Frequently Asked Questions
Where is that itch coming from?
Doesn't this just add cost to donations?
Nobody wants to move alone. We create tools and host software to facilitate moving together and communicating effectively to make contributions have more impact. These things make contributions happen that would not otherwise happen. We must grow the flow of contributions in order to have any business at all.
How do you intend to make money?
We do sales services. Elastic Fund Matching is a kind of escrow service that makes a certain kind of transaction possible. We want to do other services, such as enabling groups of users to act as a virtual company, acting as a contract counter-party. Creating new finance tools and removing the friction around them has long-term value.
The more complex that services get, the more we need to have regulatory compliance and legal structures etc. We will implement and manage the onramps and offramps that the law requires so that users have a low-friction experience and can focus on creation. For those services, we will charge a competitive fee.
Won't this just be a centralized platform?
We expect the a competitive and open market to develop, and so we will aim to provide the best services and be competitive on providing services that make sales possible. We will use our service to protect the market for our services from stupid competition by forcing interoperability, preserving a place for us to compete in an open playing field.
It is possible that some of our innovations will become mature and then propagate to decentralized infrastructure. In such case, we will continue innovating at the onramps and offramps, but first we need to demonstrate that this model has a lot of virtues and grow it so that this outcome can even happen.
Why only open source?
Anywhere that a lot of value can be created for not that much cost, we want to enable it to happen at scale. We believe our model easily will work for creators outside of software and outside of open source. However, we have to start at a size we can manage responsibly, which means small niches within open source for now.
Open source, consumer open source in particular, is a deeply underserved market. There are millions of consumers who have voiced unhappiness for decades about various popular software products but who are not programmers and cannot self-support on open source. They need a solution. Open source also lacks any IP considerations and so is very simple, something a startup needs.
Won't delegates just siphon funds to themselves?
We have planned a simple but sophisticated review & override system what uses further delegation to those represented and watch over each other to maintain deep, robust accountability. An early variant of a similar idea was actually pioneered by SlashDot through their meta-moderation system.
One of PrizeForge's core principles is pluralism, meaning no winner-take-all dynamics. Our design will allow groups with deep disagreements to separate entirely. A side-effect is that corrupt users and those entrained by them can quickly isolate themselves from the community. They will only be able to entrain what they give back, leaving no opportunity for such actors to profit while they will still face immense legal and technical exposure.
And of course it is highly illegal and against our terms of service to distort the flow of funds in a way that is intentionally fraudulent. We will cooperate with law enforcement in such cases and deny such users further access to our platform in order to protect our users and operate the reputable service that they expect.
Why are your fees so high?
There is still a general problem with micro-payments. The minimum fee on small payments can be quite high. Stripe's fees are currently the baseline for our fees. The payment networks dictate some of Stripe's fees.
We will do our best to adopt and then streamline the cheapest payment rails possible. This may involve some non-traditional payment rails, but these come with a great deal of other tradeoffs.
We are looking at changing fees so that everyone who pays a dollar gets a dollar of credit. This is an area where we are actively developing our strategy.
Why not a non-profit?
PrizeForge users rightly expect to benefit from the creation their contributions encourage. That kind of contribution is not a pure charity. Our services to enable these transactions to happen are likewise inherently commercial in nature.
Elastic funding scales up to create cooperation among the largest companies, which benefit from cooperative development of technologies they don't intend to compete on. Serving the B2B market will unavoidably create a huge commercial opportunity, and if we are not a for-profit seeking to realize the potential, then some other entity will out-innovate and out-execute us. Indeed, some of the stagnation of innovation at competitors like Kickstarter may be related to their status as a public benefit corporation that is not motivated to aggressively innovate.
All that said, we can provide streams that directly flow into non-profits, although it may make sense legally to create a pass-through entity so that contributors for such streams can deduct taxes.
Will PrizeForge ever be open source?
Not unless our infrastructure becomes decentralized or hybrid, and only that infrastructure will be open. There is more to open source than simply publishing code, and our services require hosting to be useful. They are themselves a layer of functionality implemented on top of open source and we intend to support all of the open source we rely upon.
Even in the case that we do later heavy integration with decentralized services for social decision systems, there is some advantage in having some platform operators who are closed and who create anchor points of trust in such networks, blunting attacks against smaller independent operators while noticing them first and mitigating the fallout.
There may be some demand for open data about decision processes, and there's no reason we wouldn't be able to, privacy choices of individual users aside, publish the decisions of every single users so as to enable study of the legitimacy of our social decision systems. We also expect to be actively engaged in preventing entrainment attacks and there may be little benifit to ad-hoc transparency compared to allowing delegates to review internal data. It's an area that must unfold.
Have you raised any VC funding?
No. Visiting the capital markets may enable us to grow faster than selling equity reduces our pie, but as a fund-raising platform, it is also not unreasonable for us to sidestep the capital market and focus only on our customers. Our self-funding stream makes that possible.
Among other conversations, I have spoken to one investor who grasped his forehead and, as if having triumphed over a mass of confusion, "But how can you make money if it's open source?" as if RedHat, Cygnus, and so many open-core companies like DataStax do not exist. Captial can be slow sometimes until they all rush for the same door. We will not wait.
Some of the rules of good investments are to seek winner-take-all markets and to select business models with strong moats. It is entirely possible that we may be viewed as a destroyer of such opportunities. This fact may create a deeper emototional recoil among the capital markets. Their short-sightedness is not our problem.
Do you have a recursive acronym?
Self-reinforcing thinking can be as alluring as the creation of infinite energy or matter without input. However, all valid forms of logic are built upon directed acyclic graphs, meaning trees of arguments that proceed only in one direction without ever circling back. It is valid to converge to the same points from different starting points or having taken alternate paths, but any circular logic is trivially invalid. In fact, the discovery of any new reasoning requires non-circularity as a means of escaping infinite cycles. We have rejected the use of circular acronyms as they encourage complex and baffling reasoning that evades scrutiny yet is trivially invalid once you encounter the recurrence.
