Wednesday, March 28, 2012

Why the P2P Foundation is Paying Its Salaries in Bitcoin

By Michel Bauwens
P2P Foundation
Wednesday, March 28, 2012

 http://blog.p2pfoundation.net/why-the-p2p-foundation-is-paying-its-salaries-in-bitcoin/2012/03/28

The P2P Foundation thinks that readers may be interested in the following recent development.

First, one word about the structure of the P2P Foundation. The Foundation is first of all a virtual and physical community of contributors, people who volunteer content for our wiki, blog and other resources. This is entirely a non-remunerated activity and creates our knowledge commons, which people in the world can access for free.

Our wiki has about 17,000 articles which have been viewed more than 18 million times, with an average daily readership of 23,000 for our p2pfoundation.net domain, which includes the blog.

The Foundation is also a nonprofit association legally situated in the Netherlands, and the Foundation ‘enables and empowers’ the collaboration infrastructure of the community. The legal structure allows us to pay and receive income for activities that are related for this purpose.

The Foundation also has a cooperative, with a separate legal status, which will allow us to undertake activities for third parties. The cooperative is conceived as being a global phyle, a community-oriented enterprise that aims to generate income for the contributors to the commons and the Foundation, so that we become financially sustainable. As a phyle, we operate globally with cooperators located in different parts of the globe. The coop is dedicated to the common good of humanity and the p2p knowledge commons in particular, and is aimed to sustain it, and those who work for it. It is not a profit-maximising entity, but a product-maximising entity. It operaties in the market, but ‘for’ the commons.

However, because of administrative delay issues in the registration process, our first external contract is undertaken under the aegis of the P2P Foundation as an association.

In the context of our first contract with external parties, we believe Bitcoin to be a major development, pregnant with symbolic meaning about the future structures of the world-system.

First of all, Bitcoin is the first operational, socially-sovereign, digital currency. While there have been many other local complementary currencies, they always have issues of scaling them to a global plane. Bitcoin exists, not through the creation of money by private banks and national states, but because a digitally literate global community decided to trust a particular instantiation of a protocol for the distributed creation of money. It is part of the general trend of the social design of p2p systems, to enable trust with strangers on a global scale, and to align, instead of to oppose, individual and collective interests.

The Bitcoin protocol started running, and generating Bitcoins, in January 4 2009. It has been over three years now, and yet these are still the very early days. Bitcoin already has developed and impressive, if experimental, ecology of operational support infrastructures and services. These initiatives are autonomous, driven by no authority other than that which emanates from the needs of the community of users and the nature of the Bitcoin protocol. At this point, it is already working as a small-scale global reserve currency, arguably a better storage of value than the dangerously burdened Euros and Dollars. Indeed while the value of national currencies is expected to decline in times of geopolitical dislocation, including catastrophically at times, the value of Bitcoin is expected to rise because of its inherent ‘deflationary’ design.

Value storage through Bitcoin has profound political implications, as it is the first currency that decentralises the creation of new units (or, ‘mining’ in Bitcoin terminology), rather than the current system where new money is created as a byproduct of new debt. The whole world’s ‘formal’ economy is backed by debt, and debt is backed by violence. This can be verified by defaulting, and subsequently resisting eviction: state force will be used sooner rather than later. Bitcoin value storage is revolutionary as it deflates the dark power of debt, and allows to envision a world where this power of debt is no longer at the origin of economic activity. Bitcoin draws its value from peer-to-peer network dynamics, and mints new currency not through debt but through raw computational activity. Moreover, this essential difference from the current system, we argue, is actually in itself the most powerful claim to value of the Bitcoin monetary system.

You can buy many different goods and services with Bitcoin, exchange it with other currencies, etc… It works on a global scale. Hence, it is symbolic of the shift of our world system to a ‘post-Westphalian’ phase, a phase that goes not only beyond the dominance of the nation-states, but also beyond the private global powers that have hijacked global governance, such as the financial system of the 1% . Indeed, this new currency can be created, under conditions set by the protocol, by any participating computer. It is a true p2p monetary system. A socially sovereign currency that can scale globally will be, and is, a vital part of the emerging distributed infrastructure of value creation that the P2P Foundation calls for. This does not mean that Bitcoin is necessarily the final and perfect answer to our needs, but it is an important step in demonstrating that it CAN be done. We envisage the development of future ‘forks’ and currencies that have other qualities embedded in them, and call for monetary bio-diversity.

It is to demonstrate our commitment to such developments, that we will now pay our collaborators in a mix of currencies, and part of it will be in Bitcoin. The first of the members of the P2P Foundation to be paid Bitcoin honoraries is our in-house researcher Nicolás Mendoza. This first income was payed 50% in Bitcoin, and we are committed to offer all of our cooperators the possibility to receive Bitcoin payments at their convenience.

Starting today, the P2P Foundations will accept Bitcoin donations to the following address:
19HcFgnnJseANJAHUjFifVwz68AGYrHc7v

Thank you for your support!

Reprinted with permission.

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