From: azur@netcom.com (Steve Schear)
Date: Mon, 18 Nov 1996 17:54:17 -0800 (PST)
To: cypherpunks@toad.com
Subject: Re: Crypto Bounties: Another Thought that crossed my mind.
Message-ID: <v02140b00aeb671969014@[10.0.2.15]>
MIME-Version: 1.0
Content-Type: text/plain


[snip]
Ian Grigg <iang@systemics.com> wrote:
>In order to overcome project failure, I could write my contract as a
>multi-supplier seed project (often done by governments).  That is, the
>pot gets shared around, say, the three best alternatives.  Once
>supplied, all are free to pick from the alternatives.
>
>In order to overcome the low silly bid, somehow reputation would have to
>be built into the market.  That is, your efforts in the past as
>programmer will cause your solution to be better valued than mine.

Why not the free market rate the programmers.  Have a software
distribution/payment collection system which requires that the programmer
get a completion bond from a 3rd-part insurance company.  If the programmer
fails to deliver as promised and/or on-time the donding company pays the
'investors' back in full. Since the bonding company's money would be at
risk, if the programmer failed to deliver, they have every incentive to
conservatively rate the programmers/companies offering ot build SW to spec.

[snip]
>There's a lot of aspects of newbies and switching funds that I havn't
>really thought through here.  However, I like this viewpoint because it
>eliminates the need for judges.  History shows that a good market
>microstructure will beat an authority approach in the long run.
>
>Also note that if you drop the free software assumption, and make it,
>say, moneyware, then the market becomes much more workable - the asset
>being traded is a share of future revenues.  This has more ramifications
>than might be obvious:  Propose a market to write a GAK killer for
>e$10,000.  If it clears and is built, is the Dept. of Justice forced to
>buy the rights out?
>
>> Has anything like this been proposed before?

Yes, Eric Hughes proposed a broad and structured proposal primarily
addressing this manner of market funding for software development (and
possibly suitable for other intellectual property creation) at DEFCON IV.
My previous comments on completion bonds were taken from his presentation.

--Steve