Circles and Elinor Ostroms design principles for Common Pool Resource

I think one way to the Circles is as a common pool resource. If everyone uses it in a fair way (only using one account per person) than it can serve every one - but if some people abuse the system it will loose its value for all. In the design of circles some mechanism and incentives are already built in and it is also designed in a resilient way so that only people and groups that are directly connected to the “scammer” are loosing value.

However - I think it is very valuable to have a look at the research that is done on common pool resources. Elinor Ostrom observed societies common pool resources where successfully used by a group and discovered some principals those groups had in common (actually she won the nobel price on economics for this work):

  1. Clearly defined boundaries (clear definition of the contents of the
    common pool resource and effective exclusion of external un-entitled

  2. Rules regarding the appropriation and provision of common
    resources that are adapted to local conditions;

  3. Collective-choice
    arrangements that allow most resource appropriators to participate
    in the decision-making process;

  4. Effective monitoring by monitors who
    are part of or accountable to the appropriators;

  5. A scale of
    graduated sanctions for resource appropriators who violate community

  6. Mechanisms of conflict resolution that are cheap and of easy
    access; Self-determination of the community recognized by
    higher-level authorities; and

  7. In the case of larger common-pool
    resources, organization in the form of multiple layers of nested
    enterprises, with small local CPRs at the base level.

  8. Who can join the system? Are parents allowed to create an account for a baby (as soon as its born) If someone dies - can all its money still be converted to the groups be belongs to? Are the inherits allowed to access the money created before his death?

  9. Might be solved directly by the Circles ruleset.

  10. This will be important for vital groups - they should have a process of allowing new members where existing members are involved (there might be other groups that are less community driven but instead focused on one or a few merchants)

  11. This should be easy for a crypto currency because most behavior is transparent. One of those measurements could be the level of illiquidity on an account (see discussion here) So it will be important that easy to use tools are available to monitor the behavior of your peers/groups.

  12. I guess that is missing currently. The state is more or less binary at the moment. You can trust others or you do not - you can be a member or you are not. There is nothing in between. Maybe it would be helpful to have “restricted trust” where you are only allowed to convert/exchange money up to a maximum per time unit.

  13. TBD

  14. I think this is also directly given by the structure of (potentially) nested groups within Circle.