A free(er) market is emerging and has been emerging ever since the advent of the Internet and the Web. Newer technologies have accelerated this. Old inefficiencies in knowledge and access to the market are quickly disappearing. Participation is increasingly peer-to-peer (P2P). Participants can produce, create, curate, give, lend, sell, share, auction, consume, take, borrow, buy, reuse, rent and/or barter goods, services, cash, credit, currency, equity, debt and/or knowledge. The resultant economy is highly collaborative and is sometimes referred to as the ‘sharing economy’. Efficiencies are being introduced and value is being created in the smallest of markets. Non-profit activities are thriving as well, in addition to for-profit ones. The marketplace is becoming, at once, global and local. An important subset of the new economy is collaborative and crowdsourced, and may be described as commons-based peer production. Asymmetries in information are diminished by algorithms (Google, of course), social networking & media (Facebook, Twitter), social bookmarking (pinterest, reddit, StumbleUpon, digg, del.icio.us, Slashdot, etc.) and crowdsourced knowledge sharing, review and Q/A platforms (wikipedia, stackoverflow, quora, yelp, tripadvisor, zagat, etc.). While some e-commerce and P2P-commerce tools and enabling technologies (Amazon, eBay, PayPal, craigslist, etc.) hearken back to the earliest days of the Web, many others have flourished in the new Web 2.0 ecosystem of social apps and mobile access.
What follows immediately below is an attempt to categorize and list, in no particular order and without attempting to be exhaustive, some useful new tools and platforms that enable this new economy. In general, these tools and platforms tend to be open, social and peer-to-peer. Special sub-sections are then devoted to P2P finance, in all its forms, and to crowdsourced science.
- P2P hospitality exchange & short-term property rentals: airbnb, HomeAway, VRBO, roomorama, couchsurfing and The Hospitality Club; for general information, see here.
- Massive open online courseware (MOOC): udacity, coursera,edX and MRUniversity (economics focused). The Saylor Foundation is esp. important in this regard, esp. in its promotion and development of open educational resources and open textbooks. skilledup.com and coursebuffet serve as aggregators/search-engines for this area.
- Online video lectures / talks / textbooks: Khan Academy, MIT OCW, open.michigan, FORA.tv, TED, Academic Earth, videolectures.net, Flat World Knowledge, curriki, connexions and Chegg
- P2P ridesharing/carsharing/carpooling: relayrides, flywheel, uber, tickengo, weroll, sidecar, lyft, zimride, getaround and rent2buy/higear; for general information, see here.
- Other notable P2P commerce examples : Loosecubes, Vayable and Venuetastic
- P2P renting: zilok, snapgoods, toolspinner, Liquid, poshmark, Fon, rentalic, krrb, neighborgoods, sharehammer
- Crowdsourcing
- of cognitive/technical tasks & freelancing: mechanical turk, innocentive, crowdSPRING, skillshare, elance, freelancer, oDesk, Microtask, guru and uservoice
- of physical errands, tasks/chores and services: zaarly, taskrabbit, gigwalk and EzCater
- crowdsourced mapping: crowdmap and eStrategy partners
- crowdsourced public policymaking, budgeting, public safety and governance: popularise. constitutional reform in Iceland, #AskChicago, challenge.gov, Open Government Partnership
- for a more complete list, see here.
P2P finance
A significant and growing number of people are increasingly interested in being personally invested in their own investments, loans and charitable giving. Prominent concerns include accountability, investing ethically, investing locally, investing according to one’s values, investing for social impact, giving personally and giving responsibly. The range of financial transactions span donations to loans and investments, where risk sharing and transference can be all or nothing and everything in between.
To address the above needs, a plethora of P2P finance platforms have appeared on the scene. They are described variously under the categories of crowdfunding, P2P investing, P2P lending and P2P charitable giving. They take their inspiration from both classical institutions of online charitable giving (World Vision, Compassion International, etc.) and from microfinance -- with Grameen Bank (which predated the Web by at least a decade) being the archetypal and most notable example. They are being used variously for small business enterprises, social enterprises, philanthropic work, citizen science, citizen journalism and personal projects.
Organization
|
Founding, HQ, Revenue, #Employees, Market
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Type
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Value-add?
|
Issues?
|
2006, San Francisco, 28.6M, USA,
|
Undercut market debt-interest rate (7%
APR onwards)
|
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2005, San Francisco, , 75, USA
|
“
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“
|
||
1983, Dhaka, 176M, 22149, Bangladesh
|
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2008, New York, , , USA
|
501(c)(3) non-profit; urban
impoverished women in inner-city USA – savings, credit establishment,
financial education
|
|||
2005, San Francisco, 11.5M, 109, world-wide
|
microcredit
|
501(c)(3)
non-profit; Kiva itself does not collect interest. KivaZip.org gives 0% direct loans to entrepreneurs
|
MFIs that actually make the loan charge
extremely high interest
|
|
2002, Washington D.C., , , world-wide
|
501(c)(3) non-profit;
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15% transaction fee
|
||
2009, Sterline
VA, , , world-wide
|
p2p microfinance
|
501(c)(3) non-profit; loan repayment
performance comparable to MFI-mediated approach; costs lower
|
||
2008, Seattle, , , world-wide
|
student loans microfinance
|
501(c)(3) non-profit; excellent loan
repayment performance
|
repayment after landing a job (moral-hazard?); targeted
funding takes away agency?
|
|
2008, Bangalore, , 20, India
|
microcredit
|
non-profit; 1% transaction cost (with
0.5% set aside for default protection); 8.5% interest among lowest
|
8.5% interest – 4%-5% for field
partners and 2% for creditor
|
|
2010, Singapore, , , India (NRIs can
support)
|
microcredit
|
5% fee is charged field partners
(entire loan is given to recipient)
|
12%-18% interest
|
|
2009, , , , world-wide
|
microcredit for renewable energy tech
|
501(c)(3) non-profit; 0% loans; carbon
offsets; nanoloans
|
||
2005, London
|
p2p lending
|
|||
2009, London, ,
, UK?
|
p2p lending
|
|||
2010, London, ,
, UK?
|
p2p lending
|
Lending to small and medium businesses
|
average return of 5.8% after fees and
bad debt
|
|
2012, London, ,
, UK?
|
p2p lending
|
Lending to SME & property
developers
|
||
2009
|
crowdfunding
|
|||
2008, Chicago
|
medical crowdfunding
|
7% fee
|
||
2010, San Diego
|
crowdfunding for life-changing events (medical, graduations,
etc.)
|
5% fee
|
||
2008, San Francisco
|
crowdfunding
|
4% fee for successful campaigns; 9% for
keeping funds from unsuccessful ones; 0% for returning money
|
||
2009, New York
|
crowdfunding
|
Funds disbursed only if goal met
|
5% fee for kickstarter;
3%-5% more for Amazon Payments
|
|
2012, Seattle
|
crowdfunding scientific research
|
Funds disbursed only if goal met
|
5% fee for microryza;
3% more for payment processing
|
|
civic crowdfunding
|
ONLY civic agents (governments,
public-private partnerships, NGOs) can list projects; refund (minus fees) if
project not funded or green-lighted or launched
|
5% fee for neighbor.ly + fees for bank
transfers
|
||
2009 (2011 rebranding), San Francisco
(formerly, Austin)
|
crowdfunding
|
all donated money is kept
|
5.75% fee
|
|
2010
|
crowdfunding
|
4% fee + 4% payment processing fee for
successful campaigns; 8% fee + 4% payment processing fee for keeping funds
from unsuccessful ones
|
||
crowdfunding for medical,
adoption, missions & tuition
|
0% commission; 3% payment processing;
donation model of revenue; all donated money is kept
|
|||
2012, , , , Chicago
|
equity crowdfunding for small/local
businesses
|
No fee
|
only for accredited investors<![if !supportFootnotes]>[2]<![endif]>
|
|
2010
|
equity crowdfunding
|
startups
|
only for accredited investors
|
|
2012
|
equity crowdfunding
|
startups
|
only for accredited investors
|
|
2011
|
equity criwdfunding
|
startups
|
only for accredited investors
|
|
2010
|
equity & debt crowdfunding
|
startups
|
only for accredited investors
|
|
smallknot
|
crowdfunding local small businesses
|
3% commission (for successful
campaigns) + 3% payment processing fee; rewards/perks instead of equity
|
||
TODO: Mosaic, somolend,
pledgie, artistshare, sellaband
|
A good comparison of many crowdfunding and P2P finance platforms and tools may be found here. The crowdfunding blog seeks to maintain an exhaustive directory of online crowdfunding. Two comprehensive lists may be found here and here.
Physic Ventures and Collaborative Fund focus on building investment portfolios mainly or exclusively focussed on the share economy.
Slowmoney (see also credibles) connects capital with sustainable and small local farming and food systems. BALLE (bealocalist) focusses on education, networking and advocacy for sustainable and local-centric economies. The Forum for Sustainable and Responsible Investment provides similar education, research and thought leadership.
Larger investments and sources of capital may be leveraged by accredited investors on platforms like AngelList to support startups. Investors’ Circle is a similar network of accredited angel investors, focussing on for-profit enterprises that produce and maximize positive social and environmental impact. MicroPlace is similarly interested in positive-impact investments, specifically in poverty alleviation around the world. It focusses on portfolios using microfinanced securities and is open to un-accredited micro-investors.
Inventors and makers are the focus of quirky, while innovative solutions, ideas and products are pitched using FundaGeek.
Three crowdfunding sites dedicated to science are experiment.com, sciflies and scifundchallenge.
The World Bank recently released a report on crowdfunding's potential for the developing world.
crowdability is a great aggregator and search-engine for equity crowdfunding portals.
The World Bank recently released a report on crowdfunding's potential for the developing world.
crowdability is a great aggregator and search-engine for equity crowdfunding portals.
Decentralized, digital money
The currency of the new economy is increasingly electronic and, in particular, is taking the form of alternative digital currency. Chief among these are cryptocurrencies, popularized recently by Bitcoin. These currencies tend to be peer-to-peer and decentralized. A full list of digital currencies may be seen here. A sub-category of digital currency, noteworthy in its own right, is digital gold currency. Digital currency exchangers function as markets of exchange between different digital currencies and/or between digital currencies and national fiat currencies.
Crowdsourced & open science
The increase in and increasingly easy access to cognitive surplus and volunteer computing, owing to the surplus of computing resources, are being leveraged to attempt to solve big mathematical, scientific and engineering challenges.
Metaphorically described as the global brain, this surplus is significant and dispersed across the globe. Two examples are GalaxyZoo, an attempt to do morphological classification of galaxies on a large scale, using cognitive surplus, and Folding@Home, a massively distributed computing based research project on protein folding and computational drug design.
Volunteer computing was pioneered by the SETI@home project, run by Berkley Open Infrastructure for Network Computing (BOINC), which is now the most widely used infrastructure for such projects. Astronomy projects hosted there include Einstein@home and Milkyway@home. A more fuller list may be seen here.
An important facet of this new movement is massive collaboration and openness. Known as open science or Science 2.0, the scientific activities and consequent results of these endeavors are typically highly collaborative and open, and the raw data, experimental data and results are freely and widely available.
The free and open source software movement (FOSS) may be seen as the pioneering symbol of this revolution, and, in many ways, as the forebear of the new economy, by virtue of FOSS being critical to the development of the latter’s enabling software technologies. The open movement is now broader and encompasses the whole scope of scientific inquiry and knowledge production.
The emergence of wikipedia signalled that knowledge could be produced in a widely distributed fashion. Massively distributed iterative improvements on a massive scale, sometimes called the wisdom of the crowd, would lead to maintenance of quality -- a function that was once thought to be the exclusive domain of rigorous peer-review by experts.
The growing opposition to copyrights and circulation restrictions of scientific articles crystallized in a recent movement within academia, dubbed Academic Spring. This has led to the proliferation of open access journals. A more complete list may be seen here.
The Polymath Project is a recently started approach to conduct massively collaborative mathematics.
Related Reading
Two books:
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