federation and centralization in general came up in the recent web payments working group teleconference, with "silos" dismissed as a bad thing.
For those readers who have lived their entire lives above concrete, silos are the first thing a community of farmers set up together, to aggregate their harvests for bulk sales. The alternative to joining a co-op with a silo is managing the sale of one's harvest directly, and good luck with that.
As I understand it, the concept of silo-as-bad comes from enterprise data center operations, where an imposed information systems department takes over ad-hoc (and non-interoperable) department-local data operations for greater organizational-wide harmonious efficiency, as well as removing substantial gatekeeper power that has accumulated in per-department machine priests. Such reorganizations are presented as "doing away with silos" when they really replace the many small silos with one big silo serving the entire organization. Then most of the IS department gets laid off, the general staff and faculty get less personalized IS service (but fewer things break, and far less often) and life goes on.
Anyway. In the real world, a silo is a good thing, providing a genuinely useful service to the producers of commodities who fill it and the buyers of commodities who empty it.
"silo" is only a bad word in the context of an enterprise interoperability and centralization initiative.
Although
it appears to have been initially used as something of a slur, I
propose "silo" as, going forward, a preferred word to use when talking
about centralized systems providing services to a group. For instance,
diaryland.com is my blogging silo. Google provides my e-mail silo.
Hopefully the tipjar company will be able to become your alternative
currency marketplace silo.