Hi Ian

Equity in terms of shares in joint stock company are so Last Century and so terminally broken.

What is needed IMHO is equity in terms of 'Open Capital' ie prepay credit instruments.

http://www.slideshare.net/ChrisJCook/open-capital-2015

This actually pre-dates all other forms of instrument, and with the right protocols an entire system may be built around it. Sort of a financial Nand gate.

In my opinion, Vinay's talk nicely shows how important both identities and their intertwining reputations are to the world of crypto-currencies. It could be seen as the missing layer of trust which will be needed for us to finally fully embrace peer-to-peer monies. Once we combine P2P money with P2P trust (especially via decentralized P2P communication channels), what trusted/relying parties will we then still need?

So, my guess is we'd need another free and open-source infrastructure layer, only this time one for trust (identity & reputation) instead of money. The infrastructure itself would enable disintermediation of trust (as Bitcoin has done to informational value (read: money)), and when a relying party is required, products/services could be built on-top of this layer, causing micro-intermediation instead of cartelization.

Ideally, such an infrastructure layer should look something like:

- Electronic trust networks for humans and machines (referring to Ian's earlier work on "First Class Persons", and the "Ricardian Contract" of course)
- Privacy-by-design & security-by-design / no trade-off between security & UX
- No trusted third party (TTP) necessary / Only use TTP when situation demands it
- Connect information silos & secure communication channels
- No need to process nor send sensitive information in order to automate exchange of trust
- Cheaper, faster and more broadly applicable than any other identity / reputation system
- Easy to implement in existing legal and production environments
- Enables a range of new business models

Once we combine decentralized trust with crypto-currencies and truly decentralized communications, a society whose right of existence is based on intermediaries (hierarchical societies) will then transform to one that becomes less and less dependent on it by the minute, through micro-intermediation.

"You never change things by fighting the existing reality.
To change something, build a new model that makes the existing model obsolete."
-- R. Buckminster Fuller

/my2cents

BR,

Tim

Last but not least, these thoughts are mainly inspired by Robert Hettinga's work on Geodesic Societies/Markets:

1.) Nicely summarized -- http://www.nikkei.co.jp/summit/98summit/english/online/emlasia3.html (scroll down a bit)

"But, what, you ask, do I do when someone defrauds me? The neat thing about using financial cryptography on public networks is that you can use the much cheaper early-industrial trust models that went away because you couldn't shove a paper bearer bond down a telegraph wire. In short, reputation becomes everything. Like J. Pierpont Morgan said 90 years ago, '...Character. I wouldn't buy anything from a man with no character if he offered me all the bonds in Christendom.' In a geodesic market, if someone commits fraud, everyone knows it. Instantly. And, something much worse than incarceration happens to that person. That person's reputation 'capital' disappears. They cease to exist financially. Financial cryptographers jokingly call it reputation capital punishment. :-). The miscreant has to start all over with a new digital signature, and have to pay through the nose until that signature's reputation's established. A very long and expensive process, as anyone who's gone bankrupt will testify to." -- Robert Hettinga (1998)

2.) Further in-depth explanation -- http://www.ibuc.com/pdfs/Geoecon.pdf (see page 14)

Moving money is only part of the problem. The real issue is how money is generated - and dispatched.

And a crucial issue is forged money. As long as people rely on mere arithmetic, then computers will be able to cheat the system.