User Generated Ecosystems


you as we’ve previously talked about the central aim in the development of an enterprise or economy is linking the individuals interests with the whole organization in order to achieve optimal overall outcomes in very small communities it may not be very difficult to maintain that connection in small communities people can see that their efforts contribute directly to the overall value created and the overall value created is in turn linked back to the benefits that they will gain likewise there is limited need for centralized coordination thus no great concentration of wealth in the system and people may feel that it is fair the problem with this model is that it doesn’t scale and allow for more complex economic systems with specialization of work as a consequence over time larger more complex organizations come to subsume these smaller more basic forms if you want really good scientists builders or teachers they are going to have to specialize in those activities which will in turn require large systems of exchange we invented formal centralized institutions monetary systems large market exchanges so as to achieve specialization mass production and complex economic organizations however as we did scale there came to form a disconnect between the individuals contribution and the value to the whole which creates the potential for both negative externalities large concentrations of wealth extraction and inequality as the scale of the economic systems that we are engaged in has increased the interconnectivity and interdependence between any two random members has decreased because they are farther apart in the network this has worked to disintegrate traditional cooperative institutions that are based on local interactions and interdependencies in the absence of tools for interconnecting everyone within a large national society we have had to create the large bureaucratic centralized institutions of today but these centralized institutions have created notorious divides within the modern capitalist system between owners and workers between producers and consumers with the rise of information technology and globalization we are creating organizations that span the entire planet creating massive divides between producers owners and consumers with the interests and incentives becoming increasingly misaligned clothes are produced in Bangladesh by people who get paid half nothing revenue is sucked up into a global financial system to pay shareholders while end-users have no loyalty or care for the organization from which they buy their products there is a massive misalignment of incentives that creates a hugely inefficient overall system we can analyze the incentive structure of this organization by looking at the centralized technology platforms of today here we see on one side we have value creators and the other side we have value consumers they are all coming together through some type of central server platform for example with uber you would have the value creators on one side being the drivers sending their information to a central server and on the other side you would have the riders that are using the transport service from the platform in the middle you have the platform and of course the reason that these companies are doing it is for profit so a portion of the profit or all of the profit goes up to the shareholders the users of the system do not care if the value of uber goes up or down all they care about is getting from point A to point B that is their involvement with the organization and that’s the limited vested interest that this centralized structure is able to take advantage of the drivers likewise don’t care about the value of the overall organization they just want to get paid and the shareholders and management are only interested in the quality of the service and the conditions of the workers to the extent that it affects the profits of the organization likewise we can look at Facebook and see that it is at odds with its users Facebook’s and shareholders have made massive amounts of money yet its users didn’t despite contributing the key personal information and content that is the central value proposition of Facebook profits are drawn inwards and upwards to the top management and shareholders with its billions of users and high engagement Facebook has become enormous ly powerful in our world yet it’s controlled by a small handful of people this is dangerous for society especially given the fact that it is not really structured to handle such responsibilities the only reason that these companies or shareholders are putting forth the products is for the money that they can make and that is the entire business plan it is to maximize profits and that drives our whole economy what you have here is a split between the users and the beneficiaries rights and that creates a huge degree of misaligned interest not only this but there is no user vested interest the users don’t really care about the success of the company in which they’re using that product that really leaves a lot of value on the table because the users engagement can be hugely beneficial touken economics offer the potential to reintegrate this whole system breakdown divides between users and producers between workers and owners working to align their incentives within a whole ecosystem by connecting people peer-to-peer in automating the operations of the network blockchain technology enables us to take out the centralized component and reintegrate producers and consumers into a much more functional ecosystem of exchange as illustration we can think of the production of a movie currently this is achieved through a centralized organization for profit that then hires producers directors and actors to make the film which people then pay to see with profit going to the investors but this could be turned into a token Network we use a blockchain network to create a token call it a movie coin actors directors and others get paid in that coin that viewers have to buy in order to see the film people can purchase the token before production to raise the initial capital to fund the project thus cutting out the intermediaries as another illustration we can think about the fact that the average tenure of an employee in Silicon Valley is less than two years one of the causes is the lack of alignment between employees and the owners this is called the principal agent problem every group of people has principles which are the owners and agents which are the employees and it is easy for them to become misaligned what may be good for the employee may not be good for the company in startups principals and agents are the same that’s why they are all really motivated to work together and can create a great amount of progress rapidly but as the organization grows there becomes a growing gap between owners and employees and growing potential for the misalignment of their interests by creating micro economies we can work to reintegrate the two distributed organizations have no centralized management structures for controlling and coordinating the organization the architecture of the code is the rules of the organization and people may have an input on how that code is altered the aim is to have autonomous actors who feel integrated with the organization to create true user engagement by functioning as both equity and currency the token can work to link the value of the ecosystem with the value that people exchange within that market moving to decentralized ecosystems you really have the same parties involved but you’ve removed the centralized entity completely thus closing the economic loop of that company with a peer-to-peer token exchange instead of sending money to a centralised body with fixed fee on both sides taking off a profit margin these companies can introduce a token because of the linkage between the value of each change token and the value of the network in the token system the value generated gravitates not upwards within the hierarchy but naturally propagates to the token layer that reflects the value of the whole ecosystem and goes into the pockets of anyone holding the token because it is also a utility token it means that the value goes to those using the network the producers and end-users in the example of uber imagine every single user paid in a native currency or a native token of the actual organization itself and then every driver receives that token and then they sell it back to people that need to have rides this closes the economic loop and aligns the interests of everybody in the organization you now have unprecedented vested interest every single person involved in that corporate ecosystem is now invested in the success of the organization just as everyone holding a Bitcoin will promote the digital currency to their friends anyone holding the token of any network will be incentivized to promote the use of that network so you are turning the users into evangelists another example would be brave brave is a new token network for the digital advertising industry it pays publishers for their content and users for their attention this service creates a transparent and efficient blockchain based digital advertising market relative to the traditional model an aetherium based network that radically improves the efficiency of digital advertising by creating a new token that can be exchanged between publishers advertisers and users by connecting all parties involved directly via a token market publishers receive more revenue because middlemen and fraud are reduced users who opt-in receive fewer but better targeted ads that are less prone to malware at the same time advertisers get better data on their spending and more engaged users what we start to get our economic networks that are really like a cross between private enterprise and public utility we are getting a hybrid of the community system with its vested interests where the work you produce is connected to the value of the ecosystem but also getting the option to exchange within broader systems involving high levels of specialization and complex coordination

3 thoughts on “User Generated Ecosystems”

  1. Wow, video after video a give thanks to you guys at the C Labs, so much value in such a futuristic-present-imperative topics.

Leave a Reply

Your email address will not be published. Required fields are marked *