Tagged: financial protocol

animation of EDP and SEA

So, people have adopted MTTP and co-created something. What happens if money is attracted to this?

For example, a team have invited one another through a web of peer-to-peer MTTP social contracts, and they produce a book. Traditionally, they would try to “sell” the book. However, with ecological economics, the book is given. Of course, in order for the participants to continue writing or doing other things, it would help if they were given money in return. Thus, the value that the team produce attracts money. We call this surplus.

The money that is attracted to the value co-created is divided equally to all participants. This is EDP — Equal-Distribution-Protocol. (On this website, this used to be called dmp, the distributed-money-protocol.)

For added flavour, to capture the quality of different people’s contributions, they can use the Subjective-Enumeration-Algorithm.

animation of mttp social contract

OK, this is rough, but it is amusing to think that I have actually done this — walked into businesses and presented ideas framed in the MTTP (Money-Time-Trust-Protocol) contract.

At the end of the meeting, the person is usually amazed. They have received a new idea they may use in their business, have had a super-interesting discussion, and they end up with more money than they came with.

I tried this with advertising companies and got very close to money-flow. Nobody I spoke to, however, saw the potential for using this methodology when approaching their potential new clients. Not yet at least. The idea of giving away your ideas seems to go counter ‘pitching’ and competing and owning. Once people get it though, it may turn the business world upside down, just like open-source half-did on the internet. This time, it is in the real world with anything.

Time Trust, demurrage and directions of the humble mttp

A few observations which seem to evolve from the money-time-trust-protocol quite naturally: Time Trust, demurrage, the “problem” when two givers meet, and sourcing the origins of giving.

time trust

Of course we should not be surprised that someone came up with Time Banks. In fact it was a chap called Dr Edgar Cahn during the 1980’s.

Ecological economics began with the financial handshake that turned out to be called mttp — money-time-trust-protocol, and over the months, awareness reveals some more qualities of its fractal structure. We have already mentioned moneyflow and the powerlaw as money can be decelerated, eg I am looking for about five £100-days per week to be able to make a living. Well, with due consideration, we may also wish to estimate the period of time such a contract may exist, eg for a season. That is, we have a number tagged with three periods of time. Eg, five people contract me for £100-day per week for the duration of a season.

A previous thought has been credits which developed further on ideas I had with Tav when I first engaged the Espian lot back in summer 2007. Back then, I influenced Tav to shift from thinking of personal economic units, that is a currency relative to every individual, to subjective weighting, so that money was distributed through the ratio of values each and every individual allocates. The development in terms of credits was to map it in terms of two dimensions, open-closed and black-red. The safest credit to receive was black-closed, which effectively acts like money: it is money that is guaranteed because the person is in the black and the total allocation of credits is closed so that whatever value one gets is the value one gets.

Tav didn’t see the point in a system that had normal money in it. Now that we have come up with ecological economics, it is a useful way to track how one behaves with one’s credit allocation through life, perhaps promising a lot of open-red credits say, and then phasing into giving out black-closed credits for important things. And more importantly, it allows us to track our collective behaviour, giving us a chance to shift from a money-production culture to a value-creation one — all with the self-similar social contract of mttp. In fact, mttp might be renamed as mutual-time-trust-protocol, and the thing that is formed a Time Trust. This may be the name of the book I am writing about ecological economics.

demurrage, or rusty money

And in case this is too much, too far, one potential point of validation is to recognise 1) the limits of current understanding and 2) demurrage or rusty money is built into mttp.

In relation to the first, I am perpetually making sense of the jumps I have made. It is gratifying to note how credits has become useful after making that leap nearly two years ago (in this dunno book when I started to live in Madeira). I still have no idea about how to square closed credits with third order periods of velocity of money, but I am sure it is doable. This is also an invitation for anyone to contribute to this space. The first financial bods to seriously consider ecosquared and mttp, will be able to bring to light many aspects which will not only make them famous, but will provide us with further understanding and a stable evolution of the eco^2 entity. That is, everyone is welcome.

In relation to the second, it is gratifying to note how rusty money appears in this formulation. We have not had to graft it on, like a scaffolding of categories, but rather it evolves from the same mttp social contract. Namely, when I invite someone for a day, my £100 is fixed and does not change. Even should the entity die that week, they will receive the £100. Because it is fixed, it is useless. It is not reinvested by a bank, and does not pay interest. This may not appear significant at first, but if you consider an invitation for £10m which is for a century, that £100m will not be worth much in a century’s time. That is, it “devalues” — at least in traditional economic terms. That is, it rusts, because of inflation, primarily.

A remarkable observation, which naturally evolves from mttp.

the four directions of mttp

Examining the abstraction of money as a number set to periods of time (duration, rate and period eg £100-day per week over a season), we can re-examine the initial mttp contract. Namely, a decision is made before the period of time which way the money goes. In fact there are three possible contracts when money meets equally as given by the following truth table:

One of the options is your classic money contract: both people want to take, and so they negotiate in the form of a competition. This can take the form of a contest of skill to be determined throughout the period, a random game like throwing a coin, or through some more complex inter-subjective manner which amounts for what we call “business”. Two of the options provide the classic mttp of ecological economics: the person who invites agrees to give the person who is invited the money. Thus, there is confluence in that the giver and the taker align in the vector direction of money.

What has not been accounted for so far in eco^2 thinking is if both people wish to give. This can not be resolved in the manner of a competition, at least not in the same way two takers compete. It is gratifying to note that the money that is derived by two givers could become fluid and pay for those individuals who are taking. That is, it constitutes the second major means by which money flows into the entity; the first was invitation via mttp, the other is attraction. Depending on the decision gate state, this money is either distributed to everyone participating as dmp or it is fed directly into honouring the mttp contracts of individuals coming to the end of their contracts and who are taking as they leave.

sourcing the origins of giving

And further, it is interesting to note that numbers used in sea provide at least two indicators of how we behave:

  • the values given to us total up to the total money that comes when there is a surplus payout via dmp
  • the total values any one of us gives out, provides us with the style and quality of the way we value (cf credits above) as we grow older

That is, we can sum up the totals of points that are given to tell us something about how valueable we are perceived by others, the object of the vector; and we can also see how the value of a person in their allocation, the origin of the vector.

So, when one meets another person and one invites them to eco^2 and they also decide to give, this act of generosity of giving their money for other people who they may not even know, should be valued. That is, one can look back at the historical giving of a person and see the values they set out with in terms of their pattern of subjective enumeration coupled with the way they dealt with their first eco^2 invitation.

I can not discern it linguistically here and now, but there is a means by which the simple math of subjective enumeration can bring to the fore those individuals who are not only providing greatest value to others, but also those whose eye for value is appreciated. And in terms of social engagement, this may be appreciated as wisdom.

The reaason why I can not discern this clearly is because when I was trying to invent a numerical game for adolescents so that it was the giver who ended up being respected, not those who received, my mind could not do it. I believe it is in the math of the application of number to subjective evaluation. Money can be likened to the number that is given to another person, when I say that a conversation with John was worth 7 out of 10 say. I “gave” him 7. But I have also given 7. What is the maths of the giver?

 

and finally…

The social contract instigated by mttp is quite phenomenal. That one can use mttp to replicate employment and investment and direct action, is quite something, and now to recognise the powerlaw and the logic of giving, I am humbled. I look forward to hearing how others explore this as they experience it. I did not misname it when I intuited mttp to be a fractal social contract.

 

subjective-enumeration-algorithm

Subjective-enumeration-algorithm (sea) adds a qualitative step to dmp. When each participant receives their equal share of the surplus (as per dmp), it is immediately redistributed to co-creators by the personal ratio each individual determines.

Basically, this is weighted money, where money is distributed according to the subjective evaluation of each individual. sea enables each individual to influence the flow of surplus money through them to reflect their personal values.

If Anna distributed her value as 7 to Barney and 3 to Charlie, and she received a surplus of £100 from dmp, £70 goes to Barney and £30 to Charlie. In turn, if Barney has distributed his evaluation as 5 to Anna and 5 to Charlie, his £100 surplus would be split £50 to Anna and £50 to Charlie. And if Charlie distributed his value as 2 to Anna and 8 to Barney, his dmp surplus would be split £20 to Anna and £80 to Barney. In the end, although each should get an equal £100, the distribution has been filtered through each individual’s sea values; in this case Anne gets £70, Barney gets £150 and Charlie gets £80.

There are several ways that people could monitor their subjective evaluation. A useful one is to evaluate each and everyone’s contribution as they happen. One easy procedure at the end of a meeting is to simply think of a number (0 to10) to express the value of that meeting. The running total and distribution of these subjective enumerations can be recorded as a numerical expression. When surplus is allocated, it is immediately distributed in the accumulated ratios with no extra thought applied.

The central benefit of sea is that the process of allocating money is divorced from the evaluation of value, much like mttp, freeing people to honestly evaluate others’ contributions relative to their own values. No argument, no fighting over who deserves what. In the above example, perhaps Barney was recognised for the greater input in the production of their picture. In this way, money finds itself arriving at people who exhibit the most value.

Check out this working sea sandpit on gdocs:

Screen Shot 2013-07-02 at 00.22.38

 

note: google page rank algorithm

If we wish to track subjective enumeration, google page rank algorithm may be a near-perfect off-the-shelf calculation, complete with arrays of adjacency functions as individuals rate one another. Consider the initial starting position:


(where V is the value of any person i at time 0, N the total number of people)


And the iterative equation which tends to a relative value of any person to any other person in the entity, much like google’s algorithm with a little minor tweaking, namely ∑V(Pj) :

 

(where V is the value of any person i, d is the “damping factor”, N the total number of people, M the set of people who evaluate person i, the value of person j at time t)


A fair starting point, and one which may not only interest google, but may also give some credence to the insight that mttp and eco^2 may provide a better economic structure than their current legal “incorporated company” since it is designed for networks. We may one day see google transform its entire operation through eco^2 protocols.

invitational-protocol

Invitational-protocol (ip) is a variation of mttp, used specifically to outreach to new participants. When Anna meets Barry at a conference, they conduct ip by Anna inviting Barry to come to the next in-person gathering, and offering £10 to be matched by Barry. The conditions are very similar to mttp:

  1. bring both £10 to the meeting
  2. optionally invite others to the meeting

If Barry turns up to the weekly meeting, he is welcomed warmly. He brings with him £10 and has invited Chuck, who himself turns up with £20.


In this way, trust becomes transitive, and new participants are genuinely welcomed for turning up for the first time having been attracted to the person who engaged them, the value that was seen in them, or the financial protocol that beckons a completely new economic social contract.

Money can be traced through the trust relationships formed through ip before the meeting has even occurred. Mathematically, the money that is brought to the meeting is at the fringes of the network of trust that has cascaded through ip relationships. There is no money at the centre: the “regulars” have given away their money, and in this process it doubles as ip propagates through a population. (For those interested in the detail, mttp can create equity cycles where a chain of invitations create a closed loop as the initiating inviter is finally invited; this is linear, whereas ip takes this into a two-dimensional radial pattern.)

This is not a straight linear relationship, variations evolve. For example, Dave, Charlie and Barney “nominate” Anna, a particularly effervescent and active member who has time to talent scout over the week. They invite her at £10 each to the next meeting, so Anna starts the week with £40 which she can use to invite four people using ip. If she fails to invite anyone, she can return with £40. Perhaps she invites four people and none turn up, perhaps eight do with £80 in total.

Seen in this way, invitational-protocol is a kind of test for the strength of the social fabric. Not only a social bond between regular participants who attend weekly, but a test of the environment “out there” as new people are approached with eco^2 protocols of trust.

30% eco-time

Google has 20% Google time, where employees are encouraged to work on their own projects for 20% of their paid time. This fosters an incubation process within the company itself, generating a sense of genuine co-working and has given rise to several in-house developments.

Looking at social business hubs, whose business plans are usually based on renting out of desks or space or membership, there is a tendency for such spaces to become like hot-desking, no matter the social engineering techniques employed. Hence the need to introduce 30% eco-time, where participants are invited to give 30% of their time to others.

If people are working at 70% capacity as a norm, then there is always an openness to conditions, to opportunity. It means the collective is capable of dealing with extenuating social conditions, can respond more quickly to surprise events, and suitably structured with social ligaments can co-ordinate themselves to achieve objectives that are collectively more pressing.

The economics for this depends on the conditions. At the Hub Westminster, for example, members are charged £95 for 30 hours of use over a month. Hub Westminster could ask for 10 of those hours to be given to other members, or to add an additional 10 hours for this purpose. In fact, if eco^2 is healthy enough, these additional 10 hours could be paid for at £10-hour, which means members could make back their membership fee by being paid to offer their services for free. Members could then evaluate both economic models: the traditional model where they pay for space and services to further their own objectives, or they are paid to create value for others. The second may appear to be like a company, and indeed it offers the security and working conditions for productive output, but the combination of mttp and dmp have already established that eco^2 is not a company.

In terms of eco^2, 30% is a round figure. Participants may scale themselves on how much “free time” they are working on, from 0 to 10: simply square this number to determine the percentage of their time is eco^2. David Pinto, aka happyseaurchin, is currently 10 as all his time is devoted to eco-time.