3. Market Paradigms
Market 1.0 – decentralised, disconnected, physical
Market 2.0 – centralised, connected, intermediated
- Debt (Banks) and Equity (Joint Stock Company)
- October 2008 – the Market 2.0 paradigm broke
How do we achieve a resilient Market 3.0 ?
4. Introduction - Resilience
Resilience - the enduring power of a body or bodies for
transformation, renewal and recovery through the flux of
interactions and flow of events
Resource Resilience – Natural Grid
Financial Resilience – Open Capital
5. Financial Resilience – Open Capital
Prepay – credit returnable in payment for value
Nondominium
- People-based (P2P) Credit – Guarantee Society
- Asset-based Credit – Capital Partnership
7. IOU is guaranteed by Sellers & Buyers mutually
Seller Buyer
IOU
Value
Pool
GuaranteeGuarantee
8. Seller & Buyer pay guarantee charge into Pool held
by Custodian
Seller Buyer
IOU
Value
Pool GuaranteeGuarantee
Fee Fee
9. 1/ Buyer settles credit in £ or '£'s worth' eg energy-
based or land-based currency
Seller Buyer
Value
Pool GuaranteeGuarantee
Fee Fee
10. 2/System identifies a chain of IOUs A<B<C<D<E<A
and 'nets' them out
Seller A Buyer B
Pool
GuaranteeGuarantee
Fee Fee
Buyer C
Buyer D
Buyer E
IOU
IOU
IOU IOU
IOU
11. 3/ Buyer defaults: system pays sellers and collects
from buyer if possible
Seller A Buyer
Default
Pool
Collects
Pays
Seller B
Default
Pays
12. Service provider sets guarantee limits, handles
defaults & manages system
Seller Buyer
IOU
Value
Pool GuaranteeGuarantee
Fee Fee
Manager
FeeService
13. Clearing Union
Guarantee Society is the social contract within which
Sellers accept Buyers' credit and settle balances
Sellers and Buyers pay a guarantee charge and share
costs of operation and defaults
Manager allocates guarantee limits, manages platform,
ensures transparency, handles defaults
15. It'll Never Work
For 140 years, Protection & Indemnity (P&I) Clubs have
mutually guaranteed risks Lloyds won't cover
For 125 years P& I Clubs have been managed by
Thomas Miller
16. Market 3.0 – Banking......but not Banks
- networked, decentralised and dis-intermediated market
presence = network presence
- banking as value-adding service......not banks as
value-extracting middlemen
- they'll never do it? They already are – because risk is
with end users & so capital required is minimal