Posts tagged ‘alternative currency’

Funny Money

by Heather Moore

A recent survey of the landscape of economic-themed comics revealed some gems.

I’ve been a longtime fan of xkcd and this time Randall poses his take on alternative currency and cultural memes:

(The tooltip reveals a nod to 4chan.) on the possible origins of Craigslist:
Married To The Sea

On exchange:

and finally this quite interesting anonymously posted primer on subprime loans:

The Subprime Primer

Areas of possible interest in designing new scenarios - my stab

by Irene Cassarino

Thank you Nicolas for your proposal!!

As I promised, this is my stab: I tried to include some of Nicolas’ hints, althought something is different. I do hope differences will feed the discussion!

1. Drivers for potential change

Is there any? which one? in which direction will it/they likely lead us?

What about reactionary forces that could hamper the change/ run against it?

Are some of us, in a sense, already in the future?

Do we really have to care about the change trajectory from now to them or should we be bolder and assume that the money will disappear and everything will be totally different from now, like starting from scratch?

2. Parameters of the 2015 model

What will people exchange with what?
What will the relationship/ exchange rate be between physical and non physical goods? How will the pattern of them change our perception / usage?

Will there be any difference on how we will relate with that model due to gender/age/political view/geography/previous economical path…

Will there by a global currency or a multitude of local ones? In the second case how will the multiplicity/liquidity of them be managed among communities?

Will we have a ‘cost of labour’ in 2015?

Will current distortions in the accumulation mechanism be solved, normalized, humanized… whatsoever?

Will there be actually a new form of value accumulation into capital? Through what? How will we keep it? What will be the dynamic of it over time?

Will accumulation be collective or individual?

What about devaluation? And scarcity?

What will be the new drivers of humanity growth/innovation?

3. Macro implications

How will political/social/financial powers find a new balance (if any, if sustainable…)?

Regulation / Control / Justice : who/what will control the new values and in what terms?

4. Micro implications

Try to imagine the 2015 man/woman/child/retired/wrongdoer… in their day life

5. Technology

Which is the role/weight of technology in all that? And of technology providers (link to area 3)

Hot issues / tweet list:

Physical vs digital goods
Single - global vs Multiple - local
Technology / Communication

Issues summary - Common patterns for 2015

by Nicolas Nova

Carefully perusing all the different questions we’ve put on the table this week, I tried to find a commond thread, or at least a common set of issues that our group is interested in.

  1. The unique currency issue: there is so far no global, or unique, currency, the issue of having a new one has been discussed in the contributions by Bruce or Josh. One of the question is therefore: can there be a new and unique currency? This topic also applied, as Josh mentioned, to social currencies which are even more fragmented than money currencies. And Bruce’s point about tipping points between financial power and social power also touches upon this issue.
  2. The advent of experimental forms of value exchange: the current financial turmoil can be a driver for change: either for a global currency (or first more regulated markets) OR experimental exchange of value.
    1. Experimental forms of value exchange: what sort of shapes can correspond to that? Is it about bartering as I explained in my first blogpost? Is about what Régine described in her post concerning Platoniq’s free knowledge market?
    2. Role of communities in this experimental exchange: can there be a new model of transmission/free exchange based on self-training communities? How the fragmentation and friction between religious, cultural and ethnic communities will influence the spread of new forms of exchange? Will it stays among certain communities or spread across groups?
    3. How do we call these new forms of exchange: freemarket knowledge? kashklash? …
  3. The economic aspect of new forms of exchange: how value will be regulated in this new context? what about fungibility? How does the relativity of value (based on their culture, their geographical location or other factors) will influence the transaction between groups? within the groups?
  4. What about technology? A corollary issue to all of this corresponds to the role of technology is the process: do we have tools to support these new forms of exchange? How can the history of interactions (or location) be helpful (or problematic) here? Who can propel them? What about control and privacy? Or can specific technologies (such as AI) be relevant for regulating social currencies (the tendency of public opinion for personal gain that Josh mentioned)
  5. Of course, this is just the common pattern I noticed in all the blogposts we’ve produced, perhaps there’s more ;)

Future Fungible - Multiplicity or Singularity?

by Joshua Klein

The biggest concern for me in facing 2015’s currency issues is that of proliferation - I can barely manage the multiplicity of social currencies I have now. I shudder to think how it would be if I were to find an order of magnitude more limited-platform transactable commodities I had to trade in order to realize their value.

How would we manage, or fail to manage, multiple currencies whose value is in many cases unregulated and only socially restricted? Will cross-platform transactions be available only on a case-by-case basis? Will currencies have all the vague value implications of favors?

What’s more, how will these massively multiplayer economies resist all the pitfalls of classic economies? Will World of Warcraft suddenly go bankrupt due to Second Life land loans? Can a nation state bail out a reality shard? Can IRC serve as a guarentor for an RSS feed?

[This graphics is built through service and property of IBM.]

When value becomes intrinsicly relative to a social group that is porous, both geographically and psychologically, what does that mean for the ability of the group to transact? Is a commodity only as good as its owner? Is reputation the gold standard of interactivity and trust? If so, what does that mean for online smear campaigns and the future liquidity of the digitally aged?

On the other hand, as we saw in the scip currencies of old Austria, perhaps living off a currency that is only as good as your last blog post will prompt better human relations. Right now hard federal currencies are embroidered with mores that gift them their true value - dollars are only as good as your banker, as Iceland recently learned. If reputation economies take an upper hand in measuring the worth of your word as mitigated by quantifiable computer systems, perhaps we can live and die by more than google.

This multiverse view expects that the rapid fluidity will exceed human capacity for mass manipulation and exploitation, which might also be folly. Will AI emerge that can manage the tender mercies of public opinion for personal gain? Will spamfarms move over to subtle, innocuous posts across the blogosphere which serve to tank certain currencies and bolster others? Will the resistance of a currency to devaluation increase its net worth, and hence its scarcity?

Or will we all be bound into a single, universal currency - one ring to rule them all - in order to facilitate commerce, legal or otherwise?

Starting from scratch

by Heather Moore

This is a thought exercise:

Imagine waking up in 2015 and all money has disappeared. All cash, credit cards and forms of currency, gone. Stock markets, kaput. A world without money.

What’s more, you can’t even remember that it had existed or that it had been important to you or the world.

All you have is yourself and the people and ideas you value. You have your unique combination of history, talent, skills and creativity. Your understanding of the world based on your DNA, your upbringing, your geographic location and your influences. You have your thoughts, ideas, perceptions, sensory experiences.  And you have the need to process, share, express and inspire.

Then imagine people coming together to solve problems with nothing but this, and with no prior knowledge of what exchange used to be.

Would you think in terms of what you need or what you can share? Would you exchange or contribute?

If you were to offer something to exchange, what would it be? How do you conduct this exchange? How is value established, among individuals? Among communities?

How might you set up an exchange that leverages everyone’s talents, creativity, perspectives and passions? How would you form groups? How would you solve problems?

And how might you prepare now for this future?

[Note: This is meant to be a thought exercise to explore omission, and inspired by one of John Maeda's Laws of Simplicity: 'Simplicity is about subtracting the obvious, and adding the meaningful.']

Some questions

by Nicolas Nova

One of the most important point in the picture I sketched in my other post is the cultural and geographical fragmentation of communities. Based mostly on ethnic and religious segmentation, this phenomena will be an acute driver of change. Why is that? simply because people from the same culture will be scattered in different countries, cities and continent; because these cultures will have trouble cohabiting with each others in the local; because these diaspora will stay connected all around the world, etc. What this means practically is that “friction and connection” are definitely interesting keywords to describe the near future (2015 is the near future right?). Frictions between different cultures who may fight against each others on one hand, and connections between people within the same diaspora (but geographically dispersed) or between cultures who may learn from each other.

Frictions and connections actually set up the scene for imagining issues regarding value exchange as they show the underlying factors that can explain the near future. The tension between the local and the global is also an interesting couple of factor.

[This graphics is built through service and property of IBM.]

A list of questions I am thinking about sitting at the airport in Geneva:

Will these communities stop using regular currency such as dollar-euro-yen-yuan-… and use their own currency?

Will Hawala spread out of the islamic world to other communities? Which, back tot he factors I delineated above corresponds to ask whether the local connections between different in big cities communities may lead to the spread of a value system from one culture to another. Will technology-based currencies (M-Pesa) spread from developing countries to the developed world?

Will there be a growing bartering/micro-tasks platforms (such as the one I described in my post last week)?  Who will it serve? Will it be limited to specific communities? Will it be limited to techno-geeks?

Will be bartering be limited to obscure communities? Will current currencies be only used by the developed world? Or will the situation be more complicated with currencies to support legal transactions and bartering to support non-legal ones?

Which forms bartering systems can take? Will mobile and location-based applications will enable bartering process? Is this view too technology-centric and eventually only local population would manage to barter services and goods?

What would be the consequence of having more and more bartering systems? How would States react?

What about the inter-relationships between the digital and the physical? Would I be able to trade my google history against a free access to the local foodstore (which would actually correspond to a huge hydroponic plant connected to a server farm that provide enough energy to grow apples and cherries in winter?)

If my on-line material (history of interaction uploaded pictures, mass amount of emails, google docs and communications such as tweets and blogposts) is intrinsically valued, the ones who host them act like a bank. Who’s going to be such “bank”: mobile phone carriers? search engines? internet providers? internet hosts? what sorts of other services will they eventually propose?

Will there be some “esperanto“-like transaction system? a group of people/country/institutions tired with the tyranny of the euro-dollar which will propose its own attempt to replace them by a more valuable and user-centric money? Possibly by developing countries who both manage to have enough economical resources and intellectual workers to set this up around 2010 after the big subprime crisis? I find this scenario intriguing and may expand it a bit later on, especially because esperanto is close to “desperanto” (desperate) and I can quickly imagine the failure of the high expectations people would put in an esperanto-like transaction system.

KashKlash 2015 A.D

by Bruce Sterling

KashKlash 2015 A.D

Is there any global currency?  The euro?  The amero?  The globo? What?

Is there any national currency powerful and influential enough to behave
rather like a global currency?  Dollar, pound, yen, yuan, euro, ruble, rupee?

Is there financial turmoil so severe that experimental kash-klash services
look attractive and inviting by comparison to the older status quo?

What happens if conventional financial systems are hyperinflating, deflating,
crashing in value or radically destabilized?
  Does a status quo even exist in future?
How do people live without any financial status quo?

What does a “closed currency,” or a nonconvertible currency, look like
five or six years from now?  Are wealthy people avoiding these locked currencies,
or running toward them so as to escape the scary, unstable, open global markets?

How can I get rid of my old-fashioned, burdensome, physical possessions,
and directly strengthen my important social networks online?  Can I trade my used living room couch for more Google juice?  Can I give away a camera and get more people to look at my FlickR photos?
Can I offer food and shelter to the people who help me play my online games effectively?

Can I be “more kash-klash” and “less kash-klash”?  Can I be rightwing kashklash and leftwing kashklash?  Do men and women have different kashklash styles?  How about ethnicity, age,
postal code and religion?  Where are the demographic kashklash segments? I certainly want to be in the nicest ones, if you don’t mind.

Where are the tipping points between financial power and social power?
Is it easier to be famous and to get mere money, or to be rich and just buy myself some cheap fame?

Can I get political figures elected to office without giving them huge chunks of political campaign money?  Can I move my political party into a kash-klash space?   If I can’t do that for a fancy US President, can I at least do it for my local mayor?

If I happen to be near an important event, will somebody pay me to stand there with my cameraphone waiting for something interesting to happen?  Is my position on the planet’s surface worth some kashklash?

I just got here off the train or plane. I need a cup of coffee, a shower and a place to sleep.
I don’t care who gives this vital thing to me.  I can pay for these useful services in any of 130 different ways, or not pay at all.  Who wants to talk to me? Now. Hurry.

I’m very old and tired here in the future.  Can I retire into a kash-klash? Who will look after me?  How?  I’m confused.  Can you help?  Keep helping, I’m getting older fast.  Also, there are many millions of me.

How do I rob a kashklash “bank”?

I want to put every valuable thing that I own, safely, into my beloved kashklash.  How do I do that?  I don’t care if it’s “real” or “virtual“, but I do need a safe-deposit vault.

I’m very scared by this highly insecure future that is so direly threatened by terrorists, climate change, landslides, wildfires, earthquakes, feminists, epidemics, liberals, etc.  Normally I lug around my cumbersome “survivalist bag” full of bandages, food, water, compasses, handguns, big gold bars and so forth.
Now my back really hurts from lifting all that, so I think I should have a kashklash instead.  Can you handle this for me?

Access to all my favorite items are stored in a kashklash vault.  An enemy tank just ran over my kashklash cellphone.  Now what?

I have a kashklash in one pocket for all my network services. I also have a steel multitool and fancy keychain in my other pocket for all my analog services. Can I combine these, please?  It annoys me to carry so much  tech junk that I need big ugly clownlike cargo pants.

I’m really and sincerely evil, and would like to break all Ten Commandments with my kashklash, starting with murdering some people.  Can you help me? Failing that, can you stop me?

Here in the future, I’m not worried about the past any more.  I made my peace with the past because I buried it.  Instead of just selling me some future, can you offer me an open road toward MORE future? How am I supposed to get from 2015 toward 2105?  Show me.

bruno a.

The last recession brought us punk. As much as I like The Clash, I hope this one will be kinder to music

by Régine Debatty

by Régine Debatty

cd cover
It is particularly challenging to be asked to reflect on the future of currency and economy in a time when credit crunch is expected to bloom into a full-scale recession. The financial crisis is going to have many consequences I’d rather not think about right now. But from what I can observe, the alarming forecasts are dividing the population into two main groups. A vast majority believes that they should try and understand the difference between a credit card and a debit card, cut out the coupons that will get them a fifth sausage for the price of four at the butcher counter and brace themselves for better times to come back. Then there are the others, those who believe that the crisis is a sign that the economic models we used to thrive on are leaking from all sides and that instead of trying to patch up the haemorrhage as best as we can, we should just accept that the system is fucked up and time has come to look around us for alternatives.

The so-called ‘developing countries’ haven’t waited for the credit crunch, banking bail-out plans and other crumbling down of the markets to come up with models we might want to reflect upon.

Take Brazil, a country famed for the way most of its 180 million inhabitants thrive on music. Yet, last year Sony/BMG released only a dozen new compact discs, a ridiculous number for such a succulent market.  So where has the Brazilian music gone?

The answer is easy and almost obvious: the music scene is out there in the street, outside the distribution systems sternly controlled by the major labels. Its most celebrated offspring is the tecnobrega a style of music born in Belém a city of 1,500,000 inhabitants located in the northern part of the country. The name comes from the ’80s techno music beats and from ‘brega’, which could be translated as ‘kitsch’ and ‘cheesy.’ Tecnobrega churns out about 400 new CDs and 100 new DVDs every year. None of them can be bought in stores.

Let’s leave aside the music itself and explore the business model that underpins it. The adventure typically starts in the studio of the music producer. The studio is often a small room with a computer and a few affordable pieces of equipment. Musicians are invited to come in, record their tune and that’s it for now. This music is delivered to street vendors, the kind who’d sell a pirated copy of a Hollywood blockbuster for a few dollars. They are in charge of replicating the CD and selling them to passersby. The vendors keep all the money for themselves.

But the street vendors have an important role: they act as promoters of the music, they advertise it, and the more CDs they sell, the more popular a tune becomes. In parallel, vans and bicycles carrying huge speakers broadcast the music as they drive through a neighbourhood.

Now the way musicians make money is by giving concerts and performances. The most popular artists attract tens of thousands of fans who not only will pay a modest fee to attend the ’soundsystem’ party, but will also want to remember the event by buying another CD of the band. It’s a different CD. This one is recorded during the show, is ‘legitimate’ and sold at the exit. To make it even more attractive, the musicians will greet the audience during their performance, shouting the name of the neighbourhoods in the area. The CD people buy at the exit has then gained some sentimental value.

Would tecnobrega musicians swap this business model for an ‘official’ one?
Not necessarily. The concerts of the most popular band in Brazil Banda Calypso attract hundreds of thousands of fans. Which of course makes them extremely appealing to the music industry. Alas for them Banda Calypso systematically refuses any offer, convinced as they are that the tecnobrega model is far more lucrative and flexible for musicians.

Further readings:

La cultura después de la piratería , by Jose Luis de Vicente.
Estrelas de Belém , by Vladimir Cunha.
Tecnobrega: A música paralela , by Hermano Vianna.
We Pledge Allegiance to the Penguin , by Julian Dibbell.
Brazil’s two music industries , by Sam Howard.

And a video: Good Copy, Bad Copy.

The near future of on-line bartering

by Nicolas Nova

by Nicolas Nova

The reason I enjoy reading science-fiction is not because it features MIT-inspired and glossy technological devices a la Minority Report. Instead, it’s how this genre enables the discussion of the implications of change, be they technological or sociological. For instance, to get back to the topic at hand - the future of value exchange. I find it less intriguing to observe the über geek representation of digital devices that may replace tangible coins than looking at what shape relationships between people would take.

If you read Charles Stross’ Accelerando , you would find a curious character called Manfred, who is supposedly at the “peak of his profession”. Half consultant, half spin-doctor, he delivers ideas and insights to others, who subsequently turn them into loads of money. However, as seen in the novel, Manfred is not paid with cash. The model is very different: essentially coming up with whacky but workable ideas and giving them to people who will make fortunes with them. He does this for free, gratis. In return, he has virtual immunity from the tyranny of cash; money is a symptom of poverty, after all, and Manfred never has to pay for anything. (…) The Internal Revenue Service is continuously investigating him because it doesn’t believe his lifestyle can exist without racketeering.

In design, we would call this person an “extreme user” because that character’s non-revenue model may clearly be unique and limited. Nevertheless, it offers us an interesting extreme case of value exchange. What is important here is not to take Manfred’s job as the sort of activities a normal human would do but rather to think about his business model (or perhaps one should say his life model). Therefore, let’s call Manfred an extreme user of the future. His walk of life is meaningful because of the underlying mechanisms that could be applicable for a more general group of people. We can look at him as a way to provide insights regarding human interests and desires, relevant for foresight outcomes.

What does the “Manfred case” mean for the future of value exchange? Simply, he represents how certain people could live: by trading services instead of cash. While Manfred trades potentially rewarding business ideas against a hotel room and a fresh toothbrush, others could simply barter a bit of help with gardening and get some fresh fruit or vegetables in return. This model is actually not so farfetched or futuristic: it currently exists. It’s called a local exchange trading system (LETS) but the French term is more intriguing. It’s called a SEL (meaning “système d’échange local”, system of local exchange), while “sel” in French also means salt.

I won’t enter into much detail about what the state has to say about that, nor will I try to depict how this reshuffles the notion of value. What I want to delineate here concerns what this would look like in a technologically-mediated environment. To some extent, I am thinking here of a sort of bartering platform where you can trade goods or services. What we need here is two things: a bartering platform and a service layer.

Bartering is the easy thing. Try to picture a second-hand objects marketplace such as eBay in which instead of paying you would offer to trade one or some of your belongings against the artefact you want to get in return. We’re close to that; the first brick of such platforms actually exists. Look for example at folkd or giventake , which offer debuting solutions for that matter. There is a whole ecosystem of modules (such as cclite or sweblets ) and software (xolimited , bartertrainer ) which support bartering mechanisms.

Additionally, we also have the service layer somewhere in the Web2.0 realm: Amazon Mechanical Turk or innocentive are two instances of platforms where you can offer your horsepower online and get something in return, generally money. Turk and innocentive are examples of a new kind of marketplace that enables a web-based program to co-ordinate the use of human resources to perform tasks which computers are unable to do. What we need to facilitate Manfred’s business model is basically a platform that hooks up such a service layer on top of a bartering system so that users can exchange their horsepower against goods or services.

The two examples I’ve chosen here are all but random: while the former is about micro-tasks, the latter is about collective work. Both have interesting characteristics that can serve as a model for a service-based bartering platform. Micro-tasks are indeed pertinent in a collective context because they can enable us to do small things multiplied by big numbers, which can lead to big influence.

Fungible currencies

by Joshua Klein

by Joshua Klein

Are digital economies going to be socio-local or geopolitical? Virtual economies are certainly being exploited by real-world ones; modern governments are concerned about online money-laundering, which is widespread and almost impossible to limit. The increase in pervasive mobile technologies means that geolocative relationships will be increasingly integrated into value chains that enter and exit existing (and monitor-able) economic systems, clouding identities and exacerbating the problem.

At the same time, these virtualized systems provide increased means to analyse, understand, and stabilize current established banking systems. For example, German economist Frank Westerhoff and colleagues have used agent models to build realistic markets on which they impose very small taxes on transactions in foreign exchange markets to help to reduce market volatility. They’ve found evidence that it works, but also that it has a surprising sensitivity to small aspects of market mechanics. This sort of analytic capability, when paired with well-monitored transaction tracking, could potentially help prevent catastrophes like the current sub-prime mortgage crisis in the U.S.

Then again, it could not. Virtually sociolocalized groups, like MySpace friends or Stickam clans, could instead keep their economies to themselves. If they kept the value of their currencies tied explicitly to the relationships they represent, then exchange would stay prohibitively expensive. You can’t buy a new house in Second Life with a sword in World of Warcraft unless you cash the latter out for dollars and they buy the former, and in both cases you’re violating the terms of the producers of the game.

On the other hand, if a globally available transaction API was made available to provide a market-balanced trading forum for virtualized goods, it may be possible to see the concept of “value” normalized across a global conglomeration of virtual worlds. If that happens, would the so-called “invisible hand” drive emergent economies? Could cause a drop in the price of Steel Boots in World of Warcraft? Would the discovery of a new world in Eve Online lead to a sudden flush of investment in MarioWorld Karts?

Right now these currencies are limited because they’re not fungible, but their ability to be transacted across systems is getting more and more likely. In fact, “virtualized” systems have historically used non-fungible currencies and interacted with monetized systems just fine. The example of the Hawala system is a good one, in which a reputation-based system builds on a base unit relationship to bring power to bear between strangers. This sort of authentication-based system, rather than one based on verified identity, has direct analogs to modern encryption and authentication systems used online today. Given that, it’s no great surprise to see similar reputation economics in places such as Wikipedia, Digg, MySpace, and others - or to imagine them expanding into (or over) monetized economies.

It’s not just reputation systems, either - explicit virtual economic systems are being increasingly subverted to suit the cultural groups who form their base. In World of Warcraft, “twinking,” or equipping a lower level character with high-powered weapons and armor, is a well-known permutation of the game. Once you’ve hit level 70, there’s nothing left to do but play the game differently or not play at all. At that point players have essentially “won,” but their investment in time and energy to master the skills to play the game well need to be applied differently if they’re to be enjoyed at all. Taken another way, once you’ve maxed out your character all you have to spend your hard-earned cash on is another character.

In the same way, Eve Online - which is a space-faring game essentially about trade - has its own economist to maintain a balance in the in-world economy, and even he observes that “the players themselves have actually created a lot of extra services, which allow them to earn income through in-direct game mechanics. … There are player-run banks that are being established, who provide financial services - people can even live off of the capital that these services earn.” Is Eve Online going to see virtual trust-fund babies exploiting new aspects of the existing economic system to achieve goals well outside the game’s intended industrialist growth? Is this sort of fractal capitalism leading to an integration of virtual to real currencies?

[This graphic is built through service and property of IBM.]

Either way it seems as though the tension in digital economies between sociological versus geopolitical forces is squaring off over the battle for fungibility and integration. Small culture groups are increasingly seeing real value in their virtual labors, and large-scale economic systems are finding it increasingly difficult to capitalize on same. Are these systems going to integrate through a wholesale, flat and unified system, or are they going to go scattershot into a future of radically disassociated economic relationships?