From an evolutionary perspective, a machine-readable reputation system provides us with essential information that allows us to allocate energy/matter more efficiently. It lets us project our individual and collective values onto the world around us, which improves our ability to make good decisions.

When we learn to systematically project our values onto the marketplace, we create something truly transformative: a whole new incentive system that, for the first time, corresponds to our values. By combining the information contained in reputations with the price signals of a genuinely free market, we create a pro-social marketplace that brings competitive cooperation to life. This creates an incredible new tool for human self-organization.

How this machine-readable reputation should be built and how it should collect and display its data is of vital importance. On their trading profile, every actor and tradable object will have a reputation panel that lists their various reputational attributes. Individuals and cells will list their reputations as producers and consumers and their cumulative material footprint is recorded. The name of this reputational panel is called the Mirror.

The Mirror represents the ideal reputation system we hope to create but might never attain. It aspires to represent a perfectly accurate evaluation of each actor and tradable object. The goal of the perfect reputation system is to accurately reflect the underlying reality like a mirror. Each product, service, individual and organization will have its own machine-readable scorecard compiled from all the relevant data points that it generates. This Mirror will be embedded in the metadata of every good or service a citizen or organization produces, allowing us to filter them in our searches based on their reputations.

The machine-readable reputation contained in the Mirror makes up the bulk of our social DNA. The powerful feedback loop that an accurate reputation provides can now be created with the help of a well-designed reputation system that computers can read.

The principles are simple: the reputation system is not used to evaluate individuals but the organizations and the goods and services they produce. Organizations are evaluated on metrics such as their purpose, impact, material footprint and carbon emissions. The evaluations directly reflect how beneficial or harmful an organization is to human well-being and the biosphere as a whole.

Individual citizens get their reputations from the organizations they work for and whose products they consume. This means that, to build a good reputation, citizens are encouraged to carefully choose which organizations they work for and whose goods and services they consume. This is a powerful way to give good companies a competitive advantage.

At the same time, everybody knows that individuals haven’t been evaluated as individuals but that their reputations are an amalgamation of the organizations they participate in. It also encourages people to cooperate better within the groups and organizations they belong to.

This brings us back to the three-step process of universal Darwinism: variation, selection and replication. A multitude of small groups provides the variety. The selection happens between the goods and services provided by various groups by balancing reputation and price. Organizations with a good reputation have a competitive advantage in the marketplace, and their business models are more likely to grow and replicate. Evolutionary forces will favor altruistic organizations that benefit the community over selfish actors.

We have to make it clear that the way the Mirror functions has nothing to do with the way the Chinese social credit system functions–or purportedly functions. Firstly, citizens aren’t evaluated as individuals but as part of the groups they voluntarily belong to. These group evaluations provide relative anonymity to the individuals who belong to them. Secondly, all the reputations are created collectively by a decentralized community and not by a central authority. Thirdly, the ultimate effect this machine-readable reputation has is on the price an organization can charge for the goods and services it provides and nothing more.

Since the Mirror collects lots of data about our behavior, it is vitally important to separate public information from private information. As much as we want our good deeds to be recorded, the Mirror should be absolutely silent on our private lives. The Mirror may record our public interactions in the marketplace and in political decision-making, but anything relating to our private lives should be excluded, anonymized or otherwise hidden from view. To prevent the Mirror from intruding on our privacy, a robust firewall must be erected to shield the digital footprint of our private interactions.

A good reputation can be very valuable, but unlike money, its full value cannot be cashed in instantly. The complete value of a good reputation can be monetized during the entire lifetime of the person or the organization. You could say that while money is like your checking account, reputation is like your savings account. Another comparison would be that money is like your paycheck while reputation is like a steady dividend. Both can be equally valuable, but one pays out immediately and the other over time.

This brings us to the concept of delayed return, or reciprocal, altruism. From the perspective of the Selfish Gene theory, cooperation and altruistic behavior make sense when the benefits of cooperation are guaranteed, and they also make selfish sense. Reputation is thus the ultimate version of delayed return altruism and indirect reciprocity.

With an incentive system like this, the best way to command a higher income is by serving your community better. Altruism becomes the vehicle by which you act selfishly.

I suspect that once we have a reputation-based incentive system in place, most laws and regulations will become obsolete. Very few rules and regulations are needed when the incentives are designed correctly. People intuitively know what lines not to cross if they want to keep their good reputation. Conversely, acting in the interest of your community is actively rewarded. You don’t need to forbid much because everybody internalizes how expensive bad behavior can become over time. This is self-regulation at its best.

This brings us to our ninth hypothesis: