Digital Property & Legal Entities for Distributed Network Organizations

Nic Carter, in a recent piece on CoinDesk, argues that digital property rights should extend to the realm of social media and the big platforms. He writes:

“Instead of accepting the fraying default view you can simply begin to imagine all of the internet platforms that exist today as a constellation of digital nations, each with their own legal code and with varying levels of respect for the property of users.

To make a political analogy, virtually all of these digital worlds operate as pre-democratic feudal regimes, with every participant a digital serf who tills the land at the pleasure and discretion of a capricious feudal lord.”

The analysis is spot on.

And I agree that the introduction of property rights with strong guarantees would certainly improve the situation. But I don’t think it’s enough. Because in addition to owning your data, most importantly your identity and content, I think the legal structure of the platforms themselves also ought to be rethought.

People in the platform co-op movement have some good ideas. Others, for instance the great Yochai Benkler, thought a lot about “digital commons”, i.e. digital public infrastructure. I personally think that the sweet spot would be a new kind of legal entity that enables distributed-yet-accountable, value-creating network organizations.

I don’t have it figured all out (hence a rough note), but I think if you’d take some key ideas from the co-op book and updated them for the digital economy, e.g. by integrating governance concepts that emerged in the crypto network (and maybe even DAO) space and making tokens an official representation of member-/co-ownership, we’d get to an interesting place.

Mind you, one of the key reasons why most serious decentralized blockchain networks opted to create foundations was the lack of a workable alternative real-world structure that allowed them to address their needs from open source to decentralization and accountability to the community (of course, tax optimization for their ICOs also played a role). But it’s by no means a perfect solution and certainly wasn’t invented to enable such structures.

Hence, I think the legal framework needs to evolve to power digital network organizations that are distributed, and peer-controlled/-owned. I expect we will see the emergence of such structures over the next five to ten years.

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