New Digital Currency Bases Value On Reputation

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.

That's Ripple

[IamTheRealMike]

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.

Cory thought of this

[Ultra64]

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

Re:Paper tracked barter

[Antique Geekmeister]

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.

Re:That's Ripple

[TheRaven64]

Not really. Whuffle is more sensible as a currency concept - it's fungible. There's no difference in how you can use Whuffle based on who gave it to you. There are some interesting economics papers based on the idea that anyone can create a mint and the value of its currency would be tracked based on the reputation of the person.