the bonded Avatars of Escrow, Overseer of the SL Contracts

I've been doing some thinking about what it would take for a large group to get together or an organisation to get together and in the end it always ends up with the following problem: Trust and Control


Let's say someone owns a land trust and they are paying out dividends based on buying/selling land .. and then lets say they get hit by a bus. Who has the password? What does LL do?

Or, for instance, let's say 3 people get together and create a game called blingo. They all host the IP under one account and then split the profits.

Lets say one of them has a mental breakdown, changes the password, and then decides to give away free copies of the game away.

Disaster.

Another scenario, let's say we have 20 people or so that get together and create a MMORPG type world with a bunch of sims and each one participates in the profit a little bit.

Only 3 of the main avatars get control of the main account and then they sell their share of the world and agree to transfer control of the user account. Well, they didn't get exactly the price they wanted so first they transfer out all the cash to GOM and flee the scene.

There are a lot of scenarios, and in fact they are quite endless if we all think about human nature.

So what's the solution? Are we all doomed to relying on the foibles of avatarkind?

I don't think so. I think the solution is a RL bonded Avatar who controls the CEO avatar accounts of these groups in a type of escrow and executes ticket items based on a contract agreed to the parties.

The avatar would probably have to give up their RL information, unless we can somehow get LL involved, and probably would have to post a bond.

This avatar organisation would have to build up a certain degree of trust with the community and would be responsible for arbitrating between parties.

Obviously, if the avatar organisation was not seen to be objective and trustworthy, people would not use them to control these escrow accounts.

There would be a board of directors type functionality, so shareholders in a group could elect who was allowed to send ticket items and what type of ticket items to the escrow avatar.

This seems to me to be the only real solution to the problem of trust and control, and I believe it's trust and control which is the one major blocking point to the cooperation of large groups of individuals executing on very cool large scale projects in SL which require significant time resources of all involved.

Going to assemble all these ideas together, as I think they are all connected somehow.


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the Optional Corporation

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It seems to me that quite potentially, the time of the Optional Corporation is potentially at hand and SL is a potential breeding ground for it.

The Optional Corporation is the corporation you can optionally belong to.

You can belong to one or you can belong to many. Some corporations may attempt to negotiate exclusivity with you, but those are simply minor evolutions of the corporations we have to day in the real world, and are not, strictly speaking, an optional corporation.

The optional corporation pays you mostly on pure revenue share. Some may attempt to pay by salary, but these are, again, simply minor evolutions of the old kind of corporation.

An example of an optional corporation is an affiliate relationship you might have with a company. You provide them with a marketing department and they pay you a share of the revenue.

In SecondLife, the optional corporation has a lot more interesting possibilties. For example, you become a member of a grid-wide game creation optional corporation. You contribute certain things to spec and upon doing so you are given a certain equity in the company. Based on your equity share, you may or may not get voting shares which allow you to help elect a board of directors which in turn, elect the chief executive officer.

This CEO could be responsible for many things, among those would be issuing new shares to pay for new products necessary to make the corporation continue to provide dividends.

And, of course, you can buy and sell shares. Doing so is a great way for the community to vote on which CEOs and their companies they likes the best.

I believe that the optional Corporation may be necessary for secondlife to succeed in that while there are a lot of cool games in SL, they are all very independent and with very little in the way of cooperation. We need to get large groups to come together (and to provide them with incentive to stay together) to build content which is very compelling, very rich, and very deep.

One example of an optional Corporation:

Lets say, VonLand Baron decides to buy 4 sims. He think that a certain WornesWorth is building some very cool prefabs, so he tells him - I'll give you a 10% equity share if you give me unlimited access to your prefabs to populate my sims with.

And then another 30% equity to Triangle Terra for his vehicles to provide transport to denizens in the sim.

And so on.

Oviously there are some challenges here, for example the CEO would have to be an individual of impeccable community reputation and one that people respect and trust. A third, disinterested party would probably provide audit functions to make sure nobody is pocketing the cash (they'd get a 5% equity share).

Another challenge is IP and the necessity of a fully transparent business model to engender a certain amount of trust. Also, you could be optionally working for the competition as well.

However, transparency is good for everyone. Secrets are always sources of corruption and provide friction for the advancement of society in general.

And the great thing about this model is that the power is transferred on down from the top of the organisation where perhaps it really shouldn't have been in the first place and to the individuals that actually run the company.

Temp Agency

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As we all know, SL and LSL are defficient in many ways.

However, we'd like to be able to do a certain number of things in SL in order to run our businesses.

For example, we'd like to buy land automatically, clean up prims, invite someone into a group, set land to edit, set land to no edit, add people to a ban list, etc etc.

I am thinking of starting up a temp agency that will basically be a ticketing system. You can submit a ticket (clear up these prims, buy this land, etc).

Anyone who would be perform these tickets would be 'bonded', and as the Temp Agency we would be willing to assume a certain amount of liability assuming various safety precautions are properly taken.

Obviously, if we didn't, word would get around and people would not trust the service.

A particularly industrious and well organized user could possibly blow through a significant amount of tickets in a very short time. At one every 2 minutes(let's say all in a super mall), for example, that would be 30 in an hour. If you were paying them 100-200 L$ per item, that could be up to 6000 or 24$ USD / hour. Not a great wage, but for some people it would make sense.

Note that it's not like you're going to need to be clearing off that many prims per Customer. Probably 1 in 10. So if you're making 100 L$ profit per customer, the overhead in wages would be 10%.

Oh yes, and course, there would be a secure LSL API (via llEmail, your own personal send to address and hashing for extra security) which would add tickets to the System

Question - would you use a service like this? How would you use it?
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Blaze, I think there's a simple way, to start....

All you need is a little land, and when two parties show up and agree to a contract, they submit it to you as a notecard, which you place into an object on the land. In the event of any future disputes, the contract is then available to any party to peruse and any disagreements are then subject to interpretation of the contract. Linden buyoff on this really would help a lot. All it would really take is the ability to submit contract violations as abuse reports. The presence of the contract would aid in investigation of the abuse.

Yeah, the problem is LL is pretty slow moving and I can't imagine this is a high priorit for them.



Yes, a contract would be necessary. Some kind of background in arbitration and contract law would be useful for the escrow avatar.

Ultimatlely, necessity will determine the existence of complex business structures in SL. Look at GOM. They've undertaken plenty of real-world investments and legal steps to build their credibility and provide protection. They have worked long and hard to build trust in the SL community. They provide a critically necessary service to SL residents. And there they are, handling millions of Linden dollars with no one worried about what's going to happen to their cash.

Why are they so trusted? Well, for one, there's a degree of transparency. They're willing to discuss their real lives and real names and they've even had a magazine article (or perhaps more than one, not sure).

Businesses that are going to do things that are truly worth doing, and that are needed by many customers, will take real-world steps and real-world precautions to protect themselves. Ultimately, if your business is going to do something that is so important that it requires a binding agreement, you should be using a paper contract drafted by an attorney.

I think those RL constructs (lawyers, contracts, incorporation) create significant financial friction and inertia, almost to the point that a lot of worthwhile enterprises simply don't get off the ground because they don't warrant those types of investments.

Do I want to incorporate or have a laywer sign off on a contract simply because I want to spend 1 week with a bunch of guys creating a cool new game in SL? Not really, especially when none of us expect it to go anywhere. We're just doing it because it's cool.

At the same time, it would be nice to have some kind of protection if it *did* go somewhere. Some kind of low cost, low friction, micropayment style protection.

Cool Blaze.

I've framed this related issue as a question for the upcoming town hall meeting here:

Expand the Niche To RL! The Time Is Now

Many small RL businesses, especially in Healthcare, Finance, Insurance, Real Estate, Human Service, Non-Profit and Employment Recruiting require full disclosure of identity, credentials and business references. Customers/clients just won't do business without knowing who they are dealing with.

For SL to attract these vast untapped service markets, LL must create an option where real life accounts are set up enabling real life identities - business names, corporate names, DBA's, sole propty., personal names, website linkage, etc. Once that is implemented, I for one, would be able to offer some resources within SL to my clients, small seminars, consulting services, multi-media presentations, etc.

Does LL have any plans to create the option for RL accounts within Second Life?

If not, what needs to be done to convince LL that this would be an EXCELLENT business decision!

((Your Questions for the SL Economic Town Hall))


Related Threads:

Real Life SL Accounts?

Robin L - Turn Key SL Business Ops!

Robin Linden's:
Creating SL Last Names

I've been thinking for the last month about a much smaller step: An Notary system. The idea is similar to what Michael Psaltery described, though provided as an independent third party service, and automated: Walk into the notary, provide a notecard with the agreement or statement, follow the steps and you have a notarized document.

The result is an irrefutable (if you trust the notary) statement that one or more of you 'signed' a notecard. There are of course possible add-on services: Mediation, Contract insurance, signed documents could be made public or private, etc....

I'm pretty sure with integration into an external web site (for storage, and verification), I can script this into a pretty workable system.

Would folks make use of this service? Shall I open it up?

As for corporations - there are pros and cons and many ways to frame them, rather than simply copying the now-dominate version we have in RL.

Even not so long ago, the form of the corporation was hotly debated. Even President Jackson was generally against them. There is some quote about creating a legal participant in society that has no moral guidance...

I, for one, would like to see some SL concept of corporation that address the issues of trust and commitment, but doesn't remove the personal responsibility of the AVs involved.

I think a notary system would be cool. Digital signing wouldn't be that hard to do.

Once we discussed with Pathfinder Linden the idea of a world-accessible notary, run by the Lindens. It's a simple thing, really. You just need one prim with the proper permissions. Signees of a contract just drop each a non-mod copy inside (so, each notecard has the owner correctly listed; if you have both copies inside, it means both are willing to accept the contract). Another prim gets touched, and it retrieves the notecard for you.

Precisely that system is used at Neualtenburg for retrieving the land ownership deeds. Of course, this is not a "world-accesible notary" and you would have to trust the City of Neualtenburg first - thus the need of a non-resident notary, ran by Linden Lab. The system works well for Neualtenburg's citizens, though.

Blaze, funny you bring this up. Myself and Kavai Onizuka have been discussing this a lot recently.

Personally I think it's a cool idea; the big stumbling block is transparency. Maybe LL would care to add some form of feature which allows you to share the transaction history logs with people on a certain list.

-Adam

Yeah, I asked for that:

/invalid_link.html

It's hard getting SL to move on this sort of stuff though because they have such a queue of bug fixing / scaling.

I think revamping the transaction history to provide an XML-RPC query mechanism over HTTPs would kill a lot of birds. It could solve the trust issue and it could also allow for 3rd party ecommerce sites to easily verify incoming transactions and currency deposits.

Interesting discussion on the laws of identity..

http://www.identityblog.com/stories/2005/05/13/TheLawsOfIdentity.html

I will be opening a notary service in-world soon. It will offer irrefutable signatures, non-modifiable documents, and strong checks against tampering. Even those with god-powers, Lindens or malicious crackers, will be unable to forge signatures or alter documents without detection. Furthermore, these services will all be performed in-world (the current communications channels out-of-world are not secure), though verifications can be performed independently out-of-world if desired.

More details will come soon... For now, I'm scripting my a** off!

(And for the record, doing digital signing in LSL correctly is actually quite involved!)

Can you explain how this helps us?

As an example: We sign an agreement using your system to split profit from a vehicle with someone. One party does not keep to it.

What happens next?

Another example: All group officers sign an agreement not to sell group land without consent of the other officers. One officer sells land to themself and sells it on, keeping the cash.

What happens here?

Not sure if having it signed and sealed helps?

The notary just provides a piece of the foundation for systems that would handle such situations. The notary itself does not provide a full system of law.

I have spoken with many people, who have various ideas on how to set up larger governing structures, and all of them have indicated they would need a notary service. Furthermore, there is value in a notary that is disassociated from the governing organizations that use it: Even they won't be able to forge or refute signatures.

Constructing a notary in-world is a challenging technical problem which I have the programming skills to implement, and so I'll be offering the service. Constructing in-world legal systems is better left to those more qualified than I.

I'm looking forward to seeing the various approaches that people take in building self-regulating groups in-world.

Yeah, I agree.

I have to agree with Garth .. the fact is, the signed document, while technically interesting, isn't going to be very effective if people are trying to cheat it - signed or not.

I think fundamentally the most effective way to do this, is to hand a notary (such as yourself) control over a user account.

By providing some kind of bond outside the world you can financially guarantee you're not going to mess with the accounts your working on.

Add an efficient ticketing system and you could have a fairly interesting way to manage an 'optional corporation' where decisions and work is done more bottom up and less top down.

If you want to baby step, my suggestion is to write some software which scrapes the transaction page for accounts and re-publishes it for a group of people. Think of some clever ideas on how you can protect the password that controls that page or to at least build trust among everyone that you will not abuse those passwords.

Community GridWide Game as Optional Corporation.

Characteristics:

1. Control belongs to those who develop and play for the Optional Corporation
2. Profit goes mainly to those who develop and play for the Optional Corporation
3. Participation is completely non exclusive and optional
4. Full meritocracy

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Community GridWide Game
Hi Everyone,

I'd like to create a grid-wide game based on SL weaponry and the game of Assassin.

For example what Assassin is like, check here:

http://www.cs.arizona.edu/acm/assassin/assassin.html

The SL weaponry will speak some open protocol to make the game interesting. The goal will be to shoot at people and be scored in some manner. Extra bonus points for getting Lindens and annoying forum trolls.

The idea is that SL weapons will need to be approved, because, obviously you can create some pretty unfair items.


Once approved, they can be sold as approved (we'll need some kind of trademark or something). After items have been approved, minor modifications may be required in order to make them fair.

The older items will no longer be approved but the new ones will be OK.

Items will approved by a community rather than any particular individuals or groups. I was thinking something along the lines of whoever has the highest 5 scores in the last fortnight gets to vote on item approval and item modifications.

If you want the power you need to prove that you're worthy.

As an extra (but not required!), if you are a player in the group you can also participate PvP style where you're allowed to attack each other with Push weapons, cages, etc etc without fear of abuse reports. I asked Philip if he thought this would be OK, he said sure.. give it a shot.


If anyone is interested in playing or discussing such a protocol for this game, or, heck knows of someone already doing a community based game, please post below.

Note, I realise others have tried to make their own version of this. I am looking for something different, I think, something not controlled by any particular group or individual but rather controlled by the community .. preferably the players in the game.
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SecondLife rocks!

Other examples of optional corporations:

Ebay, SecondLife, SLExchange, SLBoutique, Gaming Open Market (for market makers)

Well, it was harder than I expected! But, over 2000 lines of LSL scripting later, I opened the notary last night. See:

Nota Bene announcement

....and all because we can't even trust each other in a game....

This subject really makes me sad. (I apologize for inserting my feelings here, I know I should keep them to myself).

Every idea has its time.
I too have been pondering on a totally automated scripted notarising system. And ways of plugging the trust gaps. Encryption etc etc. Really I want a script to be able to decrypt and write a script. Possible, I guess with off-world help, but it might be best to avoid that unless absolutely necessary.
But I ponder, and threequarters script, so many SL ideas that few of them reach full fruition, in a form usable by anyone but me.
At the moment I'm aiming at a deeper understanding of the economy, and the interaction of the complex feedbacks inside it, so I haven't yet studied the detailed proposals in this thread. I'll keep it for later

No Ravi. That is a very pessimistic viewpoint. The majority of accusations of dishonesty and betrayal between people are not due to actual intentional misbehaviour. They arise rather from an initial failure to make absolutely certain that they are in agreement about what they are agreeing, and to be sure that they understand it in the same way.

Carefully drafted and signed documents are a way of trying to ensure such misunderstandings don't occur at the beginning, and to correct any misunderstandings which creep in later due to accidental or semi-accidental misremembering.

The need for such systems need not be seen as a sign of our degradation, but as a tribute to the care we take to avoid misunderstanding and unjustly blaming each other in cases where it really matters. A crystallisation of our desire to protect our relationships with each other.

Half full cup, rather than half empty.

At least - it sounds better that way, don't you think ?

Better than as a way to catch out a liar and pin the b*stard to the floor ? (gulp)