DECENTRALIZED WELFARE SYSTEMS
by Johan Nygren / 8 October 2015
“The urge to decentralize and autonomize has informed social movements since the 1970s. The language of “decentralized autonomous organization” (DAOs) appeared among the swarms of activists in the late-1990s counter-globalization movement. But the trust-replacing mechanisms of a blockchain offer less an ideology than a method, one which may make it far easier for us to hand our relationships over to code.” – Are You Ready to Trust a Decentralized Autonomous Organization?
When the cypherpunk generation first started writing about DApps and DAOs, they were a tiny minority. The cypherpunk generation put the blueprints for DAOs online in the 90s, Nick Szabo wrote about how to Formalize and Secure Relationships on a Public Network in 1997, the cypherpunks made some continuous attempts to signal the world that tribal politics could be transcended, and managed to eventually co-ordinate the creation of the early blockchain prototype Bitcoin, a proof-of-concept for some of that generation’s then decades old ideas.
Christopher Allen writes about how he “truly believes that we could have had cryptographic smart contracts by ’04”. Something delayed it more then a decade, and we got ethereum protocols in the 15s instead of the 04s. Christopher Allen cites some patent conflicts, and other corporate conflicts, but I believe it was ideological. I believe that people wanted their welfare system — their wealth sharing system — to live on, and they saw no solutions to how to do wealth sharing in a smart-contract world. I believe that there was a bootstrapping problem, and that we lacked one of the pieces of this new DAO system. The algorithmic solution to wealth sharing was still not out there in the sphere of ideas. I had to give birth to it.
This time-line of the internet shows the major mile-stones in the evolution of my wealth sharing system Resilience. From what I’ve gathered, conversation about decentralised welfare systems has been practically non-existent during the 90s-10s. The first mention of it, as far as I know, is my own work in the late 12s. I came from a background of medical science, I didn’t want anything to do with tribal politics, and I searched for a new type of welfare system — one that did not make people sick.
What I found was to combine the decentralised credit system Ripple — an amazing innovation that deserves more attention— with a wealth sharing algorithm that mirrored the credit network. I was basically remixing old ideas in ways that no one had conceived of before. Later on, in 2013, the King of Holland declared that the welfare state was coming to an end, and that decentralised welfare systems would replace it.
The conversation about decentralised welfare systems has been pretty much non-existent, while the conversation about decentralisation and blockchains has been wide-spread. The conversation about how crypto-technology over-powers the centralised welfare system has on the other hand been wide-spread. There’s been a sort of culture war about this, with one side pushing out Bitcoin-like technology while the other said “but you’re breaking our system”. Guilio Prisco writes about this decades long schism in Back to the Future: Adam Back Remembers the Cypherpunk Revolution and the Origins of Bitcoin.
Why haven’t the two sides met and discussed these issues ? It’s not like anyone is inherently against blockchain protocols, cheaper and more secure contract storage is a win win, and would have become part of the internet a decade ago if not for delay. I believe the reason for this delay is that the internet-engineers lacked some of the answers, so they kept pushing, without facing the concerns of the others. So, the other side pushed back. In summary, I believe ethereum-like-protocols could have and would have evolved more then a decade ago if not for a bootstrapping problem in the transition from centralised wealth sharing to decentralised wealth sharing.”
Resilience — decentralized basic income through paying it forward
by Johan Nygren / May 19, 2016
“The emergent properties of my system ‘Resilience’ are not covered by words like ‘donations’, so to call it ‘decentralized taxation’ is the most accurate metaphor I’ve found. The idea of ‘crypto basic income’ as part of a decentralized organization is frequently heard around the blockchain space, and that’s a hard problem. The Resilience system solves it through the use of a ‘pay-it-forward’ mechanism, so that each step in a supply chain contributes the same amount. The result is something that could not be labeled ‘donations’, it’s something new. The Resilience system is built to produce emergent effects from smaller parts, and mimics how nature achieves that through the use of evolutionary algorithms. The system introduces units of replication that are called Taxemes.
Taxemes are based on the principles of variation, selection, and heredity. Variation is achieved from each node hosting their own personal Taxeme, of which they can adjust the tax-rate at any time. Selection is achieved by designing the framework such that consumers will come to prefer Taxemes at certain tax-rates. Heredity is achieved by inheriting Taxemes upon transaction, and passing them forward down supply chains and from producer to consumer, and employee to employer.
Selection is incentivized by the rule of lowest first. Each node may host an infinite number of Taxemes at any given time, but the lowest one is favored always, and described as active or dominant.
Upon making a transaction, a dividend pathway is formed that gains a width proportional to the Taxeme that was active during the transaction. These dividend pathways are similar to blood-vessels in that wider pathways have higher throughput for the money that has been collected by Taxemes. Those who grow wide dividend pathways will compete for more universal basic income, incentivizing consumers to be part of the selection of Taxemes.
The growth-patterns of dividend pathways shape how Taxemes spread, and influence what rates will become popular, and the demography of their transmission pathways. They are designed such that they mirror how we are inter-connected financially around the world, and they discover patterns of inter-dependence that have been overlooked in the past. The growth of dividend pathways is based on a path-finding algorithm that was pioneered by RipplePay in 2003, and the system traces how nodes contribute value to one another, and how new value builds on previously created value. The visualization below shows how each circle that the path-finding algorithm renders branches out into new circles, that in turn branch out into new circles, each new circle made possible by the value added by the previous.
As Taxemes collect money, they send it into the dividend pathways down-streams of the node that was taxed, and the tax flows to all nodes within that fractal web of pathways, and is absorbed in small amounts by each node along the way, like nutrients in a vascular system.
The growth of dividend pathways is future oriented, you only receive tax from pathways that extend away from you later in time. This removes the incentive to consume from producers that have already built up large dividend pathway grids, as you only gain access to pathways that grow upwards from your consumption trail. This design influences the behavior of Taxemes, the predictability of how a specific Taxeme will spread, and the economic gains and costs of inheriting a specific Taxeme.
Dividend pathways are organic in the sense that they grow and wither naturally. They get used up and decay as basic income flows through them. You might grow thousands of pathways in one place, and then if you move somewhere else, you´ll create new pathways while your old ones gradually fade. Taxemes are removed from circulation using mechanics that mimic biological immune systems and anti-bodies. When a new Taxeme is originated, through a node consuming from a node whose active Taxeme is its personal taxeme, anti-taxemes are also created and set to destruct the originated taxeme when they collide.
These anti-taxemes spread in the reverse direction, from consumer to producer, and they are seeded in vast amounts, so that a collapse is mathematically pre-determined. I’ll leave you with a vision of why I want to deploy a decentralized basic income system, and why I’ve invented what I call wealth sharing. My dream is a world where ideas spread through mate choice, and where everyone is free to be their true self. My Resilience is the end of statism, and will do for neural information – memes – what the TCP/IP protocols did for digital information, and create resilience at the level of ideas.”