Digital Currency Feed

Turtling all the way down to 5 key questions

nicolas — 2008-10-30 20:20:09.934713

Reading all the content we have produced so far in the train, I am quite amazed by the richness of the material we have. It's a bit messy but that's how collaboration is generally made of. Given the schedule we have, I think it's important to shoot the questionnaire to secondary authors pretty soon. I am not sure whether we should wait for other refinements of issues. The most urgent is to agree on 5 key questions and shoot them over to the others. After browsing the material, we can for instance propose the following 5 key issues:

Driver for change: what factors, according to you, may change the way we exchange, buy, trade objects and services?
An ecosystem of currencies: what are the alternative currencies or exchange systems you foresee in the next 10 years? Think about experimental forms of exchange, the role of technologies.
What are the economic aspects of this? How do disparate groups exchange goods and services without a stabilized and intergroup fungible currency?
How different social scales will be impacted by this? How nation-states/communities/families/man/woman/kids will change?
What do you hope/desire for the future?

I tried to clean up and remove some elements (like the global currency which is unlikely, or the absence of currency) and went straight to the point in terms of the most important questions that came out from our discussion this week. The question may have to be reformulated but I do think they give a clear overview of what we talked about. The last bit (about people's desire) is important IMO as it aims at grasping secondary authors' personal impressions. I hope we can get a wide range of insights here. That being said, I wonder about the openness of the question. It's clearly more valuable to get some open answers but it will require more work on the part of the contacts.

KashKlash thoughts by Michele

tomislav — 2008-10-28 17:48:04.202261

Michele Visciola is a partner of Experientia, but is contributing these ideas as his personal contribution to the project.

I have some thoughts that I want to share with you after having read yours:

I believe that we will never get rid of money. Be realistic! Forget about virtual currency. We will keep living in the physical world in 2015. So let’s be real. A world with no currency would simply mean that we are regressing to a post-future era. A world without a reliable currency would mean the end of the history for all humanity. That has already been forecast several times; however, luckily enough, we are still debating about the future and I hope that in 2015 we will still be here armed with the willingness and desire to understand how to best deal with current challenges. Further, I also believe that we can easily imagine a world with one unique currency valid for everybody; but that would also imply an unrealistic scenario: a world where differences (such as origin, genre, class, education) have disappeared for ever and people can – e.g. - have the same opportunities everywhere, regardless of local economies. I am not a pessimistic guy, however I feel that achievements like this are out of reach for the next several decades.

I also believe that the main challenges we have to deal with today are dependent on two main tenets which are deep-rooted in our culture: first of all, our faith in limitless growth and, second, the regulations that allow the accumulation of unlimited resources in the hands of few, with no care for our general wellbeing. In western-like economies, we generally consume resources up to 9 times our capability to produce goods and new resources within the same timeframe. In fact, we consume vast amounts of energy to produce our goods and we throw things away even before the end of the normal life cycle they were designed for. We look at the future with no parsimony. We envisage an expanded future. We imagine our future to always contain more and more. To make that possible the legislators need to deregulate access to resources, and often ompletely obscure any reference to reality and to the wisdom of the past.

I very much like the idea that we as individuals act under the pressure of three kinds of forces: the social, the political and the financial. However, we need to be aware that at this precise moment the social and political forces are subordinate to financial power and its forces. I believe that this is mainly because financial power has been able to embody and enact the 2 tenets I was referring to above. It has done so with perseverance and persistency. Financial power has shown no limit in its fantasy and has been able to literally invent unlimited wealth, even if only virtual. These virtual riches are in the hands of few, their creators, and can literally destroy any social or political resistance to counteract or simply control them. What is worse, they can completely obfuscate any reference to the production of goods and services and further put at risk the reality of many innocent savers and other citizens.

We do not suffer a clash of currencies; indeed we are suffering a clash of risk cultures (Ulrich Beck – Conditio Humana). The creators of virtual wealth do not have the same risk culture that is at the basis of individual behavior. In fact, we as individuals are limited; our rationality is bounded, our actions are contextual and therefore restricted by the boundaries of the social and physical contexts. We make our decisions trying to reduce the amount of possible bad consequences. We do not behave to maximize our potential gains. Our behavior is fit only when it shows a clear understanding of the constraints of the situations we live in. We are normally able to assess the possible outcomes of our decisions and also determine to what extent we want to act riskily. In a virtual financial world there are no more physical (goods), nor social (rules) constraints. As a consequence, the related culture of risk will easily consider any perceived limitation as a barrier to the immediate profit of the few manipulators of huge flows of virtual cash.

So let me jump to the conclusions of my few observations: I feel that there is an urgency to reduce the power of financial forces. Will that be possible by making the manipulation of values through digital currencies more transparent? For instance, is there any opportunity to reduce the mediator role of financial institutions? How can digital currency improve the perception of artificial richness and make it vanish as soon as one institution or few individuals accumulate more than is physically conceivable?

I also believe that we need to put our faith in the limitless growth of our resources and values under serious scrutiny. How might digital currency limit the greed of the homo economicus? Is there something that we can imagine as a future scenario in which social pressure and forces get financial power into the right perspective? How can the creation of commons incrementally expand the number of people who can have access to produced values? What are the new services that might consistently increase our capability to improve our wealth without destroying values?

Areas of possible interest in designing new scenarios - my stab

irene — 2008-10-27 10:55:43.536581

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:

Accumulation
Liquidity
Reputation
Community
Scarcity
Devaluation
Demand
Offer
Information
Technology
Physical vs digital goods
Regulation
Single - global vs Multiple - local
Technology / Communication
Power
Knowledge

Issues summary - Common patterns for 2015

nicolas — 2008-10-24 14:50:04.745174

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.

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.
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.

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?
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?
How do we call these new forms of exchange: freemarket knowledge? kashklash? ...

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?
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)

Shall we refine the questions? You first

irene — 2008-10-23 17:27:01.147146

Hi guys,

wow, I'm amazed by the brainstorming here. You wrote such brillant pieces!!!

I can already see some common questions emerge, but I don't want to move faster than you and I wish you to take your stab first in the refinement step.

You can decide either to refine your own list of questions/areas of interest, or try to do the same with the all bunch of contributions.

If you prefer us to do a first and rough attempt in this direction (please tell us), so we will do. But only tomorrow evenig. Hurry up!;)

Cheers:)

The Bank of Common Knowledge

regine — 2008-10-23 09:31:49.575105

With the motto "taking the Internet to the streets" and inspired by the way the web works, Barcelona-based group Platoniq explores alternative models to distribute, shape and share information, knowledge and cultures. The models they propose are both innovative and built upon a tradition based on political, social and cultural movements that started thirty years ago. But while in the past such projects and structures were mostly the isolated doings of so-called anarchists, punks, and evangelists of 'skillshares', nowadays they are connecting local structures and processes with global dynamics and networks.

Platoniq gained world fame when they launched Burn Station , a mobile self-service system for searching, listening to and copying music and audio files with no charge. Legally and under a Copyleft Licence. Launched in 2003, Burn Station has met with an enormous and worldwide success. Its system and structure has been autonomously reproduced in schools, social centers, libraries and universities in Europe and South America, demonstrating its value as an educational tool.

Video documentation of Burn Station.

Platoniq's latest endeavour is the Bank of Common Knowledge , a lab platform that engages with new ways of enhancing the distribution channels for practical and informal knowledge. Stephen Downes believes that : The greatest non-technical issue is the mindset. We have to view information as a flow rather than as a thing. Online learning is a flow. It's like electricity or water. It's there, it's available and it flows. It's not stuff you collect....

Could the same philosophy apply to the knowledge that does not flow in the digital space?

The Bank of Common Knowledge exports the dynamics of Free Culture and the Copyleft philosophy to processes of knowledge generation and transmission among citizens.

The contents generated are Copyleft, and can be copied, redistributed or modified freely. Based on the organization of meetings among citizens, the Bank of Common Knowledge experiments with new forms of production, learning and citizen participation.

For more details check the video presentation.

Platoniq has organized several free knowledge markets over the past two years. As a member of Platoniq recently explained me, their activities cover an extensive range of topics: The Bank of Common Knowledge Markets are made possible through the offers and requests that BCK receives from citizens: How does a consumer cooperative function?, How can i share wifi with my neighbours?, Is it possible to earn money through collaboration instead of competition?, Is it possible to unfreeze patent-protected scientific knowledge? What can we learn from traditional cultures in the economic context? How can we regularize immigration documents in Spain? How can we set up a wiki without computer?

The exchanges generated during the activities are recorded and published online under a copyleft license in order to guarantee that knowledge keep on circulating.

Video of the Cambridge's market

Video of the Lisbon edition.

In order to make BCK truly public (in the sense that its appeal should go beyond the usual copyleft and the free culture crowd), Platoniq is testing various knowledge transmission and communication formats, such as games, demos, workshops, first person experiences, challenges, first aid kits or take away theory. These activities are documented in a set of video manuals or knowledge capsules produced for inclusion in the Bank of Common Knowledge.

The main goal of the project is not to build an online video archive, even if that would end up being one of the consequences , says Platoniq. The real challenge for the Bank of Common Knowledge is to build a model of transmission and free exchange whose social organization and self-training strategies can be easily replicated.

Future Fungible - Multiplicity or Singularity?

joshua — 2008-10-22 20:51:47.528025

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?

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?

Start from scratch

heather — 2008-10-22 13:59:45.724464

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?

wordle cloud

tomislav — 2008-10-22 10:31:04.503607

KashKlash

Some questions

nicolas — 2008-10-22 09:23:30.330442

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.

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.

Snippets cloud

irene — 2008-10-21 17:20:54.106330

Some other foresight scenarios

mark — 2008-10-21 11:17:23.371748

Scenarios of the Mobile World in 2015
European Union Science & Technology Foresight (check also the Publications section)
Towards the digital economy: scenarios for business
World Economic Forum - Scenarios
World Economic Forum - three 2025 scenarios
Future Studios scenarios

From now to 2015

nicolas — 2008-10-21 07:54:34.244242

Important, uncertain, uncontrollable. These are the 3 characteristics shared by the events we are looking for till 2015. Foresight is mostly about sketching and playing with the factors that will have an important influence on how we live, that we cannot be sure of and which we cannot always control.

10 years ahead, the big picture is quite clear, let's set up the scene using some common pointers. On the environmental side, the pressure will be more and more important, with the beginning of the natural resource exhaustion in some petro-region, the possible re-localization of production in places which used to outsource it to developing countries. In terms of demography, developed countries will experience both aging population and the arrival of younger migrants, which will surely lead to some unbalanced repartition of wealth and social protections. Of course, developing countries will keep seeing a booming young population, only a part of it may escape and leave for the western world. Globalization will be more and more reinforced with the interdependence of different economies but in 2015, some weak signals of today may even be more pregnant:

the competitive advantage of countries with low cost of labor may decrease, and the transportation cost will rise

the creation of wealth will be even more affected by technological and industrial factors thanks to the advent of computer-based design tools (such as 3D printing), new materials and energy sources.

the preference of consumer will more and more go to locally-produced artifacts and food.

on the political side, states and institutions will try to reduce the dependency their territories have with other sources of production.

jeremy rifkin's "age of access" will be the right metaphor here as consumers will have tons of "services" at hands mediated by various technologies. The difficulty to maintain the interoperability of these services will of course lead to weird scenarios and misunderstandings.

social relationships will still thrive with an even wider range of links: merchant-based, family-based, politically-based but, above all communautary-based with an shape: the diaspora model. The cohabitation of communities with different needs, ethnic and religious ideals, sources of wealth and desires will of course lead to some frictions.

The quick and dirty picture I've painted here is of course characterized by a clear lack of balance and symmetry between various actors (developed/developing countries, migrant versus others, those who have access and those who don't) which will eventually lead to conflicts and crisis. Globalization will foster migration, re-localization, nuisances caused by transport and their creeping infrastructures, etc. The asymmetry between different communities will also lead to greater surveillance and threat of privacy. One of the answer for this will be the recurring "calls for more regulations" in the economic, cultural, political and perhaps even religious spheres. Regulation at global levels will be so slow that nothing may happened through the UN but some regional blocks (such as the EU) may manage to structure a bit their socio-economic system. The side-effect of regulation will inevitably lead to resistance and the reinforcement of the aforementioned communities.

In my next post, I'll try to address what this means for the evolution of transactions and how these factors may reshape the exchange of value. Or, to put it shortly what happens at the individual or social level.

KashKlash 2015 A.D

bruce — 2008-10-20 19:31:52.154078

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.

So let's start: seriously!! :)

irene — 2008-10-20 18:30:38.976321

You know how the economic and cultural exchanges are organized to date. Of course you can see pros and cos. So focus on cos and try to imagine a better future - let's say on 2015 - and the development trajectory toward it as well.

Think about things that will remain stable, changes (desirable, less desirable), drivers for change, ... and draw a possible scenario (by wed 22/thrd 23: it's not an essay, just a draft). You can upload it straight on this web plat. You can even do it already as a list of basic questions + answers.

Try to be as imaginative as you can. Be bold, we definetly trust your boldness.

We are going to collect 4 scenarios, one for each one of the four of you.

From these scenarios we are deriving 4 to 5 main 'research questions' about the 2015, and offering people (secondary contributors) a set of choices for each question, so that they can help us collaboratively design the most desirable scenario(s) for the future.

We do hope that they won't only place their vote, but leave a comment on it (whatever, even by audio/video content).

From answers and the debate that will hopefully raise around them, we'll refine the emerging scenario (or maybe the scenarioS) and we'll deliver it as the result of the project (also to address the party 2015 event..)

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

regine — 2008-10-13 11:39:06.885693

by Régine Debatty

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 .

Redemption and the value of words

heather — 2008-10-10 22:16:10.273624

Redemption - such a fascinating word. It evokes fire and brimstone. And cashing-in.

The English language is brimming with abstracted words related to money that are full of other meanings. The words still maintain connections to their original meanings, but our culture seems to have lost them.

Margaret Atwood's new book 'Payback: Debt and the Shadow Side of Wealth' addresses a few of these like interest and debt .

Glancing in the dictionary, there are 13 results for the word 'value' alone. It's a noun, it's a verb. It's tied to the worth of everything, but the word itself has almost lost its value.

val·ue /vælyu/ [val-yoo] noun, verb, -ued, -u·ing. –noun

relative worth, merit, or importance: the value of a college education; the value of a queen in chess.

monetary or material worth, as in commerce or trade: This piece of land has greatly increased in value.

the worth of something in terms of the amount of other things for which it can be exchanged or in terms of some medium of exchange.

equivalent worth or return in money, material, services, etc.: to give value for value received.

estimated or assigned worth; valuation: a painting with a current value of $500,000.

denomination, as of a monetary issue or a postage stamp.

Mathematics. a. magnitude; quantity; number represented by a figure, symbol, or the like: the value of an angle; the value of x; the value of a sum. b. a point in the range of a function; a point in the range corresponding to a given point in the domain of a function: The value of x 2 at 2 is 4.

import or meaning; force; significance: the value of a word.

liking or affection; favorable regard.

values, Sociology. the ideals, customs, institutions, etc., of a society toward which the people of the group have an affective regard. These values may be positive, as cleanliness, freedom, or education, or negative, as cruelty, crime, or blasphemy.

Ethics. any object or quality desirable as a means or as an end in itself.

Fine Arts. a. degree of lightness or darkness in a color. b. the relation of light and shade in a painting, drawing, or the like.

Music. the relative length or duration of a tone signified by a note.

values, Mining. the marketable portions of an orebody.

Phonetics. a. quality. b. the phonetic equivalent of a letter, as the sound of a in hat, sang, etc. -verb (used with object)

to calculate or reckon the monetary value of; give a specified material or financial value to; assess; appraise: to value their assets.

to consider with respect to worth, excellence, usefulness, or importance.

to regard or esteem highly: He values her friendship.

[Origin: 1275– 1325; ME < OF, n. use of fem. ptp. (cf. valuta) of valoir < L valére to be worth]

I have also been thinking about what Regine said about the word 'future' sounding retro and devoid of meaning. Unfortunately, 'future' is the only word that captures ' a time yet to come' . Why are we lacking another word for 'future'? Yet somehow 'future' has also come to mean a financial term for 'commodities or stocks bought or sold upon agreement of delivery in time to come'.

fu·ture /fyutuur/

(noun) time that is to be or come hereafter.

something that will exist or happen in time to come: The future is rooted in the past.

a condition, esp. of success or failure, to come: Some people believe a gypsy can tell you your future.

Grammar. a. the future tense. b. another future formation or construction. c. a form in the future, as He will come.

Usually, futures. speculative purchases or sales of commodities for future receipt or delivery.

( adjective) that is to be or come hereafter: future events; on some future day.

pertaining to or connected with time to come: one's future prospects; future plans.

Grammar. noting or pertaining to a tense or other verb formation or construction that refers to events or states in time to come.

[Origin: 1325–75; ME futur AF, OF < L fūtūrus about to be (fut. participle of esse to be)]

'Interest' has 20 different meanings. 'Credit' has 21. 'Bond' has 28. Shockingly, 'stock' has 61. Is there a connection with attaching many meanings to a word with that word losing its meaning altogether?

Perhaps we need to reclaim the original meanings of these words . Or s tart from scratch and create new words that wake us up and make us think a nd act. Words that jostle us and make us realize the urgency of creating our 'time yet to come' before the momentum of current events creates it for us.

LETS - Local Exchange Trading Systems

irene — 2008-10-09 08:50:07.218133

A LETS is a locally initiated, democratically organized, not-for-proﬁt community enterprise which provides a community information service and records transactions of members exchanging goods and services by using the currency of locally created LETS Credits. The LETS Credit currency does not involve coins, paper money or tokens of any kind but rather acts as a scoring system, keeping track of the value of individual members' transactions within the system. It is simply a community information system attached to its own market-place.

The attached document deals with the theory and diffusion of Local Exchange Trading Systems and similar communities around the world and includes all necessary information on how it works, who is using it, where the most important communities are located, what are the benefits and the disadvantages. In addition, the documents offers several links guiding you directly to internet websites.

On line

irene — 2008-10-08 17:18:45.810967

The digital currency project is now online. The debate over a proper name is still underway...although we have been discussing it quite a bit ! If you want to contribute to choosing the name of the 'baby', let us know your thoughts. You're more than welcome - we're exhausted!:) So far, we are quite fascinated by Bruce's proposal KashKlash , but Josh is fond of Fungible and Mark recently fell in love with Cellularity...

But anyway, what's in a name? What really matters here are views , visions , ideas , opinions ...whether they clash or harmonise among each other.

Have a taste...

Bruce Sterling is drifting on a wire connecting feudal economies, the gold farmers of World of Warcraft and the Jesuits preachers.

Joshua Klein is wondering how far the tension in digital economies between sociological versus geopolitical forces, which are squaring off over the battle for fungibility and integration, will bring us.

Nicolas Nova ' s considerations explore the near future of online bartering.

...and enter the debate - we invite you to use your account to share your opinion, comment on other posts or add any kind of multimedia content you find pertinent.

p.s. Please have a look also at the firts articles: LETS , an overview of local exchange trading systems, and The Days of Capitalism are Numbered , by Giorgio Ruffolo, which is wondering what is money for..

What's in a name?

mark — 2008-10-08 14:43:34.464146

I asked a bit around in our multilingual office about possible project names.

Gift : Uphaar (Hindi), Tohfa (Urdu), Donaco (Romanian), Opari (Euskadi), Kata benda (Indonesian)

Value :Daam (price in Hindi), Mulye (Hindi), Keemat (Urdu), Väärtus (Estonian)

Exchange : Len-den (Hindi in a more business sense), Adla badli (urdu informal way), Aadan pradaan (give and take in formal hindi)

The near future of on-line bartering

nicolas — 2008-10-08 13:12:03.995572

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.

The Days of Capitalism are Numbered

irene — 2008-10-08 12:16:33.814325

by Giorgio Ruffolo (original title: A che serve la moneta?, in "Il capitalismo ha i secoli contati ", © Einaudi 2008, ISBN 8806188275 - translated by Katherine Margaret Clifton)

What is money for?

God and gold often make their appearance in literature. In Faust by Gounod Mephistopheles sings: «God of gold and lord of the world». According to a legend dating from the time of the Sumerians and the Babylonians, gold is dug from the bowels of the Earth on behalf of the gods that inhabit a remote planet and who serve themselves of human slaves to extract gold from the mines. Slaves who never see the sun, living dead. But a mutinous few gave gold to men, just as Prometheus gave them fire, and for this they were exterminated. Men have extracted from gold its dust, gifted with magic powers. In the Old Testament, which draws on all the legends of that time, it is known as manna.
But the gods of the mysterious planet have maintained a relationship of command with some of the miners and they make use of them for mysterious operations intended to sustain their dominion over men.
In effect, gold is not a solitary god. Other metals have from time to time challenged its supremacy: silver above all; as have many other objects (both material and immaterial) to which the role of money has been attributed. However, gold is not only money. And money is not only gold. So what is it?

From the king of Lydia to date, money is the meeting point between market and State
The question of what exactly money is has been discussed for centuries and not always in a very clear manner. Gilles de Muisis, abbot of Tournai in the fourteenth century, considered it «a murky thing». «They», he said of coins, «grow and diminish in value and you never know what to do. When you expect to gain you find it is the contrary». Even today many, amongst whom the unfortunate debtors of the sub prime, are of the same opinion. In the sixth century B.C., the king of Lydia, Croesus, coined money, giving it its classic shape. Yet before and after him, money has assumed a variety of shapes: shells, dog's teeth, leather and fabrics, salt, cocoa, tea, tobacco, axes and knives. And even, as in Indochina, bulky gongs and discs of metal (perhaps to discourage misers).
One thing is certain; money has always been very important in the history of mankind. It can be considered the central element of the economy. Central, because it constitutes the meeting point of two great subjects of the economy: the market and the State. Money is inconceivable without one or the other.

We don’t know why the Greeks and Romans gave Hera, or Juno if you wish, the nickname of ‘moneres’. «Solitary»? «Admonisher»? The Romans dedicated a temple on the Campidoglio to her. Zeus-Jupiter on the other hand, to punish her for some misdemeanour, hung her between the sky and the earth, tied to a cable (of gold, naturally) from which the devious goddess managed to free herself. Between the sky and the earth: a metaphor springs to mind, between State and Market, which certainly never occurred to Zeus.
Yet that would be a fine metaphor for money. Often hung from a gold cable (think of the famous gold standard) but always tempted to free itself; born of the combined efforts of the Market and the State. Time and again one prevails over the other in governing it.

And then banks came...

In recent history, for example, the role of the States in governing the world’s currencies was decisive in the years following the Bretton Woods agreement, immediately after the war. Then in the seventies and eighties, it was the market, through the banks, that assumed a growing role in governing currencies, above all thanks to the liberalisation of the movement of capital. Governing, to some extent, because, belying the predictions of the great economist Milton Friedman, who had announced a period of tranquil self-regulation of the money and stock markets, during the nineteen-eighties and nineties they became unstable and reckless as never before, a situation that has continued into the beginning of our century.

In recent times financial institutions (banks and all the other financial «intermediaries» sprang up like mushrooms. And thanks to the proliferation of their offers (such as the now famous derivates) and the volume of the transactions they create (about ten times the world gross product), money travels over the surface of the Earth at incredible speeds, never mind Juno!

During the last and most recent upset, that of the so-called sub prime (mortgages granted too lightly to an excessively gullible clientele) the repercussions of the enormous power exercised by the banks in managing currency: not gold coins, which have been out of circulation for some time, nor even the gongs and discs of metal; or the paper money – invented by the Chinese and reinvented by the Scottish in the eighteenth century – but telephonic and electronic money.

The mechanisms through which the banks have vastly extended the area of credit (Polyani would have said that they have marketized space and time) are technically fascinating, especially if explained impeccably by economists as eminent as Luigi Spaventa: in particular, with regard to the spread of risks and its twofold consequence of effectively protecting the individual but at the same time disseminating the risk throughout the system: rather like the gold dust, the legendary manna, which the Old Testament tells us was so useful the Jewish people, while at the same time exterminating their enemies (in our case it is a question of the banks and their clients).

Keynes, the Europe and the serendipity of money

The fact is that this most recent crisis has raised more than one doubt about the possibility of losing control of the money system; and the paradox due to which the Central Banks, created to guarantee the stability of the system, are forced to intervene with massive injections of cash to avoid the consequences of its instability. It has also re-presented the problem of the relationship between «gold» and politics, with which we opened this prattle, that we will continue in an even more lunatic manner, recalling a heretical proposal that should fundamentally resolve the problem of excessive recklessness of the banks... by eliminating the banks. The proposal derives from a provocation by a German business man in the nineteen-thirties, Silvio Gesell - quoted with interest by Keynes - who proposes, in order to eliminate the unproductive waste of financial accumulation, applying a negative interest to credits, with the payment of an annual duty that gradually reduced the value. The proposal was relaunched, ten years ago by the so-called Bromsgrove Group, or group of Money Reformers led by James Gibb Stuart, in a more complex form that involved the entire money and tax policy. In a few words, rather than gathering revenue with taxes or borrowing, the government should create money to directly finance public investments or individual consumption: money distributed in Keynesian style and saddled with negative interest in the Gesell manner, which would then be immediately spent in consumption and investments exorcising an inflationistic excess in demand thanks to an immediate increase in the offer and a depressive defect of demand thanks to the absence of saving. Before laughing at the idea, just ponder it for a moment, as the eccentric James suggests in an imaginary discussion in the manner of Swift, whose works are not recommended to bankers with high blood pressure.

However, it will not be necessary to make an attempt on their arteries – which are somewhat fatigued at present – there are less bizarre ways of re-establishing some form of control over finance that threatens to lose its way. For example, the reconstruction of some sort of international order of the Bretton Woods type, perhaps taking up and updating the ideas that, at the time, Keynes was forced to abandon. Not to adopt a single world currency, as he suggested – the bancor – but to jointly organise a balanced system regulated by stable relationships between the world currencies: today the dollar and the euro, tomorrow, who knows?

Certainly, in Europe it would take a European government capable of dealing with a strong currency, strengthened by a European macroeconomic policy a weak economy (the opposite of what America does). The euro was born of serendipity. The mythical king of Serendippo was famous because seeking one thing, he found another much more important. The euro was to be a strong franc, nothing more; instead, it has become an international currency, with headquarters in Frankfurt. The euro can be much more than a currency, the first step in the construction of a European power with a strong vocation for rebalancing the global disorder. We could then avoid, as happens at present, an important part of our riches, both real and potential, disappearing to a remote planet where the unfathomable gods of finance preside over our destinies.

Kash Klash(?) project - the vision

irene — 2008-10-08 12:02:40.492889

We create our future as much as our past creates us. The relatively new digital world of the internet has offered us new methods of communicating, of discovering and of interacting. We have learned that we don't have to simply copy familiar physical forms and adapt them to this new environment, but that we can use our collective imagination to invent new forms and tools, as dynamic and holistic as we are. Friedrich Kiesler in 1939 defined this as co-realism: 'an exchange of interacting forces' and situates the idea of expanding human capacities within it. Here is an opportunity to transform our recent past as consumers and producers to that of active co-creators of our collective future — to create something new with all that we have learned from farming culture, academic enlightenment, master craftsmanship and industrial efficiency and use the essential elements to light a path through our new integrated physical/digital world.

Are we prescribing or determining form and behavior? Are we making means for a specific experience, or are we creating conditions for what has been called the experimental exercise of freedom? - Mies van der Rohe

KashKlash is a space to share thoughts on, and to shape, the future; a playground for visionary people like you, who, in a sense, are already living a few years ahead.

One particular aspect of the future we are particularly keen to explore is related to exchanges in our culture.

Let's start from the basic consideration that people have always shared and exchanged things. Sure, it comes to us naturally. But today's digital communication systems are changing and expanding this age-old behaviour: not only are there new things to share — pictures, music, ratings, writings, videos, data and information — but there are now also many more platforms and opportunities for sharing and exchanging to take place.

Can we consider such exchanges to be 'economical'? Sure we can, as in the original Greek meaning of "one who manages a household": although these exchanges often don't involve money, they are rapidly growing in importance. Yet, our current capitalist economy is based on the assumption that everything has a monetary value, and ought to be traded according to that value. What is challenging our imagination is that the uptake of digital technology is starting to undermine this assumption.

Consider a person uploading a picture on Flickr, with an open license. She is making a 'gift' to the Flickr community in the sense that she does not expect to have any financial compensation in return, but she does get other things instead: e.g. the feeling of belonging to a community of peers, a great potential visibility for her picture, the recognition of the beauty of it, the happiness of having her friends and relatives virtually gathered around that picture, and so on. The exchange has become non-financial and is definitely shaping a different, or if you want, alternative, ecosystem. An alternative to the mainstream.

Of course we know that alternative economies are nothing new: Local communities worldwide have always practised sharing and trading things (both material and immaterial, like time) without the support of money. Even now in 2008 this local practice is still very widely diffused, yet it sits at the margin of the dominant economic model and has a reputation of being naïve. What is new, with respect to a few years ago, is the increased interaction between digital/global and physical/local sharing through digital, especially mobile, communication tools.

Personal/Shared Values vs. Monetary Value

The current world of physical currency offers a degree of anonymity that allows individuals and groups to disassociate what they produce with what they consume. What have we lost in blurring the association between the two? Does the web, rich with connections and openness, offer an opportunity to reclaim this lost territory? What are the implications of this? Can both forms co-exist? In the merging physical/digital world, will other types of compensation - time, skills, services, a sense of belonging, visibility, public recognition, identity and so on - be increasingly important?

What might replace money as it exists now? What could be sharable and what cannot? What impact could this have on people and communities? How could a post-money economy best be organised, especially given the failures of the current economic model? How do communities of sharing shape and maintain themselves? How do they build their values? Do they have explicit or implicit values? What are the differences between global/online and local/physical communities of sharing? To what extent can digital/mobile communication tools help people in both online and physical communities manage their sharing and exchanging practices? What would the rules, rituals and habits of this future world be?

To address these questions, we created KashKlash, a forum to debate, imagine and co-create this future.
It is worth noting here that the focus of this understanding is on a possible future ecosystem, rather than on the technological tools underpinning it. We want the technology to adapt to the landscape we are trying to sketch out, not to be pulled in a certain direction by technology.

We want you to feel free to express your view, even if you feel that it is loosely related to the subject of the discussion: this platform is a simply a playground for ideas coming from people who are in love with the future and we are looking forward to seeing the amazing jigsaw puzzle of insights that results!
Please experiment with your thoughts and transfer them to us through words, images, sounds, videos, whatever medium you prefer.
We know how powerful ideas can be when a suitable space is created for a diverse community of people to express them.

KashKlash is a public domain project, set up by Heather Moore of Vodafone’s User Experience group, where all the content is public and open for all to use, allowing everyone to gain from everyone else’s contributions.
Such an open and spirited climate should not be hampered by Vodafone's involvement, and it should be clear to everybody that opinions presented within this project are not somehow attached/attachable to Vodafone but are opinions from individuals, belonging to them and to the public domain.

Fungible currencies

joshua — 2008-10-08 11:44:15.010307

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 GeoPets.com 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?

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?

KashKlash

bruce — 2008-10-08 11:13:47.368125

by Bruce Sterling

If the grip of conventional cash loosens, we can expect some suppressed patterns of human behavior to re-emerge.

First and foremost, Western feudal society. Feudal society created the original, money-based, Western capitalism. Feudal traces are still clearly visible on the Western cultural landscape. For instance: modern women, selling sex-work for cash money, are still actively subjected to an old-school feudal shame and honor-standard. In the past, much larger areas of human activity were actively money-repellent.

There were long centuries where the landed aristocratic nobility actively avoided the money economy, and despised all its minions. In an honor-bound aristocratic society, money was considered shameful. The use of monetary advantage was dishonorable and weak.

Some of this was due to highborn family connections and blue blood -- a sharp distinction between the people you were willing to acknowledge and breed with ("our kind of people") and the people you didn’t want to know at all (serfs, merchants, the computer illiterate, etc). In any functional aristocracy, marriages are always strictly arranged. People, and especially women, become a non-monetary trade-good.

Who do you marry -- where do you go for "dates"? Do you hire some matchmaking service (mercenaries) or go mate-shopping on a social network? Who owns this ultimate means of human production?

The core value of a feudal society was military command. The great lord had the ability to rouse his feudal retainers and get them to loyally die on a battlefield. This meant grandeur and honor. Cash was not a major issue.

The warrior ethos still despises mercenaries today -- although mercenaries are now known as "private militia companies," and do pretty well behind the battle lines. There still seems to be something grotesque and contemptible about warfare for a fistful of dollars. Sex and war, you can't bank on them. Why?

Feudal aristocrats were always committed to the land and its inhabitants -- aristocrats were named after their domains, commonly. He's the "Prince of Wales," he's not the "Prince of Rolls Royce." In feudalism, major actors in the money-economy were considered to be conniving, cosmopolitan flyweights, upstarts here today and gone tomorrow -- an annoyance, something like day-traders.

What design intervention would make people with money seem like an annoyance -- people grimy, unstable, grasping and declasse', more trouble than they were worth? They are forbidden to come to the front door. They have to knock at the sordid "tradesman's entrance."

Aristocrats were famous for running up huge bills and not paying them. Was this a passive resistance? What is today's equivalent? There must be many.

I'd suggest that we see a distinct nostalgia for feudalism springing up in digital war-games such as WORLD OF WARCRAFT. Warcraft has an economy, but "gold farmers" in Warcraft are actively despised. Players who buy their way into Warcraft -- by snitching expensive game-goods on eBay, or by paying Chinese drudges to "level them up" -- these people are distrusted by other players.

Why? Because they lack battlefield craft. They just don't know how the game is played and how it's properly done. They lack the game's complex social background and its intricate codes of acculturation. They are parvenus. They're not gentlemen.

Big infusions of cash will not help Warcraft players pursue their Warcraft goals. Players are much better off socially ingratiating themselves with feudal "guilds." Warcraft guild leaders spend most of their time and energy diligently rallying subordinates to show up for Warcraft action, and persuading them to risk their virtual lives and armor in the fields of Warcraft combat.

People pay real money to play Warcraft. They stay within Warcraft because of cumulative social pressure. Pressure from their guild overlords, from their own social-climbing aspirations, and from their colleagues.

There is no massively multiplayer online role-playing game called "World of MerchantCraft." Why is this?

Conceivably, people could play in some post-feudal, exciting milieu of Renaissance bankers, buying wool in Flanders in exchange for Italian garlic. They could overthrow the backward feudal character of Warcraft, in much the way the Medici bankers ate away at Europe's blue-blood establishment.

But this MONOPOLY style of capitalist gameplay has never had any big multiplayer hit online. What accounts for this?

Similarly, nobody plays WORLD OF WARCOMMUNISM. There's plenty of room online for an exciting game where the players seize the means of production, establish the dictatorship of the proletariat, divide the military and the factories into Soviets, liquidate the Whites, then form a Politburo and publish Five Year Plans. Plus, exciting purges and gulags!

Why is simulated Communism missing from the Internet? Open-source peer-production is flourishing. Where is the digital Communism? Why is there no Communist eBay?  

There are millions, even billions of people who are keenly familiar with Communism. Many were career Communist apparatchiks, and they have computers and cellphones now. Why do virtual worlds and economies lack any Communism? There isn't even a multiplayer Communist fantasy game.

Theocracy. The Roman Catholic Church is often justly called "the first multinational." The Church uses money -- it has its own banks -- but it is never a money-centric organization. One never hears about members of the College of Cardinals or the Vatican Curia comparing their stock holdings or their personal fortunes.  

The Pope is not the richest guy in all Christendom. However, he is the Pope.  

Why does the time-tested organizational structure of the Church lack any online parallel? There are technology zealots called "evangelists" -- but they never receive the tender care and feeding that actual evangelists can count on. Where are the digital equivalent of sisterhoods, brotherhoods, the monasteries and convents, the confessions, penances and forgiveness, the vows of poverty and obedience? Where is the ethic of service and salvation?  

There is an interesting principle -- I believe it's from the Jesuits -- concerning advertising. These evangelists were forbidden to preach (or to advertise). Instead, they had to earnestly engage in public good works. Then -- and ONLY then -- if someone came and asked them, "Why are you doing these fine things?" -- THEN they were allowed to preach. Only then they were allowed to explain the Good News of salvation.  

I'm thinking that this has a visible parallel with an effective micro-lending bank.  

Imagine a sophisticated, historically-aware social-software bank that does not directly seek profit or loan opportunities. Instead, what it seeks is commitment and some visible results in the community. This approach is wise, patient and deliberate: it's an entry-barrier.  

This "bank" does not advertise or trumpet its services. "What have you done to DESERVE the right to talk about our kind of resources?" "Yes, you are one of us now -- but you are not allowed to TELL ANYONE until you have done something to compel their admiration and respect."  

Maybe Gandhi. Gandhi's financial backers used to say, "It costs us a lot to keep him in poverty." Maybe Gandhi was quite right when he said, "We must become the digital bank we want to see."  

Actually, Gandhi never said that. And if he saw "Hello Money" in India right now, he would fall right over.

POSTSCRIPT:  

Some other social enterprises one might usefully think about.  

The Knights Templars. They loaned money to kings, and were fantastically rich, but their emblem was two poor knights sharing a horse.  

Islamic hawala systems. They are very old. They are digitizing now and they mostly run on personal reputations. The police hate them.  

Offshore money laundries. One may not admire them, but they are highly-evolved and it is stupid to pretend that they don't exist.  

Botnets. If you don't confront the "dark side of the force," you don't know what the force really is.  

Academia. It's "publish or perish," but the contributor whose papers are the "most frequently cited" gets enough resources to support a thriving horde of graduate students. It's not his own personal wealth that is central. Not at all. The survival of his graduate students makes him the dean of his field.  

Literary reputation. All the major players here are dead. Does Shakespeare care how many books he's selling right now? Does Moliere sweat blood about the digital rights management over his performances?  

Hoboes. Tramps do not pay each other. They do leave informational chalk marks that allow other tramps to beg as successfully as they themselves begged.  

Gypsies. Why do these ancient global meanderers look and act so much like they did when they first arrived in Byzantine Anatolia in the 1100s? Cellphone "wandering" is very like a Gypsy practice. What kind of deliberate social engineering would it take to make a group of cellphone users behave like general Gypsies? Clearly there would be some festivals (tech conferences), folk music (ringtones), folk markets (electronic markets), soothsaying (blogging), magic (technology), small-scale handicrafts (programming, web-design, user-experience, etc), fortune-telling (venture-capital, market forecasting, etc).  

The unborn. What would they not blame us for?