How to Build Reputation and Reward into Funding Platforms

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The quote below is from the AssetMap blog (highly recommended if you are not currently reading it).

One of the fibers in the current cultural milieu is a fascination with the science of happiness. After a century of belief in the power of stuff to make us happy, many Americans are, reasonably, feeling a little sold down the river. Much of the most quoted research suggests that when it comes to “buying happiness,” purchasing experiences (restaurants, vacations, etc) is a better bet than buying items. Fascinatingly, part of the additional benefit of experiences seems to be that we’re less likely to compare ourselves to others than if we’re buying things.

While the internet has enabled an incredible array of new purchasing options, one of the more interesting models that has emerged is crowdsourced funding for initiatives that would not otherwise not have a clear source of revenue. In the nonprofit space, Kiva has been the greatest success, facilitating more than $150 million in microcredit loans from average citizens to entrepreneurs in the developing world. In the last year, Kickstarter and IndieGoGo have applied the model to creative pursuits, giving artists, musicians and filmmakers a new way to engage their fan communities.

Yet for each of these successful platforms, there are a dozen that have flopped. What the successful companies share is an obsession with making their user experience addictive.

I think that there are 4 key elements of the addictive experience:

  1. Embracing the emotional reward of giving. The core reward for participation in these systems is the sheer joy of giving and enabling creation – whether its someones debut album or a new peanut shelling business that’s being created. The interface and features of these platforms are designed to amplify these rewards.
  2. Building social reciprocity into the system. Interestingly, these systems each have an element of reciprocity. When you make a Kiva loan, you actually get your money back when the entrepreneur returns the money to the lending institution. Kickstarter allows creators to offer rewards and prizes for different funding levels. The important thing to note is that this is not a transaction economy. People aren’t “buying” the gifts they get back. Instead, it is a system of social reciprocity that serves to reinforce the bond between the two actors.

Insightful thoughts on how mechanisms to encourage reciprocity can be built into funding platforms. A frequent question in alternative currency discussions is, “How will people be able to convert between financial capital and social capital?” Crowdfunding and Micropatronage appear to provide one piece of this puzzle. What will be interesting to see now is whether any given platform can put all the pieces together by:

  1. Providing a social platform that allows users to demonstrate “potential capital” (human+social) to other users.
  2. Funding mechanisms that allow users to attract financial capital in exchange for value creation
  3. Reputation and reward mechanisms that allow users to accrue social capital in return for both funding/patronage and value created and gifted to the community.

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  • Openworld

    Inspired post!

    Perhaps the reputation/reward in new funding platforms you’ve outlined will also connect to “pay for results” initiatives.

    An intro to “Results Only Work Environments” in the corporate world –

    http://en.wikipedia.org/wiki/ROWE

    And in virtual settings –

    http://projects.csail.mit.edu/soylent

    Best,

    Mark Frazier
    @Openworld

  • Gregory Rader

    @OpenWorld Thanks for the feedback. I would expect that these sorts of arrangements will become more common as production becomes less intermediated (less concentrated in hierarchical corporations). I find your suggestion interesting in contrast to suggestions by in the alternative currency community that we should institute some sort of time based currency (time-bank). These two options are clearly not compatible as the time based currency by definition refers to the inputs (time) rather than the outputs (results).

    There is quite a bit of economic research dedicated to this question, mostly associated with “New Institutional Economics” (http://en.wikipedia.org/wiki/New_institutional_economics). The general conclusion is that “pay for results” tends to exist where output goals can be clearly defined and performance against those goals can be easily measured (ex. Sales). Hourly pay tends to exist where quality/quantity of output is difficult to measure and does not meaningfully affect the amount of man-hours needed as input (ex. cashier – needed at the register for x hours regardless of output quality/quantity). Salary tends to exist where both input and output are difficult to measure.

    I expect technology should continue to make output easier to measure, though we then run the risk encouraging frivolous production if we do not find better ways to account for quality.Thoughts?

  • Openworld

    Personal currencies can provide a way to bridge the apparent chasm between time-based and output-based systems that you’ve pointed out.

    The Wikipedia entry on the Cincinnati Time Store has a wonderful example of how individuals resolved it in the early 19th century:

    http://en.wikipedia.org/wiki/Cincinnati_Time_Store

    As can be seen in the image, the issuer of the personal currency offered three hours of his carpentry services – or three 12 pound measures of corn.

    Soon, we’ll have abundant opportunities to issue our own similar personal currencies, convertible to the time-based services and/or tangible outputs as each issuer defines.

    These offers – and agreements to exchange personal currencies – can be done through cell phones with new augmented reality apps, as explored in this thread on Douglas Rushkoff’s forum:

    http://j.mp/99kak1

    What do you think? Hope there will be a way to try it soon!

    Best,

    Mark
    @openworld

  • Gregory Rader

    @openworld I will have to ponder the possibility of conversion that you bring up. The question I have is, who has the conversion option and when are they able to exercise it? Presumably the redeemer of the note holds the conversion option, but he has no way of knowing what sort of output he will get for three hours of work until after the work is performed, at which point he has lost the conversion option. This could potentially be resolved by reputation tracking, though I think viability would hinge critically the specifics of implementation.

    Another potential concern I would have is that I don’t necessarily want someone to be able to demand (redeem) my labor at any time. Our current monetary system is more flexible and resilient because money is “loosely coupled” to value. In other words, I might give you $100 for an hour of your labor, but if you try to redeem that $100 for an hour of my labor I maintain the option to tell you that my labor now costs more than $100 or simply that my labor is not currently up for sale. So both participants in the transaction want the to maintain the conversion option for themselves.

    As such, there is value in having a currency that ‘floats’ against all specific units of value. This is a viable option when a currency has widespread usage but obviously makes less sense when it is tied to a specific person. A compromise might be a system that allows us to create personal currency on the spot and link it to the value of some standardized basket of goods. So you might sell me an hour of labor for 1 unit of currency equal to one “basket”. At some point in the future I could choose to return to you one hour of labor or provide you with some other liquid asset equal in value to one “basket”.

    With this possibility we maintain the “float” on both sides of the transaction while still allowing on the spot currency creation. Positively identifying and recording the parties to the transaction is still vital because they are still the guarantors of the value of the currency, even if it isn’t tightly linked to the value of their labor.

    Ok, enough thinking out loud for now…lets keep this going, thanks as always for taking the time to share your thoughts,

    Greg

  • Openworld

    Greg,

    I agree with your point on reducing uncertainty over scheduling of services.

    To increase demand for their personal currencies, issuers would likely feature URLs on each note linking to a web-based calendar. This calender would show a prospective redeemer the available blocs of free time open for the issuer’s provision of onsite or remote (telework) services.

    The site would increase trust and demand for his/her personal currency by:

    - showing the number of still un-redeemed hours in the issuer’s other extent personal currency notes;

    - linking to reputation ratings based on feedback by past redeemers of the service offers;

    - indicating the applicable code of good conduct to be respected by the redeemer as well as issuer of the personal currency.

    In practice, my guess is that issuers of personal currency would quickly create a market for trusted third parties to offer standard templates for the above web sites (along with spot-check audits and online dispute resolution systems).

    Look forward to next thoughts –

    Best,

    Mark
    @openworld

  • giyom

    @openworld, I agree that personal currencies are the key building block, the starting point in reinventing the monetary system. Borrowing in your own currency – what you are abundant in – is freedom. Borrowing in someone else’s currency is slavery.

    @greg, this company http://hourville.com/ has created a nice UI for finding and scheduling personal services. I remember talking to one of their founders a couple years ago at SXSW and mentioned that they should not just be US$-based but have their own currency. The mixed model of using US$ for untrusted parties and credits for trusted “friends” parties is also a great model that seems to work for neighborgoods. Not sure if it evolved that way, though.

  • Kurt Laitner

    Hi Greg and Mark,
    I would suggest we are talking about several dimensions of value here, Reputation, Trust, Time, Deliverables (==Results), Commitment (of time in advance). Every value exchange ‘space’ will need to publish a value exchange equation that states what kinds of things are valuable in that space. Greg mentions several types of work (cashier, sales..) that have different value equations and have been handled by commission, salary etc in the past. The problem with past solutions is that none of them account for all dimensions of value, and for good reason, because it has been very difficult to do so without mediated environments (like using a social network).

    The in my mind is to define carefully as many dimensions of value as we can, figure out a metric for each, and publish a parametrized equation that shows the relationships between them. Each value exchange space then publishes its value exchange equation and participants choose whether or not that makes sense to them. These equations then become a natural way to map resources to needs across value spaces.

    If you are someone who hates commitment but has the ability to create valuable deliverables (like Conversion (sales)), you will head for spaces with low Commitment and high Results orientation. If you are not much for the pressure of deliverables, but don’t mind showing up 9-5 you would choose something with a high Commitment and low Results orientation.

    I suppose the point I am making is that we do not have to choose one of the options proposed above, but we do need to understand the game we are playing. Corporate cultures now hold the key and if you are not advancing in a company but are working your butt off, chances are there is a culture mismatch, or more specifically, the company you work for has a different value equation than you. Time to move on. Too bad feedback is poor in these environments.

    As to Greg’s core challenge, how do we convert between social and financial currencies, this is a very sticky question, starting with some fundamental assumptions that underly it, and as such I will somewhat side step it :-) for the time being. Short answer is that we convert from ‘social’ or intangible subjective value to ‘financial’ or tangible objective value all the time, we just aren’t good at defining and measuring it, so the conversion is very inefficient. One gets a salary for showing up and meeting a job description, which usually isn’t written to deliverables or to any strict understanding of value added. Job descriptions are generally task descriptions, corresponding to processes, which if we are talking about a very enlightened org map to strategic goals and objectives (through several layers). The ‘value’ equation of the corporation should be in those goals and objectives, linked to mission and vision, but often these documents are flawed as well, and soft ‘culture’ transmits what is valued ‘around here’.

    An example, you do good work for a number of employers (let’s leave ‘good’ alone for the time being) and create several evangelists for your services. You could say that this is their ‘rating’ of your work and someone can inspect your ‘social network’ to aggregate ‘ratings’ (ie call your references, and your previous employers, say through a resume verification service). You will now have much demand for your services, should what you have demonstrated (Deliverables, meeting Commitments (an aspect of Trust) etc.) matches what the potential client needs. Your name may also get out just from your evangelists talking to people who talk to people, they are in this manner providing a ‘Surfacing’ function and this is valuable to you. Hence we have referral fees from head hunters. As your reputation grows, and your list of accomplishments too, you now can charge more for your time.

    I actually think a rudimentary value equation (far better than most kickstarter asks) is possible even now, with some heads together for a month or two; the key is to create the kernal of a value exchange mechanism then let it heal itself. Personally I see transactions involving scarce currency being ‘liquidity events’ that should trigger distributions through the network to all that have participated in the value creation. This gets us around the prediction of value in advance. Of course this is more of an entrepreneurial mindset (work to create value then get paid when it all works out some day) and may not fit some temperaments. Some will still want to hedge that risk and take a salary like arrangement (payment in advance) in return for signing over their value creation but that equation and the cost of risk reduction will be transparent, and this transparency will affect choices over the mid to long term. Performance evaluation will similarly become more precise (what value did this person provide for the salary taken).

    In the case of the salaried employee, they are taking Time from their employer (paid in a salary in advance of value creation) in exchange for whatever is expected of them (Commitment, Deliverables (Results)). This is trivial but the point I make is that we need to frame the larger equation, then all current arrangements become special cases.

    Sorry to ramble, I had no time to write a shorter, better written blurb.

  • Gregory Rader

    Mark and Guillaume,
    It sounds like you are suggesting a platform like odesk.com with a built in currency creation system. I could definitely see there being some value in this. I do think this type of system would be limited to task based freelance type activities simply because those are the sorts of things that are easy to define prescribed outcomes for ahead of time. As @klaitner points out, this is not criticism if we consider it in the context of a world with many complementary currencies filling different niches.

    An interesting offering along these lines is TheSuperFluid.com (h/t to @sebpaquet). This platform is similar to hourville but all transactions are conducted in “quid” which are not convertible into $. They have a set formula so that the “monetary base” of quid rises in proportion to the number of users. Therefore, the value of quid rises or falls based on the amount of value offered per user on the platform. This doesn’t quite live up to your vision but it doesn’t provide an option wherein the value of currency is intuitively understandable in terms of velocity of exchange on the platform.

    Might dedicate a new post to it after giving it a try, would be curious to hear your thoughts…

  • Gregory Rader

    Klaitner,
    We talked about much of this previously in the comments to Defining Abundance in the Context of a Gift Economy

    At that time I was a little unclear as to what you meant by “value equations” though I think I am fully with you now. I agree completely that there are many types of value and distinct currencies and metrics will track some of these values better than others. Individuals might gravitate towards one over another as you suggest, or they might use several at the same time. In a sense that is what we are all doing now. Almost all of us are paying the bills with in some other way but build reputation or influence through our social media activities…different value systems for different activities and different goals.

    I also agree that transparency will work its way through all of our legacy institutions in one or another eventually. Monetary system, Corporation, Government will all see major disruption in the coming years as their inner workings and various “value equations” become transparent.

  • Openworld

    Kurt and Greg,
    I agree that defining deep dimensions of value (trust, reputation, etc) will help new currencies spread.

    Yet the a priori categories above to me seem insufficient.

    They appear to overlook an important aspect – the qualities of spirit (virtues) shared by a currency issuer and a recipient. Alignments of such qualities can deeply influence the “terms of trade” that a personal currency issuer is willing to make with a recipient.

    Although such alignments resist expression in an equation, there is another way that their weight can be taken into account.

    I see this happening through folksonomies – tools for issuers of personal currencies to create tags and badges that describe the qualities of spirit (#lumenes, in Ebdish) they value.

    Online communities could use data mining to scour the folksonomy of values/virtues as personal currencies proliferate. (In the course of such data mining, more tangible metrics of trust, timeliness, etc would also be sifted).

    Such a process could help vast numbers of personal currency issuers federate in mutually beneficial ways with kindred online communities. Tribes that move to issue their own social currencies could agree to underwrite convertibility of (best fit) personal currencies into other deliverables according to standards set by the tribe. Terms of such convertibility could improve as a personal currency issuer earned his or her way toward becoming a fully-backed member of the community.

    In this way, the Cincinnati Time Shore precedent for redeeming personal currencies in convertible ways (time-based services or a more durable alternative) can reemerge — and go to scale.

    What do you think?

    Best,

    Mark
    @openworld

    • Openworld

      Greg and all,

      Earlier today, I came across a remarkable ContactSummit Google Groups comment by @devinbalkind, a principal of the Saparis Foundation and the Beex crowdfunding site.

      In it, Devind mentioned that a related FLO Farm venture — a 200+ acre intentional community – is looking into alternative currencies.

      >>[Devin] Our group is going to start experimenting with land-backed currencies denominated in acre-months

      This was the trigger for my my gift-of-time offer (http://j.mp/fUDuUp ) a few hours ago at Beex , given my hope such currency innovations will gain traction.

      I posted a response in the ContactSummit group to Devind’s comment. Below are highlights on the possible convergence of land-backed currencies with time-based service offers.

      Look forward to your thoughts and to continuing the conversation!

      Best,

      Mark
      @openworld

      ======== my ContactSummit response to @devinbalkind ==========

      >>It’s geat to hear that you’re exploring land-backed currencies for
      social ends! One of my main interests at Openworld (http://
      openworld.com) has been on land value capture funding for services in
      free economic zones.

      >>Here are a few thoughts on land-backed currencies, time-based personal
      currencies, and how they might converge via a “flex” conversion
      offer.

      >>1. Land backed currencies

      >>Hong Kong and Singapore have decades of experience using auctions and
      tenders for leasing out publicly-owned lands to generate revenues for
      public goods. In Hong Kong’s case, this generated US$ 70+ billion in a
      recent 30 year period. On a smaller scale, individual owners – or
      resilient communities holding land in common – could issue time-acre
      shares as you suggest, and put these up for online auction. The real
      estate arenas of EBay and other auction sites could be used for this
      purpose.

      >>2. Time-based currencies

      >>As @rushkoff suggested in his Radical Abundance keynote at the 2009
      O’Reilly Conference, individuals can also issue time-based
      currencies. Comment 1 at http://j.mp/ahEtkD — and a thread on cell
      phone-based personal currencies at http://j.mp/99kak1 — explore how
      spot auctions of time offers might work for this.

      >>More recently, a convo sparked by a @venessamiemis post ( http://j.mp/eOS7jH
      ) mapped an opportunity for individual issuers of time-based offers to
      pool them in payment for education, without recourse to taxation.

      >>3. A ‘Flex’ conversion option: time-acres or time-based services

      >>The above elements could work together in intentional communities such
      as Flo Farm. This could be done by building on a currency innovation
      introduced by Cincinnati’s “Time Store” ( http://en.wikipedia.org/wiki/Cincinnati_Time_Store
      ).

      >>In the early 1800s, members of the Time Store used time-based personal
      currencies with a difference — they could be converted by a recipient
      into something tangible. As you’ll see in the above Wikipedia link,
      the person who issued the depicted Time Store personal currency note
      offered three hours of his carpentry services — _or_ 12 bushels of
      corn.

      >>In the case of a community such as Flo Farm, the innovation might be
      for residents, as individuals or as groups, to issue currencies
      redeemable in the form of (auctionable by the recipient) indicated
      time-based services, or a specified amount (also auctionable by the
      recipient) time-acres.

      >>The issuers of the note could also set terms and conditions regarding
      the use of the services or properties, to ensure that the recipient
      hewed to a given code of conduct and agreed to a given arbitration
      system in the event of a dispute…

      • http://OnTheSpiral.com/ GregoryJRader

        Mark, thanks for sharing this. As you well know, I am very interested in these transition points between the old models and new models…from transactional models to abundance models. One of the problems we run into at these transition points is applying abundance logic to scarce goods and vice versa.

        When it comes to exchanging abundant resources I think we are very open to asymmetry. I am more than happy to share your content, Like or RT or simply recommend your ideas because these “gifts” are abundant. They don’t cost me anything, and in fact giving them away liberally benefits me, so long as I don’t use them frivolously and create noise.

        However, when asking for money, whether payment or donations, we are dealing in scarce resources and in that situation I think the logic changes somewhat. When we exchange scarce resources we expect something tangible in return; even if that something is simply good feelings or whatever…we still want to be able to make the direct connection – $x donation created X impact.

        So in this case I want to know why Sarapis needs the money…what is it going to be used for specifically? I would also like to see them somehow accept your offer and tell us what your donated research time will be committed to, and what outcomes that will lead to. One reason why the Kickstarter model works so well is that it creates so much transparency. Donations go to specific projects with specific impacts and/or deliverables instead of going into big black-hole foundations.

        I did notice your note about Vanessa and Doug acting as “arbitrators”, which is definitely an innovative step in the right direction.

        Hope you find this helpful, or at least worth pondering ;)
        Greg

  • giyom

    Yes, precisely. In my view, personal community come first, community currencies come later. Community currencies are merely convertibility agreements of personal currencies. There are many benefits to this approach.

  • giyom

    Sorry I meant, personal currencies come first, community currencies come later.

  • Kurt Laitner

    Hi Mark,
    I have on my very long list of things to do to spend some time understanding ebdish’s vocabulary, lumenes included. I am actively interested in different perspectives and do not consider the set of dimensions of Value and dimensions of Reward discussed here or even the more complete set I put on Vanessa’s mindmeister map “new economy” to be a closed set. I want the set to be elegant and sensible with little overlap (some dependencies may be abstracted out in the future, either leaving primitives as the base set and defining others as functions of the primitives or leaving the set as is understanding that ‘in fact’ they are apples and oranges.

    I think as you describe ‘shared values’ or ‘spirit’ we are talking about an input to what I’ve termed ‘Connection’ (which in this light is more of an action than a dimVal, whereas your spirit or ‘Alignment’ is perhaps a better definition of dimVal) and I can understand that these aspects may determine preference for counterparties by modulating other dimVals like Trust and Reputation. All dimVals are useless unless contextualized in a value space. I make no value judgements (value being used here in two senses, hopefully you are able to follow easily enough) as to what value equations are ‘better’, I am only interested in coming up with a generally applicable model that will allow us to specify ‘rules’ in advance that are simple and create ‘emergent’ behavior and structures, in the same way as the complexity theory folks have defined simple rules for the ‘game of life’ and witnessed eerily ‘lifelike’ emergent properties when the system is run. My position is that system design must become proficient at setting these initial conditions in a way that emergent behavior is as desired, this will require iteration, competition and selection at the ruleset level.

    Of interest to me at the systems level is that it is both optimized and robust, and my concern is that we must examine biological mechanisms that introduce variation (mutations, epigenetics) and find a way to introduce these. My wife joked that the gene pool of ‘value equations’ competing may result in optimization to the existing value equation, just because we are change resistant and existing ways of doing things would be an attractor. Warning duly noted.

    In your comment on federation I see a failure in my current mental model. Though I believe all aspects of a system should emerge from simple rules, I am holding on to the idea of a ‘space’ defined a priori (which is a construct not a rule) so that participants might be assured of the value equation they are participating in. Even keeping track of this may well be a cognitive load worth removing to ensure flow. Currently, in my mind, this value equation is defined in two parts, structurally by the ‘natural’ relationship (inverse direct function etc) between dimVals then at run time through the constant settings applied to each dimension (k*Participation, n*Trust where k and n are set by the space owner, where space ownership has its own value equation (value equations are nestable) (ie. ownership of a space will change over time, think of twines as an example Mark, where the owner had special rights, but operation of the twine showed someone else putting all the effort in, who should have accrued ownership rights through that effort).

    Perhaps this value space needs to be emergent as well, where the value equation constants (a design level construct) are continuously revised at the run time, rather than just the ownership/benefit being revised at run time based on value generated.

    I think I will start a new mindmeister map or a brain (theBrain.com) so that we could structure dimVals and dimRewards together.

    As usual it would be nice to have *net to build *net, but we must work with what we have.

    Thanks Mark and Greg, you both continue to stimulate me to think.

  • Kurt Laitner

    @giyom intriguing concept, that personal currencies come before community currencies – first for some mappings, I intend to understand how to measure then track each dimension of value – and this may well become contextual as well, this contextualization of the measurement of a dimVal may correspond to the ‘community currencies’ you speak of – as to order of operations, we must understand how to measure dimVals (in my conceptualization) before we can operate value equations, but we can think about both in parallel for the time being. what I don’t have a mapping for is personal currencies, partly because I still have to investigate symbionomics, metacurrency.org, and others conceptual models before I can properly map to them or comment on them, but also because I think perhaps I am coming from an opposite direction, that one’s actions speak louder than self definition, your ‘personal currencies’ (as I guess the concept to mean) in other words are an emergent property of the system running, not something define-able a priori. Please educate me, this is fertile ground.

  • Openworld

    Kurt, Greg, and Guillaume,

    Thanks for the thoughtful and stimulating responses.

    I’m intrigued by the notion that we’re evolving “extended selves” that include others with kindred meme/lumene-seeding agendas in the boundaries of our conception of self-interest.

    Within the Venn diagram of relationships that form our expanding personas, a commons seems to be emerging in which monetary transactions seem moot. But I do think measurable indices of success can be applied.

    I’ve sketched some thoughts on these aspects of “Ebdish” that may prompt further ideas on how we can weave nextgen currencies –

    - a way to show one’s empathic (extended) self via social tetrahedrons… http://j.mp/bQn4jt

    - narrative fractals for mating flows to spread kindred memes and qualities of spirit…
    http://www.quora.com/What-are-narrative-fractals

    Also, @mgorbis has a post (with comments) on “a society without money” that I hope you’ll find rewarding: http://j.mp/6SDGJk .

    Look forward to seeing the ideas shared here mix and evolve.

    Best,

    Mark
    @openworld

  • Gregory Rader

    Questions for @OpenWorld @Giyom and @Klaitner on the most recent set of comments:

    Mark, certainly the qualities you describe are relevant to many exchanges. Must these qualities be accounted for in the currency itself or might they simply be presumed of anyone who chooses to transact through a given medium? If you desire to transact with people who share similar values to you then you might choose currency A whereas if you are seeking an anonymous exchange you might use currency B…

    Guillaume, I agree that individually created value is the most fundamental (most granular) basis for any value accounting. Does this necessarily imply that alternative currencies will or should be adopted starting at this level of granularity? Given that we are transitioning from a system with one universal currency (per nation anyway) might we not expect the transition to start there and progressively add granularity? In other words, might personal currency be the end game rather than the first step?

    Kurt, do you expect the equations you are describing to be explicit described (and required of) the users of a particular currency or might they simply be implied by the way a currency functions? For example, Klout and PeerIndex convert social media contributions into quantified reputation/influence…this seems to be clear in the general sense without reference to any explicit equation. Do you see the value equation as something necessary for the user or simply a tool for the currency/metric creator to differentiate or position themselves?

    Thanks again for your thoughtful contributions,
    Greg

  • Kurt Laitner

    Greg, yes i see the equations as explicit and published and as subjects of system calculation (very much involved in matching rsources to needs). While the secret sauce approach to quantification has some advantages ( more difficult to game, proprietary) this is not a good appraoch in my mind. The transparency of value equations allows the equations themselves to compete.

    A quick apology to Mark that i have not gotten at the links above, this return reminds me to go visit them.

    Thanks all.

  • Openworld

    Greg,

    >>If you desire to transact with people who share similar values to you then you might choose currency A whereas if you are seeking an anonymous exchange you might use currency B

    Yes, I can see how a rich smorgasbord of new currencies – each advancing a quality of spirit one admires – might generate a satisfying spectrum of choices. Yet it would take a long time for credible currencies standing for elemental qualities to emerge, let alone to credibly evolve more complex assemblies of virtues that would better correspond to our preferences.

    So why not hit a fast forward button, and start instead with personal currencies? Individual time-based service offers can set out terms and conditions congruent with the issuer’s most important values from the outset. And such personal currencies can include a “flex” redemption option. This can enable the recipient, if he/she prefers not to consume the issuer’s time-based service, to claim instead a tangible commodity or other item owned by the issuer.

    This flexible redemption option, I think, will enable a system of personal currencies to go to scale. This aspect will help new issuers build a market for their personal currencies. Tribes/online communities can further boost the personal currencies of trusted members by acting as guarantors.

    Tribe leaders – and others whose brands (aka package of qualities) are widely admired – may be in a position to personally launch trusted reserve currencies under this scenario. Here’s an example of how it might work. Ordinarily, I might issue a note for five hours of my time, with a flex conversion option for the recipient to redeem it instead for 30 bushels of wheat. But let’s say I’ve earned trust with a third party who is widely admired. I could ask that person if they’d be willing to offer 30 minutes of their time, once I had completed 100 hours of research for them to full satisfaction. That 30 minutes would then be available for me to offer kindred spirits – rather than wheat or other tangible items – as the flex option bundled with my personal currency.

    Such a system would more rapidly lead to (federated) personal currencies that are highly resonant with one’s values.

    What do you think?

    Best,

    Mark
    @openworld

  • Guillaume Lebleu

    The reason why I think private currencies will precedes group/community currencies is that private currencies provide an easily executable solution to a real problem for issuers and holders: 1) they allow issuers to raise capital/get in debt, and repay in their own goods/services in the issuer’s preferred unit(s), which is truly liberating, 2) they allow holders to protect their purchasing power and to support businesses they care about. To me, private currencies offer an alternative to traditional equity and debt instruments (including cash). The problem is acceptance: people may be worried about holding notes from a few businesses, what if one fails?

    Acceptance is where group currencies can help by mutualizing risk or at least broadening the purchasing power of the individually issued notes.

    At the community level, the use of a tax in the group currency, if agreeable and/or enforceable, is a logical way to further broaden acceptance, and to fund solutions to community problems.

    To me this evolution is quite natural. The reverse is difficult: hard to convince people that a circulating tax will benefit them individually.

    Of course, I’m talking about money here, but I think this can be applied to non-tradable currencies.

  • Gregory Rader

    Continuing the conversation with @klaitner @openworld @giyom re: alternative/personal currencies:

    Mark, I think you nailed the crux of the issue at the very start of your comment: “Why not hit the fast forward button?I am not sure it is possible to ‘fast forward’.

    I don’t doubt that what you are describing is possible or that it might be preferred by many people in many situations. My cause for hesitation is simply that what you are describing is at least several steps beyond the current horizon, and as such I am interested in how the intervening transition might take place…what current developments might foreshadow the outcome you describe?

    There are two components that have to be considered:
    Are personal currencies technologically feasible?
    What must occur in order for the prevailing culture to accept and adopt a system of this sort?

    I think you have argued persuasively that technical feasibility is not that far off. The bigger issue is cultural acceptance. When analogized to ‘money’ I imagine people being overwhelmed by the complexity of such a system. The biggest weakness of our current centralized monetary system (that it is opaque to the user) is also its biggest advantage in terms of adoption (all the complexity is hidden from the user).

    Guillaume’s comment brings to mind an alternative – perhaps a better analogy is investment rather than money. We already have personal equity investment emerging as a trend. The situation Guillaume describes seems to me only one step beyond this. Currently this type of transaction would have to be facilitated with a non-standard legal contract. However, if this becomes common then it is only one step further to standardize the contracts (or several variations on the contract) and make them tradable. Issuers could either repay through paying the equity dividend, buying out the contract, or providing some predefined set of services (collateral so to speak).

    What do you think about that as a potential intermediate step that perhaps facilitates cultural understanding and comfort with these types of instruments?

  • Guillaume Lebleu

    To me the intermediate step to personal currencies is small business currencies. Debts redeemable in goods/services exist today (ex. Gift certificates, CSA subscriptions, rewards), but not in a way that they can easily be transferred, like stocks/bonds, and function as pseudo-money.

  • Openworld

    Greg and all,

    >>What must occur in order for the prevailing culture to accept and adopt a system of this sort? …you have argued persuasively that technical feasibility is not that far off. The bigger issue is cultural acceptance … I imagine people being overwhelmed by the complexity of such a system.

    I see it quite differently.

    Every week, millions of people donate personal time to good causes. An opportunity exists, I think, for personal currencies to emerge from a familiar, well-established ethos of volunteering.

    At the local level, one track for the launch of personal currencies seems within reach of anyone with a desktop printer, web design skills, and generous spirit. A second, virtual track would need more effort to get going, but possibly could be launched through a crowdsourced mashup of Android or other existing smartphone apps.

    Track 1. Issuing “gift certificates” of time for local good causes

    An individual might launch personal currencies in their community by printing, numbering, and signing certificates with offers to donate his or her time. These vouchers could offer immediate help to local nonprofit groups at a time when givers and receivers are hurting for funds.

    Such acts of generosity can benefit the giver as well as receiver. The issuers of the time offer can gain by building community awareness, references, and reputation (based on online feedback from recipients regarding completed work) that in turn help build downstream demand for his/her marketable skills.

    How might this play out in an ideal case? Let’s say Kurt wants to help a local nonprofit group improve health outcomes in at-risk groups. He creates or customizes a downloaded personal currency template, and prints out a time and date-stamped 5 hour gift certificate. His printed coupon reads that it is redeemable for certain types of IT services that he can offer on systems to send out text alerts. It also includes any information that Kurt wants to include regarding venue, service scheduling, web links to his cv, etc.

    On receiving his gift offer, the health group he has given it to sees that Kurt is fine with delivering the free services either directly to them – or to third parties aligned with their activities. This flexibility lets the (original) recipient group potentially use Kurt’s service offer to greater benefit, through gifts or exchanges that can help ease immediate financial pressures.

    Kurt might also set out a basic condition on each printed voucher to deter photocopying/counterfeiting. He could require each proposed transfer of a voucher to a new recipient to be registered on a trusted web site (eg Squarespace or Ning) through a standard form. This web form would send an immediate email or SMS message to Kurt regarding the proposed transfer to the new party, enabling Kurt to OK (or decline) it.

    The final(approved registrant in a chain of transfers then would be able to redeem Kurt’s voucher for his offered gift of service. On fulfillment of Kurt’s time pledge, the recipient of the services would then have an opportunity to post feedback on Kurt’s web page (or better, on that of an ePinion-style neutral web site) whose link was on the gift certificate. Kurt’s reputation in the marketplace would rise – and demand for his future time-based vouchers would grow – as recipients of his initial gifts shared their feedback on his services.

    Track 2. Issuing personal time-based service offers in virtual form

    Issuance and transfers of digital gift certificates for time-based services may also grow rapidly through smartphones. Taking a photo on an Augmented Reality-enabled camera phone can trigger essentially immediate popups of related information about the person in focus.

    This information can include links to a web sites with standing offers of time-based services that a person offers to good causes, along with links to a trusted third party site to review summaries of prior work done (plus feedback ratings from recipients).

    With this information, the parties might agree find ways for each other to help admired local or global good causes – or perhaps to shift instead into a classic market exchange of services for personal benefit.

    If the parties were unable to agree easily on an “exchange rate” for two-way time donations, a smartphone app might offer a solution. It could give the parties an option to hold a real-time auction for a given number of pledged time donation vouchers hours on eBay or on a similar spot auction site.

    This auction – if successful – would set the market value of the individual’s time vouchers in terms of preferred currencies that other party was seeking.

    I’m sure that there are a number of issues (secure data sharing, online dispute resolution, digital notarization, etc) that would have to be rigorously developed in a system for personal currency exchange.

    Yet it seems likely that many of the components are within reach to create working examples on Track 1 and Track 2, especially if their aim from the outset is to promote gifts of volunteer time to charitable causes.

    Thoughts?

    Best,

    Mark

  • Kurt Laitner

    @openworld Mark, the idea of ‘transfer agent’ in this space is interesting to think about, would suggest one would use cryptography to implement the signing of personal currency and the transfer agent would encrypt again for each transferee (break key for old holder, issue to new holder). This could potentially with a messaging layer to notify me there is activity, or that I have a new counterparty, which may have social implications, as if they have an interest in my work perhaps I should be connected to them on twitter, linkedin or some such network. Beating a dead horse, some dimVals are transactable in this way, some aren’t, see tradeable vs non-trade-able here http://habitatchronicles.com/Habitat/KidTrade.pdf

  • Guillaume Lebleu

    @openworld exactly my thoughts on the mechanics of personal currencies. I don’t know if the “donating your time” scenario will be the trigger though. Using these personal currencies as rewards will provide a more sustainable model IMO, which can be leveraged for donations.

    Regarding exchange rates, I think fixed rates with redemption limits may be easier to implement (and understand by users) than actual floating market-based exchange rates. In other words, my hour is worth your hour, or my dollar is worth your dollar, but I won’t accept more than x amount of your hours or dollars. This is equivalent to a credit limit.

    A group currency is just a generalization to n people of a private agreement between 2 people to accept each other’s personal currencies.

  • Kurt Laitner

    @giyom must have exchange rates for all tradeable dimensions of value, canonical example would be money for time (your hourly consulting rate if you will) other combinations of tradeable dimVals could be very interesting, haven’t delved deeply into this yet. Non tradeables may support exchange rates, like Money/Time aka Hourly Rate = fn(Reputation,Competency,Commitment (of Time in advance),…) more complicated than that of course (more dims involved, then we get to constant values and direct versus inversely proportionalities). So much to do, so little Time, I’m sure there’s a value equation that could solve that for me.

  • Gregory Rader

    Thoughts on the latest batch of comments:I should clarify my last comment (quoted by Mark) by explaining that all my comments assume some frame of reference to the domain of usage cases. I agree that the development tracks suggested by Mark are quite plausible given the context contained therein. In that context, many users would be willing to work with a certain degree of complexity in order to benefit a good cause.

    The previous comment intended an implied reference to scalability. When considering scalability I am looking for analogs amongst current financial instruments that would provide users with a cognitive use template. My suggestion was that many people already have investment accounts and think of their investments as very much like money, very much convertible into money. Therefore personal equity investments might provide a bridge between agreements between individual and financial instruments that people currently see as analogous to money. Mark, you and I and everyone else reading this blog see that what you are suggesting potentially substitutes for a monetary arrangement, I am just less confident that the average person would see such a certificate as “monetary” in nature…and that does not reflect at all on its feasibility, the average user might very well use such arrangements in specific cases without that understanding.

    I like giyom’s suggestion regarding gift certificates and the like. These types of instruments have the benefit of being non-standardized allowing experimentation, while preserving fungibility and scaleability, at least to some degree. Once a ubiquitous institution takes this approach, allowing gift certificates or points or whatever to be tradeable, then I think we will see the same tools filter down to smaller establishments very quickly. The benefits of this approach to retailers should be obvious – the more a company like Amazon.com can get users to trade in its certificates, the more “currency” there is floating around that ultimately will be redeemed for Amazon merchandise.

    I could sum up all of these points as follows: I expect change to emerge from both ends of the spectrum. New tools that diverge dramatically from existing monetary securities will tend to find niches where they substitute for monetary transaction without necessarily being recognized or intended as substitutes. They will simply be accepted as more finely tuned to a specific purpose. At the other end of the spectrum I expect many existing financial securities will become more liquid, more easily convertible, and more easily tradeable. Some of these will come to be seen as “monetary” in nature just as the notion of money in the industrial banking era grew to encompass savings accounts, money market funds, etc (M1, M2, M3, etc). As this line blurs other types of certificates will also become more liquid and will begin to act like money. Ultimately the line will blur completely and everything will just be investments with varying degrees of liquidity.

  • mikeriddell62

    Please check out http://www.hometownplus.co.uk. Our pilot project in Wigan went live today.

    it’s an incentives scheme that is cause related and which uses time as a currency.

    @mikeriddell62

  • Sebastien Paquet

    I wonder what can be inferred from the rapid uptake of transferrable cell phone minutes as an alternative currency in Africa. These are basically gift certificates with easy-to-understand value issued by a non-bank entity.

    The uptake over there was probably accelerated by the general lack of money among the population – this currency was competing against non-use rather than an available currency.

    This is why I suspect the former middle class is a prime target for adopting this kind of currency in the Western world, as their access to credit is being exhausted.

    I don’t know about you, and maybe someone articulated this up-thread and I’m just rephrasing, but as I think about this, I see a pretty definite split between three broad classes:

    1- what I would call “down-to-earth” currency, that a layman can translate quite readily and unambiguously to some quite tangible good like food or fuel, and whose issuance should be limited and whose value is (ideally) pretty well protected against runaway inflation;

    2- group/crowdfunding-style, “speculative/innovative” currency, which basically represents for the holder a bet on some person or collective creating something awesome, and ending up owning part of it if the project is successful;

    3- appreciation/gratitude currency, whose issuance is unlimited and renders flows of acknowledged value visible. (hyperlinks fall into this category)

    I could see myself using all three types of currency in different contexts, and I suspects types 2 and 3 are easiest to grow right now, in what is effectively an early adopter environment.

    Does that make any sense?

  • Kurt Laitner

    I’d like to play along with Sebastian, though I think simplicity is being traded for comprehensiveness, it is an excellent place to start.

    Would propose we have a currency for every common scarce commodity, Sebastian has started an excellent list, food, fuel – though the currency should be exchangeable directly for a quantity of the commodity, then no inflation problems. Gas is easy, litres of gas. In the case of food, to reduce complexity, let’s instead of having apple currency and bread currency, use a non inflating monetary unit (this is a very relative thing, so maybe we should just set it at 2010 beer prices on major national brands – I haven’t studied the long term stability of say bread in beers, but for the most part I’m guessing it is stable, this may be less so for apples in beers but I’m having fun, and reserve the right to be a little irresponsible). There are of course other commodities, cell phone minutes (not inflatable, a minute is a minute, even if it now costs $1000). Do this for pretty much every item on an average monthly bank/cc statement of a member of your society and you have a list. I am deliberately vague with ‘society’ as nation isn’t quite right (Canadian and American banks statements are likely fairly similar, as perhaps Germany and France, but perhaps all four not so much). Whatever shortlist you come up with you denominate in non inflating terms and find a way to represent them and transfer them (I suggest computers). We also need to ensure the tangible commodity is available in the appropriate amount, or that we have perfectly hedged against inflation in (local) dollars in some other way. I vote for Greg to handle this one.

    This is a huge start. I can now pay Sebastian in litres of gas for some work he does. If he doesn’t need gas he gives them to Greg for something Greg does for him. When someone wants the gas they go to the gas station and buy 10 liters of gas (gallons for you us folks, sorry) with your ’10 liters of gas coupon’.

    If we could only get the issuers of stored value cards to issue them in kind rather than in currency values, issue them electronically, and make them transferable (ok let them take a transfer fee to pay for the infrastructure, fine). Given the coming hyperinflationary apocalypse, the timing for stored value cards indexed to inflation couldn’t be better. Now why can’t wall street come up with USEFUL complex derivative products like that instead of the crap they’ve been peddling.

    OK that was not too bad, now number 2. Sounds like equity to me. Easy to track, old school corp law holds, only problem is that equity needs to be reassigned fluidly in real time based on everyone’s contribution, including money, coke, chips, and awesomeness. Then when your (would’ve been opensource or kickstarter and nobody gets paid even if you make awesomeness by definition and that sucks) now *net project gets cashed out in the IPO to end all IPO’s (possibly literally) everyone gets paid according to their real time equity position, courtesy of the value equation behind the project. That’d be *net. Shouldn’t take more than 10 years.

    Appreciation currency, number 3, is already done, just not very well, and not linked to harder values, which it certainly is in real life. If I have a reputation for being a kick ass fund manager, I get paid more. If you have a reputation as a kick ass social media guru and you want to come into a *net project to build *net, I am betting the equation is tuned to reward you for that (ie screw time banks, your time is worth more than mine). As the kick ass fund manager I may throw what I have, money, at the project for say 20% up front equity. Tomorrow, if I do nothing else and everybody on the project is busy cooking up awesome-ness, it’s worth 19% of a bigger pie and is worth more in real $’s (hopefully, inflation adjusted).

    I actually believe 2&3 belong together, even though 3 is being done by itself right now.

    Enough fun though, this is actually very difficult in practice, and I have to still do a real job, which means I have no time for it. Pity, really.

  • Gregory Rader

    @sebpaquet We might want to add a fourth category to those that you propose. I see two fundamental axes of differentiation – scalability and degree of objective or transparent value. Scalability is primarily a function of the efficiency of the trading infrastructure and the standardization or fungability of the currency. Degree of objective or transparent value is a function the ease with which a user can intuit the value of the currency. Combining the two gives us four quadrants…

    What you call “down to earth” currencies would fit into the first quadrant. This category would also describe what I referred to as “monetary” currencies in my previous post, because they function like the money that we are all accustomed to using. Some might argue that the value of a “fiat” dollar is not objective or transparent at all, and on a technical level this may be true, but as a practical matter the value of a dollar can be intuited quite easily from the prices all around us. Cell phone minutes and gift certificates would fit neatly this category given that their value is highly fungible, assuming an efficient infrastructure for trading.

    (skipping #2 for the moment)Your third category could be described as scalable but not objective or transparent. Digital artifacts of appreciation scale quite easily and their value is highly fungible in the sense that they account for all users according to consistent rules. The value that these scores represent however is far from obvious. Because exchanges are asymmetric it is impossible to determine an agreed upon market value.

    That leaves us with two categories: (not scalable + objective/transparent) and (not scalable + non-objective). Non scalable + non-objective may initially sound useless but this actually describes our non-digital social relations quite well. This is the category that contains reciprocity, favors, reputation within a community or social circle, etc. Our mental accounting of these activities does not scale well beyond a relatively small group of personal acquaintences and the value of such things is quite difficult to determine. Nonetheless, being well regarded in ones community certainly does have value.

    Not Scalable + Objective/Transparent would describe systems like the one Mark is proposing. The value of a given security is clearly defined however widespread use would be limited due to complexity involved in trading numerous unique (non-fungible) assets. This is analogous to how investments function today. Investment securities tend not to be used as a transaction tool, despite the fact that their market values are well defined, because of the complexity involved in managing an investment account of numerous securities with volatile valuations. These securities therefore function better as stores of value that are thoroughly planned. I could imagine Mark’s proposed system filling a similar niche – securities would be created primarily to serve primary funding needs…once created they might be tradable on a secondary market but owners would prefer when possible to thoroughly plan their holdings and transact in other mediums.

    Returning then to your second category, these currencies might find various niches between the extremes depending on their implementation. The larger the group or platform, the more a given currency positions itself towards scalability. The more convertible or transactable the more a given currency positions itself towards the objective/transparent end of the spectrum.

    I will have to develop this further in a future post with examples. Anyone know of any easy infographic tools?

  • Kurt Laitner

    When you mention objective value, it makes me think of Michael J Pastor’s (Jungian) Room with Four Views – another useful perspective on the conversation as we are talking about groups of people interacting with each other in a space exchanging value, and perspectives matter – see http://internetpsyche.blogspot.com/2008/07/room-with-four-views.html – he outlines this in detail but my main takeaway is that the pursuit of objective views is only one piece of the puzzle, with the intersubjective view becoming more important as we have the capacity to represent it. This tends in a way toward Mark and Gillaume`s view of the subjectivity of personal currencies building an intersubjective view of value. The pursuit of objectivity in currency depersonalizes it, this abstraction of course has its uses as a universal medium, and the ultimate averaging function.

  • Sebastien Paquet

    Yeah, I believe that in times of high uncertainty objective value tends to vanish, leaving only subjective and intersubjective views to fall back on. Everyone is effectively betting on their personal set of assumptions regarding what will happen next, who and what can be trusted, etc.

    Greg: http://www.quora.com/How-do-you-create-infographics-What-tools-do-you-need?

  • Sebastien Paquet

    Just to stimulate our imaginations a bit more, here’s a potential deployment scenario.

    1. A number of people manage to build enough trust among themselves to get involved together in a public good-type project. Group members are effectively making a bet on themselves.

    2. They build a rudimentary appreciation currency game around the project, in order to give each other feedback and reward contribution.

    3. The project produces an impactful result and earns some recognition in a wider circle. Project contributors get a slice of the “fame pie”.

    4. The appreciation currency mechanics are adopted by other projects.

    5. A metaproject is initiated, using the same kind of currency, but operating at a federated level. Projects themselves, rather than individuals, begin receiving and granting appreciation currency. Now we move towards the intersubjective level, as groups begin to explicitly value each other and gratitude flows begin to reflect aggregated valuations.

    6. Not sure what happens next, but there’s got to be a path from there on to free beer for acknowledged contributors, somehow…. I don’t know how to articulate it better yet, but my hunch is that the prescience of creative groups will eventually be valued by the man on the street as he begins to feel a pressing need for trustworthy guidance.

    Fundamentally, I think it’s all about growing resilient chains of trust throughout society.

  • Kurt Laitner

    Sebastian, it sounds like you are speaking of what david hales and ryan from rypple speak of re chains of trust being the streambed for flows of exchanges to travel over, one small problem with their theory, trust is not 100% transitive a trusts b, b trusts c, does not imply a trusts c, at least not 100% and this is contextual, as i may trust my friend filip to recommend an investment manager, but not a programmer, and if he gave me a bum steer on a plumber, no more trade reccs from him, even though i still trust him with my life – as for the great project, count me in, the people around this right now are a hell of a crew

  • Gregory Rader

    One quick point of clarification on “objective value”…I need to distinguish the meaning of this comment in the context of a medium of exchange from the meaning in the context of a store of value.

    I interpret your comments in a store of value context…in the long run I agree that nothing is objective. The currencies I referred to as monetary, Seb’s category 1, can not be relied upon to maintain their value in the long run any more than anything else. And, given that value is defined as relative to other sources of value, to claim that any one has “objective” value in this sense would simply be an arbitrary convention.

    However, in the context of a medium of exchange this analysis changes. What I mean in this context is how easily the user can understand the “values” for which a given currency can be redeemed in the short run. For example, it is very unclear what a reputation score or a follower count can be redeemed for…these things clearly have value but that value is not transparent or consistent. On the other hand, it is very obvious what $1 will buy you today.

    In the alternative space we might have securities like those Mark describes that have very clearly defined redemption conditions. We might also have systems like “quid” on theSuperFluid platform that might fluctuate in percieved value in the short term based on the specific offerings available on the platform on a given day.

    I don’t mean to suggest that anything has an objective value in a philosophically absolute sense, just that “redeemability” can be defined more or less objectively/transparently.

    Kurt, I will have to follow up after checking out the link you posted…

  • http://www.openworld.com Openworld

    Greg and all,

    Recently, I came across a remarkable ContactSummit Google Groups comment by @devinbalkind, a principal of the Saparis Foundation and the Beex crowdfunding site.

    In it, Devin mentioned that a related FLO Farm venture — a 200+ acre intentional community – is looking into alternative currencies.

    >>[Devin] Our group is going to start experimenting with land-backed currencies denominated in acre-months

    This was the trigger for my my gift-of-time offer (http://j.mp/fUDuUp ) a few hours ago at Beex , given my hope such currency innovations will gain traction.

    I posted a response in the ContactSummit group to Devin’s comment. Below are highlights on the possible convergence of land-backed currencies with time-based service offers.

    Look forward to your thoughts and to continuing the conversation!

    Best,

    Mark
    @openworld

    ======== my ContactSummit response to @devinbalkind ==========

    >>It’s geat to hear that you’re exploring land-backed currencies for social ends! One of my main interests at Openworld (http://openworld.com) has been on land value capture funding for services in free economic zones.

    >>Here are a few thoughts on land-backed currencies, time-based personal currencies, and how they might converge via a “flex” conversion offer.

    >>1. Land backed currencies

    >>Hong Kong and Singapore have decades of experience using auctions and tenders for leasing out publicly-owned lands to generate revenues for public goods. In Hong Kong’s case, this generated US$ 70+ billion in a recent 30 year period. On a smaller scale, individual owners – or resilient communities holding land in common – could issue time-acre shares as you suggest, and put these up for online auction. The real estate arenas of EBay and other auction sites could be used for this
    purpose.

    >>2. Time-based currencies

    >>As @rushkoff suggested in his Radical Abundance keynote at the 2009 O’Reilly Conference, individuals can also issue time-based currencies. Comment 1 at http://j.mp/ahEtkD — and a thread on cell phone-based personal currencies at http://j.mp/99kak1 — explore how spot auctions of time offers might work for this.

    >>More recently, a convo sparked by a @venessamiemis post ( http://j.mp/eOS7jH ) mapped an opportunity for individual issuers of time-based offers to pool them in payment for education, without recourse to taxation.

    >>3. A ‘Flex’ conversion option: time-acres or time-based services

    >>The above elements could work together in intentional communities such as Flo Farm. This could be done by building on a currency innovation introduced by Cincinnati’s “Time Store” ( http://j.mp/atmfDp ).

    >>In the early 1800s, members of the Time Store used time-based personal currencies with a difference — they could be converted by a recipient into something tangible. As you’ll see in the above Wikipedia link, the person who issued the depicted Time Store personal currency note offered three hours of his carpentry services — _or_ 12 bushels of corn.

    >>In the case of a community such as Flo Farm, the innovation might be for residents, as individuals or as groups, to issue currencies redeemable in the form of (auctionable by the recipient) indicated time-based services, or a specified amount (also auctionable by the recipient) time-acres.

    >>The issuers of the note could also set terms and conditions regarding the use of the services or properties, to ensure that the recipient hewed to a given code of conduct and agreed to a given arbitration system in the event of a dispute.

    • http://OnTheSpiral.com/ GregoryJRader

      Mark, thanks for sharing this. As you well know, I am very interested in these transition points between the old models and new models…from transactional models to abundance models. One of the problems we run into at these transition points is applying abundance logic to scarce goods and vice versa.

      When it comes to exchanging abundant resources I think we are very open to asymmetry. I am more than happy to share your content, Like or RT or simply recommend your ideas because these “gifts” are abundant. They don’t cost me anything, and in fact giving them away liberally benefits me, so long as I don’t use them frivolously and create noise.

      However, when asking for money, whether payment or donations, we are dealing in scarce resources and in that situation I think the logic changes somewhat. When we exchange scarce resources we expect something tangible in return; even if that something is simply good feelings or whatever…we still want to be able to make the direct connection – $x donation created X impact.

      So in this case I want to know why Sarapis needs the money…what is it going to be used for specifically? I would also like to see them somehow accept your offer and tell us what your donated research time will be committed to, and what outcomes that will lead to. One reason why the Kickstarter model works so well is that it creates so much transparency. Donations go to specific projects with specific impacts and/or deliverables instead of going into big black-hole foundations.

      I did notice your note about Vanessa and Doug acting as “arbitrators”, which is definitely an innovative step in the right direction.

      Hope you find this helpful, or at least worth pondering ;)
      Greg

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40 Responses to How to Build Reputation and Reward into Funding Platforms

  1. Openworld says:

    Inspired post!

    Perhaps the reputation/reward in new funding platforms you’ve outlined will also connect to “pay for results” initiatives.

    An intro to “Results Only Work Environments” in the corporate world –

    http://en.wikipedia.org/wiki/ROWE

    And in virtual settings –

    http://projects.csail.mit.edu/soylent

    Best,

    Mark Frazier
    @Openworld

  2. Gregory Rader says:

    @OpenWorld Thanks for the feedback. I would expect that these sorts of arrangements will become more common as production becomes less intermediated (less concentrated in hierarchical corporations). I find your suggestion interesting in contrast to suggestions by in the alternative currency community that we should institute some sort of time based currency (time-bank). These two options are clearly not compatible as the time based currency by definition refers to the inputs (time) rather than the outputs (results).

    There is quite a bit of economic research dedicated to this question, mostly associated with “New Institutional Economics” (http://en.wikipedia.org/wiki/New_institutional_economics). The general conclusion is that “pay for results” tends to exist where output goals can be clearly defined and performance against those goals can be easily measured (ex. Sales). Hourly pay tends to exist where quality/quantity of output is difficult to measure and does not meaningfully affect the amount of man-hours needed as input (ex. cashier – needed at the register for x hours regardless of output quality/quantity). Salary tends to exist where both input and output are difficult to measure.

    I expect technology should continue to make output easier to measure, though we then run the risk encouraging frivolous production if we do not find better ways to account for quality.Thoughts?

  3. Openworld says:

    Personal currencies can provide a way to bridge the apparent chasm between time-based and output-based systems that you’ve pointed out.

    The Wikipedia entry on the Cincinnati Time Store has a wonderful example of how individuals resolved it in the early 19th century:

    http://en.wikipedia.org/wiki/Cincinnati_Time_Store

    As can be seen in the image, the issuer of the personal currency offered three hours of his carpentry services – or three 12 pound measures of corn.

    Soon, we’ll have abundant opportunities to issue our own similar personal currencies, convertible to the time-based services and/or tangible outputs as each issuer defines.

    These offers – and agreements to exchange personal currencies – can be done through cell phones with new augmented reality apps, as explored in this thread on Douglas Rushkoff’s forum:

    http://j.mp/99kak1

    What do you think? Hope there will be a way to try it soon!

    Best,

    Mark
    @openworld

  4. Gregory Rader says:

    @openworld I will have to ponder the possibility of conversion that you bring up. The question I have is, who has the conversion option and when are they able to exercise it? Presumably the redeemer of the note holds the conversion option, but he has no way of knowing what sort of output he will get for three hours of work until after the work is performed, at which point he has lost the conversion option. This could potentially be resolved by reputation tracking, though I think viability would hinge critically the specifics of implementation.

    Another potential concern I would have is that I don’t necessarily want someone to be able to demand (redeem) my labor at any time. Our current monetary system is more flexible and resilient because money is “loosely coupled” to value. In other words, I might give you $100 for an hour of your labor, but if you try to redeem that $100 for an hour of my labor I maintain the option to tell you that my labor now costs more than $100 or simply that my labor is not currently up for sale. So both participants in the transaction want the to maintain the conversion option for themselves.

    As such, there is value in having a currency that ‘floats’ against all specific units of value. This is a viable option when a currency has widespread usage but obviously makes less sense when it is tied to a specific person. A compromise might be a system that allows us to create personal currency on the spot and link it to the value of some standardized basket of goods. So you might sell me an hour of labor for 1 unit of currency equal to one “basket”. At some point in the future I could choose to return to you one hour of labor or provide you with some other liquid asset equal in value to one “basket”.

    With this possibility we maintain the “float” on both sides of the transaction while still allowing on the spot currency creation. Positively identifying and recording the parties to the transaction is still vital because they are still the guarantors of the value of the currency, even if it isn’t tightly linked to the value of their labor.

    Ok, enough thinking out loud for now…lets keep this going, thanks as always for taking the time to share your thoughts,

    Greg

  5. Openworld says:

    Greg,

    I agree with your point on reducing uncertainty over scheduling of services.

    To increase demand for their personal currencies, issuers would likely feature URLs on each note linking to a web-based calendar. This calender would show a prospective redeemer the available blocs of free time open for the issuer’s provision of onsite or remote (telework) services.

    The site would increase trust and demand for his/her personal currency by:

    - showing the number of still un-redeemed hours in the issuer’s other extent personal currency notes;

    - linking to reputation ratings based on feedback by past redeemers of the service offers;

    - indicating the applicable code of good conduct to be respected by the redeemer as well as issuer of the personal currency.

    In practice, my guess is that issuers of personal currency would quickly create a market for trusted third parties to offer standard templates for the above web sites (along with spot-check audits and online dispute resolution systems).

    Look forward to next thoughts –

    Best,

    Mark
    @openworld

  6. giyom says:

    @openworld, I agree that personal currencies are the key building block, the starting point in reinventing the monetary system. Borrowing in your own currency – what you are abundant in – is freedom. Borrowing in someone else’s currency is slavery.

    @greg, this company http://hourville.com/ has created a nice UI for finding and scheduling personal services. I remember talking to one of their founders a couple years ago at SXSW and mentioned that they should not just be US$-based but have their own currency. The mixed model of using US$ for untrusted parties and credits for trusted “friends” parties is also a great model that seems to work for neighborgoods. Not sure if it evolved that way, though.

  7. Kurt Laitner says:

    Hi Greg and Mark,
    I would suggest we are talking about several dimensions of value here, Reputation, Trust, Time, Deliverables (==Results), Commitment (of time in advance). Every value exchange ‘space’ will need to publish a value exchange equation that states what kinds of things are valuable in that space. Greg mentions several types of work (cashier, sales..) that have different value equations and have been handled by commission, salary etc in the past. The problem with past solutions is that none of them account for all dimensions of value, and for good reason, because it has been very difficult to do so without mediated environments (like using a social network).

    The in my mind is to define carefully as many dimensions of value as we can, figure out a metric for each, and publish a parametrized equation that shows the relationships between them. Each value exchange space then publishes its value exchange equation and participants choose whether or not that makes sense to them. These equations then become a natural way to map resources to needs across value spaces.

    If you are someone who hates commitment but has the ability to create valuable deliverables (like Conversion (sales)), you will head for spaces with low Commitment and high Results orientation. If you are not much for the pressure of deliverables, but don’t mind showing up 9-5 you would choose something with a high Commitment and low Results orientation.

    I suppose the point I am making is that we do not have to choose one of the options proposed above, but we do need to understand the game we are playing. Corporate cultures now hold the key and if you are not advancing in a company but are working your butt off, chances are there is a culture mismatch, or more specifically, the company you work for has a different value equation than you. Time to move on. Too bad feedback is poor in these environments.

    As to Greg’s core challenge, how do we convert between social and financial currencies, this is a very sticky question, starting with some fundamental assumptions that underly it, and as such I will somewhat side step it :-) for the time being. Short answer is that we convert from ‘social’ or intangible subjective value to ‘financial’ or tangible objective value all the time, we just aren’t good at defining and measuring it, so the conversion is very inefficient. One gets a salary for showing up and meeting a job description, which usually isn’t written to deliverables or to any strict understanding of value added. Job descriptions are generally task descriptions, corresponding to processes, which if we are talking about a very enlightened org map to strategic goals and objectives (through several layers). The ‘value’ equation of the corporation should be in those goals and objectives, linked to mission and vision, but often these documents are flawed as well, and soft ‘culture’ transmits what is valued ‘around here’.

    An example, you do good work for a number of employers (let’s leave ‘good’ alone for the time being) and create several evangelists for your services. You could say that this is their ‘rating’ of your work and someone can inspect your ‘social network’ to aggregate ‘ratings’ (ie call your references, and your previous employers, say through a resume verification service). You will now have much demand for your services, should what you have demonstrated (Deliverables, meeting Commitments (an aspect of Trust) etc.) matches what the potential client needs. Your name may also get out just from your evangelists talking to people who talk to people, they are in this manner providing a ‘Surfacing’ function and this is valuable to you. Hence we have referral fees from head hunters. As your reputation grows, and your list of accomplishments too, you now can charge more for your time.

    I actually think a rudimentary value equation (far better than most kickstarter asks) is possible even now, with some heads together for a month or two; the key is to create the kernal of a value exchange mechanism then let it heal itself. Personally I see transactions involving scarce currency being ‘liquidity events’ that should trigger distributions through the network to all that have participated in the value creation. This gets us around the prediction of value in advance. Of course this is more of an entrepreneurial mindset (work to create value then get paid when it all works out some day) and may not fit some temperaments. Some will still want to hedge that risk and take a salary like arrangement (payment in advance) in return for signing over their value creation but that equation and the cost of risk reduction will be transparent, and this transparency will affect choices over the mid to long term. Performance evaluation will similarly become more precise (what value did this person provide for the salary taken).

    In the case of the salaried employee, they are taking Time from their employer (paid in a salary in advance of value creation) in exchange for whatever is expected of them (Commitment, Deliverables (Results)). This is trivial but the point I make is that we need to frame the larger equation, then all current arrangements become special cases.

    Sorry to ramble, I had no time to write a shorter, better written blurb.

  8. Gregory Rader says:

    Mark and Guillaume,
    It sounds like you are suggesting a platform like odesk.com with a built in currency creation system. I could definitely see there being some value in this. I do think this type of system would be limited to task based freelance type activities simply because those are the sorts of things that are easy to define prescribed outcomes for ahead of time. As @klaitner points out, this is not criticism if we consider it in the context of a world with many complementary currencies filling different niches.

    An interesting offering along these lines is TheSuperFluid.com (h/t to @sebpaquet). This platform is similar to hourville but all transactions are conducted in “quid” which are not convertible into $. They have a set formula so that the “monetary base” of quid rises in proportion to the number of users. Therefore, the value of quid rises or falls based on the amount of value offered per user on the platform. This doesn’t quite live up to your vision but it doesn’t provide an option wherein the value of currency is intuitively understandable in terms of velocity of exchange on the platform.

    Might dedicate a new post to it after giving it a try, would be curious to hear your thoughts…

  9. Gregory Rader says:

    Klaitner,
    We talked about much of this previously in the comments to Defining Abundance in the Context of a Gift Economy

    At that time I was a little unclear as to what you meant by “value equations” though I think I am fully with you now. I agree completely that there are many types of value and distinct currencies and metrics will track some of these values better than others. Individuals might gravitate towards one over another as you suggest, or they might use several at the same time. In a sense that is what we are all doing now. Almost all of us are paying the bills with in some other way but build reputation or influence through our social media activities…different value systems for different activities and different goals.

    I also agree that transparency will work its way through all of our legacy institutions in one or another eventually. Monetary system, Corporation, Government will all see major disruption in the coming years as their inner workings and various “value equations” become transparent.

  10. Openworld says:

    Kurt and Greg,
    I agree that defining deep dimensions of value (trust, reputation, etc) will help new currencies spread.

    Yet the a priori categories above to me seem insufficient.

    They appear to overlook an important aspect – the qualities of spirit (virtues) shared by a currency issuer and a recipient. Alignments of such qualities can deeply influence the “terms of trade” that a personal currency issuer is willing to make with a recipient.

    Although such alignments resist expression in an equation, there is another way that their weight can be taken into account.

    I see this happening through folksonomies – tools for issuers of personal currencies to create tags and badges that describe the qualities of spirit (#lumenes, in Ebdish) they value.

    Online communities could use data mining to scour the folksonomy of values/virtues as personal currencies proliferate. (In the course of such data mining, more tangible metrics of trust, timeliness, etc would also be sifted).

    Such a process could help vast numbers of personal currency issuers federate in mutually beneficial ways with kindred online communities. Tribes that move to issue their own social currencies could agree to underwrite convertibility of (best fit) personal currencies into other deliverables according to standards set by the tribe. Terms of such convertibility could improve as a personal currency issuer earned his or her way toward becoming a fully-backed member of the community.

    In this way, the Cincinnati Time Shore precedent for redeeming personal currencies in convertible ways (time-based services or a more durable alternative) can reemerge — and go to scale.

    What do you think?

    Best,

    Mark
    @openworld

    • Openworld says:

      Greg and all,

      Earlier today, I came across a remarkable ContactSummit Google Groups comment by @devinbalkind, a principal of the Saparis Foundation and the Beex crowdfunding site.

      In it, Devind mentioned that a related FLO Farm venture — a 200+ acre intentional community – is looking into alternative currencies.

      >>[Devin] Our group is going to start experimenting with land-backed currencies denominated in acre-months

      This was the trigger for my my gift-of-time offer (http://j.mp/fUDuUp ) a few hours ago at Beex , given my hope such currency innovations will gain traction.

      I posted a response in the ContactSummit group to Devind’s comment. Below are highlights on the possible convergence of land-backed currencies with time-based service offers.

      Look forward to your thoughts and to continuing the conversation!

      Best,

      Mark
      @openworld

      ======== my ContactSummit response to @devinbalkind ==========

      >>It’s geat to hear that you’re exploring land-backed currencies for
      social ends! One of my main interests at Openworld (http://
      openworld.com) has been on land value capture funding for services in
      free economic zones.

      >>Here are a few thoughts on land-backed currencies, time-based personal
      currencies, and how they might converge via a “flex” conversion
      offer.

      >>1. Land backed currencies

      >>Hong Kong and Singapore have decades of experience using auctions and
      tenders for leasing out publicly-owned lands to generate revenues for
      public goods. In Hong Kong’s case, this generated US$ 70+ billion in a
      recent 30 year period. On a smaller scale, individual owners – or
      resilient communities holding land in common – could issue time-acre
      shares as you suggest, and put these up for online auction. The real
      estate arenas of EBay and other auction sites could be used for this
      purpose.

      >>2. Time-based currencies

      >>As @rushkoff suggested in his Radical Abundance keynote at the 2009
      O’Reilly Conference, individuals can also issue time-based
      currencies. Comment 1 at http://j.mp/ahEtkD — and a thread on cell
      phone-based personal currencies at http://j.mp/99kak1 — explore how
      spot auctions of time offers might work for this.

      >>More recently, a convo sparked by a @venessamiemis post ( http://j.mp/eOS7jH
      ) mapped an opportunity for individual issuers of time-based offers to
      pool them in payment for education, without recourse to taxation.

      >>3. A ‘Flex’ conversion option: time-acres or time-based services

      >>The above elements could work together in intentional communities such
      as Flo Farm. This could be done by building on a currency innovation
      introduced by Cincinnati’s “Time Store” ( http://en.wikipedia.org/wiki/Cincinnati_Time_Store
      ).

      >>In the early 1800s, members of the Time Store used time-based personal
      currencies with a difference — they could be converted by a recipient
      into something tangible. As you’ll see in the above Wikipedia link,
      the person who issued the depicted Time Store personal currency note
      offered three hours of his carpentry services — _or_ 12 bushels of
      corn.

      >>In the case of a community such as Flo Farm, the innovation might be
      for residents, as individuals or as groups, to issue currencies
      redeemable in the form of (auctionable by the recipient) indicated
      time-based services, or a specified amount (also auctionable by the
      recipient) time-acres.

      >>The issuers of the note could also set terms and conditions regarding
      the use of the services or properties, to ensure that the recipient
      hewed to a given code of conduct and agreed to a given arbitration
      system in the event of a dispute…

      • Mark, thanks for sharing this. As you well know, I am very interested in these transition points between the old models and new models…from transactional models to abundance models. One of the problems we run into at these transition points is applying abundance logic to scarce goods and vice versa.

        When it comes to exchanging abundant resources I think we are very open to asymmetry. I am more than happy to share your content, Like or RT or simply recommend your ideas because these “gifts” are abundant. They don’t cost me anything, and in fact giving them away liberally benefits me, so long as I don’t use them frivolously and create noise.

        However, when asking for money, whether payment or donations, we are dealing in scarce resources and in that situation I think the logic changes somewhat. When we exchange scarce resources we expect something tangible in return; even if that something is simply good feelings or whatever…we still want to be able to make the direct connection – $x donation created X impact.

        So in this case I want to know why Sarapis needs the money…what is it going to be used for specifically? I would also like to see them somehow accept your offer and tell us what your donated research time will be committed to, and what outcomes that will lead to. One reason why the Kickstarter model works so well is that it creates so much transparency. Donations go to specific projects with specific impacts and/or deliverables instead of going into big black-hole foundations.

        I did notice your note about Vanessa and Doug acting as “arbitrators”, which is definitely an innovative step in the right direction.

        Hope you find this helpful, or at least worth pondering ;)
        Greg

  11. giyom says:

    Yes, precisely. In my view, personal community come first, community currencies come later. Community currencies are merely convertibility agreements of personal currencies. There are many benefits to this approach.

  12. giyom says:

    Sorry I meant, personal currencies come first, community currencies come later.

  13. Kurt Laitner says:

    Hi Mark,
    I have on my very long list of things to do to spend some time understanding ebdish’s vocabulary, lumenes included. I am actively interested in different perspectives and do not consider the set of dimensions of Value and dimensions of Reward discussed here or even the more complete set I put on Vanessa’s mindmeister map “new economy” to be a closed set. I want the set to be elegant and sensible with little overlap (some dependencies may be abstracted out in the future, either leaving primitives as the base set and defining others as functions of the primitives or leaving the set as is understanding that ‘in fact’ they are apples and oranges.

    I think as you describe ‘shared values’ or ‘spirit’ we are talking about an input to what I’ve termed ‘Connection’ (which in this light is more of an action than a dimVal, whereas your spirit or ‘Alignment’ is perhaps a better definition of dimVal) and I can understand that these aspects may determine preference for counterparties by modulating other dimVals like Trust and Reputation. All dimVals are useless unless contextualized in a value space. I make no value judgements (value being used here in two senses, hopefully you are able to follow easily enough) as to what value equations are ‘better’, I am only interested in coming up with a generally applicable model that will allow us to specify ‘rules’ in advance that are simple and create ‘emergent’ behavior and structures, in the same way as the complexity theory folks have defined simple rules for the ‘game of life’ and witnessed eerily ‘lifelike’ emergent properties when the system is run. My position is that system design must become proficient at setting these initial conditions in a way that emergent behavior is as desired, this will require iteration, competition and selection at the ruleset level.

    Of interest to me at the systems level is that it is both optimized and robust, and my concern is that we must examine biological mechanisms that introduce variation (mutations, epigenetics) and find a way to introduce these. My wife joked that the gene pool of ‘value equations’ competing may result in optimization to the existing value equation, just because we are change resistant and existing ways of doing things would be an attractor. Warning duly noted.

    In your comment on federation I see a failure in my current mental model. Though I believe all aspects of a system should emerge from simple rules, I am holding on to the idea of a ‘space’ defined a priori (which is a construct not a rule) so that participants might be assured of the value equation they are participating in. Even keeping track of this may well be a cognitive load worth removing to ensure flow. Currently, in my mind, this value equation is defined in two parts, structurally by the ‘natural’ relationship (inverse direct function etc) between dimVals then at run time through the constant settings applied to each dimension (k*Participation, n*Trust where k and n are set by the space owner, where space ownership has its own value equation (value equations are nestable) (ie. ownership of a space will change over time, think of twines as an example Mark, where the owner had special rights, but operation of the twine showed someone else putting all the effort in, who should have accrued ownership rights through that effort).

    Perhaps this value space needs to be emergent as well, where the value equation constants (a design level construct) are continuously revised at the run time, rather than just the ownership/benefit being revised at run time based on value generated.

    I think I will start a new mindmeister map or a brain (theBrain.com) so that we could structure dimVals and dimRewards together.

    As usual it would be nice to have *net to build *net, but we must work with what we have.

    Thanks Mark and Greg, you both continue to stimulate me to think.

  14. Kurt Laitner says:

    @giyom intriguing concept, that personal currencies come before community currencies – first for some mappings, I intend to understand how to measure then track each dimension of value – and this may well become contextual as well, this contextualization of the measurement of a dimVal may correspond to the ‘community currencies’ you speak of – as to order of operations, we must understand how to measure dimVals (in my conceptualization) before we can operate value equations, but we can think about both in parallel for the time being. what I don’t have a mapping for is personal currencies, partly because I still have to investigate symbionomics, metacurrency.org, and others conceptual models before I can properly map to them or comment on them, but also because I think perhaps I am coming from an opposite direction, that one’s actions speak louder than self definition, your ‘personal currencies’ (as I guess the concept to mean) in other words are an emergent property of the system running, not something define-able a priori. Please educate me, this is fertile ground.

  15. Openworld says:

    Kurt, Greg, and Guillaume,

    Thanks for the thoughtful and stimulating responses.

    I’m intrigued by the notion that we’re evolving “extended selves” that include others with kindred meme/lumene-seeding agendas in the boundaries of our conception of self-interest.

    Within the Venn diagram of relationships that form our expanding personas, a commons seems to be emerging in which monetary transactions seem moot. But I do think measurable indices of success can be applied.

    I’ve sketched some thoughts on these aspects of “Ebdish” that may prompt further ideas on how we can weave nextgen currencies –

    - a way to show one’s empathic (extended) self via social tetrahedrons… http://j.mp/bQn4jt

    - narrative fractals for mating flows to spread kindred memes and qualities of spirit…
    http://www.quora.com/What-are-narrative-fractals

    Also, @mgorbis has a post (with comments) on “a society without money” that I hope you’ll find rewarding: http://j.mp/6SDGJk .

    Look forward to seeing the ideas shared here mix and evolve.

    Best,

    Mark
    @openworld

  16. Gregory Rader says:

    Questions for @OpenWorld @Giyom and @Klaitner on the most recent set of comments:

    Mark, certainly the qualities you describe are relevant to many exchanges. Must these qualities be accounted for in the currency itself or might they simply be presumed of anyone who chooses to transact through a given medium? If you desire to transact with people who share similar values to you then you might choose currency A whereas if you are seeking an anonymous exchange you might use currency B…

    Guillaume, I agree that individually created value is the most fundamental (most granular) basis for any value accounting. Does this necessarily imply that alternative currencies will or should be adopted starting at this level of granularity? Given that we are transitioning from a system with one universal currency (per nation anyway) might we not expect the transition to start there and progressively add granularity? In other words, might personal currency be the end game rather than the first step?

    Kurt, do you expect the equations you are describing to be explicit described (and required of) the users of a particular currency or might they simply be implied by the way a currency functions? For example, Klout and PeerIndex convert social media contributions into quantified reputation/influence…this seems to be clear in the general sense without reference to any explicit equation. Do you see the value equation as something necessary for the user or simply a tool for the currency/metric creator to differentiate or position themselves?

    Thanks again for your thoughtful contributions,
    Greg

  17. Kurt Laitner says:

    Greg, yes i see the equations as explicit and published and as subjects of system calculation (very much involved in matching rsources to needs). While the secret sauce approach to quantification has some advantages ( more difficult to game, proprietary) this is not a good appraoch in my mind. The transparency of value equations allows the equations themselves to compete.

    A quick apology to Mark that i have not gotten at the links above, this return reminds me to go visit them.

    Thanks all.

  18. Openworld says:

    Greg,

    >>If you desire to transact with people who share similar values to you then you might choose currency A whereas if you are seeking an anonymous exchange you might use currency B

    Yes, I can see how a rich smorgasbord of new currencies – each advancing a quality of spirit one admires – might generate a satisfying spectrum of choices. Yet it would take a long time for credible currencies standing for elemental qualities to emerge, let alone to credibly evolve more complex assemblies of virtues that would better correspond to our preferences.

    So why not hit a fast forward button, and start instead with personal currencies? Individual time-based service offers can set out terms and conditions congruent with the issuer’s most important values from the outset. And such personal currencies can include a “flex” redemption option. This can enable the recipient, if he/she prefers not to consume the issuer’s time-based service, to claim instead a tangible commodity or other item owned by the issuer.

    This flexible redemption option, I think, will enable a system of personal currencies to go to scale. This aspect will help new issuers build a market for their personal currencies. Tribes/online communities can further boost the personal currencies of trusted members by acting as guarantors.

    Tribe leaders – and others whose brands (aka package of qualities) are widely admired – may be in a position to personally launch trusted reserve currencies under this scenario. Here’s an example of how it might work. Ordinarily, I might issue a note for five hours of my time, with a flex conversion option for the recipient to redeem it instead for 30 bushels of wheat. But let’s say I’ve earned trust with a third party who is widely admired. I could ask that person if they’d be willing to offer 30 minutes of their time, once I had completed 100 hours of research for them to full satisfaction. That 30 minutes would then be available for me to offer kindred spirits – rather than wheat or other tangible items – as the flex option bundled with my personal currency.

    Such a system would more rapidly lead to (federated) personal currencies that are highly resonant with one’s values.

    What do you think?

    Best,

    Mark
    @openworld

  19. Guillaume Lebleu says:

    The reason why I think private currencies will precedes group/community currencies is that private currencies provide an easily executable solution to a real problem for issuers and holders: 1) they allow issuers to raise capital/get in debt, and repay in their own goods/services in the issuer’s preferred unit(s), which is truly liberating, 2) they allow holders to protect their purchasing power and to support businesses they care about. To me, private currencies offer an alternative to traditional equity and debt instruments (including cash). The problem is acceptance: people may be worried about holding notes from a few businesses, what if one fails?

    Acceptance is where group currencies can help by mutualizing risk or at least broadening the purchasing power of the individually issued notes.

    At the community level, the use of a tax in the group currency, if agreeable and/or enforceable, is a logical way to further broaden acceptance, and to fund solutions to community problems.

    To me this evolution is quite natural. The reverse is difficult: hard to convince people that a circulating tax will benefit them individually.

    Of course, I’m talking about money here, but I think this can be applied to non-tradable currencies.

  20. Gregory Rader says:

    Continuing the conversation with @klaitner @openworld @giyom re: alternative/personal currencies:

    Mark, I think you nailed the crux of the issue at the very start of your comment: “Why not hit the fast forward button?I am not sure it is possible to ‘fast forward’.

    I don’t doubt that what you are describing is possible or that it might be preferred by many people in many situations. My cause for hesitation is simply that what you are describing is at least several steps beyond the current horizon, and as such I am interested in how the intervening transition might take place…what current developments might foreshadow the outcome you describe?

    There are two components that have to be considered:
    Are personal currencies technologically feasible?
    What must occur in order for the prevailing culture to accept and adopt a system of this sort?

    I think you have argued persuasively that technical feasibility is not that far off. The bigger issue is cultural acceptance. When analogized to ‘money’ I imagine people being overwhelmed by the complexity of such a system. The biggest weakness of our current centralized monetary system (that it is opaque to the user) is also its biggest advantage in terms of adoption (all the complexity is hidden from the user).

    Guillaume’s comment brings to mind an alternative – perhaps a better analogy is investment rather than money. We already have personal equity investment emerging as a trend. The situation Guillaume describes seems to me only one step beyond this. Currently this type of transaction would have to be facilitated with a non-standard legal contract. However, if this becomes common then it is only one step further to standardize the contracts (or several variations on the contract) and make them tradable. Issuers could either repay through paying the equity dividend, buying out the contract, or providing some predefined set of services (collateral so to speak).

    What do you think about that as a potential intermediate step that perhaps facilitates cultural understanding and comfort with these types of instruments?

  21. Guillaume Lebleu says:

    To me the intermediate step to personal currencies is small business currencies. Debts redeemable in goods/services exist today (ex. Gift certificates, CSA subscriptions, rewards), but not in a way that they can easily be transferred, like stocks/bonds, and function as pseudo-money.

  22. Openworld says:

    Greg and all,

    >>What must occur in order for the prevailing culture to accept and adopt a system of this sort? …you have argued persuasively that technical feasibility is not that far off. The bigger issue is cultural acceptance … I imagine people being overwhelmed by the complexity of such a system.

    I see it quite differently.

    Every week, millions of people donate personal time to good causes. An opportunity exists, I think, for personal currencies to emerge from a familiar, well-established ethos of volunteering.

    At the local level, one track for the launch of personal currencies seems within reach of anyone with a desktop printer, web design skills, and generous spirit. A second, virtual track would need more effort to get going, but possibly could be launched through a crowdsourced mashup of Android or other existing smartphone apps.

    Track 1. Issuing “gift certificates” of time for local good causes

    An individual might launch personal currencies in their community by printing, numbering, and signing certificates with offers to donate his or her time. These vouchers could offer immediate help to local nonprofit groups at a time when givers and receivers are hurting for funds.

    Such acts of generosity can benefit the giver as well as receiver. The issuers of the time offer can gain by building community awareness, references, and reputation (based on online feedback from recipients regarding completed work) that in turn help build downstream demand for his/her marketable skills.

    How might this play out in an ideal case? Let’s say Kurt wants to help a local nonprofit group improve health outcomes in at-risk groups. He creates or customizes a downloaded personal currency template, and prints out a time and date-stamped 5 hour gift certificate. His printed coupon reads that it is redeemable for certain types of IT services that he can offer on systems to send out text alerts. It also includes any information that Kurt wants to include regarding venue, service scheduling, web links to his cv, etc.

    On receiving his gift offer, the health group he has given it to sees that Kurt is fine with delivering the free services either directly to them – or to third parties aligned with their activities. This flexibility lets the (original) recipient group potentially use Kurt’s service offer to greater benefit, through gifts or exchanges that can help ease immediate financial pressures.

    Kurt might also set out a basic condition on each printed voucher to deter photocopying/counterfeiting. He could require each proposed transfer of a voucher to a new recipient to be registered on a trusted web site (eg Squarespace or Ning) through a standard form. This web form would send an immediate email or SMS message to Kurt regarding the proposed transfer to the new party, enabling Kurt to OK (or decline) it.

    The final(approved registrant in a chain of transfers then would be able to redeem Kurt’s voucher for his offered gift of service. On fulfillment of Kurt’s time pledge, the recipient of the services would then have an opportunity to post feedback on Kurt’s web page (or better, on that of an ePinion-style neutral web site) whose link was on the gift certificate. Kurt’s reputation in the marketplace would rise – and demand for his future time-based vouchers would grow – as recipients of his initial gifts shared their feedback on his services.

    Track 2. Issuing personal time-based service offers in virtual form

    Issuance and transfers of digital gift certificates for time-based services may also grow rapidly through smartphones. Taking a photo on an Augmented Reality-enabled camera phone can trigger essentially immediate popups of related information about the person in focus.

    This information can include links to a web sites with standing offers of time-based services that a person offers to good causes, along with links to a trusted third party site to review summaries of prior work done (plus feedback ratings from recipients).

    With this information, the parties might agree find ways for each other to help admired local or global good causes – or perhaps to shift instead into a classic market exchange of services for personal benefit.

    If the parties were unable to agree easily on an “exchange rate” for two-way time donations, a smartphone app might offer a solution. It could give the parties an option to hold a real-time auction for a given number of pledged time donation vouchers hours on eBay or on a similar spot auction site.

    This auction – if successful – would set the market value of the individual’s time vouchers in terms of preferred currencies that other party was seeking.

    I’m sure that there are a number of issues (secure data sharing, online dispute resolution, digital notarization, etc) that would have to be rigorously developed in a system for personal currency exchange.

    Yet it seems likely that many of the components are within reach to create working examples on Track 1 and Track 2, especially if their aim from the outset is to promote gifts of volunteer time to charitable causes.

    Thoughts?

    Best,

    Mark

  23. Kurt Laitner says:

    @openworld Mark, the idea of ‘transfer agent’ in this space is interesting to think about, would suggest one would use cryptography to implement the signing of personal currency and the transfer agent would encrypt again for each transferee (break key for old holder, issue to new holder). This could potentially with a messaging layer to notify me there is activity, or that I have a new counterparty, which may have social implications, as if they have an interest in my work perhaps I should be connected to them on twitter, linkedin or some such network. Beating a dead horse, some dimVals are transactable in this way, some aren’t, see tradeable vs non-trade-able here http://habitatchronicles.com/Habitat/KidTrade.pdf

  24. Guillaume Lebleu says:

    @openworld exactly my thoughts on the mechanics of personal currencies. I don’t know if the “donating your time” scenario will be the trigger though. Using these personal currencies as rewards will provide a more sustainable model IMO, which can be leveraged for donations.

    Regarding exchange rates, I think fixed rates with redemption limits may be easier to implement (and understand by users) than actual floating market-based exchange rates. In other words, my hour is worth your hour, or my dollar is worth your dollar, but I won’t accept more than x amount of your hours or dollars. This is equivalent to a credit limit.

    A group currency is just a generalization to n people of a private agreement between 2 people to accept each other’s personal currencies.

  25. Kurt Laitner says:

    @giyom must have exchange rates for all tradeable dimensions of value, canonical example would be money for time (your hourly consulting rate if you will) other combinations of tradeable dimVals could be very interesting, haven’t delved deeply into this yet. Non tradeables may support exchange rates, like Money/Time aka Hourly Rate = fn(Reputation,Competency,Commitment (of Time in advance),…) more complicated than that of course (more dims involved, then we get to constant values and direct versus inversely proportionalities). So much to do, so little Time, I’m sure there’s a value equation that could solve that for me.

  26. Gregory Rader says:

    Thoughts on the latest batch of comments:I should clarify my last comment (quoted by Mark) by explaining that all my comments assume some frame of reference to the domain of usage cases. I agree that the development tracks suggested by Mark are quite plausible given the context contained therein. In that context, many users would be willing to work with a certain degree of complexity in order to benefit a good cause.

    The previous comment intended an implied reference to scalability. When considering scalability I am looking for analogs amongst current financial instruments that would provide users with a cognitive use template. My suggestion was that many people already have investment accounts and think of their investments as very much like money, very much convertible into money. Therefore personal equity investments might provide a bridge between agreements between individual and financial instruments that people currently see as analogous to money. Mark, you and I and everyone else reading this blog see that what you are suggesting potentially substitutes for a monetary arrangement, I am just less confident that the average person would see such a certificate as “monetary” in nature…and that does not reflect at all on its feasibility, the average user might very well use such arrangements in specific cases without that understanding.

    I like giyom’s suggestion regarding gift certificates and the like. These types of instruments have the benefit of being non-standardized allowing experimentation, while preserving fungibility and scaleability, at least to some degree. Once a ubiquitous institution takes this approach, allowing gift certificates or points or whatever to be tradeable, then I think we will see the same tools filter down to smaller establishments very quickly. The benefits of this approach to retailers should be obvious – the more a company like Amazon.com can get users to trade in its certificates, the more “currency” there is floating around that ultimately will be redeemed for Amazon merchandise.

    I could sum up all of these points as follows: I expect change to emerge from both ends of the spectrum. New tools that diverge dramatically from existing monetary securities will tend to find niches where they substitute for monetary transaction without necessarily being recognized or intended as substitutes. They will simply be accepted as more finely tuned to a specific purpose. At the other end of the spectrum I expect many existing financial securities will become more liquid, more easily convertible, and more easily tradeable. Some of these will come to be seen as “monetary” in nature just as the notion of money in the industrial banking era grew to encompass savings accounts, money market funds, etc (M1, M2, M3, etc). As this line blurs other types of certificates will also become more liquid and will begin to act like money. Ultimately the line will blur completely and everything will just be investments with varying degrees of liquidity.

  27. mikeriddell62 says:

    Please check out http://www.hometownplus.co.uk. Our pilot project in Wigan went live today.

    it’s an incentives scheme that is cause related and which uses time as a currency.

    @mikeriddell62

  28. Sebastien Paquet says:

    I wonder what can be inferred from the rapid uptake of transferrable cell phone minutes as an alternative currency in Africa. These are basically gift certificates with easy-to-understand value issued by a non-bank entity.

    The uptake over there was probably accelerated by the general lack of money among the population – this currency was competing against non-use rather than an available currency.

    This is why I suspect the former middle class is a prime target for adopting this kind of currency in the Western world, as their access to credit is being exhausted.

    I don’t know about you, and maybe someone articulated this up-thread and I’m just rephrasing, but as I think about this, I see a pretty definite split between three broad classes:

    1- what I would call “down-to-earth” currency, that a layman can translate quite readily and unambiguously to some quite tangible good like food or fuel, and whose issuance should be limited and whose value is (ideally) pretty well protected against runaway inflation;

    2- group/crowdfunding-style, “speculative/innovative” currency, which basically represents for the holder a bet on some person or collective creating something awesome, and ending up owning part of it if the project is successful;

    3- appreciation/gratitude currency, whose issuance is unlimited and renders flows of acknowledged value visible. (hyperlinks fall into this category)

    I could see myself using all three types of currency in different contexts, and I suspects types 2 and 3 are easiest to grow right now, in what is effectively an early adopter environment.

    Does that make any sense?

  29. Kurt Laitner says:

    I’d like to play along with Sebastian, though I think simplicity is being traded for comprehensiveness, it is an excellent place to start.

    Would propose we have a currency for every common scarce commodity, Sebastian has started an excellent list, food, fuel – though the currency should be exchangeable directly for a quantity of the commodity, then no inflation problems. Gas is easy, litres of gas. In the case of food, to reduce complexity, let’s instead of having apple currency and bread currency, use a non inflating monetary unit (this is a very relative thing, so maybe we should just set it at 2010 beer prices on major national brands – I haven’t studied the long term stability of say bread in beers, but for the most part I’m guessing it is stable, this may be less so for apples in beers but I’m having fun, and reserve the right to be a little irresponsible). There are of course other commodities, cell phone minutes (not inflatable, a minute is a minute, even if it now costs $1000). Do this for pretty much every item on an average monthly bank/cc statement of a member of your society and you have a list. I am deliberately vague with ‘society’ as nation isn’t quite right (Canadian and American banks statements are likely fairly similar, as perhaps Germany and France, but perhaps all four not so much). Whatever shortlist you come up with you denominate in non inflating terms and find a way to represent them and transfer them (I suggest computers). We also need to ensure the tangible commodity is available in the appropriate amount, or that we have perfectly hedged against inflation in (local) dollars in some other way. I vote for Greg to handle this one.

    This is a huge start. I can now pay Sebastian in litres of gas for some work he does. If he doesn’t need gas he gives them to Greg for something Greg does for him. When someone wants the gas they go to the gas station and buy 10 liters of gas (gallons for you us folks, sorry) with your ’10 liters of gas coupon’.

    If we could only get the issuers of stored value cards to issue them in kind rather than in currency values, issue them electronically, and make them transferable (ok let them take a transfer fee to pay for the infrastructure, fine). Given the coming hyperinflationary apocalypse, the timing for stored value cards indexed to inflation couldn’t be better. Now why can’t wall street come up with USEFUL complex derivative products like that instead of the crap they’ve been peddling.

    OK that was not too bad, now number 2. Sounds like equity to me. Easy to track, old school corp law holds, only problem is that equity needs to be reassigned fluidly in real time based on everyone’s contribution, including money, coke, chips, and awesomeness. Then when your (would’ve been opensource or kickstarter and nobody gets paid even if you make awesomeness by definition and that sucks) now *net project gets cashed out in the IPO to end all IPO’s (possibly literally) everyone gets paid according to their real time equity position, courtesy of the value equation behind the project. That’d be *net. Shouldn’t take more than 10 years.

    Appreciation currency, number 3, is already done, just not very well, and not linked to harder values, which it certainly is in real life. If I have a reputation for being a kick ass fund manager, I get paid more. If you have a reputation as a kick ass social media guru and you want to come into a *net project to build *net, I am betting the equation is tuned to reward you for that (ie screw time banks, your time is worth more than mine). As the kick ass fund manager I may throw what I have, money, at the project for say 20% up front equity. Tomorrow, if I do nothing else and everybody on the project is busy cooking up awesome-ness, it’s worth 19% of a bigger pie and is worth more in real $’s (hopefully, inflation adjusted).

    I actually believe 2&3 belong together, even though 3 is being done by itself right now.

    Enough fun though, this is actually very difficult in practice, and I have to still do a real job, which means I have no time for it. Pity, really.

  30. Gregory Rader says:

    @sebpaquet We might want to add a fourth category to those that you propose. I see two fundamental axes of differentiation – scalability and degree of objective or transparent value. Scalability is primarily a function of the efficiency of the trading infrastructure and the standardization or fungability of the currency. Degree of objective or transparent value is a function the ease with which a user can intuit the value of the currency. Combining the two gives us four quadrants…

    What you call “down to earth” currencies would fit into the first quadrant. This category would also describe what I referred to as “monetary” currencies in my previous post, because they function like the money that we are all accustomed to using. Some might argue that the value of a “fiat” dollar is not objective or transparent at all, and on a technical level this may be true, but as a practical matter the value of a dollar can be intuited quite easily from the prices all around us. Cell phone minutes and gift certificates would fit neatly this category given that their value is highly fungible, assuming an efficient infrastructure for trading.

    (skipping #2 for the moment)Your third category could be described as scalable but not objective or transparent. Digital artifacts of appreciation scale quite easily and their value is highly fungible in the sense that they account for all users according to consistent rules. The value that these scores represent however is far from obvious. Because exchanges are asymmetric it is impossible to determine an agreed upon market value.

    That leaves us with two categories: (not scalable + objective/transparent) and (not scalable + non-objective). Non scalable + non-objective may initially sound useless but this actually describes our non-digital social relations quite well. This is the category that contains reciprocity, favors, reputation within a community or social circle, etc. Our mental accounting of these activities does not scale well beyond a relatively small group of personal acquaintences and the value of such things is quite difficult to determine. Nonetheless, being well regarded in ones community certainly does have value.

    Not Scalable + Objective/Transparent would describe systems like the one Mark is proposing. The value of a given security is clearly defined however widespread use would be limited due to complexity involved in trading numerous unique (non-fungible) assets. This is analogous to how investments function today. Investment securities tend not to be used as a transaction tool, despite the fact that their market values are well defined, because of the complexity involved in managing an investment account of numerous securities with volatile valuations. These securities therefore function better as stores of value that are thoroughly planned. I could imagine Mark’s proposed system filling a similar niche – securities would be created primarily to serve primary funding needs…once created they might be tradable on a secondary market but owners would prefer when possible to thoroughly plan their holdings and transact in other mediums.

    Returning then to your second category, these currencies might find various niches between the extremes depending on their implementation. The larger the group or platform, the more a given currency positions itself towards scalability. The more convertible or transactable the more a given currency positions itself towards the objective/transparent end of the spectrum.

    I will have to develop this further in a future post with examples. Anyone know of any easy infographic tools?

  31. Kurt Laitner says:

    When you mention objective value, it makes me think of Michael J Pastor’s (Jungian) Room with Four Views – another useful perspective on the conversation as we are talking about groups of people interacting with each other in a space exchanging value, and perspectives matter – see http://internetpsyche.blogspot.com/2008/07/room-with-four-views.html – he outlines this in detail but my main takeaway is that the pursuit of objective views is only one piece of the puzzle, with the intersubjective view becoming more important as we have the capacity to represent it. This tends in a way toward Mark and Gillaume`s view of the subjectivity of personal currencies building an intersubjective view of value. The pursuit of objectivity in currency depersonalizes it, this abstraction of course has its uses as a universal medium, and the ultimate averaging function.

  32. Sebastien Paquet says:

    Yeah, I believe that in times of high uncertainty objective value tends to vanish, leaving only subjective and intersubjective views to fall back on. Everyone is effectively betting on their personal set of assumptions regarding what will happen next, who and what can be trusted, etc.

    Greg: http://www.quora.com/How-do-you-create-infographics-What-tools-do-you-need?

  33. Sebastien Paquet says:

    Just to stimulate our imaginations a bit more, here’s a potential deployment scenario.

    1. A number of people manage to build enough trust among themselves to get involved together in a public good-type project. Group members are effectively making a bet on themselves.

    2. They build a rudimentary appreciation currency game around the project, in order to give each other feedback and reward contribution.

    3. The project produces an impactful result and earns some recognition in a wider circle. Project contributors get a slice of the “fame pie”.

    4. The appreciation currency mechanics are adopted by other projects.

    5. A metaproject is initiated, using the same kind of currency, but operating at a federated level. Projects themselves, rather than individuals, begin receiving and granting appreciation currency. Now we move towards the intersubjective level, as groups begin to explicitly value each other and gratitude flows begin to reflect aggregated valuations.

    6. Not sure what happens next, but there’s got to be a path from there on to free beer for acknowledged contributors, somehow…. I don’t know how to articulate it better yet, but my hunch is that the prescience of creative groups will eventually be valued by the man on the street as he begins to feel a pressing need for trustworthy guidance.

    Fundamentally, I think it’s all about growing resilient chains of trust throughout society.

  34. Kurt Laitner says:

    Sebastian, it sounds like you are speaking of what david hales and ryan from rypple speak of re chains of trust being the streambed for flows of exchanges to travel over, one small problem with their theory, trust is not 100% transitive a trusts b, b trusts c, does not imply a trusts c, at least not 100% and this is contextual, as i may trust my friend filip to recommend an investment manager, but not a programmer, and if he gave me a bum steer on a plumber, no more trade reccs from him, even though i still trust him with my life – as for the great project, count me in, the people around this right now are a hell of a crew

  35. Gregory Rader says:

    One quick point of clarification on “objective value”…I need to distinguish the meaning of this comment in the context of a medium of exchange from the meaning in the context of a store of value.

    I interpret your comments in a store of value context…in the long run I agree that nothing is objective. The currencies I referred to as monetary, Seb’s category 1, can not be relied upon to maintain their value in the long run any more than anything else. And, given that value is defined as relative to other sources of value, to claim that any one has “objective” value in this sense would simply be an arbitrary convention.

    However, in the context of a medium of exchange this analysis changes. What I mean in this context is how easily the user can understand the “values” for which a given currency can be redeemed in the short run. For example, it is very unclear what a reputation score or a follower count can be redeemed for…these things clearly have value but that value is not transparent or consistent. On the other hand, it is very obvious what $1 will buy you today.

    In the alternative space we might have securities like those Mark describes that have very clearly defined redemption conditions. We might also have systems like “quid” on theSuperFluid platform that might fluctuate in percieved value in the short term based on the specific offerings available on the platform on a given day.

    I don’t mean to suggest that anything has an objective value in a philosophically absolute sense, just that “redeemability” can be defined more or less objectively/transparently.

    Kurt, I will have to follow up after checking out the link you posted…

  36. Openworld says:

    Greg and all,

    Recently, I came across a remarkable ContactSummit Google Groups comment by @devinbalkind, a principal of the Saparis Foundation and the Beex crowdfunding site.

    In it, Devin mentioned that a related FLO Farm venture — a 200+ acre intentional community – is looking into alternative currencies.

    >>[Devin] Our group is going to start experimenting with land-backed currencies denominated in acre-months

    This was the trigger for my my gift-of-time offer (http://j.mp/fUDuUp ) a few hours ago at Beex , given my hope such currency innovations will gain traction.

    I posted a response in the ContactSummit group to Devin’s comment. Below are highlights on the possible convergence of land-backed currencies with time-based service offers.

    Look forward to your thoughts and to continuing the conversation!

    Best,

    Mark
    @openworld

    ======== my ContactSummit response to @devinbalkind ==========

    >>It’s geat to hear that you’re exploring land-backed currencies for social ends! One of my main interests at Openworld (http://openworld.com) has been on land value capture funding for services in free economic zones.

    >>Here are a few thoughts on land-backed currencies, time-based personal currencies, and how they might converge via a “flex” conversion offer.

    >>1. Land backed currencies

    >>Hong Kong and Singapore have decades of experience using auctions and tenders for leasing out publicly-owned lands to generate revenues for public goods. In Hong Kong’s case, this generated US$ 70+ billion in a recent 30 year period. On a smaller scale, individual owners – or resilient communities holding land in common – could issue time-acre shares as you suggest, and put these up for online auction. The real estate arenas of EBay and other auction sites could be used for this
    purpose.

    >>2. Time-based currencies

    >>As @rushkoff suggested in his Radical Abundance keynote at the 2009 O’Reilly Conference, individuals can also issue time-based currencies. Comment 1 at http://j.mp/ahEtkD — and a thread on cell phone-based personal currencies at http://j.mp/99kak1 — explore how spot auctions of time offers might work for this.

    >>More recently, a convo sparked by a @venessamiemis post ( http://j.mp/eOS7jH ) mapped an opportunity for individual issuers of time-based offers to pool them in payment for education, without recourse to taxation.

    >>3. A ‘Flex’ conversion option: time-acres or time-based services

    >>The above elements could work together in intentional communities such as Flo Farm. This could be done by building on a currency innovation introduced by Cincinnati’s “Time Store” ( http://j.mp/atmfDp ).

    >>In the early 1800s, members of the Time Store used time-based personal currencies with a difference — they could be converted by a recipient into something tangible. As you’ll see in the above Wikipedia link, the person who issued the depicted Time Store personal currency note offered three hours of his carpentry services — _or_ 12 bushels of corn.

    >>In the case of a community such as Flo Farm, the innovation might be for residents, as individuals or as groups, to issue currencies redeemable in the form of (auctionable by the recipient) indicated time-based services, or a specified amount (also auctionable by the recipient) time-acres.

    >>The issuers of the note could also set terms and conditions regarding the use of the services or properties, to ensure that the recipient hewed to a given code of conduct and agreed to a given arbitration system in the event of a dispute.

    • Mark, thanks for sharing this. As you well know, I am very interested in these transition points between the old models and new models…from transactional models to abundance models. One of the problems we run into at these transition points is applying abundance logic to scarce goods and vice versa.

      When it comes to exchanging abundant resources I think we are very open to asymmetry. I am more than happy to share your content, Like or RT or simply recommend your ideas because these “gifts” are abundant. They don’t cost me anything, and in fact giving them away liberally benefits me, so long as I don’t use them frivolously and create noise.

      However, when asking for money, whether payment or donations, we are dealing in scarce resources and in that situation I think the logic changes somewhat. When we exchange scarce resources we expect something tangible in return; even if that something is simply good feelings or whatever…we still want to be able to make the direct connection – $x donation created X impact.

      So in this case I want to know why Sarapis needs the money…what is it going to be used for specifically? I would also like to see them somehow accept your offer and tell us what your donated research time will be committed to, and what outcomes that will lead to. One reason why the Kickstarter model works so well is that it creates so much transparency. Donations go to specific projects with specific impacts and/or deliverables instead of going into big black-hole foundations.

      I did notice your note about Vanessa and Doug acting as “arbitrators”, which is definitely an innovative step in the right direction.

      Hope you find this helpful, or at least worth pondering ;)
      Greg

  37. Quora says:

    Who are some insightful, currently active bloggers who think about new currencies and economies?…

    Arthur Brock, Eric Harris-Braun and Alan Rosenblith on New Currency Frontiers: http://blog.newcurrencyfrontiers.com/ Webisteme: http://www.webisteme.com Alan Rosenblith on the Symbionomics blog: http://alanrosenblith.blogspot.com symbionomics.com Grego…

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