What, Why & How ECSA
WHAT IS ECSA?
We are in the midst of a paradigm shift in the global economy — for the first time, the economy can become a design question for us all. Instead of imposing a uniform system of value upon us, as fiat currencies do, ECSA’s key goal is to create a platform for socially and financially liquid, heterogenous value.
To create this, we need finance that emphasizes decentralization, disintermediation and interoperability. These principles are needed not only for creating new forms of finance, but also for connecting those forms to our social systems. From individuals to organizations, we are becoming increasingly more networked and social; meanwhile, our financial options are still locked into their traditional forms. The technologies of distributed ledgers open the possibility of a programmable economy, which allows the design of new systems of value creation and distribution, enabling the users to set the rules for their own economic spaces.
When people can together transform finance towards the coming paradigm, they will be the founders of the new game of economy. ECSA’s mission is to build the tools to open source finance and terraform new economic spaces, and to provide a framework for those tools that grows toward a heterogeneous, collective economy accessible to everyone.
Finance, as it stands now, brings future potential into the present through monetization, enabling future investments in the present by making them liquid. The possibility for financial actors to manufacture financial instruments out of debt and equity, thereby impacting volatility and liquidity in markets, has become a political weapon to orient and organise the masses (as Robert Meister has articulated). Currently, every mechanism of value eventually plugs into a core system that will never value our actual, affective existence — our real values. Yet, from households to cities, from software to trade, the work and very being of people are what backs the underlying value of finance. Simultaneous to this unrecognized backing, we are tethered to the instruments of finance to access new value. For example, even the new sharing economy is simply a more granularized surface for the extraction of value by centralized, monopolistic platforms (e.g. Uber, Airbnb, TaskRabbit, etc.).
The invention of Bitcoin has caused a fundamental rethink about the functional organization of global monetary architecture, and its impact on how contemporary power operates. In light of the naturalization of free-market economy and subsequent financialization of everything, the invention of Bitcoin reminds us that money is not a natural given but an artificial (and potentially creative) medium — precisely, a technology. From Bitcoin, we obtained blockchains. Now we have the potentiality to go beyond blockchains: to modularize the architecture, and create a network around these modules. Each of these modules can define its own economic space, yet interoperate with all other economic spaces, in the manner of their choosing. This *beyond blockchain* potential is the technological basis for the new engagement with finance, and through it, economy as a whole.
This opens up the playground for money, liquidity, financial instruments, and the economies that encompass them. All of these methods of finance can now be approached with a hacker attitude and a poetics of experimentation. This is our wager. We are in the midst of a paradigm shift in the global economy — for the first time, economy is a design question for us all. ECSA allows you to re-write the economic playbook.
MULTIVERSE OF ECONOMIC SPACES
The nature of an economy is comparable to that of a game. Like a game, an economy sets rules which generate a space of interactions. As the rules are employed, they guide the behavior of the agents, creating new behavioral patterns and tendencies within them. In other words, the rules condition the agents into players of a particular economy or game. A chess player has particular characteristics, thinks along particular lines, developing values that emerge from chess. A different game (like, for instance, Twister) leads to very different tendencies of behavior, different thoughts and values for its player.
Like games, economies do not have an essential core, but emerge from their network of rules, encounters with those rules, and the tendencies of behaviour these encounters induce in their players, forming their strategies, styles and habits of play. Economies exist in a network of family resemblance. They can be thought as generators of economic spaces, which expand our palette of interactions toward new possibilities.
Economies, like games, should be multiple and branch into highly varied forms. Currently, this potential multiplicity is easy to overlook because we are embedded in a monoeconomy, where one value system holds general dominance. All other forms of governance are incentivized to serve this system, and punished (economically) if they steer away from its principles. This is an economy in the paradigm of the industrial farm, not a functioning ecosystem — it is in a constant battle to enforce its control over other valuation systems.
Instead, we insist on a multiverse of different economies, with different value systems — a network of economic spaces interacting with each other (some of which might even be unrecognisable from the perspective of the monoeconomy).
SELF-ISSUANCE and SELF-GOVERNANCE
The basis of interchange between varied forms of valuation is self-issuance and self-governance.
Self-issuance is a principle where any agent can issue value, proposing it to other agents — its valuation is therefore a general question for the society at large, and a practical question for each individual agent whenever they face an offer for it. This also emphasizes the subjectivity of value. In current finance, value masquerades as objective, actively suppressing the highly subjective nature of value and the forms it takes. Valuation is ultimately an expression. Issuance of value and value systems is therefore a proposition to be evaluated by others, thus transforming it into a collective expression of value.
Self-governance is the right to propose governance, which the other agents can choose to acknowledge. Governance here extends from private contracts to general agreements, from accepting a certain template of identity when joining a platform (which is a form of contemporary governance often unrecognized as such) to rules of general behavioural definition. In an economic space, self-governance means the ability to form the economic space so that its dynamic aspects (attractors, state spaces, etc.) reward the desired behaviour and outcomes.
HOW DO WE GET THERE?
The goals of self-issuance (implying (data) sovereignty and p2p relationships) and a multiverse of value demand specific designs, and therefore specific technological systems. These technical implementations are what ECSA is working on, helping to launch the open source software project Agoric. Any technology, like Agoric, that underpins these goals, has to combine the best parts of both the (relatively well-known) blockchain technologies and the (relatively unknown) eRights framework.
OTHER KEY CONCEPTUAL TOOLS
Interoperability is key for the self-realization of a system, in that it allows the system to modulate its relations to the environment in an optimal way — both reducing costs of adaptation (i.e. maintaining a degree of autonomy from the external world) and also allowing for the degree of differentiation required for the system to evolve and become resilient to external forces.
Technologically, interoperability needs to be implemented on many levels: interoperability of contacts, Virtual Machines, of consensus algorithms, and so on. This multi-layered approach facilitates the socio-economic interoperability of economic spaces with different value systems and different granularity of agents: optimizing the interoperability of a system is about the creation of porous boundaries and deciding where to set them.
Do you remember when it was thought that one huge computer was enough for the whole world? It turned out that the proposition of many small computers communicating in a network works better, is more resilient, secure, capable, scalable and much more flexible to use.
The blockchain architectures currently in use are essentially like that one huge computer, a global Virtual Machine. For the same reasons as above, those architectures are unsustainable. Instead, we are implementing a modular architecture, following the many-small-computers model. This allows both private and public contracts that can be implemented and allowed to interoperate, with only the parties to a contract needed to participate in its execution, verification and replication. Modularizing the mechanisms of blockchain creates the basis for a network that is naturally scalable.
The ECSA ecosystem of economic spaces is a decentralized network topology: a conceptually and architecturally flat power structure in which participants to the network share the burdens and the benefits that derive from contributing to the generation of new values and preservation of the autonomy of the network from third parties. ECSA’s tools are open to many interpretations, variations, and iterations, replacing an extractive logic with a logic and an ethos of collective self-organisation and transversal cooperation. Autonomy is the capacity to set the attractors for transindividual becoming. ECSA allows you to choose your own attractors for collaboration and your particular valuation of non-monetary assemblages (from relationality, trust, and quality to land, labour, and material goods).
The biggest shift comes from granting each individual, community, and organization full ownership and control of its data. This control is ultimately encoded on the contracts that the user engages in. In this way, data can both be shared and controlled, resolving the long standing tension between privacy and utility.
If you’re interested in the growing Agoric and Ecsa community, joining our discussions, or to get an early look at the whitepapers, sign up here.