[p2p-research] UWS

[Michel Bauwens]

dear friends,

thanks for having a look at this new currency proposal, fabio would
appreciate any commentary

On Fri, Oct 30, 2009 at 7:59 PM, Fabio Barone <holon.earth at gmail.com> wrote:

> Dear friends,
>
> you all have expressed interest in the alternative currency system I have
> been working on the last two months.
>
> A very rough prototype has been finished now.
>
> There is only a locally running instance here, as the initiator of
> the project would first like to verify the system on his own premises.
>
> There is code available at github, I can provide the url on request
> (very little documentation, sorry).
>
> I now wrote a blog describing the system a bit. I would be very interested
> in your feedback before publishing the blog.
>
> Best wishes
> fabio
>
>
>

The Universal Wealth System

On kind invitation by Michel, I am outlining here
yet another alternative currency system. This system
builds on known concepts but weaves them together in
a new way.

The system has been ideated by a Swiss now living in Brazil.
On his request I have been invited to his place to write
a prototype of the software, which is written open source.
I have implemented the prototype out of interest for alternative
currencies and to try to expand my knowledge about them.
The prototype is very crude, especially because my skills
in web design are more than limited ;) Nevertheless I plan
to make it available if there is any interest.

I do not intend to promote it in any particular
way, nor to claim any primacy, novelty or special ingenuity
in its approach, neither do I affirm to have found
any panaceas or best solution. I believe in a future world
of abundance, and the way there is to free ourselves
from the yoke of debt and scarcity based money. I endorse
any endeavour to get there and any individual currency system.

Keep in mind, while reading, that this is work in
progress. We deliberately deemed it appropriate to
go out with this idea to seek feedback in true open
source manner. It may well be that feedback will
show that this approach is not feasible.

This post is an invitation for discussing this idea and
to evaluate if it bears any value for further development.
Should we deem it to be a valid and interesting proposal, I believe
other contributors may be joining the effort. Otherwise
it just has been a worthwhile undertaking thinking about new
currency systems and exchanging ideas.

*****************************************************************

In UWS, the community is key as is trust and reputation.
In UWS, nobody owns anything and everybody shares everything.
You are free to join the system at any time and free to leave
it whenever you want. You are also free to put as much into
and share as much as you want with the community.
Every service delivery, or work, if you like, should be seen
as lifetime dedicated to the community. Therefore it's
an investment into the community.

UWS fosters a decentralized model where individual cells
can build and manage their own wealth. Ideally, cells would be
able to exchange their wealth over a protocol or a kind of
clearing system, but this is outside the scope of this first
post. UWS allows for concepts like a basic income, which
should free us to follow our passions in chosing what we do
and what we work for.

It helps to look at UWS not as another currency model. Instead,
it is a more wider approach which actually tries to model
the whole economic activity, including material flows.
It balances material flows with human activity.

Basically, in UWS there are two realms, and actually there
are two different "currencies" unified over a formula.

On the one side, there is a more or less classical LETS or
mutual credit system. If you happen to know Bernard Lietaer's
classification (see http://www.transaction.net/money/), UWS
mutual credit realm is more of a ROCS system (Robust currency system).

As like any mutual credit system, in UWS units are earned by
exchanging services, which are credited to one account
and debited to another - the balance is 0. There is also
the notion of community requested services. Such services
reward only units to the service deliverer; no account is
debited, essentially increasing the total units issued.
Ideally, which such services would be deemed public would be
evaluated in an open, transparent and collaborative
community process (this should be left open for every community
to design their own). Generally, such units are always
newly created when services are being performed
which the whole community requests, therefore representing
a valuable contribution to the community.

It seems to offer itself as a good approach to start the scheme
by requesting some community work in order for people to get
their accounts started. At the base of service deliveries
is time. Units are earned in proportion to time.

Service deliveries however are weighted. And they are negotiable.
Through multi-dimensional reputation and trust mechanisms
(and currencies) ideally the factors would be determined
by the community, and would reflect demand and offer.
Services need not to be delivered by the hour, they can also
be offered / advertised for tender at lump sum or fixed price.

In fact two players would be able to determine their factors for
exchanging mutual services on their own and gain advantage.
However, ideally the factors would be needed to be gained through
reputation,
so you can't get high factors right from start. Also, if you
start cheating, the rest of the community will sooner or later
realize and penalizing your reputation until nobody will be likely
to trade with you.

A new member to the system will have to reputate himself before
he can achieve higher factors. Moreover, factors could be subject to
market forces: if programming or food production is being requested,
those factors would rise, while if web-designers are not high in
demand, their factor would diminuish.
Thus, if there is a stringent need for agricultural produce,
the factor for food production would be high, therefore encouraging
this type of work and rewarding it.

Other dimensions of reputation
building could be determined by user feedback on services, similar
to ebay or other such sites, although everybody would be able to
rate other's reputation. More dimensions are
conceivable (e.g. quality, quantity, subjective impression).

This multi-dimensional reputation system is a core element of the
UWS, however we haven't put much work into it yet, as it is
very complex. We strive now first to get a local group running and
verifying the system itself, before putting enormous amounts of work
into something nobody might be willing to use. Should the system prove
to be worthwhile, we assume other developers be wanting to jump in
and help evolve it.

Note that nobody is selling anything as an individual.
If a 100kg bag of potatoes has been produced, the individual
gets paid with an amount of service units, weighted through
the factor which had been agreed for the work.

This leaves us now with a 100kg bag of potatoes. And this brings
us to the second realm of UWS, the assets. While the service
realm is akin to a LETS or ROCS, the asset realm corresponds
in fact to a backed currency. Every good in the system gets
a correspondent value in terms of inventory units. The units
are backed by real goods - nearly unsusceptible to inflation,
while also quite resistant to speculation.

The most important part here, which we haven't pinned down
yet, is that every good entered into the system gets an
inventory value in reference to some base unit. Initially
reference to a fiat currency has been postulated, but I
personally don't like this at all and would prefer another
reference - the Terra seems to be the most appropriate one.
Assuming the Terra to be the reference, the potatoes
get an inventory value. Like if 1 Terra buys me 1kg of potato,
the inventory value of the 100kg bag is 100 inventory units
(or 100 Terra, but from now on I will continue with IU for
inventory units).

These 100 IU worth of potatoes are now available for consumption.
They are goods of the community, and everyone inside the community
can access these goods. Every individual of the community has a RIGHT
to retrieve a portion of this wealth. In fact, the service
units, instead of money, can be looked at as RIGHTS to access
community wealth. The formula to calculate the price in service
units (SU) is:

xIU * TOTAL_SERVICES / TOTAL_INVENTORY = ySU

Therefore, the total price in SU for the 100 IU inside the system
depends on the total amount of services and goods in the system.

An individual's share on total services in the system entitles
him the right to the correspondent share on goods in the system.

We played with the idea to put auctions on the purchase of items, to
introduce market dynamics. The value of deteriorating
goods like potatoes, for example, would diminuish over time.
Therefore an auction mechanism could ensure that the goods are
bought upon market conditions. However, we have deferred this approach
for now, as its implications are not trivial, especially through the
time span an auction runs, and the necessity to be online (mobile
technology is likely to help here).

Basically anything can be inventorized: land, Euros, Yens,
houses, cars, tools, manufacturing products, etc.

The basic premise is that the good comes into community ownership.
If someone inventorizes land, the land doesn't belong to this individual
anymore. The member can be renumerated through a correspondent
value of SU's though, making him a wealthy person inside the system :).

Such land in community ownership can now be rented instead. Someone
entering a community can use this land under rental, in SU's for example.

The same for houses on such land. Someone leaving the community will
leave those assets behind. A leaving individual would exchange (if she
wants) her
remaining SUs for some other tangible asset (could be fiat currency
or something else the system can currently offer) which she could
bring into a new cell.

A disadvantage of such a system is its dependency from
technological devices. The biggest disadvantage is its
tight coupling to totals, making it difficult to implement
for latency-sensible applications. Maybe this could be alleviated
by some end-of-day calculations or so, or some other financial/statistical
tools I am not aware of, as in fact it's just another factor.
Furthermore, the more services and goods are in the system, the
less there are fluctuations.

A very interesting field for application for the system instead
I could visualize in virtual project management and collaboration,
or capital partnerships à la Chris Cook.

Whenever a new project, a LLP, a virtual company or something like
that gets created, a new cell of the UWS is setup. Investors
can invest monetary assets, workers, engineers, designers,
administrators, etc. invest lifetime. A trust, in Cook's manner,
would be managing the assets. Through the engagement, the participants
earn rights to the produce of the undertaking. At project end the "payroll"
corresponds to the SUs earned. Every individual is free to
leave the project and redeem all her SUs against any assets in the
correspondent
IU value: Dollars, if there are Dollars in the system (the project
made profits), or kWh, or hours of solar energy - whatever
the project defines as its output.

However, the project needs not to stop here and could be continued,
e.g. constituting a new business. So members could opt to not
or partly be paid out and leave SU (and therefore assets) in the system -
something like expressing trust in the future of the project - or community!
New members can join in any role requested by the project at any time.

This would allow decentralized project and business opportunities
allowing us to work on projects we feel affinity and interest for,
freeing many from the slavery of paid jobs.
-- 
Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - Research:
http://www.dpu.ac.th/dpuic/info/Research.html - Think thank:
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

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