The traditional models of producing order (governance)
In geo-states order tends to come from a chain of command which information flows from the bottom to the top. Orders flow from the top to the bottom. The person at the top deemed the leader, the President, is in the position to be the commander of the troops.
In traditional corporations order also tends to come from a chain of command in which knowledge flows from the bottom to the top and commands flow from the top to the bottom.
The problem with the traditional models is that in a world of increasing complexity the attention of those at the top is very scarce. Good ideas which are generated at the bottom might never flow to the top because of filters. Knowledge generated at the bottom might not reach the top because of attention scarcity. As a result those at the top increasing have to rely on expert advisers or on technologies which provide decision support.
Order from process in digital space
In cyber-states order comes from process. The process comes from the algorithms encoded into the fabric of the cyber-state. When Larry Lessig said “Code is Law” he was revealing that process produces order in digital space and code is what represents the algorithms of digital space that govern process.
In Distributed Collaborative Organizations order also comes from process. If the DCO is built up around a blockchain then the DCO is governed by those algorithms, which encourage all participants to follow a certain set of processes which inherently produce the order we see.
This is similar to how ant colonies, bee hives, and other organic structures have order if you look closely at the distributed rule set but to the casual observer who does not study insects it might look completely chaotic. These algorithms provide the mechanisms which allow for stigmergy to shape the behavior of the swarm. All of this can be encoded into a series of smart contracts which can allow the swarm to be self governing, and to be potentially more scalable and effective at governing because of swarm intelligence which can help solve the problem of attention scarcity.
Governance by software protocol
Digital space is holonic. Every computer in digital space is a node. Every node in digital space could be called a peer for example. In human terms we could call it F2F (friend to friend) or N2N (neighbor to neighbor). If we look at Bittorrent as an example then we can see that a node can be in more than one role at a time so the node can be both a seeder and a leecher. It is the share ratio which governs the network because everyone in the network can be rewarded or punished depending on whether they meet a minimum threshold of the share ratio.
The Bittorrent example reveals that you can create order through mathematics, algorithms, ultimately making the process more important than the nodes. For this reason you do not need a leadership to create whitelists and blacklists of who can get what but instead you can have a decentralized rule set, a process which everyone knows and follows just by downloading the software itself. As a result by using the software you’re subscribing to the process and the software is only able to interact with others following the same process which produces order from adherence to software protocol.
In biological networks such as ant colonies, bee hives, or termites you see self organization which builds and maintains critical architecture. Human beings can also take advantage of this self organizing mechanism to build and maintain institutions. The process is called stigmergy and to take advantage of this concept fully we have to revisit the fundamental theory of “the firm” as form or organization.
An attention based view of the firm
As human beings we are guided by our attention. It is also a fact that our attention is a scarce resource which many competing entities seek to capture. In an attention based view (ABV) of a firm it is attention which is the most precious resource and the allocation of attention is critical to the successful management of the firm. In a traditional top down hierarchical firm managerial attention is considered to be the most precious (Tseng & Chen, 2009), and is an very scarce resource. The allocation of attention within a firm can facilitate knowledge search. Knowledge search is part of the process of producing innovation and is effective or ineffective based on how management allocates their attention.
In the top down hierarchical model of the firm you must rely on managers properly allocating their attention because their attention is scarce. The problem of attention allocation (Tseng & Chen, 2009) and attention scarcity both plague traditional top down firms. In heterarchical flat organizations this may not be true anymore and when stigmergy comes into play it opens a door to a whole new method of knowledge search.
Attention-based stigmergic Distributed Collaborative Organizations
A Distributed Collaborative Organization (DCO) is a new model of human organization which did not exist until recently. Now that technology allows for Distributed Ledgers such as what we see with the Bitcoin blockchain it opens the door to new forms of human organizations such as the Distributed Collaborative Organization. Distributed Collaborative Organizations have unique capabilities and work by utilizing a token which represents “membership” in the DCO. Because of how DCOs are set up the tokens likely do not represent securities as they would if the traditional firm were used.
Attention-based stigmergic DCOs can take advantage of swarm intelligence to direct the attention of the members of the DCO. Stigmergy can be implemented through attractor patterns/attractor tokens, and incentive design patterns, both which would direct the attention and shape the activities of the swarm through simple algorithmic rules written as smart contracts. In this instance as Larry Lessig is famously quoted as saying: “Code is Law” but in a non-hierarchical swarm the user’s attention is the most precious resource.
Because attention is the most precious resource in a swarm there should be a mechanism allowing advertisers, or others, to pay for the attention of individual members within the swarm. In this case the DCO would have to be designed in such a way that attention is treated as extremely scarce, something to be preserved by use of bots/autonomous agents (personal preference swarms?) and automation. These personal swarms or personal drone networks if you’d like to call them that would seek out knowledge and information on behalf of individuals without the possibility of distraction.
These swarms could seek out the best deals for individuals. It could collect an extremely detailed amount of information about each and every product and use algorithms to compare products. This would allow swarms to evaluate anything from video games, to supermarket food, to stocks, to populate a list and buy, or to apply swarm intelligence to the construction of investment portfolios. All of this leads to a completely new paradigm of human organization through self organizing stigmergic institutions.
In order to maximize the utility and interoperability of blockchain technology as a whole it is important for service providers to design their services to be blockchain agnostic from the beginning. The reason being is that the current Bitcoin infrastructure is a lot like the nation states where you have a sort of lock-in. Vender-lock in is not good for the long term evolution of blockchain technology even if it might temporarily benefit the Bitcoin network effect.
Smart wallets are designed to be blockchain agnostic. Instead of the user having to trade between different kinds of coins or download multiple wallets there is one unified wallet which can allow the user to send and receive any kind of cryptocurrency or cryptoasset. This blockchain agnostic approach can limit code duplication and technical debt.
Holy transactions: is one of the first smart wallets. Holy transactions in addition to being a smart wallet is also an exchange. The flaw with holytransactions is it’s a centralized service which is not the recommended approach for long term security.
Moonstone.io is a currently in development smart wallet and in addition it will provide a truly decentralized exchange. The backend of Moonstone.io is the Bitshares blockchain which allows for the trading of BitAssets such as bitBTC, bitUSD, bitLTC, bitGLD (bitGold) and more. Moonstone.io intends to allow for trading 1:1 between bitBTC, bitUSD and other BitAssets and in addition it will in some cases even allow physical delivery such as with BitGLD.
Smart blockchains are blockchains which are reconfigurable and which can communicate with other blockchains. It is important that an “Internet of Blockchains” form if blockchain technology is going to evolve effectively. In order for this to happen blockchains must be able to communicate with other blockchains and this can happen through atomic cross chain transactions (ACCTs).
Bitshares currently is intending to be one of the first smart blockchains. The core developers are focusing on adaptability through reconfigurability and atomic cross chain transactions are already coded waiting to be enabled.
What are atomic cross chain transactions (ACCTs)?
One of the most important aspects to allow blockchain technology to scale up is to have multiple communicating chains. These communicating blockchains would form an “Internet of Blockchains” (IOBs). Examples of this would be BlockNet and SuperNet. In the end all blockchains must develop the ability to link up to each other so that transactions can flow between blockchains allowing for example a transaction to be initiated on the Bitshares blockchain and filled on the Ethereum blockchain or vice versa. The communication between chains would make each blockchain a node in a network of blockchains and this is why blockchain agnosticism is a prudent approach for current and future developers.
Kruchten, P., Nord, R. L., & Ozkaya, I. (2012). Technical debt: from metaphor to theory and practice. IEEE Software, (6), 18-21.
What is a sharedropping?
Sharedropping is a practice perfected by the Bitshares community. Stan Larimer discusses the purpose of sharedropping in the article titled Bitshares Sharedrop Theory. This quote below highlights what a sharedrop does:
It’s not about imitating Bitcoin. It’s about attracting an affinity group. And once you’ve motivated that group to hold onto your coin, you have eyeballs to sell. In this case, the value of your coin is tied to the value of your group as a target for other developers’ promotional shares. This is exactly what PTS and AGS holders are: A demographic MUCH more likely to be good supporters. These block chains are like mailing codes that let you target your shares to the people you want to reach much, much, much more precisely than using Silicon Valley mailing codes!
One of the first successful sharedrops occurred within the Bitshares community. Originally Bitshares was centralized around a company Invictus Innovations which invented the concept of Protoshares. Protoshares at the time represented nothing more than an idea. All who believed in that idea were encouraged to acquire Protoshares through either mining it with their CPUs, working for it, or buying it.
What is a stigmergic operation?
Protoshares represented the hopes and dreams of the Bitshares community symbolized as a token and the developers encouraged all participants to rally around that shared idea by formulating a social consensus. This represents a stigmergic operation and provides one of the best examples of stigmergy to date in the crypto community.
How can you conduct a stigmergic operation?
To do a stigmergic operation just follow these basic steps.
- Come up with a compelling idea and share it with people who are likely to appreciate it. Be good at explaining the idea and make sure people believe it can work.
- Find an attractor pattern to represent the idea. This could be as simple as tokenization where anyone can mine if they believe in the idea or acquire the token somehow by buying or working for it. It can also be the joining of a mailing list, the membership on a forum, citizenship, reputation or anything you want.
- Create stakeholders in the idea. This is where you conduct the sharedrop onto all who hold the token, or who are on the mailing list, or who maintained active membership on the forum or virtual citizenship group.
- Create a social consensus and or constitution.
Once all is in place you will have created a swarm. The price of the attractor tokens will influence behavior of the swarm. In bees the duration of a dance is the signal but for humans price is usually the signal. The social consensus is also extremely important to follow consistently because it is the glue which holds everything together. It is trust in the distributed rule-set which holds the holonic structure together.
What is a holon?
A holon is both a whole and a part. An example would be that an individual human is composed of cells which are composed of atoms. The individual human is considered to be a whole human but that individual human is also a part of the human society making the individual part of a bigger whole. So the human being would be a good example of a holon but so would a node in a complex adaptive system.
What are holonic systems?
If we remember take bees as an example this time instead of humans then the holonic system would be the bee hive. The bee hive would be a representation of the societal governance structure of the bees that belong to the hive. The bees would be holons because they would be part of the hive due to the fact that they follow the rules of the hive. They cooperate between each other but are all subordinates to the rules of the hive which represents the whole. The bee hive represents a holonic system, as do ant colonies, swarms of birds, schools of fish.
The difference between pathological hierarchies and holonic hierarchies
In a pathological hierarchy perhaps one individual or one node in the network assumes the role of the “whole”. This individual might consider him or herself to be the ruler, the number 1, the head authority, who must coerce and control everyone below them. This structure typically takes the shape of a rigid pyramid where the decision making and thinking typically comes from the head authority, with limited room for individuality below.
Holacracy embeds a generative mix of autonomy and cooperation in a flexible fabric of holonic design constitutional rules. It constitutes a new operating system for organizations that regulate the individual/
group dynamics to eliminate on one side the possibility of capture via power games, and on the other side, the inherent chaos characteristic of “leaderless,” decentralized organizations.
In a holonic system of governance there is a system for generating rules to provide order. So for instance in the case of virtual governance the nodes on the network can all run the same software, the same configurations, and each changing of the configurations of each node in the network the rules for the network can change in collaborative fashion. Roles and rules are set collectively and collaboratively.
Every participant in a holacracy is a sensor for what is going on, and each plays a role in identifying the tensions in a timely way while taking active steps to resolve them. Effectiveness and resistance to
capture are achieved by enhancing the power of collective decision locally via procedures such as: “After taking Individual Action, a Part-ner should tell any affected Role about it, and, on their request, initi-
ate actions to resolve any Tension created by the Individual Action or refrain from taking this Individual Action again in the future.”
The honey bees dances which act as the “attractor patterns”. These dance patterns signal the “best site”. Swarm intelligence is what we are seeing with bees but we also see it with humans. With humans we could substitute the “dance pattern” with something as simple as a data feed (which often is just a rising price trend). The data feed pattern represents an attractor pattern which can attract a swarm.
Human beings are looking for “value”. Swarms of human beings interested in value will look for certain attractor patterns that signal the kind of “value” they are looking for. Personal preference swarms bring AI into the mix by allowing non-human software agents to augment the human swarm capability.