Attuning to the Crowd
How an algorithm that listens is key for Holo’s Initial Community Offering
I used to be utterly spooked by the proposition of algorithms “listening”. Normally this means some company is tracking your keystrokes, or using keywords from your text messages to spit out Facebook advertisements that match. In the case of Holo’s crowdfund ← → ICO, however, carefully tuning into the crowd makes our community offering what it is.
What’s up with Holo’s next-economy amalgam of fundraising?
Many of us have recently received questions about how and why we use these two bleeding edge funding methods together. Answering this question is fun (for nerds), as it allows us to introduce, ever so humbly, what we consider to be one of our major business innovations. It’s a strange world you live in when operating in the name of sustainability requires a wholesale disruption to the surreptitious overlords of the digital economy. But I digress.
I’ll lay it out for you as if we’re in one of Holo’s strategy meetings. Arthur Brock is scribbling on a piece of paper and chuckling to himself. Nicholas Perrin’s eyes are bugging out of his head with excitement. Jean M Russell is making an elaborate map out of sticky notes on the wall. I am muttering to myself about the joys of turning capitalist impulses against themselves. Now that the scene is set, here’s the short answer:
The crowdfund links to the ICO through a feedback loop. The demand demonstrated through crowdfund participation determines the supply of ERC20 tokens sold in the ICO.
The supply of tokens that can be swapped into HoloFuel upon the launch of the network is set in relation to demand demonstrated by purchases from the crowdfund. Cause…well…we simply needed to find a non-arbitrary way to measure demand for services. Why? Because measuring demand means that we are going against the grain of dominant tech companies, and letting go of steam-roller economics, in favor of creating what we truly intend to use. No more, no less. Our crowdfunding campaign figures are used to indicate demand for cloud hosting and confidently estimate the size of our initial community of developers, hosts, and users.
New tokens are released by an algorithm connecting disbursement to demand projections, which are based on the sale of boxes, events, and developer tools. Each day’s sales expand the supply of tokens according to a fixed formula. These are algorithms that allow us to attune to the crowd in a meaningful way. We’ve also realized that it’s possible for the demand for tokens on a given day will exceed the amount released. So be it. If it’s a problem, it calls for the direct increase of network capacity through the crowdfund itself.
From our view, the crowdfund measures demand because we assume that the intention to host has a good bit to do with intention to use, too. Those who purchase those hosting nodes (or as we say on the team, “dem nodies”) will also earn Holo credits for hosting the sharded data generated by those apps.What’s more, the crowdfund hasn’t only pulled in hosts whose new hardware will make a substantial push to level out the monopolized web hosting industry, but also confirms developer trainings, app-design consultations, and our non-traditional hackathons, which include reflection and community-building practices as a precursor to development. One of the coolest parts of the work has been spinning up tool-kits, educational tools, and all sorts of arrangements with distributed computing enthusiasts to make sure the application ecosystem kicks off mightily.
As I discussed last week, Our ICO is a pre-sale of hosting credits. Our crowdfund makes the crowd, not only the cloud, but also the stakeholders, along those who purchase credits through the ICO. To this we add a whale-catching mechanism,too! No single wallet can buy more than 10% of the daily credit supply. This is one of those steps that simply must be taken in order to make sure the sale is as inclusive as possible, and that future hosts and users won’t have to compete with a few rich lugs snapping up all the available credits. Sale statistics will also be logged on our website in real-time.
Consent and Community via HoloFuel
You get two forms of promise with HoloFuel. First, hosts are also stakeholders in the network, meaning that fuel ensures the existence of the product in question, and is therefore a crucial part of the network’s functioning. This incentivization arose in part from recognizing the end of the bygone days of netizens. Or perhaps what’s gone is appreciation for their effort? Either way, what I see is that people’s donation of their computing and processing power (think torrent clients and pirate communities) doesn’t quite cut it for the average user. You might say there are twin longstanding problems in the otherwise epic world of torrents: reliability, from the use perspective, and fair-weather contributors, from the community governance perspective.
This is an obvious difference from a market offering in which participants have no ostensible reason to be decent to each other. With the current web, we know that the middlemen are primary stakeholders in our interactions. I’ll spare you a diatribe about how excited I am about peers interacting as fortifiers of their shared environment rather than as consumers of the same product. But c’mon. That’s awesome.
This set up is also different from p2p currencies, like Bitcoin, where the community-wide tabulation of existing tokens doesn’t actually mark out a path or designate actors to ensure the health and appropriateness of that currency. Let me be blunt: A sign of poor health is volatility so extreme that it gives its holders aneurysms. No metaphor here when it comes to health! And a sign of inappropriateness? A block of transactions has an energy use akin to that of a small country.
The other promissory function of HoloFuel? The infrastructure provider has skin in the game. Since HoloFuel is a mutual-credit currency, every purchase of hosting has a corresponding debit in a Holo reserve account. The reserve credit limits are driven by the preferences and capacities of the Hosts in aggregate. On this basis, one can rest assured that the promised asset on which the currency is based is actually available. So rather than a smoke-and-mirrors processes of consensus, let’s just take a good hard look at what money is in the first place. It’s a promise, so why not fortify that promise? As an infrastructure provider, Holo is held to the same reputation standards as other actors. The twist is that, in order to earn against its massive debt, its role is hard-coded, not to make moral judgments about the network and its proceedings, but to be a sober assessor of whether or not the backing resources in question exists.
The consent we take, in contradiction from blockchain ‘consensus’, is from the crowdfund. It is consent on the order of “what” we collectively value and “how much” we offer to each other as a network. A people’s currency is one built on an asset everyone agrees is necessary. For us, this agreement comes in the form of crowdfund participation where we haven’t been at all shy about our crusade against the current evils of the digital economy. What’s valuable is what is perceived to be needed. This is one facet of seeing — money springs into existence not because it’s minted for, say, funding wars, but because it actually represents computing power that we mutually deem valuable enough to make into a medium of exchange. Seems fair to put an infrastructural element in this position!
When we link the supply of HoloFuel to the movements of our crowdfund campaign, we make our commitment to attune to the crowd. This is a pattern that we will continue as a means of embodying the virtue of resourcefulness and enacting an economics of sufficiency. A sober economics of realism and real accountability. One that doesn’t bet on infinity, but gauges the here-and-now with a scrutinizing eye. Visions of “beyond” come with the territory of new technology. The part that really requires work and willingness is to listen, deeply, to the present answers to “what?” and “how much?” These aren’t details. They’re deep care.