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The Almighty Buck Bitcoin Social Networks Technology

New Digital Currency Bases Value On Reputation 100

Posted by Soulskill
from the for-everyone-who-wanted-to-rep-grind-in-real-life dept.
An anonymous reader writes: If digital currencies are fundamentally different than physical ones, why do they work in the same way? That's a question being asked by Couchbase co-founder J. Chris Anderson, who's building a currency and transaction system where reputation is the fundamental unit of value. "Unlike with bitcoin—which keeps its currency scarce by rewarding it only to those who participate in what amounts to a race to solve complex cryptographic puzzles—anyone will be able to create a new Document Coin anytime they want. The value of each coin will be completely subjective, depending on who creates the coin and why. 'For example, the coin my disco singer friend created and gave me at my barbeque might be what gets me past the rope at the club,' Anderson says. A coin minted by tech pundit Tim O'Reilly might be highly prized in Silicon Valley circles, but of little interest to musicians. 'It's a bit like a combination of a social network with baseball trading.'" Anderson isn't aiming to supplant Bitcoin, or even challenge the money-exchange model that drives society. But he's hoping it will change the way people think about currency, and open up new possibilities for how we interact with each other.
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New Digital Currency Bases Value On Reputation

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  • by msobkow (48369) on Saturday July 19, 2014 @09:57AM (#47488771) Homepage Journal

    This sounds like paper-tracked barter, with a delayed payment on half of the deal. Which is kind of the key problem that money was intended to solve -- money can be traded for *anything*, not just what the issuer has that is of value. This ends up being a throwback to the days of "store scrip", only even more limited.

    An interesting experiment, but ultimately futile and pointless.

    • by drinkypoo (153816)

      An interesting experiment, but ultimately futile and pointless.

      Without more than a passing familiarity with economics, the point of this exercise seems to me to be to illustrate the way money works without centralization. Isn't this in fact how the international money trade works? If you want to pay for a lot of something with a lot of some kind of currency that nobody wants, you're probably not going to get a very good deal.

      • by Antique Geekmeister (740220) on Saturday July 19, 2014 @11:05AM (#47489095)

        Or the way it _doesn't_ work, I'm afraid.

        Inventing new, private currencies seems designed for abuse, and the harvesting of all money in the system by arbitrage traders with no practical regulation or control of the abuse. Such "non-currencies" have been tried before, and are inevitably brought down by one of these factors:

                Governments concerned about taxes not being collected on the barter scrip.
                Arbitrage abuse bleeding all the value out of the relevant currencies and destroying smaller investors.
                Fraud by the central scrip maintainers.

        All of these occurred with the "company scrip" that was used by many railroads to pay workers and tie their economy to the "company store" in the US expansion west.

        • by zidium (2550286)

          But then again, it worked WONDERS for Worgl, Austria (google "The Miracle of Worgl"), Ithaca, NY, Berkshire Bucks, the Ancient Egyptians (built the pyramids using distributed paper money based on degrading wheat storage), AND the Cathedral economy of the pre-Enlightenment Europe.

          • Thank you for pointing out those examples. I'll be quite curious to see if they manage to survive even a single generation.

            It can take time for the factors I mentioned to destroy a private currency. The "Miracle of Worgl", for example was shut down by the Austrian National Bank. (Avoiding federal taxes and control of the economy is always grounds to shut down private or semi-public experiments.) The Egyptian example had actual backing for the currency, and seems to have been government controlled. I'll ackn

        • Re: (Score:2, Interesting)

          by ColdWetDog (752185)

          For a quick introduction to this concept, pick up a copy of Neal Stephanson's Confusion [nealstephenson.com].

        • by sysrammer (446839)
          16 tons, what do you get?
          Another day older and deeper in debt.
          St. Peter don't you call me 'cause I can't go,
          I owe my soul to the company store!

          TEFord
      • Isn't this in fact how the international money trade works?

        No. If you want to buy Swiss Francs with Zimbabwe Dollars, you will need a lot of them. But the currency traders all more-or-less agree on the exchange rate. You aren't going to get a different exchange rate depending on what you want to ultimately buy with the Francs. These "Document Coins" are different. The coin issued by the nightclub can only be used to go to that nightclub. You can't use it to buy groceries (unless the grocer goes to the same nightclub, and is willing to spend time negotiating t

      • Without more than a passing familiarity with economics, the point of this exercise seems to me to be to illustrate the way money works without centralization. Isn't this in fact how the international money trade works?

        No.

        Money, pretty much by definition, is a standard medium of exchange. It might fluctuate in value a bit here or there, but if it isn't relatively stable, then it isn't good money in the first place. An example of that is the hundred trillion dollar note in Zimbabwe currency.

        This experiment would remove any standard: a "coin" would be worth vastly more to one person than another, based on completely arbitrary definitions of "value".

        So it isn't a standard -- it's kind of the opposite -- therefore it

    • This sounds like paper-tracked barter

      It sounds more like digital coupons. A shop (such as the mentioned nightclub) issues a "coin" that is valued by a customer that wants to go there, but not by others. That is the same as a coupon that can be clipped from a newspaper, or printed from a webpage. Plenty of coupons can already be used from a cellphone, so the "digital" part really isn't new.

    • I think you might be missing the point, in that it seems like this is not meant to be traded for actual goods and services. It's not supposed to be like money. It's not supposed to have real value. In big letters in the middle of the article, it says, "‘If Bitcoin is the toy version of what we’ll all be using the future, then i want to build the crazy art project version of the future.’"

      It seems to be more like a way of quantifying social currency rather than economic currency. I get

      • by Mandrel (765308)

        I do something cool for a famous person, and they give me a coin. Now that coin becomes something like a trading card, which I can collect and trade

        The article's description of the system is too vague to pin it down, but I think you've got the right idea.

        Famous people can give someone who they want to reward a personal token like their signature, that can be given to others (as a gift or for money). This can be like a digital version where people can display online their collection of famous badges, each cryptographically verifiable by person, date generated (so you can boast of "before they were famous" badges and "on the day of her achievement" ba

        • Well it's kind of better for the rich person, probably, since it doesn't actually cost them anything. It doesn't even cost them the time of a lunch date.
          • by Mandrel (765308)

            Well it's kind of better for the rich person, probably, since it doesn't actually cost them anything. It doesn't even cost them the time of a lunch date.

            Time is money. Hence signatures. But selfies with celebs seem to be the new signature.

            I'm envisioning a smartphone app that allows celebs to transfer a time-stamped, location-stamped, and level-stamped crypto-signed badge to people they meet through RFID smartphone bumps. People can display these badges in Facebook posts, and their collection in a Facebook app.

            Tradeable bragging rights with minimal imposition on celebs.

    • Sounds like store coupons to me, or maybe low value gift certificates (like the kind restaurant managers give you, when your meal is a disastar, instead of refunding your money).

  • Trade is so BORING. (Score:1, Interesting)

    by Anonymous Coward

    As bases for society go, trade is really not much more interesting than theological obligation as a way of running society.

    Now we actually have the technological power for it, it would be nice to re-visit voluntary centralised management according to need, where artificial scarcity is discouraged rather than encouraged. (Not to be confused with Stalinism, which was just state capitalism and managed to combine all the worst aspects of both Marxism and the free market under a single owner.)

    • As bases for society go, trade is really not much more interesting than theological obligation as a way of running society.

      Except that societies based on trade tend to be much nicer places to live.

      Now we actually have the technological power for it, it would be nice to re-visit voluntary centralised management according to need

      Societies based on "need" (Cuba, North Korea, etc.) tend to have very little technology. The problem is that the technology that can be used for "planning" can also be used for communication. Then people will realize how much better the rest of the world lives, and be able to communicate among themselves to organize protests and rebellions.

      • I think the problem rather is what to do if what I consider me "need" differs from what the Zentralkomite says I "need". Or if what I want to produce differs from what Zentral has decided I shall produce.

  • That's Ripple (Score:4, Informative)

    by IamTheRealMike (537420) <mike@plan99.net> on Saturday July 19, 2014 @10:01AM (#47488795) Homepage

    Ripple, before the name was bought by a Silicon Valley company and changed into something a bit different, was more or less exactly this.

    There's a video on the original web page [ripplepay.com] that explains this concept quite nicely. You could set up debt relationships between people and denominated in any currency, including ones you invent on the fly like hours of The Real Mike's time. However it never really took off in a big way, perhaps because it was rather complicated, and bootstrapping such a system from the internet (full of strangers who don't know each other, don't trust each other and may not even exist) is presumably very difficult.

    However if the concept sounds interesting you could do worse than check out the original thinking by Ryan Fugger behind Ripple. Satoshi once told me that Ripple was interesting because it was the only system that does something with trust other than centralise it.

  • Excellent. Now all the social-media pokes and teddy-bears can have collectible value.
  • by Anonymous Coward

    Let's try having the Favors Bank from the world of the Crime Syndicate of America. Somebody does you a favor, you owe them a favor.

    It'll work out fine.

     

  • Yeah. No thanks. (Score:4, Insightful)

    by Chas (5144) on Saturday July 19, 2014 @10:08AM (#47488819) Homepage Journal

    Considering how quickly, completely, irreparably and FALSELY someone's reputation can be savaged nowadays, this is just rife for abuse.

  • Cory thought of this (Score:4, Informative)

    by Ultra64 (318705) on Saturday July 19, 2014 @10:13AM (#47488847)

    Cory Doctorow wrote a story where reputation acts as money: http://craphound.com/down/Cory... [craphound.com]

    • by BitZtream (692029)

      And Cory Doctorow is someone that should ever be referenced or listen to since when? Let me guess, you think Dailymail is a news source too?

  • That seems like it might be a proposal for ways to spend things like SE reputation for things other than bounties on SE. :)
  • In other words you're writing a check. Nothing new here. Move along. This is not the news you want to see.

  • by eric31415927 (861917) on Saturday July 19, 2014 @10:21AM (#47488885)

    So what are the value of Bob bucks when Bob dies?

  • 'For example, the coin my disco singer friend created and gave me at my barbeque might be what gets me past the rope at the club,' Anderson says.

    The fact that he thinks this is a good example says a lot about his relationship to reality.

  • by Anonymous Coward

    Money is distinguished by a number of characteristics but mostly by abstracting exchange value so it doesn't matter what you do or did to earn the money and it doesn't matter what you want to buy: real money just works. By this fundamental definition, bitcoin isn't yet money, although it is becoming more so as it gets more widely adopted.

    Anyway, what is being proposed is mostly stupid. It isn't money; it won't ever be money; and it will really just make barter HARDER rather than easier, so I don't see th

  • Why don't we have a digital currency that is backed by the full faith and credit of a national government. We could set up an independent bank that could create this digital currency out of thin air and then loan it to banks while charging a base interest rate (let's call that interest rate the "prime interest rate" may I also suggest we call the bank something other than "federal reserve bank" since that might confuse people into thinking it is part of the federal government even though it is not -- ok you

    • I see what you redid here.

    • by zidium (2550286)

      This is absolutely amazing ;-)

    • That might actually be an improvement on the current system. What we have now is low level banks issuing digital currency as loans to people. The digital currency is immediately transferred to someone else (or why would you ask for the loan?) and the new owner is tracked by another (or perhaps the same) bank. The "prime interest rate" doesn't really control how much currency the banks create. That only effects the bottom line of the banks 30 days after the currency is created.
  • As is the "value" of everything. Money certainly has no intrinsic value in nature.

    • by Arker (91948)
      "Money certainly has no intrinsic value in nature."

      Money does not exist, as such, in nature. It's a characteristic human adaption - a symbolic medium of exchange allows sharing of information resulting in more efficient economic decisions. It's no exageration to say that it is foundational to civilization, at least as important as the mastery of fire or the wheel.

  • This concept of reputation based currency reminds me of the monetary system employed by the fictional race the Dwellers, in the Iain M Banks novel "The Algebraist". A given individual's reputation within that society determines the value of Kudos they have, which they can then barter/trade like money.

  • Currency (Score:4, Funny)

    by rossdee (243626) on Saturday July 19, 2014 @10:44AM (#47488985)

    I don't want a Fiat currency
    I want a Ferrari currency

  • by OzPeter (195038) on Saturday July 19, 2014 @10:48AM (#47489009)

    Given human nature I can see this ending up not so happy for everyone.

  • Sounds more like digital coupons to me. The upside: no scissors needed!

  • "Reputation" is a digital artifact that can be manufactured and manipulated. I'd hate to think my payckeck was dependent on my Slashdot Karma times number of Linked/In connections times Stackfault rep. Why not base it on something objective but equally irrelevant like height or nosehair count. Just not size of woowoo.
  • This is straight out of Charles Stross' scifi novel Accelerando [amazon.com]!

    Tipsters are warning of an impending readjustment in the overinflated reputations market... His reputation is up two percent for no obvious reason today, he notices: Odd, that. When he pokes at it he discovers that everybody's reputation - everybody, that is, who has a publicly traded reputation - is up a bit. It's as if the distributed Internet reputation servers are feeling bullish about integrity. Maybe there's a global honesty bubble formin

  • I think he might have stolen the idea from G.R.R. Martin? Valar Morghulis.

  • by l0ungeb0y (442022) on Saturday July 19, 2014 @11:38AM (#47489297) Homepage Journal
    We'd have "Attention Slavery" that rewards group think and attention whoring. I'd much rather have an anonymous task based system than something that rewarded sycophants and celebrities. But I recognize this might very well be the currency that Main Stream America's been waiting for.
    • We'd have "Attention Slavery" that rewards group think and attention whoring. I'd much rather have an anonymous task based system than something that rewarded sycophants and celebrities. But I recognize this might very well be the currency that Main Stream America's been waiting for.

      Look on the bright side, we might finally be able to prove the whole cycle of silence theory via having a way of tracking the dropping reputation of somebody who dares commit such heresies of daring question the group's dogmas, like doubting the One True Holy Solution to life's ills or daring point out internal inconsistencies.

      And all without the ethical problems caused by being the ones to set up the experiment, since all we're doing is just observing.

  • by AlienSexist (686923) on Saturday July 19, 2014 @12:19PM (#47489475)
    I used to joke about giving points to my friends whenever they made me laugh or something. Now there's a slightly more tangible +1. In a commerce sense, my imagination can only see companies using this as a sort of loyalty point program (like exchangable frequent flyer miles).
  • The entire concept of Currency (Money), is the equalizer between dis-similar trades, and needs. Money allows someone like a woman's dress designer to purchase eggs from a local farmer, who is a man; and doesn't have any interest nor value given to the Dress design market. In effect, this currency idea would make the dress designer's currency "worth less" to those outside his/her circle. One can not survive solely within their single production circle. And I wouldn't want my currency (Computer Stuff) to
  • by gweihir (88907) on Saturday July 19, 2014 @12:50PM (#47489687)

    The primary value of currency is universal exchangeability. Remove that and it is worthless. Apparently Mr. Anderson is really, really stupid.

  • Finally, a safe and financially savvy way to diversify my portfolio. I'm currently at about a 70/30 POG - Beanie Baby mix, but I feel like I'm tilted too heavily toward large caps.

    (Ha! Large caps! You see what I did there?)

  • bad design (Score:4, Insightful)

    by Tom (822) on Saturday July 19, 2014 @01:28PM (#47489839) Homepage Journal

    A quick scan of TFA is enough to convince me this is fundamentally flawed. Case in point: He doesn't even bother to prevent double-spending, instead relying on an ill-defined concept of "people will notice and devalue you", which is basically handwaving. And that for a problem that's been solved 20 times over.

    The idea is cute, but I wouldn't trust his implementation one inch.

    • by pla (258480)
      FTA: "The value of each coin will be completely subjective, depending on who creates the coin and why."

      I don't think this has a problem with double-spending, because it has no actual value.

      This has almost no resemblance to "currency" in any meaningful sense, and calling it such amounts to nothing short of deceptive. This looks more like a formalized system of LinkedIn endorsements, except still with the same underlying flaw that your technophobe mother can "endorse" your 133t Perl scripting skills. O
      • by Tom (822)

        I don't think this has a problem with double-spending, because it has no actual value.

        Wrong. It has not centrally defined value, but it has value. If you give me X for this painting on my wall, then X is its value, regardless of what X is. It could be US$ or pieces of cake or a service.

        • by pla (258480)
          Wrong. It has not centrally defined value, but it has value. If you give me X for this painting on my wall, then X is its value, regardless of what X is. It could be US$ or pieces of cake or a service.

          Yes, I said that poorly, but you chose to ignore my point. The whole reason we use token currencies comes from the convenience of not pricing things in terms of goods or services. We don't need to value a shovel in terms of chickens, or a cow in terms of a number of hours spent weeding your garden. We ca
          • by Tom (822)

            We can agree that X units of currency will pay for a shovel, Y units for a cow, and Z units per hour for weeding the garden.

            That's true.

            The drawing, and more importantly, who made it, has value; but that puts us back to "how many Garfield sketches does a cow cost?

            It depends. What you basically end up with here is custom fiat money. It's the digital version of IOWs. It is worth what I say it is worth multiplied by your trust in me actually holding up my bargain. It's interesting, but we agree that it goes too far on the customizability end.

  • A standard base with a fixed value that is the same for the home builder and the pot dealer (not just in Washington). Otherwise your using barter, which is fine, but highly personalized. Currency needs everyone's agreement to work.
  • Because you can't bank on someone who may fall out of fashion in an instant.

    Ask those poor people now stuck with Rolf Harris artwork.

  • So, it's a paperless IUO system. Where do I dump my savings to get into this!?!

  • And people have been doing them since we needed to trade stored grain.

  • ...isn't a currency.

    Sorry.
  • ..base publishing on randomness. Slowly grind site's reputation to an all time low.

  • If it's not fungible, it is not a currency.
  • Anderson isn't aiming to supplant Bitcoin, or even challenge the money-exchange model that drives society. But he's hoping it will change the way people think about currency

    Ah, so the whole thing's just a performance art piece, not a serious proposal. Good to know. Now we can just ignore him until he goes away.

  • They used to call it indulgences.

"Out of register space (ugh)" -- vi

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