Crowd-Mutual Aid: The Anti-Cancer Commune's Unique Internet Finance Model

'Crowd-mutual aid'! — A P2P micro-mutual-protection model based on the internet and social networks.

Roughly: a group of people organise together and promise one another that when someone in the group meets a certain kind of risk, I guarantee that I will help you. For example, we see in films a group of soldiers vowing that if a comrade falls on the battlefield, the others will take care of his family.

This practice has existed since ancient times. Its purpose is to guarantee one's own survival in a huddled, collective form. In a broader sense, the emergence of states, nations and political parties in human society is nothing other than this method; in a narrower sense, the emergence of the insurance industry is also this practice. There are many similar organisations in our lives.

But this practice had limits. Because of geographical constraints and information asymmetry, the people who gathered might be just a group in one location. To achieve greater coverage, more people had to publicise, inform and connect, making costs extremely high. In the realm of protection, this gave rise to insurance companies. Insurance companies connect people, persuade them to adopt this collective method, collect the premiums, and pay you when you meet a risk. Because of the existence of this institution and the problems in how it operates, costs became high, the original intent behind the insurance industry was distorted, and insurance companies became money-grabbing tools that forgot the problem they were meant to solve.

Once the internet solved the communication problem, new approaches became possible. If we can achieve nearly zero-cost communication over the internet, then the reason for insurance institutions to exist is greatly reduced; if we can achieve nearly zero-cost fund transfers, the necessity for insurance companies to collect premiums in advance is greatly reduced; if we can achieve near-zero cost overall, then the premiums people need to pay are massively, massively reduced.

Crowd-mutual aid is exactly this kind of thing!

In theory, crowd-mutual aid has the highest protection efficiency: 100% of the funds are used for protection, all the money in the organisation is used for protection purposes, and the institution that runs the crowd-mutual aid may be a very light, very small company. Yet in our country's current commercial insurance, only 25% of premiums are used for protection — where does the rest of the money go? It is consumed, or becomes the insurance company's profit.

Moreover, social security, commercial insurance and charitable foundations all first need to collect fees, with an institution to hold and operate the money. This creates risk, and hence so many scandals. In the crowd-mutual aid model I envision, funds are not collected in advance; only when one member meets a risk do the others give him money.

This raises a question: in a crowd-mutual aid organisation, when one member meets a risk and the other members do not help, does the plan not go bankrupt? This problem is easy to handle. There must be a feasible system and rules: whoever does not help others loses the chance to be helped by others. When everyone joined the organisation for the same purpose, why stop halfway? With such an efficient organisation, why give it up?

So in a crowd-mutual aid organisation, what we want people to consider is their own interest, not some 'love' or 'dedication' — those are unreliable and insufficient to solve the problems of human society. Only on the premise of recognising that people are self-interested can a true solution be proposed, and crowd-mutual aid is one such solution. Whether you act out of love or out of self-interest, we do not care.

More abstractly, philosophically, it fits the pursuit of a beautiful world of 'all for one and one for all'. Everyone's rights and obligations are equal; there is a philosophical beauty to it — it even partly realises communism.

By now you must be thinking of today's hot internet finance model — 'crowdfunding'. Indeed, it has the sense of crowdfunding: many people raise funds for a certain purpose. But it is clearly different from crowdfunding:

1. In crowd-mutual aid, everyone's status is equal and rights and obligations are reciprocal, whereas in crowdfunding the status and the rights and obligations of the two sides are not equal.

2. At a static point in time, a crowd-mutual aid organisation is relatively closed, whereas crowdfunding is open.

By now you must also be thinking of an existing business form — 'commercial insurance'. Indeed, its principle is the same, but it is also clearly different from commercial insurance:

1. Commercial insurance collects premiums in advance; crowd-mutual aid is free to join and paid after a risk event occurs;

2. Joining and leaving commercial insurance carry financial thresholds, and leaving incurs a penalty, whereas crowd-mutual aid is free to enter and leave;

3. The fund efficiency of crowd-mutual aid can reach 100%; commercial insurance cannot. (There are many other differences, to be detailed in a separate article later.)

By now you must also be thinking of an existing form of public welfare — 'charitable foundations'. The difference is obvious: a charitable foundation first has to get a sum of money into its own hands, which creates risk — have you not seen how the Red Cross fell? In crowd-mutual aid, the funds are managed by the members themselves, transfers are P2P, and no one touches your money! The status of the participants in a charitable foundation is also unequal, and whether one helps or is helped cannot be guaranteed.

See — is crowd-mutual aid a good thing?

See — is it an innovative model?