Assurance contracts may be a way to pay for so-called “public goods;” things that it’s said everyone can use without diminishing their value to others. Typical examples of public goods include public parks, open source software, national defense. Assurance contracts are basically pledges of funding towards providing a public good. If enough people pledge funds, then the good is undertaken. (The public park is built.) If not enough people pledge then the good is not provided. (The public park is not built.)
The open source 3D editing program “Blended 3d” was released as a result of SPP. The source code was released only when enough members of a community collectively pledged 100,000 Euros. The program was proprietary before.
Some have proposed Assurance contracts as an alternative to taxation as a way to provide public goods.
Note that the concept of public goods is itself a matter of controversy between free market economists versus more collectivist economists like Samuelson, who is credited with creating a formal theory for them.
I wonder if Seasteads could be funded by assurance contracts, given enough knowledge about and interest in them?
> I wonder if Seasteads could be funded by assurance contracts, given enough knowledge about and interest in them?
I think pledging is a great way of financing. I do not have the statistics to back it up, but I think pledges are more effective than donations. If you pledge you will be sure that your money only goes to the project if a sufficient amount of others give their money, too. So when you give your money away you can be sure it is enough to start the project resp. keep it running.
If you donate, you are often uncertain whether your money makes a difference. It is likely that too few people donate. That would waste your money because the project can’t take off. So you probably hesitate a lot more to donate than to pledge.