The Economics of Neighbourhoods

Or, what's special about it, really?

Reputation Currencies play an important role in distributed economics. As explained in this post, such currencies operate radically differently to monetary ones. Generally speaking, they work well when validating the potential of an agent in a specific context, or when predicting specific human behaviour based on past history.

Long story short, Neighbourhoods heavily leverage reputation currencies. They are organisational structures that emerge when network effects accrue to reputation currencies.

The differences between traditional organisations and neighbourhoods are articulated below:

  • Organisations tend to leverage internally articulated reputation systems and designations to drive culture. Such cultural systems tend to be derivatives of overarching regulatory frameworks, often resulting on monolithic behaviour, or hierarchical structures - which are relevant only in very specific use-cases. Neighbourhoods operate as social networks that use formal, agent-centric reputation for cultural articulation. Their ability to scale, (and contract) is significantly faster (since preservation of culture isn't the result of top-down activity). Moreover, they can modulate much more nuanced behaviour, since reputation isn't stored in universal consensus-driven ledgers. Reputation is computed contextually and locally.

  • Neighbourhoods also enable their members to port reputation into other neighbourhoods. Again, this isn't possible in traditional org structures (for eg: if you're a VP in a company, porting it to another organisation isn't always easy) This opens fascinating new feedback loops between neighbourhoods. Traditional competitive practices between organisations give way to more collaborative patterns between neighbourhoods since there is a bi-directional flow of relevant information through memetic bridges.

In the long run, memetic bridges provide a sense of sufficiency for Neighbourhoods members when they receive them. In other words, Neighbourhoods rely on multi-dimensional wealth systems (reputational + monetary) for validation and social orchestration.