Co-operative governance and the blockchain

Traditionally, co-operative entities such as retail stores, small-scale manufacturing, real estate, service firms, etc. have been local by nature.

By contrast, platform co-operatives like Resonate are often international from their inception.

Building trust is obviously much easier when you can physically interact with your fellow co-op members. For international projects such as ours, this becomes much more difficult, as not everyone can simply drop by our Berlin office for a cup of coffee.

Fortunately, blockchain technology may be a solution for securing trust in new, international co-operative structures like ours.

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The blockchain is a technology that allows a crypto-currency like Bitcoin to exist without a central bank. It provides a secure, decentralized and (most importantly) an un-editable record of all transactions. Every exchange of Bitcoin is stored in the blockchain and shared by everyone. The key element is anonymity, for although all transactions are visible in the chain, the user identities are not.

We’re imagining a system whereby by-laws, amendments, membership and voting rosters are all written into a similar blockchain, providing an irrefutable history of all legal and administrative procedures.

The system would provide visible proof of membership, but could anonymize voting records. It could establish the initial founding by-laws of the co-operative while showing the evolving record of amendments and alterations, with voting records built-in to prove acceptance (or rejection) of rule changes.

Other actions that could be stored in the blockchain include:

  • Write-in membership rosters
    • users choose anonymous registry
    • users choose publicly visible registry
  • Write-in initial co-op by-laws
  • Write-in proposal for by-law revision
  • Write-in voting on and passed/failed revision
    • users choose anonymous voting
    • users choose publicly visible voting

Things get even more interesting when we start to consider whether projects would want to create even more layers of interaction into the system — such as discussion and proposal processes. While we imagine that could create a great deal of extra “noise” within the chain, some organizations may find this to be a more transparent approach. (We visualize that all discussions around by-law revisions would happen outside the blockchain and would only enter the chain upon voting.)

We’re excited about this innovative technology because it creates fundamentally new forms of privacy and direct value exchange. Building on it will allow us to implement censor-proof privacy across the service, so that end-to-end encryption is native by default. Better value exchange leads to direct access between all parties across the ecosystem.

For our blockchain needs, Resonate is partnering with RChain – a new blockchain system that is uniquely positioned to provide effective scaling solutions. Our collaboration represents a special relationship between two co-operatives, and you can read more about our partnership here.

We’re hoping to work with a number of organizations and developers on creating a cooperative blockchain system that will exist independently of Resonate, serving the larger platform coop community that stands in need of the same apparatus.

If any developers are interested in working with us, please get in touch.