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Tiberius Brastaviceanu

Engaging For the Commons - Global Pull Platform - Helene Finidori - 0 views

menemania.typepad.com/...engaging-for-the-commons.html

Helene Finidori value value networks paper

shared by Tiberius Brastaviceanu on 21 Nov 12 - No Cached
  • "activating" human agency and political will and addressing the root causes for power unbalance and resistance to change is at the heart of tomorrow's paradigm shift.
  • action-oriented strategy and process methodology for generating engagement, accountability and outcomes in the political, economic, social and environmental spheres, which may contribute to enable this activation.
  • empowering individuals and communities, nurturing public wisdom
  • ...29 more annotations...
  • The platform is structured around commons, issues of social, environmental, economic nature,
  • treated as social objects: the nodes around which social networks are created, conversations and repeated interactions are initiated, new territories explored, meaning and intents shared, learning achieved.
  • ‘pinging of actors’ by ‘citizen-followers’ creates a pull dynamic
  • will yield conversations, knowledge flow, and feedback loops beneficial to learning, progress visualization, and evaluation
  • reate a context favorable to collaboration, exchange of ideas and know-how.
  • The process consists in letting people/organizations:
  • Select, follow,
  • Keep informed and track progress
  • Self assign actor role and communicate/report on self-activity and impact and status of issue.
  • Share
  • Find solutions and potential collaborators for action
  • Select or refer designated actors to acknowledge or request their engagement and action at various levels
  • participate in the conversation, report on activity and impact
  • evaluate and rate activity/impact of and trust toward actors' activity, impact and progress.
  • organize for collective action
  • garner follower participation
  • Initiate and participate in conversations, debates, deliberations
  • The ecosystem is composed of
  • Common’s spaces
  • Common’s graph
  • Progress & Impact or Situation Dashboard
  • The platform creates a context for the following
  • Curate the knowledge flow and increase learning
  • Connect and interrelate people, stakeholders, issues, and knowledge.
  • Help situate an issue
  • Define boundaries
  • Help situate self and others
  • Identify roles and interdependence between actors and issues.
  • Visualize the emergent bigger picture
Francois Bergeron

The Rise of the Service Robot - 2 views

www.photonics.com/Article.aspx

robotic paper

shared by Francois Bergeron on 01 Nov 12 - No Cached
  • Some experts believe that service robots will change the world the same way the personal computer did 30 years ago.
  • The field is relatively new, so the definition of “service robot” is still up for discussion, but it is generally considered to be a robot that is not installed in an industrial setting.
  • New sensors and processes that provide real-time environment monitoring in 3-D must not only prevent collisions during manipulation but also identify and learn new objects. The increasing use of service robots in everyday environments ultimately calls for new user interfaces that can take into account the full range of communications channels.
  • ...1 more annotation...
  • “The biggest challenge is to cope with the dynamic and unpredictable environment of service robots,” Fischer said. “Compared to industrial robots, the environment is totally undefined
Kurt Laitner

Towards a Material Commons | Guerrilla Translation! - 0 views

guerrillatranslation.com/...towards-a-material-commons

Michel Bauwens interview flok society

shared by Kurt Laitner on 31 Jan 14 - No Cached
  • the modes of communication we use are very tightly coupled with the modes of production that finance them
  • I’m focused on the policy formation around this transition to a new, open knowledge and commons-based economy, and that’s the research work I’m doing here
  • The problem is I can only make a living by still working for capital.
  • ...88 more annotations...
  • We now have a technology which allows us to globally scale small group dynamics, and to create huge productive communities, self-organized around the collaborative production of knowledge, code, and design. But the key issue is that we are not able to live from that, right
  • A lot of co-ops have been neo-liberalizing, as it were, have become competitive enterprises competing against other companies but also against other co-ops, and they don’t share their knowledge
  • We cannot create our own livelihood within that sphere
  • instead of having a totally open commons, which allows multinationals to use our commons and reinforce the system of capital, the idea is to keep the accumulation within the sphere of the commons.
  • The result would be a type of open cooperative-ism, a kind of synthesis or convergence between peer production and cooperative modes of production
  • then the material work, the work of working for clients and making a livelihood, would be done through co-ops
  • But it hasn’t had much of a direct connection to this emerging commons movement, which shares so many of the values and  principles of the traditional cooperative movement.
  • There’s also a lot of peer-to-peer work going on, but it’s not very well versed around issues like cooperative organization, formal or legal forms of ownership, which are based on reciprocity and cooperation, and how to interpret the commons vision with a structure, an organizational structure and a legal structure that actually gives it economic power, market influence, and a means of connecting it to organizational forms that have durability over the long-term.
  • The young people, the developers in open source or free software, the people who are in co-working centers, hacker spaces, maker spaces. When they are thinking of making a living, they think startups
  • They have a kind of generic reaction, “oh, let’s do a startup”, and then they look for venture funds. But this is a very dangerous path to take
  • Typically, the venture capital will ask for a controlling stake, they have the right to close down your start up whenever they feel like it, when they feel that they’re not going to make enough money
  • Don’t forget that with venture capital, only 1 out of 10 companies will actually make it, and they may be very rich, but it’s a winner-take-all system
  • we don’t have what Marx used to call social reproduction
  • I would like John to talk about the solidarity co-ops, and how that integrates the notion of the commons or the common good in the very structure of the co-op
  • They don’t have a commons of design or code, they privatize and patent, just like private competitive enterprise, their knowledge
  • Cooperatives, which are basically a democratic and collective form of enterprise where members have control rights and democratically direct the operations of the co-op, have been the primary stakeholders in any given co-op – whether it’s a consumer co-op, or a credit union, or a worker co-op.
  • Primarily, the co-op is in the service of its immediate members
  • What was really fascinating about the social co-ops was that, although they had members, their mission was not only to serve the members but also to provide service to the broader community
  • In the city of Bologna, for example, over 87% of the social services provided in that city are provided through contract with social co-ops
  • democratically run
  • much more participatory, and a much more engaged model
  • The difference, however, is that the structure of social co-ops is still very much around control rights, in other words, members have rights of control and decision-making within how that organization operates
  • And it is an incorporated legal structure that has formal recognition by the legislation of government of the state, and it has the power, through this incorporated power, to negotiate with and contract with government for the provision of these public services
  • In Québec they’re called Solidarity co-ops
  • So, the social economy, meaning organizations that have a mutual aim in their purpose, based on the principles of reciprocity, collective benefit, social benefit, is emerging as an important player for the design and delivery of public services
  • This, too, is in reaction to the failure of the public market for provision of services like affordable housing or health care or education services
  • This is a crisis in the role of the state as a provider of public services. So the question has emerged: what happens when the state fails to provide or fulfill its mandate as a provider or steward of public goods and services, and what’s the role of civil society and the social economy in response?
  • we have commonses of knowledge, code and design. They’re more easily created, because as a knowledge worker, if you have access to the network and some means, however meager, of subsistence, through effort and connection you can actually create knowledge. However, this is not the case if you move to direct physical production, like the open hardware movement
  • I originally encountered Michel after seeing some talks by Benkler and Lessig at the Wizard of OS 4, in 2006, and I wrote an essay criticizing that from a materialist perspective, it was called “The creative anti-commons and the poverty of networks”, playing on the terms that both those people used.
  • In hardware, we don’t see that, because you need to buy material, machines, plastic, metal.
  • Some people have called the open hardware community a “candy” economy, because if you’re not part of these open hardware startups, you’re basically not getting anything for your efforts
  • democratic foundations like the Apache foundation
  • They conceive of peer production, especially Benkler, as being something inherently immaterial, a form of production that can only exist in the production of immaterial wealth
  • From my materialist point of view, that’s not a mode of production, because a mode of production must, in the first place, reproduce its productive inputs, its capital, its labor, and whatever natural wealth it consumes
  • From a materialist point of view, it becomes  obvious that the entire exchange value produced in these immaterial forms would be captured by the same old owners of materialist wealth
  • different definition of peer production
  • independent producers collectively sharing a commons of productive assets
  • I wanted to create something like a protocol for the formation and allocation of physical goods, the same way we have TCP/IP and so forth, as a way to allocate immaterial goods
  • share and distribute and collectively create immaterial wealth, and become independent producers based on this collective commons.
  • One was the Georgist idea of using rent, economic rent, as a fundamental mutualizing source of wealth
  • Mutualizing unearned income
  • So, the unearned income, the portion of income derived from ownership of productive assets is evenly distributed
  • This protocol would seek to normalize that, but in a way that doesn’t require administration
  • typical statist communist reaction to the cooperative movement is saying that cooperatives can exclude and exploit one another
  • But then, as we’ve seen in history, there’s something that develops called an administrative class,  which governs over the collective of cooperatives or the socialist state, and can become just as counterproductive and often exploitive as capitalist class
  • So, how do we create cooperation among cooperatives, and distribution of wealth among cooperatives, without creating this administrative class?
  • This is why I borrowed from the work of Henry George and Silvio Gesell in created this idea of rent sharing.
  • This is not done administratively, this is simply done as a protocol
  • The idea is that if a cooperative wants an asset, like, an example is if one of the communes would like to have a tractor, then essentially the central commune is like a bond market. They float a bond, they say I want a tractor, I am willing to pay $200 a month for this tractor in rent, and other members of the cooperative can say, hey, yeah, that’s a good idea,we think that’s a really good allocation of these productive assets, so we are going to buy these bonds. The bond sale clears, the person gets the tractor, the money from the rent of the tractor goes back to clear the bonds, and  after that, whatever further money is collected through the rent on this tractor – and I don’t only mean tractors, same would be applied to buildings, to land, to any other productive assets – all this rent that’s collected is then distributed equally among all of the workers.
  • The idea is that people earn income not only by producing things, but by owning the means of production, owning productive assets, and our society is unequal because the distribution of productive assets is unequal
  • This means that if you use your exact per capita share of property, no more no less than what you pay in rent and what you received in social dividend, will be equal
  • But if you’re not working at that time, because you’re old, or otherwise unemployed, then obviously the the productive assets that you will be using will be much less than the mean and the median, so what you’ll receive as dividend will be much more than what you pay in rent, essentially providing a basic income
  • venture communism doesn’t seek to control the product of the cooperatives
  • It doesn’t seek to limit, control, or even tell them how they should distribute it, or under what means; what they produce is entirely theirs, it’s only the collective management of the commons of productive assets
  • On paper this would seem to work, but the problem is that this assumes that we have capital to allocate in this way, and that is not the case for most of the world workers
  • how do we get to that stage?
  • other two being counter politics and insurrectionary finance
  • do we express our activism through the state, or do we try to achieve our goals by creating the alternative society outside
  • pre-figurative politics, versus statist politics
  • My materialist background tells me that when you sell your labor on the market, you have nothing more than your subsistence costs at the end of it, so where is this wealth meant to come from
  • I believe that the only reason that we have any extra wealth beyond subsistence is because of organized social political struggle; because we have organized in labor movements, in the co-op movement, and in other social forms
  • To create the space for prefiguring presupposes engagement with the state, and struggle within parliaments, and struggle within the public social forum
  • Instead, we should think that no, we must engage in the state in order to protect our ability to have alternative societies
  • We can only get rid of the state in these areas once we have alternative, distributed, cooperative means to provide those same functions
  • We can only eliminate the state from these areas once they actually exist, which means we actually have to build them
  • What I mean by insurrectionary finance is that we have to acknowledge that it’s not only forming capital and distributing capital, it’s also important how intensively we use capital
  • I’m not proposing that the cooperative movement needs to engage in the kind of derivative speculative madness that led to the financial crisis, but at the same time we can’t… it can’t be earn a dollar, spend a dollar
  • We have to find ways to create liquidity
  • to deal with economic cycles
  • they did things the organized left hasn’t been able to do, which is takeover industrial means of production
  • if they can take over these industrial facilities, just in order to shut them down and asset strip them, why can’t we take them over and mutualize them?
  • more ironic once you understand that the source of investment that Milken and his colleagues were working with were largely workers pension funds
  • idea of venture communism
  • pooling, based on the capture of unearned income
  • in Québec, there is a particular form of co-op that’s been developed that allows small or medium producers to pool their capital to purchase machinery and to use it jointly
  • The other idea I liked was trying to minimize a management class
  • much more lean and accountable because they are accountable to boards of directors that represent the interests of the members
  • I’ve run into this repeatedly among social change activists who immediately recoil at the notion of thinking about markets and capital, as part of their change agenda
  • I had thought previously, like so many, that economics is basically a bought discipline, and that it serves the interests of existing elites. I really had a kind of reaction against that
  • complete rethinking of economics
  • recapture the initiative around vocabulary, and vision, with respect to economics
  • reimagining and reinterpreting, for a popular and common good, the notion of market and capital
  • advocating for a vision of social change that isn’t just about politics, and isn’t just about protest, it has to be around how do we reimagine and reclaim economics
  • markets actually belong to communities and people
  • capital wasn’t just an accumulated wealth for the rich
  • I think what we’re potentially  talking about here is to make the social economy hyper-productive, hyper-competitive, hyper-cooperative
  • The paradox is that capital already knows this. Capital is investing in these peer production projects
  • Part of the proposal of the FLOK society project in Ecuador will be to get that strategic reorganization to make the social economy strategic
  • Kurt Laitner on 31 Jan 14
     
    A lot of really interesting points of discussion in here.
Tiberius Brastaviceanu

Fostering creativity. A model for developing a culture of collective creativity in science - 0 views

www.ncbi.nlm.nih.gov/...PMC1808036

open science paper

shared by Tiberius Brastaviceanu on 05 Aug 14 - No Cached
  • Scientific progress depends on both conceptual and technological advances, which in turn depend on the creativity of scientists
  • creative processes behind these discoveries rely on mechanisms that are similar across disciplines as diverse as art and science
  • research into the nature of creativity indicates that it depends strongly on the cultural environment
  • ...48 more annotations...
  • create optimal conditions in a research organization with the aim of enhancing the creativity of its scientific staff
  • Creativity has been traditionally associated with art and literature but since the early twentieth century, science has also been regarded as a creative activity
  • Measuring creativity is a challenging task owing to its complex and elusive nature
  • Measurement of brain activity showed that creativity correlates with two brain states: a quiescent, relaxed state corresponding to the inspiration stage, and a much more active state corresponding to the elaboration stage
  • models of creativity
  • have a common feature: they depend on a balance between analytical and synthetic thinking, and usually describe the creative process as a sequence of phases that alternate between these states
  • Most research on creativity has focused on the individual
  • However, more recent studies suggest that creativity also depends strongly on the social and cultural context
  • breakthroughs depended on collaboration and social support
  • social environment in business organizations affects the creativity of their employees
  • Although creative individuals are essential, the strong link with the environment indicates that creativity might be greatly enhanced by generating a culture that supports the creative process.
  • Many of the interviewees repeatedly emphasized three main qualities necessary to be a good scientist: rigorous intellect, the ability to get the job done and the ability to have creative ideas.
  • almost all interviewees characterized their breakthrough moment as an abrupt leap in understanding
  • Although breakthroughs in science depend on such an ‘internal' conceptual shift, they also rely on ‘external' experimental results. However, most interviewees described their breakthroughs as largely internal:
  • Only two scientists expressed the view that their breakthroughs were purely external events, based on the observation of novel data.
  • intuition
  • must be combined with rational thinking to be effective
  • Although the synthesis of a new concept relies on intuition, which is based on subconscious mental processing, it must be subjected to conscious examination and analysis
  • specific mental skills or attitudes
  • ability to make unexpected connections
  • ability to choose relevant possibilities from an infinite set of irrelevant ones
  • interest in the unknown'
  • enjoyment of the creative process
  • stimulation by interacting with colleagues
  • undoubtedly the most crucial trait for creativity, which thrives on the exchange of ideas
  • The majority felt that the individual and the collective are equally important:
  • what interactions are optimal for creativity
  • The majority of interviewees answered that other people provided them with ‘inspiration to do something new'
  • positive feedback after the emergence of a new idea is almost as important as the inspiration that triggered it
  • collective provides the individual with technical expertise
  • Therefore, scientists would value a culture of interaction and mutual inspiration more highly than access to technology, although the latter is essential for their experiments.
  • At the end of the interviews, each scientist was asked to describe the best possible conditions for generating creativity at a research institute.
  • Cross-fertilization is absolutely essential
  • These results indicate strongly that an interactive environment is the single most important factor for stimulating creativity
  • interacting with people doing very different things
  • interacting with colleagues informally
  • interactions within any institution are strongly affected by its organization
  • Several interviewees described ‘an open hierarchy' as an important factor for creativity
  • hierarchy is based on genuine respect because people are great scientists, but at the same time they're very approachable and open towards what you have to say
  • These results suggest that the best conditions for scientific creativity come with a free-flowing hierarchy and a highly developed culture of interaction to guarantee the exchange of ideas and inspiration.
  • Furthermore, interdisciplinary interactions lead to the generation of new and unusual ideas
  • Finally, because of the freedom to try new things, these ideas can be tested and eventually generate new insights.
  • Creativity can be described as an emergent phenomenon
  • nonlinear phenomena
  • Emergence depends on dynamic interactions between individual agents within the system
  • The importance of a ‘freedom to try new things' and a ‘free-flowing hierarchy' further supports the idea that individual components in an emergent system must be able to interact flexibly without central control
  • During the interviews, it became apparent that although a culture of interaction and creativity exists at EMBL, this itself is not often the subject of discussion. The values on which this culture is based are seemingly implicit rather than explicit
  • Potentially, the EMBL culture of interaction could be strengthened further by consciously expressing and discussing the values on which it is based
Tiberius Brastaviceanu

Dark Intellectual Property. Why We Need a Kickstarter for Patents - 0 views

www.wired.com/...need-a-kickstarter-for-patents

ip academia paper argument Tibi Greg university dark IP

shared by Tiberius Brastaviceanu on 06 Aug 13 - No Cached
  • “dark IP,” the intellectual property (IP) that remains on the shelf: undiscovered, unexplored, untapped
  • our ability to catch so much in the net by dragging the surface (to use Mike Bergman’s analogy) actually still misses the invisible wealth of what lies beneath.
  • But dark IP is different than the other hidden-depths knowledge since it’s also unfair. Because taxpayers paid for much of the research — whether basic understanding with long-term benefits or more applied research with shorter-term benefits — that now lies collecting dust on university shelves.
  • ...31 more annotations...
  • the people of the United States spent an average of nearly $40 billion every year supporting institutional research
  • 65 percent of invention disclosure bundles remain, on average, unlicensed and unused … each year.
  • ”…the street finds its own uses for things.”
  • most of the IP (much of which we paid for) isn’t actually on the street, where entrepreneurial folks can do something with it.
  • the overworked and understaffed tech transfer offices
  • their models
  • There’s not necessarily room for exploration and discovery
  • byzantine bureaucracy of large organizations
  • But let’s face it, there’s also the hoarding and the overprotecting
  • So much IP is generated that it’s far too much for any one entity to ever make sense of
  • very few people are aware of — let alone able to access — an invention outside the social circle of its inventors, the scientific community involved, or even the “crowd” that’s sometimes harnessed in open innovation
  • we need new ways of democratizing it
  • Not democratizing the IP itself — institutions should still own and generate profits from the intellectual property they’ve created — but democratizing the ways in which we allow this IP to be discovered and licensed.
  • idea contests
  • marketplaces
  • competitions to find uses for on-the-shelf IP
  • missing out on the transformative potential of what technology can do here
  • promoting new ways of interacting around intellectual property
  • Marblar, where I’m an advisor
    • Tiberius Brastaviceanu
      Tiberius Brastaviceanu on 06 Aug 13
       
      The guy is not entirely for open innovation but proposes an intermediary model to democratize the use of IP
  • This turns off the average entrepreneur, who doesn’t have the patience and bandwidth to engage in all the unnecessary overhead of searching, browsing, and licensing IP.
  • Many small startups don’t even bother with IP
  • Another missing piece is ways of allowing the crowd to interact with each other and decide which technologies should be licensed
  • bidding wars
    • Tiberius Brastaviceanu
      Tiberius Brastaviceanu on 06 Aug 13
       
      competitive dynamic for acquiring IP and using it effectively. This doesn't solve the problem, because some companies will still buy it for defensive purposes or block others from using it, unlike with truly open innovation. 
  • Most of the examples I listed above haven’t changed much over the past decade or broken into the mainstream.
  • why not a Kickstarter for IP?
  • Such a website would bring together not just funds and transactions, but communities — with their attendant feedback mechanisms — that are interested in creating something novel around unused patents.
  • such a model would help get the ideas of a few into the minds of many.
  • open up the currently closed shelf to virtual browsing
  • inventions are not only ‘filed’ or ‘granted’ but ‘browsed’ or ‘licensed’.
Tiberius Brastaviceanu

Open Collaboration - The Next Economic Paradigm - 0 views

www.chaoticripple.com/...open-collaboration-paradigm

collaboration economy blog paper Joe Brewer

shared by Tiberius Brastaviceanu on 30 Apr 11 - No Cached
  • we’re in the midst of a collapsing paradigm
  • to be replaced by something new
  • I will explain what the new paradigm
  • ...40 more annotations...
  • business
  • government
  • education
  • research
  • The old economic paradigm was a service economy built on the digital communications revolution that began in the early 1970′s.
  • financial capital has decoupled from productive capital
  • financial meltdown
  • major societal institutions have stalled
  • the funding models
  • no longer work properly
  • The new model is the Open Collaboration Paradigm
  • we will see a radical departure from old institutional models.
  • social capital is increasingly recognized
  • generating wealth for society
  • This will be a profoundly social economy, built on unprecedented capabilities to self-organize people and resources in the crowd.
  • Social media
  • connect ideas, people, and institutions
  • blur the inside/outside distinctions
  • Network connections
  • radical transparency will be the new norm
  • Another profound shift will occur in the realm of ownership
  • No longer
  • viable
  • to horde intellectual property
  •  Collaborative consumption will arise as a more robust business paradigm,
  • risk is distributed
  • implications for business
  •  Those who can leverage the wisdom of crowds for market research, product development, and efficient resource allocation will be more adept and agile in the face of rapid change.
  • Those who build walls around themselves will fail to tap into the flow of knowledge and resources running rampant in the crowd
  • governments will have to become more transparent and responsive to their citizens
  • information becomes more immersive and dynamic
  • Research has already begun to use open collaboration that goes beyond the halls of academia.
  • collaborative approach to research will become the norm,
  • The era of “user generated content” and “prosumption” — where consumers of goods and services co-create what they will consume — is now a decade along in its evolution.  We will increasingly see collaborative design and production of consumables across society.
  • In the education arena, we will see more curricula as shareware and an increased emphasis on multi-perspective teamwork as the necessary skills for engaging in collaborative projects.
  • Expert/amateur boundaries have already blurred to the point where individuals can acquire graduate-level knowledge through self-directed learning on the internet.
  • distance learning
  •  Lifetime learning
  • active pedagogy
  • So get ready for the new economic paradigm.
Kurt Laitner

Smart Contracts - 0 views

www.alamut.com/...smartContracts.html

smart contract cryptography paper

shared by Kurt Laitner on 21 Mar 13 - No Cached
  • Whether enforced by a government, or otherwise, the contract is the basic building block of a free market economy.
  • A smart contract is a set of promises, specified in digital form, including protocols within which the parties perform on the other promises.
  • The basic idea of smart contracts is that many kinds of contractual clauses (such as liens, bonding, delineation of property rights, etc.) can be embedded in the hardware and software we deal with, in such a way as to make breach of contract expensive (if desired, sometimes prohibitively so) for the breacher.
  • ...77 more annotations...
  • A broad statement of the key idea of smart contracts, then, is to say that contracts should be embedded in the world.
  • And where the vending machine, like electronic mail, implements an asynchronous protocol between the vending company and the customer, some smart contracts entail multiple synchronous steps between two or more parties
  • POS (Point of Sale)
  • EDI (Electronic Data Interchange
  • SWIFT
  • allocation of public network bandwidth via automated auctions
  • Smart contracts reference that property in a dynamic, proactively enforced form, and provide much better observation and verification where proactive measures must fall short.
  • The mechanisms of the world should be structured in such a way as to make the contracts (a) robust against naive vandalism, and (b) robust against sophisticated, incentive compatible (rational) breach.
  • A third category, (c) sophisticated vandalism (where the vandals can and are willing to sacrifice substantial resources), for example a military attack by third parties, is of a special and difficult kind that doesn't often arise in typical contracting, so that we can place it in a separate category and ignore it here.
  • The threat of physical force is an obvious way to embed a contract in the world -- have a judicial system decide what physical steps are to be taken out by an enforcement agency (including arrest, confiscation of property, etc.) in response to a breach of contract
  • It is what I call a reactive form of security.
  • The need to invoke reactive security can be minimized, but not eliminated, by making contractual arrangements verifiable
  • Observation of a contract in progress, in order to detect the first sign of breach and minimize losses, also is a reactive form of security
  • A proactive form of security is a physical mechanism that makes breach expensive
  • From common law, economic theory, and contractual conditions often found in practice, we can distill four basic objectives of contract design
  • observability
  • The disciplines of auditing and investigation roughly correspond with verification of contract performance
  • verifiability
  • The field of accounting is, roughly speaking, primarily concerned with making contracts an organization is involved in more observable
  • privity
  • This is a generalization of the common law principle of contract privity, which states that third parties, other than the designated arbitrators and intermediaries, should have no say in the enforcement of a contract
  • The field of security (especially, for smart contracts, computer and network security), roughly corresponds to the goal of privity.
  • enforceability
  • Reputation, built-in incentives, "self-enforcing" protocols, and verifiability can all play a strong part in meeting the fourth objective
  • Smart contracts often involve trusted third parties, exemplified by an intermediary, who is involved in the performance, and an arbitrator, who is invoked to resolve disputes arising out of performance (or lack thereof)
  • In smart contract design we want to get the most out of intermediaries and arbitrators, while minimizing exposure to them
  • Legal barriers are the most severe cost of doing business across many jurisdictions. Smart contracts can cut through this Gordian knot of jurisdictions
  • Where smart contracts can increase privity, they can decrease vulnerability to capricious jurisdictions
  • Secret sharing
  • The field of Electronic Data Interchange (EDI), in which elements of traditional business transactions (invoices, receipts, etc.) are exchanged electronically, sometimes including encryption and digital signature capabilities, can be viewed as a primitive forerunner to smart contracts
  • One important task of smart contracts, that has been largely overlooked by traditional EDI, is critical to "the meeting of the minds" that is at the heart of a contract: communicating the semantics of the protocols to the parties involved
  • There is ample opportunity in smart contracts for "smart fine print": actions taken by the software hidden from a party to the transaction.
  • Thus, via hidden action of the software, the customer is giving away information they might consider valuable or confidential, but the contract has been drafted, and transaction has been designed, in such a way as to hide those important parts of that transaction from the customer.
  • To properly communicate transaction semantics, we need good visual metaphors for the elements of the contract. These would hide the details of the protocol without surrendering control over the knowledge and execution of contract terms
  • Protocols based on mathematics, called cryptographic protocols, tre the basic building blocks that implement the improved tradeoffs between observability, verifiability, privity, and enforceability in smart contracts
  • secret key cryptography,
  • Public key cryptography
  • digital signatures
  • blind signature
  • Where smart contracts can increase observability or verifiability, they can decrease dependence on these obscure local legal codes and enforcement traditions
  • zero-knowledge interactive proof
  • digital mix
  • Keys are not necessarily tied to identities, and the task of doing such binding turns out to be more difficult than at first glance.
  • All public key operation are are done inside an unreadable hardware board on a machine with a very narrow serial-line connection (ie, it carries only a simple single-use protocol with well-verified security) to a dedicated firewall. Such a board is available, for example, from Kryptor, and I believe Viacrypt may also have a PGP-compatable board. This is economical for central sites, but may be less practical for normal users. Besides better security, it has the added advantage that hardware speeds up the public key computations.
  • If Mallet's capability is to physically sieze the machine, a weaker form of key protection will suffice. The trick is to hold the keys in volatile memory.
  • The data is still vulnerable to a "rubber hose attack" where the owner is coerced into revealing the hidden keys. Protection against rubber hose attacks might require some form of Shamir secret sharing which splits the keys between diverse phgsical sites.
  • How does Alice know she has Bob's key? Who, indeed, can be the parties to a smart contract? Can they be defined just by their keys? Do we need biometrics (such as autographs, typed-in passwords, retina scans, etc.)?
  • The public key cryptography software package "Pretty Good Privacy" (PGP) uses a model called "the web of trust". Alice chooses introducers whom she trusts to properly identify the map between other people and their public keys. PGP takes it from there, automatically validating any other keys that have been signed by Alice's designated introducers.
  • 1) Does the key actually belong to whom it appears to belong? In other words, has it been certified with a trusted signature?
  • 2) Does it belong to an introducers, someone you can trust to certify other keys?
  • 3) Does the key belong to someone you can trust to introduce other introducers? PGP confuses this with criterion (2). It is not clear that any single person has enough judgement to properly undertake task (3), nor has a reasonable institution been proposed that will do so. This is one of the unsolved problems in smart contracts.
  • PGP also can be given trust ratings and programmed to compute a weighted score of validity-- for example, two marginally trusted signatures might be considered as credible as one fully trusted signature
  • Notaries Public Two different acts are often called "notarization". The first is simply where one swears to the truth of some affidavit before a notary or some other officer entitled to take oaths. This does not require the notary to know who the affiant is. The second act is when someone "acknowledges" before a notary that he has executed a document as ``his own act and deed.'' This second act requires the notary to know the person making the acknowledgment.
  • "Identity" is hardly the only thing we might want map to a key. After all, physical keys we use for our house, car, etc. are not necessarily tied to our identity -- we can loan them to trusted friends and relatives, make copies of them, etc. Indeed, in cyberspace we might create "virtual personae" to reflect such multi-person relationships, or in contrast to reflect different parts of our personality that we do not want others to link. Here is a possible classification scheme for virtual personae, pedagogically presented:
  • A nym is an identifier that links only a small amount of related information about a person, usually that information deemed by the nym holder to be relevant to a particular organization or community
  • A nym may gain reputation within its community.
  • With Chaumian credentials, a nym can take advantage of the positive credentials of the holder's other nyms, as provably linked by the is-a-person credential
  • A true name is an identifier that links many different kinds of information about an person, such as a full birth name or social security number
  • As in magick, knowing a true name can confer tremendous power to one's enemies
  • A persona is any perstient pattern of behavior, along with consistently grouped information such as key(s), name(s), network address(es), writing style, and services provided
  • A reputable name is a nym or true name that has a good reputation, usually because it carries many positive credentials, has a good credit rating, or is otherwise highly regarded
  • Reputable names can be difficult to transfer between parties, because reputation assumes persistence of behavior, but such transfer can sometimes occur (for example, the sale of brand names between companies).
  • Blind signatures can be used to construct digital bearer instruments, objects identified by a unique key, and issued, cleared, and redeemed by a clearing agent.
  • The clearing agent prevents multiple clearing of particular objects, but can be prevented from linking particular objects one or both of the clearing nyms who transferred that object
  • These instruments come in an "online" variety, cleared during every transfer, and thus both verifiable and observable, and an "offline" variety, which can be transfered without being cleared, but is only verifiable when finally cleared, by revealing any the clearing nym of any intermediate holder who transfered the object multiple times (a breach of contract).
  • To implement a full transaction of payment for services, we need more than just the digital cash protocol; we need a protocol that guarantees that service will be rendered if payment is made, and vice versa
  • A credential is a claim made by one party about another. A positive credential is one the second party would prefer to reveal, such as a degree from a prestigious school, while that party would prefer not to reveal a negative credential such as a bad credit rating.
  • A Chaumian credential is a cryptographic protocol for proving one possesses claims made about onself by other nyms, without revealing linkages between those nyms. It's based around the is-a-person credential the true name credential, used to prove the linkage of otherwise unlinkable nyms, and to prevent the transfer of nyms between parties.
  • Another form of credential is bearer credential, a digital bearer instrument where the object is a credential. Here the second party in the claim refers to any bearer -- the claim is tied only to the reputable name of issuing organization, not to the nym or true name of the party holding the credential.
  • Smart Property We can extend the concept of smart contracts to property. Smart property might be created by embedding smart contracts in physical objects. These embedded protocols would automatically give control of the keys for operating the property to the party who rightfully owns that property, based on the terms of the contract. For example, a car might be rendered inoperable unless the proper challenge-response protocol is completed with its rightful owner, preventing theft. If a loan was taken out to buy that car, and the owner failed to make payments, the smart contract could automatically invoke a lien, which returns control of the car keys to the bank. This "smart lien" might be much cheaper and more effective than a repo man. Also needed is a protocol to provably remove the lien when the loan has been paid off, as well as hardship and operational exceptions. For example, it would be rude to revoke operation of the car while it's doing 75 down the freeway.
  • Smart property is software or physical devices with the desired characteristics of ownership embedded into them; for example devices that can be rendered of far less value to parties who lack possesion of a key, as demonstrated via a zero knowledge interactive proof
  • One method of implementing smart property is thru operation necessary data (OND): data necessary to the operation of smart property.
  • A smart lien is the sharing of a smart property between parties, usually two parties called the owner and the lienholder.
  • Many parties, especially new entrants, may lack this reputation capital, and will thus need to be able to share their property with the bank via secure liens
  • What about extending the concept of contract to cover agreement to a prearranged set of tort laws? These tort laws would be defined by contracts between private arbitration and enforcement agencies, while customers would have a choice of jurisdictions in this system of free-market "governments".
  • If these privately practiced law organizations (PPLs for short) bear ultimate responsibility for the criminal activities of their customers, or need to insure lack of defection or future payments on the part of customers, they may in turn ask for liens against their customers, either in with contractual terms allowing arrest of customers under certain conditions
  • Other important areas of liability include consumer liability and property damage (including pollution). There need to mechanisms so that, for example, pollution damage to others' persons or property can be assessed, and liens should exist so that the polluter can be properly charged and the victims paid. Where pollution is quantifiable, as with SO2 emissions, markets can be set up to trade emission rights. The PPLs would have liens in place to monitor their customer's emissions and assess fees where emission rights have been exceeded.
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