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Public Goods

Last updated February 15, 2022

One important advantage of startups over public goods is the possibility of an exit. Exits create incentives for upfront funding, hiring, motivation and alignment through equity, a share in the exit. However, for nonprofits, FOSS, and public goods projects, this “light at the end of the tunnel” does not exist.

Source: Retroactive Public Goods Funding by Optimism

How do we incentivize people to contribute to the stone soup that is public goods funding?

# Definitions

# Defining ‘public’

The vernacular term “public” is understood to be something of the people, freely available for use—such as parks, roads, and common lands.

A public can be identified and classified by shared problems, the extent to which they are aware of such problems, and the extent to which they do something about it.” Similarly, how do we define a community?

Crypto and web3 overcome a lot of the bariers of web1 and web2, namely the inability to satisfy inalienable access to ‘public’ resources. The internet’s so-called “ public spaces” are nothing like our cities’ public parks. They are merely someone else’s private server, where access can be revoked at will.

Public also means creating venues in which people could begin to identify themselves as part of a collective whole.

To publish a web document or software application is more than making something public: it’s an act of making a public (Warner, 2002)

# Defining ‘good’

Why are public parks more desirable than public parking lots? This brings us to an important realization: any definition of public goods presupposes a shared understanding of what is in the public’s benefit, and why.”

These ‘goods’ exemplify a set of shared values within the ‘public’.

Are there concepts of ‘free riders’ with public goods? What about tragedy of the commons? “It is clearly in the interest of society to promote the creation and consumption of public goods—be they vaccines, public libraries, or open source code”

# Economical

Public goods are

  1. non-excludable: it’s extremely difficult to stop someone from using the good, like roads and bridges
  2. non-rivalrous: it’s abundant, and one person’s use of the good doesn’t substantially reduce the amount left for someone else (e.g. there’s more than enough air to go around)

Static open source (code that anyone can copy off the internet) is an example of a public good. Another example of these are public infrastructure like roads (although not necessarily, if you have your drivers license revoked you may not be able to make use of the roads in the first place).

It seems only natural that online media archives and open digital infrastructure should qualify as well.

Yet, no matter their claim to universality, instantiations of public goods are always local. The public cannot contain everyone. Locality is created and felt through [shared space, time, or experience]. It requires synchronicity of experience, rel: group limits

Club goods are excludable but non-rivalrous. A lot of more recent app launches (e.g. Dispo and Clubhouse) used waitlists to create ‘fake scarcity’ to transition from a public good to a club good.

Related: positive sum worlds



Crypto protocols are one of the most compelling novel institutional forms, specifically deriving from their “public” qualities

  1. unrestricted membership + participation
  2. open APIs
  3. transparent allocation of resources and pwoer

Yet not perfect

# ‘Voice’ in web3

“The equivalence of stake and voice in crypto is reminiscent of early American democracy, in which political representation was conditioned on property ownership. Under this regime, only 6% of the total US population was eligible to vote—a laughably exclusionary idea of the body politic by today’s standards (Ratcliffe, 2013)”

“The most consequential members of the crypto-public today are those who hold the most tokens, meaning even small holders are effectively removed from the conversation about what’s in their benefit.” Same concepts as design justice, we need to talk with and consider the marginalized peoples under existing systems of power so we can gain a deeper understanding of the public that we are building for and how to best serve them.

# Obessions with profit

Web3 supposed allows us to ‘codify’ the set of values that a public goods represents. Yet, in practice in web3, “little space has been made for different values to be discussed or enacted. Which is why, in the absence of ways to enact our shared values, we default to the lowest common denominator: profit.”

The United States Dollar does not have a responsibility to profit its holders. A cryptocurrency is a monetary instrument, not a business.

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