03/27/2016

New Theory of Value

PhiEconomy is bringing together technology & economics to create a CryptoEconomics new theory of value. It gets inspired on the Capitalism System and its apparent contradictions, Satoshi Nakamoto‘s greatest invention: the Bitcoin & Blockchain and, last but not least, the PHI proportion (present in many living organisms & represented or known as the “golden” measure or ratio).

Current Societies are founded on two pillars: family & work. We spend most of our time on these “two areas”. Capitalism is built upon the construction and development of boths.

The notion of having to work for living & “surviving” is inherent to the human being. Coming from ancient ages, where the man had to go and find the food to feed the clan/family, it is even present nowadays. There is no reason for a person to be without any occupation. It is even seen as a “bad social attitude” not going to “work”. Not earning money is not conceivable for any person that wants to hold any social status. We are a gregarious race. We move in groups and it is very important to be part of and being accepted by our peers.

It is difficult for all human kind to keep up with the idea that we just “appear” on this land, among other human beings, animals, minerals without any clear purpose. So we create tasks and occupations, we create problems to be solved by us, to “occupy” that free time given to us since the first minute we are born.

Under this notion, it is really difficult for any human being to decide what he/she wants to do with its life. “What makes me happy?” we usually wonder…

In general, education and social rules shape the way we should act, taking the promise of “free will” into a very narrow space. Social mandates, public media information mold the way we act.

Capitalism “capitalizes” on those ruling rules offering a way to keep people busy pursuing material things –the more, the better- to bring the notion of “happiness”. The more stuff & experiences I accumulate, the better life I’m living. But in order to do that, I have to work “hard” to obtain those things I “really need”. The problem with this Is: It is never enough! There is always something else I could reach, the “next step” or the feeling I always need something extra. i.e: if I have a car, there is always a better model. Or I have to change it after a few years, otherwise it is going to lose value -or it is old already-.

Another important concept on this is the way we program our lives. Since we are kids, we are included into a “social adjustment” or “normalization” via going to learn the way we should behave in our lives. We start at kindergarten, then after, we go to elementary school, then high school. We then need to go the University to obtain our degree and finally, a Master or PhD is “desired” or “recommended”. Everything to get prepared for the “work market” and be able to “sell” ourselves on this main activity. Of course, another thing that is expected is to “form/create” a family with inheritance. Once we get a job/work, we have 8 hours journey, from Monday through Friday and about 30-35 years of “expected lifetime work”. So by then, we can retire and have the “free time” back to apply that “free will” that was promised when we “land” here -and we postponed for the “higher/greater good”.

This entire mechanism is what motorize the engine for Capitalism. Was this designed on purpose? Was this done naturally based on what human beings are naturally able to do? I mean, is this the right system based on what humans can do with their lives?

The purpose of this work is not answering those fundamental questions about life, but to enable a conceptual framework that will help us understand later, some processes to create a new set of economic rules.

The Decentralization of processes for value creation -having platforms without any intermediation, whether this is a company or a government- allow us to see the “dissapereance” of the “surplus” concept. In the past, this was needed to reward those who “risk” their capital in order to pursue a business, grabbing what was called “human resources” and “machinery” to produce the goods or services. With the advancement of thecnology and moreover, the P2P concepts for “community-created” economic value, there is no need to generate surplus. Each participant on the value creation -whether this is “economic” or “social” but to something that is “demanded” on a platform by the society- will get their “portion” of this value generated DIRECTLY -no intermediation or capital appropiation-. One may think then: “What happens with the GREED?”…”What happens with what the old economists use to call “selfishness” that was “Intrinsec” to the human being? This was that really motorized the Capitalism. Well, that was true up to certain point. If we look at the Maslow’ Pyramid we see that many of the things we experience nowadays correspond to the area where the basic needs are not fullfilled. In a system where Scarcity is the NORM, you may face inequality, power concentration, poverty, violence. Every one fights for their wealth. And the more I can get, the better -because I have fear that the future could be darker for me so I have to save, I have to make the more I can-.

On the contrary, once we get into a system of abundance, where all basic needs are covered…Many things stop to have sense as we perceive now. Surplus is one. Capital Accumulation or even Capital start to vanish as a concept.

PhiEconomy propose a new system based on abundance. A new system where all participants in a platform of value exchange -whether this is economic or social- get rewarded. Dividing the participants into consumers and prosumers. The Consumers on the platform will pay for those goods/services/advices/content or whatever is demanded. The Prosumers will get those goods for free and also get paid for the ones who generates -so this digital money can be used on other platforms connected to the PhiEconomy Framework where they are not prosumers-. Incentive? Be productive, be a prosumer on some platforms -where you enjoy “adding value” to the Community- and use that digital coins to add the goods/services you need but you either do not want to generate or do not have the knowledge/time to do it.

PhiEconomy core engine is based on a algorithm that introduces to the Economy two natural “orchestrators” for living organism. This is the PHI number and the Fibonacci’s scale. We are creating a living organism of P2P interactions within our Humanity now. The more decentralized apps/platforms for value exchange we create, the more we simulate a “one person living organism” where we are all part of, and have certain tasks/acitivites necessary to make it work.

PHI number and Fibonacci scale is present in the architecture, biology -Ludwig’s law-, art already. And it is called the “golden or divine proportion” as all organism that contains it provides a “perfect” simetry.