To My New Friends at Illumination

I see your help and input as a vital part of my writing process

A new beginning?

I read this post by Dr Mehmet Yildiz and I expressed some initial skepticism in my reply. But Dr. Yildiz was quite kind and willing to help me by connecting me with these writers Ann K Frailey, Karen Madej, and Desiree Driesenaar. It’s really hard to convey what a huge help this was. I started using Medium as a platform to promote an app I’m developing about 18 months ago. Since that time I’ve written over 60,000 words about a specific implementation of a new technology that has applications in the realm of social justice, corporate governance, and the formation of peer-to-peer communities for the purpose of corporately holding funds.

On top of the +5,000 hours I’ve spent on R&D, I’ve also spent a ridiculous sum of my own money to develop a prototype. But I was never able to overcome the skepticism of people. No one has ever seen a product like this provide a useful service to existing communities. Was there an existing market for peer-to-peer insurance coverage for small groups of around 50 people? In all of my research I never found one. Then I met Desiree Driesenaar who told me about broodfonds or bread funds (see also). Unbelievable, my jaw dropped, a market for the technology already existed. This seemed to validate my idea. Using traditional payment networks to provide this type of service is far more expensive than using alternate payment networks. I discuss this at length in this post: Groups Need an Easier Way to Hold Funds.

Why Broodfonds are so important

There are less than 20,000 people in the entire world who benefit from this type of insurance product. This is why I never found any mention of these types of groups over the course of my +2 years of research. Most would assume that the reason why the market for this type of coverage is so small is because there is no demand for it. That’s not what my research showed. Instead, I realized that there is a very high demand for these types of groups but costly regulations created way too much regulatory overhead which was holding down the real demand for this type of peer support network. But these groups in the Netherlands demonstrate that small cooperatives of 50 people can effectively provide this type of risk-sharing.

“13,000 members in close to 300 Broodfonds groups throughout the country — each made up of freelancers living in the same geographical region.”

That’s an average of about 44 people per group.

This is exactly what I was writing about when I addressed the problem of paid sick leave in the US! The only difference is that these groups use the traditional banking network. The regulatory overhead in the Netherlands is likely much lower. In the US these groups are not viable because the regulatory overhead has effectively quashed their formation.

My models showed that the best group size was between 50 to 100 people.

P2P Insurance at its most basic level

“Reducing the group size:

- A community risk pool is 25 to 125 people (optimally 50 to 60). - Increasing personal relationships among participants.”

And again here:

Fraud Protections within TandaPay

“Additionally, although not a requirement, it is recommended that more conservative participants should seek out groups with less than 50 people.”

This validates all of my research!

So what now?

I have no idea, I ran out of funds and decided that for the time being it would be best to put aside TandaPay as a startup project. I wrote about this decision in this post: Now that I’m looking for work, was pursuing my startup worth it?

This new discovery provides some hope however that there is a group of people who already exist who would be a perfect initial candidate to adopt the technology.

A broodfond and a TandaPay group are effectively identical. The only difference is the regulatory overhead created by having to use traditional payment networks that produce third party liability. TandaPay was created to perform the exact same function as a broodfond minus the third party liability. Every participant is fully in control of their own funds at all times, thus third party liability is eliminated. If you are curious how the technology is able to pull off this miracle feat you can read these posts which explain how this works:

TandaPay Explained — How decentralized peer-to-peer insurance works (skip to section: TandaPay Escrow Layer)
The Law and Smart Contracts — Smart contracts create coordination not obligation

Yet another dumb idea

All of my ideas are radical and this next one is going to sound just as dumb as a peer coverage group of 50 people. But first, let me pose a question and a few obvious answers.

Why is sponsored content so controversial?

Authors who promote content for their own financial gain have an inherent conflict of interest.
Any author agreeing to accept payment before they provide an opinion on a product or service will be unable to provide an unbiased opinion to their readers.

UPDATE (4/10/2020): The Perils of Sponsored Content on Medium

Both of these are true and there are many other reasons why anyone who promotes sponsored content should be questioned. In the world of cryptocurrency projects this problem is orders of magnitude more serious. This is because many of these cryptocurrency projects are seeking to crowdfund development by appealing for donations from the general public. A great number of unsuspecting people have been swindled by projects that crowdfunded development using cryptocurrency.

I really don’t want to raise funds. Instead, I only want to raise awareness of the potential applications of this new technology. Is this a distinction without a difference? Maybe, I don’t know. I only know that many writers publish on Medium and there is always difficulty finding a balance between content you care about and content that is popular:

You can publish about topics that you truly care about. This kind of publishing will likely make you no money because the things you are most passionate about may be inappropriate for a general audience. This means you never go viral.
You can publish about topics that you know will go viral. This kind of publishing will likely make you money because they are suited for a general audience. This means that writing about these topics takes away from your ability to write about things you truly care about.

What if you could get paid by publishing on topics that you truly care about? Is there a way of solving the inherent conflict of interest?