Fractal Ownership Applied: Last Days of the Beginning
November 4–8, I’m at the #human-centric design week of our NGI Venture Builder Program (Next Batch Application is now open. Apply!). We are meeting with local communities and companies. The goal is to build an MVP co-designed within the community, create a community of local co-workers — and present it back with them to an audience at the end of the sprint.
Check out Day 1 Observations and Day 2 Analysis. Read up on Fractal Ownership Intro here.
This is the recap. Including the co-design of the MVP and presentation Days 3 and 4 — but most insights of this part come from the reflection on the many situations that emerged during and after, on the ground in Milazzo, all the discussions we had:
- It turns out Fractal Ownership may be the liquid form (and a few other nuances) of the Steward Ownership as implemented by worldbrain.io, Mozilla Foundation and many others
- Cooperatives may be the old and dusty name of a new trend we are seeing and actively seeking: co-ownership as dreamt of by House.coop, and “access” is the leftover culture imposed on the user generation of the rent-seeking platforms, and we weren’t asked for an opt-in either)
And a powerfully eruptive feedback round on the top of a mountain on an ancient greek theater facing the active vulcano Stromboli, followed by the Sicilian way of bonding over antipasti during lunch that takes an entire afternoon.
At a bootcamp like this, one is constantly torn between getting stuff done for our current projects and the learning experience. Hyper optimizers as we are we go for both of course. But a new human-centric design, as it is itself being co-designed during the Milazzo Bootcamp by the Ledger Consortium and its 16 cohort startups (oh, don’t we love fractals!), primes us to become human-centric thinkers from first principles:
- No scoping the territory beforehand (“The map is not the territory,” observe reality),
- Not always a translator at your side and even if — you’re lost in translation (Language even if shared is biased, observe reality with the eyes of the other)
Especially experts and teams with a lot of experience in “human-centered design” had difficulties embracing “the Sicily Experience/Experiment.” We have a saying in Turkish: “He who knows a lot, mistakes a lot” — when I recognize this situation, I always remember (and share) my Bitcoin moment: How I dismissed the paper as a P2P protocol expert, because from only that perspective it is really inferior to many other P2P protocols and state of the art. The thing is though, Bitcoin wasn’t trying to “fix” CAP theorem or make BitTorrent transact faster, as many P2P experts were focusing on back then (and many in the crypto scene myopically focus on now again?!). Instead, Bitcoin synthesized from a myriad of disciplines to create something entirely new, a catalyst of the paradigm shift we are experiencing. I believe we will see and are in need of a few further catalysts.
“Human-centric design the Ledger Way” may be another such catalyst. I did some research and could connect and contrast to what I know: Design Thinking and didn’t know: Human Centered Design. It appears that “traditional” Human Centered Design holistically focuses on involving the humans (not just users, but all stakeholders of a technology) — but embedding the insights only back into user experience. Design Thinking, on the other hand, is all about innovation and finding new ways to satisfy needs or create new wants, and developing the ability to quickly test those — especially for “wicked problems”. What we experienced in Sicily seems to embed both and remedy the one critique of human centered design:
Whilst users are very important for some types of innovation (namely incremental innovation), focusing too much on the user may result in producing an outdated or no longer necessary product or service. This is because the insights that you achieve from studying the user today are insights that are related to the users of today and the environment she or he lives in today.
And we live in a world of volatility, uncertainty, complexity, and ambiguity.
VUCA.
The Sicily Experiment — Human-centric Design the Ledger Way.
Certainly, the coming months and years I will expand on this :) And how it can be a great addition to our tool belt as token engineers. But to keep this article readable, I will tie the main points to the specific experience I had in Sicily trying to build an MVP in just 1.5 days, after discovering the complexity and ambiguity of the situation in Milazzo.
As I wrote in the last part, the theme emerged as “Silenzio Siciliano” — a lack of communication that deprives cooperation from the fertile ground it needs to grow.
(Now that I look at the outlines, this might also be the theme of the Millennials)
Uncertainty, no money, no prospects — “why should I be the one to invest in the future?!” No trust — “Why should I speak, if the truth never comes out”…
This seems to be the main reason why there is so much value in Milazzo, both positive and negative not accounted for. Our current system of accounting for externalities of a company like the refinery of Milazzo is absolutely O.K. with a paperblock of Sustainability Report published every year — that reads more like a marketing pamphlet with a hell lot more pages. And it is full of alternative truths, e.g. “The data from the study show no significant critical health issues in the Milazzo area. As reported on page 108 of the SENTIERI study: ‘The general mortality observed in men is lower than the expected values, and does not differ for women.’” All that is needed is one of the big four audit firms to confirm “this truth”: “Additional administrative and accounting checks are carried out by the audit firm PricewaterhouseCoopers, which certifies our Financial Statement, Consolidated Financial Statement, and Sustainability Report.” That’s it.
So why should people of Milazzo even bother try to change anything at all? When the existing system certifies that all is within the allowed limits, “lawful”. Is that system legitimate?
The Milazzo people have so much to give, and so much to share — so much positive value yet unaccounted for: Our entrepreneur friend with the Sana Follia could help retrofit all Fiat 500 on the streets of Milazzo, into electric vehicles within a couple of months, as soon as a local gets the franchise to open up the first Newtron workshop in Milazzo. There is so much unused land because the non-profit Fondazione Lucifero lacks the time and resources to organize and coordinate all possible projects to renew and revitalize abandoned property.
How our current systems organize property, into owners and renters, doesn’t really help the Fondazione Lucifero to get the local support they need with the appropriate incentives they share. Franchise ownership is a solution that works for mature companies with a proven technology, marketing, and partner network — this might be a solution, but only when our startup Newtron already “has made it.”
How can we kickstart networked cooperation, and manage its complexity consciously, especially in the beginning when it’s about getting from “Zero to One”?
On the dawn of Day 3 I am determined to “show them” the value of fractal ownership — itself yet only an idea, in which we have to put original work to prove and improve! I already feel overwhelmed. But we’ll be building on the shoulders of open source giants:
When we first entered the Ledger program, Fredd & Sito, part of the mentor team, did a check-in call with all teams. On that call already, Fredd and I had clicked on TAO as a philosophy and complex systems. He had mentioned a game for simulating complex systems he worked on together with Raffaella, which I would look up much later. Only through the collaboration with Zargham did I saw the much needed value-add of a game in explaining “Business Dynamics” of token economies, in which the human should play the center role, self-determined & self-sovereign, and not just be an agent that receives incentives (that some technocrat designed) to optimize for system goals (opposing techies’ view). So that people can heal from “spreadsheet thinking,” and develop an intuition for the very volatile, uncertain, complex, ambiguous world we live in, embrace it, and understand and welcome innovation that is not just incremental (opposing bizdevs, investors, economists’ view). This loose collaboration in the past months gave rise to “The TAO of Token Economies” which just now is taking concrete shape, and especially through — and for — the idea of Fractal Ownership, gained further momentum in the past two weeks.
Federico “fredd” Bonelli, is a philosopher of science and creative arts director/producer (to pick only 2 of his multiple disciplines) working with Dyne.org as an independent researcher and the facilitator of Trasformatorio. He is also the one who set the stage for the human-centric design week in Milazzo. Raffaella Rovida has a degree in Civil Engineering and a PhD in Sustainability and Regional Planning, currently is working at the Copenhagen Institute of Interaction Design. Her work deals with urban regeneration projects, simulations of complex systems (system dynamics) and circular economy. Together the Duo created a table game called “Le Grand Jeu.”
Le Grand Jeu can help design a situation where some narratives about the future of our society could be told, crafted and eventually discussed in a positive way.
The game becomes a methodology to assess and narrate new scenarios for concepts like alternative (digital) currency, sustainability, and circular economy.
As I would understand -after- Day 3, there are no rules really — only a few to help us understand the basic mechanics of society/community building — guess what: those also exist in the Bitcoin and other Blockchain/ Distributed Ledger protocols.
But first I tried what techies and experts always do: create a controlled environment. Things I initially fixated about:
- Having a physical map of Milazzo, so people who will play the game can relate, and strategize where to build what and why
- Wanting to create a set of role cards to reflect -my- observations from Day 1, there should be an entrepreneur, a teacher, a foundation director. I wanted to give them character descriptions (personas -I- observed). I shared the sheet with Raffaela, whilst I was prepping with the rest of the Dyne team. She gently suggested I might want to give it a pure try first, and let people create and play the part they want.
I was listening to those who played the game before, and who created it, and wasn’t really listening. That’s what opinionated people do :) Still, observing the game play was quite sufficient to see the basic mechanics that instead were important:
- Radical transparency: The grid, you can build on or off, is transparent. Who the others are (identity) and what they do (transactions) is out in the open: At every round players decide to build, invent, or call the assembly to change a rule by consensus, e.g. the form of taxation. At any point two players can form an agreement, e.g. mutual credit — the contract is written on a piece of paper and placed out in the open on the board.
- Uncertainty & Dynamics: The game master has one job — perturb the system, in an engaging and fun way. When players get the hang of it, they may even start themselves to play this part, they put a dent in the universe — or the grid.
- Money — as karma — flows. It’s a means of accounting for value creation, with its positive and negative impact, and value sharing. It accumulates in money pots. It has a color, it can “stink.” When someone plays this game they immediately understand “money.” And understand that “No money is not an excuse.”
The most beautiful thing about it was that the play demonstrates non-ergodicity at every round. Even if you don’t know the definition, the game draws you to act upon it and develop an intuition for it. Non-ergodicty, the fact that expected utility theory doesn’t explain much of our realities, is something that is being taught in the fringe of “Complexity/Ergodicity Economics” quite recently. An intuition that we badly need “the users of Electraseed Fund,” the project, with which we applied to the Ledger Program, to develop in the first place.
I’m game.
(Writing this I realize: Fredd had placed the real Milazzo as the game board for us to play Le Grand Jeu in real life during the bootcamp. Let’s take a moment to appreciate the beauty of fractalism and the merger of game & reality going on here :) Chapeau, Grand Game Master!)
As I dig a bit deeper into the Le Grand Jeu github repository, I find the original manifesto — it is heartening for a cyberneticist. I share it with Zargham. He says:
I want to play.
To make introductions complete: Micheal “Z” Zargham is a polymath. He draws from his experience in Systems Thinking, Sustainability, as well as Robotics & Automation, and Financial Engineering for large corporations. As a researcher Zargham aims to address global social and environmental challenges through the most powerful leverage point ever to exist: information structures and flows. We use cadCAD to simulate the dynamics of the financial/governance/business models proposed for networks (like Fractal Ownership). By connecting Le Grand Jeu with this framework we could be modeling and simulating the rule sets to the games people want to play, and help them see how those play out. Z likes to call cadCAD a differential games engine in this context. But the framework is for multiscale and multiaspect modeling of networked dynamics in general. More on this in the next series on Implementing Electraseed Fund & Fractal Ownership.
Day 4 — The Awakening.
As I wake into the Demo Day of the MVPs “co-designed within the community to present it back with them to an audience,” I have grasped what a powerful tool Le Grand Jeu is to talk about complex systems with the people who will be affected by those systems and who will affect those systems, who will shape and be shaped by them.
My mind is primed in thinking in systems that emerge out of simple rules of society/community building: radical transparency, value creation/addition, sharing, consensus.
We enter the lovely Christmas decorated Fondazione Lucifero, set up the game table, and sit down to play. It doesn’t take long, for one of the local guides, Mose, to join. Fredd explains the rules in Italian (did you know that Sicilian dialect has no future tense?).
Fortune decides with how much karma (light/dark beans, positive/negative value, money/waste, energy/entropy) and how much property you enter the playing field.
Mose builds an entrepreneurs center on his land located near the city center. I have a lot of land and finally get to build the glas houses with an innovative solar film that also produce electricity, but am almost broke. Sito builds a floating concert center off the harbor. Lucia joins and invents a happiness machine. We even get the restaurant at the Capo. The local themes emerge naturally.
Second round in, some of us experience financial hardship, whilst the money pot of the community has grown due to high taxes. The assembly is called. We debate what to do with the money. Let’s drop the taxes, Enzo says, the teacher at the Fondazione, who now also joined the game. Mose disagrees.
This would be the perfect coupling point for computer aided simulations, I think to myself. Not all people enjoy political debate…and there is a better way, we call Computer-aided Governance.
After some time, we all agree to create a Fund that supports local projects, which create positive value and fixed income/revenue streams for the locals: entrepreneurship, entertainment, electricity! Players think about how to offset the negative impact of their investments and businesses in the next round…
When playing, people find a common language, share their thinking, or take on an opposite role to theirs, even exaggerate, the good and the bad. It’s lighthearted, serious, play. Yet they get to see the implications of their investments, inventions, intentions, and value sharing principles.
We still need to build the underlying digital infrastructure — and a way for them to on-board it easily. Stay tuned! Will be sharing our journey of Implementing Electraseed Fund & Fractal Ownership.
With the demo and the final pitch, we leave a message in Milazzo, in the Fondazione Lucifero:
“The world has gone mad, and the system is broken,” says Ray Dalio. Milazzo can dare to show a little healthy madness: Sana Follia. Follow the money… and rewire the system. Let’s manage complexity, let’s manage complexity consciously. Then we can rewire the system to “our benefit.” What that benefit is — every community needs to decide for themselves — continuously — through communication. Technology, (distributed ledger, model- and data-driven optimization of value flows, making those visible/understandable through games and simulations) — especially this ledger technology that comes with tokens — can help start revolutions.
Minimally Viable Revolutions.
