPEN CURRENCY NOW

What exactly is entailed with making currencies open? It turns out, quite a bit more than simply making currency accounting software open source. In order to understand what makes a currency truly open, we may need to let go of some preconceptions about currency design and implementation.

First, what do we mean by “open?” Open refers to a common space that cannot be enclosed by any individual, organization, or government. A common space is owned by all, regardless of nationality, affiliation, employment, or ideology. A common space may refer to something tangible, such as air, or something intangible, such as knowledge. Free speech could be thought of as an "idea commons." In other words, a commons is a space which, by definition, is not enclosed or controlled.

We assert that the “currency commons” refers to the capacity that communities have to agree on how to measure and interact with flows of resources that matter to them. We also assert that the right of groups of people to agree on how to measure what they care about is as inalienable as the right to free speech. However, without intending to, most currency projects end up enclosing this space in some way. What follows is a four part piece on how we can have truly OPEN CURRENCIES. Thanks Eric Harris-Braun, Arthur Brock, and Michael LInton for the solid education in these matters!

PART ONE: TRANSPORT

Let's assume that all currencies are formal structures for gathering / sharing information about flows of resources. What those flows are, how they are measured, and what we do with that information are the rules that define the currency. For example, a twenty dollar bill encapsulates the information that the bearer is entitled to twenty dollars worth of goods or services from any vendor in the United States (presumably because the bearer provided a good or service worth twenty dollars to someone else). The paper note simply transports this information. The same information could be transported by a check or a card reader. The information is what counts; having twenty dollars means something. What it means is, of course, dependent on the rules that make up the USD.

We frequently forget to differentiate between how we transport (or transact in) a currency, and the rules of a currency. For example, there is NO differentiation in the case of the twenty dollar bill. The paper transports information which is generated under the USD rule set. It would be impossible to instead transport another currency generated under different rules on that piece of paper. The transport medium necessarily includes a specific rule set.

Now, consider the bank's funds transfer network. You can’t use it to transfer time-dollars, because US dollars are the only currency allowed in the network. In fact, how the Fed defines who has access to the transport network is synonymous with the definition of the dollar. If you want access to the transport network, you HAVE to agree to their particular set of rules. Therefore, the currency is CLOSED.

Consider how detrimental this is for a second. I could opt out of the banking network, but to do so would mean I couldn't transact. If I want to retain the ability to transact, I have to play by their rules. The banks have made adherence to the USD rules a precondition for making transactions. They have me over a barrel by virtue of their currency’s monopoly of the transport network. I have no choice but to accept those rules if I want to make transactions using their network.

What's strange is that almost all community currency projects to date have done EXACTLY the same thing. Sure, I can find a well-intentioned time-bank run by a co-op or non-profit, but I can't use the time-banking network to transact in any currency other than that network's time-dollar. Sure, I can join a commercial barter network, but I can't use their point-of-sale readers to transact in any currency other than their trade credits. Inadvertently, we seem to have exactly duplicated the closed pattern of the USD.

In these closed community currencies, if I want the ability to make transactions, I MUST use the the currency for which the network was created. I cannot generate my own rules and invite others to play using the same transport network. I would have to invest the resources to build a completely new transport network if I wanted to transact in a new currency, and, for all but the most zealous, doing this is highly cost prohibitive.

OPEN TRANSPORT

In contrast, an OPEN transport network would allow transactions to be made in ANY currency. The rules of the currency would be SEPARATE from the ability to transact. I would be free to stop participating in a given currency if a new and better currency appeared on the transport network (or choose to participate in both). I would no longer be COERCED into adhering to a particular set of rules by virtue of needing a way to transact. I would be free to choose the rules that made sense to me, since access to the transport network is not in question.

I have been an active participant in the currency community now for four years (both as a documentary filmmaker and as a currency practitioner). I have been struck by how deeply the scarcity mentality is embedded in our community despite what we know about money. When I think about the fact that currency practitioners have to invest countless hours in implementing a network for ONE currency, it’s no wonder that they get contentious about what currency design is the best. They are putting their reputation and a whole lot of resources behind ONE idea, so they MUST convince people it works, sometimes even to the detriment of other perfectly viable currency designs. Add this to the fact that ~85% of currencies fail, and you have a pretty bleak picture scarcity-wise. What if we dropped the ideological arguments, and came together to create a truly OPEN TRANSPORT NETWORK where there was room for ALL types of designs? Wouldn’t we all gain? Wouldn’t we transcend the artificial scarcity of transport?

Right now, the most tangible manifestation of an open transport network is the wikiwikimoney project by the Twollars folks. Twitter is the transport network, and wikiwikimoney lets you track transactions in currencies you define. However, you can choose how to structure your currency (within limits) and what it is supposed to be for. Access to the transport network is not dependent on obeying the rules of A particular currency. For a more powerful taste of what’s to come check out THE METACURRENCY PROJECT.

MORE SOON

We also need open data, open rules, and open identity, but those are discussions for another time. Stay tuned!

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I like some of the random phrases which emerge. They present a nice summary.