Image by Marga Santoso

Economics

Distributed Operating System for the Web

Until now, Qbix has been the central point of this growing economy. Companies pay Qbix to develop apps. Qbix closes the sale, assigns managers, hires developers, and pays them out. All this is done using traditional payment systems, using credit cards and wire transfers. By being in the center, Qbix is able to control the sales and development process. The efficiencies brought by the Qbix Platform allow Qbix to have a faster turnaround time, charge less than the competition, and still enjoy sizable margins, which allow the company to recoup its investment in the Platform.

However, Qbix Platform is open source, just like Wordpress. What if, rather than trying to extract rents forever, we could gradually decentralize the entire process through releasing software, documentation and growing public awareness? The end goal is to enable a massive, decentralized ecosystem of developers working on apps and plugins, companies paying them to install and host their software, and non-techie communities being able to grab widgets and build rich social websites on their domain at the click of a button. The communities deliver massive value to their members, and anyone can make money by becoming a developer or starting to host Qbix apps on their servers.

In fact, this is what happened with ecosystems like Wordpress, Drupal, and Joomla. Wordpress powers 30% of all websites in the world, there are tons of conferences, books, experts, training, certifications, and so on. Automattic, the company behind Wordpress, doesn't get a royalty from each blog and each plugin, but it was valued at more than $1 Billion USD.

Current Ecosystem

Currently, Qbix Inc. is the central node of our ecosystem. Companies and organizations come and pay Qbix to build apps for their community. Then, they pay Qbix to manage hosting and maintenance for the apps. Of course, having a full unrestricted license to their app software, the Community can hire anyone else to take over development and/or hosting, but for now, most of the expertise and knowledge about the Qbix platform resides with people employed by Qbix. 

Payments between all stakeholders are currently made using the mainstream financial system. Within the United States, this is typically via credit cards and ACH between banks. Internationally, companies like Payoneer or UpWork.com may be involved in transferring money and charge around 10% from sender and receiver. This is what all that looks like:

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However, with time, a familiar pattern plays out with open source projects like WordPress, Drupal, Joomla, Magento and many others: the ecosystem gets progressively decentralized. Instead of a single gatekeeper presenting a bottleneck, a marketplace grows up that includes developers, hosting companies, conferences, books, and certifications. Any company can now buy a domain name with name.com, host it on hostgator.com, and perform a "one-click" install of Wordpress. They can then customize their site with a growing list of plugins and themes made by people around the world, all without needing permission from Automattic, the parent company that kicked off the Wordpress ecosystem.

Qbix is embarking on the same path as these other companies. With time, the growing Qbix ecosystem will come to include many independent app developers and hosting solutions around the world. The app developers and hosting companies will solve problems in new innovative ways that we haven't thought of.

Monetizing Open Source

Open source software has many advantages, one of the main ones being that anyone can read the code, submit bug fixes, or build on top of it. Anyone can install it without asking permission, and find new ways to use it or integrate it into innovative solutions.

A lot of the software we use today, either directly or under the hood, was produced by open source projects. In fact, open source solutions have largely replaced proprietary software in tons of areas. This includes operating systems (Linux, BSD), web hosting (Apache, NGINX), and even web browser engines (WebKit, Chromium, Gecko). When it comes to adoption, the open source ecosystem has outpaced the respective closed solutions from Microsoft: Windows, Internet Information Server, and Internet Explorer. Recently, Microsoft even switched Internet Explorer's rendering engine to use Chromium under the hood. Similar things happen in other areas, such as Wikipedia displacing Britannica / Encarta, or the Web itself displacing AOL.

The economics of open source are very different from those of "intellectual property". Instead of relying on large private investments upfront, and then retaining control, the project is developed to a usable state and released to the community. Everyone can use it and contribute any bugfixes and features they develop back into a growing snowball. The cost of developing and maintaining the code base and documentation is therefore split among many people. Instead of being employed by a large, hierarchical corporation, innovation can come from anywhere. This model is not new — it has been employed in most fields of science for centuries, and there have been suggestions that it can work better than the intellectual property system in the discovery of drugs and pharmaceuticals as well.

However, open source initiatives still face two massive challenges that need to be solved:

  1. Social. Being installed on many different sites, there is no seamless experience for users who surf from site to site. Usually, each site has its own login and password. Moreover, the user's contacts do not automatically carry over between sites, causing the user to have a lonely experience at first. Most solutions to these problems (connect with Facebook, connect GMail contacts) have made people rely on centralized corporations controlling their data, identity and brand.

  2. Economic. Most users of the software do not compensate the original developers or subsequent contributors in any way. Most major projects today are funded by donations or grants, sometimes by a consortium of for-profit companies. An open source platform like Wordpress can be installed on thousands of sites, with many different plugins, and none of the authors are compensated.

Qbix Platform has already solved challenge #1, allowing a seamless experience across all sites and apps that incorporate the platform. People can invite friends to a site, and get notified when they join. The system can automatically maintain address books across sites, so everyone can see events, articles, etc. that their friends are sharing with them, like a decentralized Facebook.

By introducing the QBUX token, the Qbix Platform is going to be able to solve challenge #2, creating robust mechanisms to compensate not just authors of open source software, but also the hosting companies that provide the resources (hard drive space, network bandwidth, etc.) users require on the server side. The compensation is tied to how much the software is actually used, and is enforced by the network effect achieved by each individual app, and the Qbix Platform itself.

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Monetizing and Personalizing Content

The QBUX token ecosystem doesn't just help monetize open source software. It also helps monetize content of all kinds, in proportion to how much is actually accessed and used. This can help solve the crisis in monetizing journalism, music, movies and other industries disrupted by the Internet. It can help finance major new alternatives to proprietary content, such as OpenStreetMap instead of Google Maps, or repositories of public data on cities, opening up tons of new uses for content without the permission of a single company.  

 

Content and Software is served by Hosting companies, and can be embedded in any Community website using iframes or "widgets". Thanks to the features of the modern Web (including cross-domain security, postMessage and service workers), the Community websites can interact with the software and content they embed, all the while not having direct control of it, or even visibility into the content.  

 

In fact, thanks to the Web's security model, these widgets are able to show users a completely personalized and even social experience, while the embedding site has no access to that information, and only deal with anonymized user ids:

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Decentralized Ecosystem

Various Communities may already have websites for their members, perhaps running on Wordpress. Now with the Qbix Platform, their websites can begin to include Widgets that enable real-time chat, events, profiles, videoconferencing and much more. These widgets can also securely display personal data or custom content distributed by the Host domain. The end result is an ecosystem of

  • App Developers who develop multi-user apps on Qbix Platform,

  • Hosting Companies that install and run their Apps, and 
  • Communities whose websites embed Widgets powered by these Apps and hosted by these third party Hosting companies.

Community can refer to any business, brand, influencer, town, village, or any organization that wants to unite their members and give them web-based tools to communicate and collaborate. Typical examples include:

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The growing marketplace of apps and their Widgets built on the Qbix Platform is available for any Community to install on their Website. And, because the apps are open source, this works even when the Community has a bad Internet connection (such as a rural village or a cruise ship), since the third party Hosting company can be set up locally as well.  

 

The QBUX token enables current ecosystem of Qbix website and app development to be gradually decentralized into a global ecosystem, until there is no central gatekeeper or bottleneck at all. Qbix Inc. becomes just one of many Developers in the ecosystem, who happens to have built the first Apps, and just like any other Developer, makes money by partnering with various Hosting companies to offer them to Communities.

Token Economics

The QBUX token is the native currency of the Qbix ecosystem, finally allowing fair and efficient payments between Communities, App Developers and Hosting companies. It is designed as a pure utility token representing payment for resources expended by Hosting companies, and royalties paid for Software development. Holding a token entitles one to pay for a growing list of Widgets and APIs one can embed in their website.

Just as now, Communities are the ones who are interested to pay for multi-user Apps to help their members meet, date, stay in touch, make reservations at local businesses, doctor's appointments, plan trips together, organize study groups, collaborate on projects, and so on. All these Apps have been "Productized" by their Developers into Widgets that any Community can find on the Marketplace and embed into their website, transforming it into a "member portal" that works to unite their community in various ways.

  1. First, the Community sends some QBUX to the App's developer, and receives that App's BUX, which are essentially "vouchers" it can spend with any Hosting company that installed that App.

  2. Next, every time a member of a Community visits their website as a user, and uses one of these Widgets, a micropayment is made by the Community to the third party Hosting company that hosts this Widget

  3. Finally, in order to "cash out" these micropayments, the Hosting company must periodically trade with the App Developer (or one of their authorized partners) and exchange the earned micropayments for actual QBUX.

  4. Thus, QBUX are exchanged between wallets held by Communities, Developers and Hosting companies. The exchanges are illustrated in the following diagram:

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The plan is to make QBUX available to be bought and sold through various gateways and exchanges. Unlike in securities transactions, where the intent is to hold the token and sell it later at a higher price, QBUX are designed to be spent on a growing marketplace of content, widgets and "productized" functionality. The real economic incentives of the participants are outlined below:

  • App Developers make money because once an app is developed, the marginal cost of making a copy is very small. Thus, App Developers are interested to have their apps installed on as many Hosting companies as possible, and used by as many Communities as possible. The more people use the app, the more the App developer can make by selling QBUX for {App}BUX vouchers, and then redeeming them to Hosting companies at a profit.

  • Hosting Companies specialize in buying and managing the physical infrastructure (computers, hard drives, network connections) to service widgets, so Communities and App Developers don't have to do that. They then license and install various Apps and Content, and receive new updates as they are published. By charging Communities more in micropayments than it takes to operate the Hosting service, the Hosting company can make a profit that increases with the number of Communities using them to host their Widgets.

  • Communities want to release an online portal to serve their members, without having to reinvent the wheel. They aren't interested in developing apps or maintaining hosting infrastructure, and are willing to pay for both. They typically have budgets — which they collect from local services, membership dues, donations from benefactors, or in other ways. This kind of expense can fit into various budgets, including "online presence", "events", "recruiting", "alumni", and so on. In fact, even the collection of dues can be automated by an App via a Widget on their website, bringing the process full circle.

  • Members of communities, i.e. authorized users of their website may be given some "trial" {App}BUX for various Apps, to try. They be rewarded with various credits for taking actions such as recruiting new members, or sharing memes on social networks.

  • Community Management companies can also arise that work together with Hosting Companies to perform services such as customer support, removing spam, moderating the community and enforcing community norms, something that is extremely difficult for centralized platforms to do, but something that can be done on a local level.

The ecosystem itself has several economies of scale that actually make the entire ecosystem more efficient and save everyone participating a lot of money over time:

  • Reusability: Instead of every Community paying to develop the same functionality over and over, one App Developer can just release it and make it available in a "productized" way to all Communities via the Qbix Platform. And every time there is a new version, improvement or bugfix, it is made available to everyone.

  • Remixing: By being made widely available and freely licensed in an open ecosystem, Apps and Content can find new uses that their original authors never even imagined. We have already seen the explosion of innovation enabled by the Web over the last 20 years. Now, Qbix Platform can take it to the next level.

  • Network Effects: App Developers and Hosting Companies are incentivized to make as many partnerships as they can with one another. The more Apps a Hosting Company offers, the more Communities will use them. The more Hosting Companies and Communities use the App, the more money the App Developer makes. The more Communities bought {App}BUX, the less chances any rogue company can clone their app and compete with them. (This action is normally disallowed by the default App licensing.)

  • Separation of Concerns: The whole ecosystem is separated into at least three roles: App Developers, Hosting Companies and Communities. The latter includes Universities, Startups, Organizations, or entire Villages. Rather than hiring in-house programmers, and trying to manage their own infrastructure, they can enjoy the results produced by professionals, in a free and open market.

  • Collaboration: Different roles can work together to help everybody. A hosting company can work with App developers to release a new version that optimizes their unit economics, and thus their profits. This version benefits all hosting companies. A Community can partner with an App Developer to build and promote a new type of app for their members, and then earn QBUX making this app available be hosted worldwide, benefiting communities everywhere. For the first time, making this Open Source really pays.

  • Economics: This economic model also helps prevent common economic problems on the Internet, such as "click fraud". Unlike traditional ad-supported models, the QBUX economic model is closer to micropayment-based models like the Basic Attention Token (Brave Browser). And because Communities have to buy the {App}BUX they spend, they are vigilant not to give "fake traffic" to anyone, because they are effectively spending their own limited QBUX to do it. They thus pass on the cost to their users, through an internal credit system. Their members help the Community purchase more QBUX through various actions, including possibly paying the Community the fiat currency it needs to purchase more QBUX from a market maker.

The Community can manage its own local economics in many ways, including giving users free trials, rewarding them with credits for certain actions, and charging them for usage. All of this can be automated through the Qbix Platform.  

 

Note that regular Users themselves do not need to have custody of QBUX themselves. This allows the system to handle billions of users, and also to be made more compatible with any local regulations, since the only entities that need to pass checks for anti-money-laundering are the Communities, App Developers, Hosting companies and so on.