If you missed the Sacred Capital Project AMA, check out a recap of the questions and responses!
Our next Forum AMA w/Junto is Thursday, September 26th @ 12PM EST. Sign up and ask your questions here.
1. Could you share how reputation staking works?
Reputation staking is one of the principles of the Reputation economy — since it has a non-zero sum, it can’t be spent, but it can be staked.
In an agent-centric environment, when you “stake your reputation” on something, it implies you are willing to place an activity in one app/ecosystem to provide more context to another.
This is initiated by the app creators, who propose a stake, and it is completed when you, the user, consents. This consent essentially allows you to import context into this new application.
This means you’re not engaging in the new application in a sterile manner, like a stranger would, but with a rich social backdrop (check some of the other examples shared above). If you believe the past reputation isn’t relevant in the application, you can choose not to consent.
2. Why would it be easier for users to build a reputation through your app VS through the user’s own activities/interactions within their app?
In the first phase of our rollout, our focus is on building a common foundation that can be shared by applications. We’re exploring conversations with the Holo team to release a set of standards and frameworks for data structures and zomes that will be used by all apps for reputation computations. Once this is in place, we’ll shift to Phase 2. This involves providing users a dashboard to navigate the new economy. Think of it as a control panel through which you can build and harness your reputation wealth to modulate your engagements in the new economy. The attached image should offer some insights.
3. Can you provide more details on the revenue model?
We haven’t made it public yet, so stay tuned; details will be announced in the coming months.
4. In your interview “The Yin and Yang of Wealth,” 1 you say:
“We now know that the problems of climate change, lack of emotional well-being, and inequity can’t be solved with material capital alone. They require organised efforts to facilitate cultural shifts, re-building social fabric, information sharing and more.”
How do you see reputational currencies contributing to the resolution of such problems?
At an abstract level, we are creating a formal economic language for reputation. This enables reputation to serve as an economic vehicle for social, cultural and informational capital. It’s a sharp contrast to money serving as the only vehicle available for all forms of capital.
In more tangible terms, it allows entrepreneurs or people driving movements to reward specific behaviour in tangible yet non-monetary ways.
So, in terms of contributing to solving the big problems of our time, we see reputational currencies as a way to introduce more meritocracy into wider discussions and social exchanges. Valuing agent-centric reputations should drive a different set of outcomes from the ones we are getting today.
5. Is there not a danger that reputational currencies will only create a different type of inequality — one based on reputation?
This is a question that often comes up in our conversations, and it is one that we must be mindful of. Here are a couple points to consider:
- Reputation thrives under diversity and contextuality, so building stacked-up structures, which are common in a traditional economy, are harder. For example, a single, centralised top-down score for “who is the best film critic” isn’t as effective as a fragmented mosaic of reputation scores. That’s because my idea of a good film critic might differ from yours. Building a reputation as an economy is the key here since it promotes this multi-dimensional approach.
- This might be worth an extended conversation, but I’ll put it out anyway. Since reputation has fundamentally a non-zero sum, there’s never a question of inclusion as there is with money. Anyone can leverage the reputation economy as long as there is a rich social fabric, i.e., a community of people willing to validate your work.
We think these two points go a long way in building a meritocracy of sorts and in reducing some of the inequities that exist in the current economy system.
6. Also in the interview: “A formal reputation economy will allow us to think of organisations as dynamic and evolutionary instead of static.”
How, exactly, will a reputation economy help us to think of organisations as dynamic and evolutionary instead of static?
We think reputation economies have remarkable implications for organisations since they provide programmatic social fabric. Some of this will evolve over the coming years, so it’s better to not over-speculate at this point, but the gist is, organisations in the traditional economy do not have access to a formal economic language for reputation. As a result, reputation is articulated and captured through managers in a company or non profit organization.
With reputation economies, we can break past some of the human limitations of articulating performance/human potential/reputation and hold them in truly scalable ways. In other words, organisations of the future might look more like social networks, designed for specific purposes, fuelled by reputation currencies. These networks of people will have far greater organisational capabilities.
Like we mentioned before, this might be a bit further out in the future, so I’ll leave it at that.
7. My main concern is, sometimes misunderstandings and mis-communication can occur, and then it’s like that person has a black mark against their name for all eternity.
The role of reputation labs is to help entrepreneurs and app developers to think about reputation design. Generally, a well-designed reputation system will have some form of a legacy mechanic (taking into account previous reputations).
This legacy mechanic would allow consistently high-rated users to reap some benefits, whilst giving lower-rated users a chance to build their reputation back up.
Because users have the ability to see how reputation is designed, well-designed reputation systems where forgiveness and fairness are prevalent should garner more users than those with badly designed reputations.
8. I presume they would have the opportunity to redeem themselves?
Due to the agent-centric nature of the reputation interchange, the user has the power to navigate through the new economy in their own terms. This gives the user agency on where they choose to stake their reputations, letting them decide whether a score is fair or valid.
If a user wants to participate in an ecosystem that calculates reputation in a way that they don’t necessarily agree with, they could choose not to stake any external reputation into said ecosystem. This, however, would eliminate a large amount of the network effects gained from participating in the interchange.
Essentially, our system is designed to give the users agency over their own reputational wealth.
9. A reputation can be built from objective, measurable data points (e.g., money transferred in time) or from subjective information (the Uber car was too cold). Have you thought of ways to have a control for such subjectivity?
Combining this with the question by @dellams above: Can you please expand on the relative reputation score (context) as well as staking?
Yes, you’re right — reputation data is of two types: objective data as well as subjective viewpoints. While objective data is easier to handle, subjective data is best represented through relative Reputation.
This is captured in point no. 3 of the Reputation Economy principles Relative Reputation basically means the reputation score is a function of “who is querying.” In other words, the score you see about your ride share driver is a function of your context (maybe your network or preferences in the past, etc.) and not an absolute score that everyone sees in the same way.
This sounds complex, but it is actually highly intuitive in agent-centric environments like Holochain, since we aren’t trying to establish universal consensus. Reputation scores get calculated on individual user chains, which hold information that is relevant to us and not to the entire community.
So, to answer your question in a sentence, the key lies in embracing relativity and staying away from absolute, monolithic definitions of reputation.
10. In addition, different social, legal, and economic environments may result in differences in how reputation is constructed and construed.
Yes. Each application or ecosystem has the freedom to articulate or design their reputation to fit their specific needs. This diversity is celebrated. By designing reputation as an economy, you enable any app/ecosystem to benefit from network effects for their reputation scores, irrespective of scale.
11. Is it economically viable to participate in a reputation-based system? Can you provide successful examples?
By economically viable, do you mean monetarily rewarding? Yes, absolutely. Eventually, the aim is to build a reputation as a thriving economy in itself, which intersects with money when contextually appropriate. However, we leave that decision up to the app creator (Reputation Labs will also assist entrepreneurs in figuring the best way to do this). For example, “punctuality” may warrant a monetary reward in some situations like highly time-sensitive work, but it may require other benefits in other applications.
Over time, we hope reputation forms a wealth system in itself. And once that’s in place, we can explore models like reputation-backed mutual credit/equity and debt issuances. These are financing models still prevalent in less industrialised nations where money is circulated on the basis of the social fabric. With the advent of distributed ledgers, these models can be further accelerated, and we hope to eventually reach a situation where money transfers may begin to be replaced by decentralised money issuances.
The vision for our dashboard encompasses this: you would be able to view your reputation scores across networks, and simultaneously view the available credit that you can draw down at any given moment. (But all of this is for later; it’s not something we will lead our development with.)
12. What is your sense of the adoption enablers, and what is the timeline for early adopters and subsequent folks?
Spreading an economic language for reputation is going to be a very long process. Sacred Capital has been on this journey for many years now.
But for us, these next twelve-month period is when the theory moves into practise. We want to put the tools in the hands of early adopters and support them with training and information on designing reputation. Our plan is to first publish some basic zomes for managing and calculating reputations for app developers to start building on.
The last few months, both within our own networks and in wider discussions, we have seen a lot of interest and talk on why reputation is needed. This is why we are moving now to put it into practise. We believe that by this time next year, we will see a lot of applications, both agent-centric and data-centric, implementing reputation.
13. Does being agent-centric also mean that reputation scores are not objectively true, but that they clearly are originating from specific agents doing the rating? For example, if someone has a habit of giving unfair scores, then collectively, we should be able to see that ratings from this person are less reliable than others.
Reputation can be either objective or subjective, and it can be relative or absolute.
Absolute objective reputations are relatively easy to do (exam grades, traffic violations, number of likes on a post), but they are not very rich. They are unable to capture more subtle judgements and how they matter to you.
So, unfair scores definitely are a good use case for the power of relative and subjective ratings. If everyone who you value rates a certain individual’s subjective ratings poorly, then that should show up when you interact with that person.
14. What are your personal stories? What inspired you to become interested in these currencies and reputation?
What is your personal motivation for building this ecosystem? Is there a vision you would like to see in your personal life and/or in the world because of what you are building?
A good summary of my personal motivation is also captured in this interview with the Holochain Citizen.
What motivated you to create your app/platform?
After a life as a mainstream trader, I spent four years at a community founded by Gandhi where I came across living examples of distributed economics. A conversation with Eric Harris-Braun in 2014 sparked Sacred Capital. We’ve been formally developing the project since 2017. The intention is to build a formal economic language for multi-dimensional value, instead of only for material value.
*Note: Please note that some minor editing has occurred.
