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Session, Friday June 25, 2010 late afternoon

Open Companies, Democracy, Reputation Systems

Pie Trust:

Two dreams:

  1. Democracy in open projects
  2. Open companies (Alex Stigsen)

Clip from the session


What is an open company?

People choose what they work on:

  • "Anyone can join at any time, doing any task they think is appropriate, at a time they think is appropriate." -- Alex Stigsen
  • Employees are like community members
  • They can get paid, or not. Main or side job.
  • You get paid as you contribute more.

Who decides payment? If unpaid, it's an open project. You may not trust your "boss". Distribute payment decisions.

Goals of PieTrust

Code a reputation system

Necessary properties of the reputation system:

  • Anti-collusion (group that contributes little but numbers)
  • Anti-pseudonyms

Possibly desirable properties:

  • Reputational Currency
    • people trading reputation for collusion
  • Levels of contribution: Core contributors should have most money and control


Q: How to fork a company? A: require the forking to give back to the forked... (social requirement) Larger reputation systems... It follows you!

Reputation system


Tell each person: How would you distribute 100$ to others? Iterate (unlike Page Rank, which finds equilibrium) Provably convergent

Suppose you have two groups, equal size, rating only internally as positive. Seed group gets basic money and distribute it (incl. to themselves) Their ratings are public (individually).

Revenue sources

Transaction fees if real money is being distributed. Open source, but charge big companies for usage.

System can also be used for (sold to!):

  1. Rating skills
  2. Bonus payments
  3. Freelancers' incentive
  4. Joint ventures

Other discussion

Issue of startup time vs last-second contributors. Also, angel's investing gets counted!

First profitable quarter, parcel out profits over earlier periods.

Impedence mismatch with equity. We want to take over the function of equity, but

  1. Don't call reputation equity, because legal, tax implications of selling equity

so give control of ($) equity to a non-profit, according to rules agreed-upon.

Problem solved: Founder stops contributing after getting equity. You see your reputation drop.

Q: How different from meritocracy? A: It is a way to get a working decentralized meritocracy.

Thankless jobs:

  • credit for thankless jobs, hopefully?
  • At least one eg of company that uses reputation for bonus, and drudgery is rewarded
  • Diagnosis for really useless work.

It encourages people to take on a task without asking permission.

Democracy in open projects

In an open project, you can't just give 1 vote to each member

Problems with giving each member 1 vote in an open project

  • Pseudonym problem (people could get more votes just by creating more accounts)
  • Collusion problem (even if you screen out multiple accounts, people could get a bunch of friends to sign up just to vote with them)
  • Core contributors are a minority: most of the power would be held by lurkers and minor contributors. It is desirable for the core contributors to hold most of the power.


Same reputation system can be used for weighting votes in an open project.

Why about using it for government?

Why not use it for settling a town?

1 person-1 vote from human dignity
So, use one-person-one-vote decision-making whenever there is a system with no opt-out.
Otherwise, you can give weighted votes. (E.g. open-source)


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