Check out Kelley Weaver’s recent Huffington Post!
In 1906, Sir Francis Galton (a cousin to Charles Darwin) asked 800 people at a country fair in England to guess the weight of a cow. A lot of people guessed way too high or way too low, but when Galton averaged the guesses out, he found that the crowd as a whole was spot-on: the mean of all the guesses was 1197 pounds, the exact weight of the cow.
Thus began the field of collective intelligence, or the study of the wisdom of crowds. The fact that crowds collectively can make better decisions than individuals – even expert individuals – remained a fairly obscure area of knowledge until the age of the internet. The internet made it easier to form ad hoc groups, and to poll them. In 2016, a reporter challenged a web-based crowd intelligence platform to do the impossible: predict which horses would come first, second, third, and fourth in the Kentucky Derby. As in Galton’s experiment, the crowd’s predictions were perfect, and the reporter won $10,842 on a $20 bet.
Harbour is an organization that is applying the wisdom of the crowd to solve a real-world problem: making sense of the complex and chaotic landscape of cryptocurrency.
Cryptocurrency was invented in 2009 when someone put a paper on the web called Bitcoin: A peer-to-peer electronic cash system, and signed it ‘Satoshi Nakamoto’. The few people who paid attention to such things were blown away by Bitcoin, which decisively solved some very hard technical problems that had stumped computer scientists for decades, and hailed it as the most important innovation since the web. The rest of the world mostly ignored it. It was really just three months ago that the capitalists of the world realized that the specialists are right, these cryptocurrencies do change everything. They started throwing money at them, and about $0.1 trillion appeared out of thin air in three months.
Unlike centralized app stores, where the money goes exclusively towards lining the pockets of the store owner, cryptocurrencies are, as Satoshi Nakamoto said, peer-to-peer. We can own a bit of the apps that run in this decentralized system. It’s a radical blend of capitalism and democracy that is fundamentally different from anything we’ve seen before.
Emboldened by the wave of capital flooding into cryptocurrency, start-ups are springing up like mushrooms, funding themselves with Initial Coin Offerings (ICOs) – a new fundraising mechanism where they mint a digital token and offer it to anyone who wants a piece of the pie.
This is an opportunity, and a fundamental shift in the way business is done, but it’s also far too confusing for one person to navigate. There are over 800 cryptocurrencies, with new ones appearing all the time, a number of scams, and a lot of uninformed people offering bad advice on social media.
Harbour proposes making sense of this chaos in the same way that the crowd figured out the weight of that cow: using collective decision-making to choose which cryptographic tokens to buy, sell, and hold. Their ICO, starting on August 1st, gives people the chance to get on board with their DAO, a collective for holding and managing cryptographic tokens.
DAO stands for Decentralized Autonomous Organization, and also plays nicely on the Chinese word ‘Dao’, the philosophical ideal of Zhuangzi, who said, “There is no governor anywhere”. It is a new kind of organizational structure, allowing holders of Harbour’s token to vote on the decisions it makes, receive a share of the assets it holds, and even change the rules that govern it.
The DAO fits naturally with the internet, a fundamentally decentralized network which has always been – to put it bluntly – pro-collaboration and anti-authority, receptive to the natural, non-imposed order expressed in The Declaration of Independence of Cyberspace and the Hacker ethic of internet prehistory which said, “mistrust authority; promote decentralization”.
What makes Harbour interesting is that they are applying the principle of decentralization from top to bottom: decentralized ownership of the DAO, decentralized decision-making of crowd-wisdom, peer-to-peer cryptocurrency, and decentralized fundraising in their ICO.