24 Oct 2000 pelleb   » (Apprentice)

I had an interesting discussion last night with a friend of mine about auditing of NEU's (Entities within my NeuDist project - think Nanocorps). He was arguing that people would only trust investing money or trading in NEU's if there was some sort of equivalent to the US GAAP and external manual Audits.

I'm a believer that for entities that are entirely online, including all their revenue, expenses, holdings etc. You can do the equivalent entirely in software. If users can see realtime what the status of the entity is and how funds and contracts flow through it, that should bring a level of trust that is unheard of in brickspace.

Independent analysts could make a living analyzing NEU's for investments or the savvy investor could do the same thing.

This requires a few important aspects of the NeuDist software. It has to be opensource so the process is entirely open. The software has to be properly audited like OpenBSD. Idealy there would also be some sort of way for the enduser to find out exactly what build of the server is running.

For other NEU's that venture out into Meatspace, I agree with my friend that we need to have other ways of determining trust. One way is to use an Advogato style trust model, another is to use and external auditing group. NeuDist will support the use of independent certifiers. These are not like todays CA's. Some of them will be underwriters, some will be analysts, there might even be cases where goverments see the usefullness in certifying a NEU for doing business (ie. incorporating) in the real world. The point is that different applications need different kinds of trust. If we at somepoint see Anheiser Bush or Coca Cola becoming NEU's they would need a trust model reliant on an army of auditors keeping track of them.

Before people argue that these entities should be private and none of what goes on should be public, I'd like to point out that that will be the case for probably the majority of NEU's out there. However if you want to receive an investment in terms of equity, bonds etc you may find that no one will give you any money unless you show them your books. This you could then easily do by adding a CAP to your financials. Many models exist, the idea with NeuDist is that we will provide a very basic yet vital layer in a framework for financial and legal trading and communication.

Also a big shout out to sohodojo. His ideas about NanoCorps map very closely to NeuDist.

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