However, what I'm going to write about today is alternative digital currencies such as Bitcoin. It is interesting, to me at least, to note that Bitcoin actually doesn't really differ much from traditional mainstream currencies in terms of how it spends. In technical terms, of course, it's quite different.
But what if we want to completely change the way that society uses money? What if we want to create a currency (or credit system) that actually gives us alternatives? Well I've been thinking about that. And I think I've come up with some viable ideas regarding alternative currency systems.
One of the main properties of traditional money seems to be the high degree in which it seems to be tied to the global markets and inflationary processes. It doesn't seem to be very conducive to decentralization strategies.
One of the main features that I would like to build into (or see built into) an alternative currency/credit system is a sort of natural independence from the whole...such that everyone can get a fair shake...an opportunity. Think about how each and every one of us has the same amount of time each day. We can spend it how we want. It's often one of the main determining factors of our monetary income, in fact. But what if there is a credit crisis/crunch, a bubble in a market or industry in which you are a professional, or some other global economic phenomenon?
The fact is that there are a lot of times where the opportunities (real opportunities) seem to be far more abundant than the cash that people have to trade for those opportunities. We need to notice the dichotomy between real natural resources and wealth and the artificial tool called money that we use to trade our skills and products for other products and services that someone else creates.
Of course, there's always the possibility to barter. Unfortunately, bartering can be time-consuming and this effect is amplified in our global and highly complex markets with tons of stuff being traded in the free market. It's just really hard to keep track of value when bartering. (not to mention...how would one save up value if you're bartering) I'm not discounting the role that bartering and negotiation can play in our lives. I think it can have tremendously good benefits in a lot of circumstances. But, let's be honest. Money is a highly useful tool.
Except when it's not. Money's not too useful if you don't have access to a whole lot of it. So what else can we use?
Keep in mind that we live and work in an open system. Our bodies and the plants and animals we eat are powered by the Sun. There's constantly lots of new energy being pumped into our environment. That's not to say that it's necessarily easy to capture that. But we are constantly building new infrastructure to help us capture more useful energy. And experts in every field are constantly finding ways to make energy do more useful ways and to accomplish the same task with less energy and less materials. Computers, for instance, can do orders of magnitude more calculations with a fraction of the energy input that it once took.
To cut to the chase, what I've been thinking about is a currency or credit system which would be completely digital (out of necessity) and which would have a minimum and maximum balance for all account holders. (people) Let's use the example of 0-100 being the range in which you could go. Everyone would start out with the same amount of credits and these would become immediately available for trade among your local peers, online bloggers, or whomever you want to buy from or support.
A term I've come up with that I think aptly describes this idea is Opportunity Credits. Why do I call it that? Well, the intent is that this system would be a more ever-present token with which people could trade with and which would be, by its very nature, more evenly distributed among people. By design, people would not be able to collect great piles of that currency. People would be able to collect great wealth. But that is not the same thing as the currency we trade with.
Wealth is the stuff that we use. Natural resources, land, water, air, a house, rare earth minerals, skills, relationships, health, etc.
Paper money (or digital for that matter)...or even Gold (especially just sitting in your vault) is not really inherently valuable. Admittedly, gold has more inherent value than paper money but how many people have a use, want, or need for a hunk of Gold. Sure, there's probably trace amounts of it in your smartphone but I doubt there are many people that have the capability or the interest in manufacturing their own smartphone. So is it fair to say that real wealth is pretty separate from the stuff we commonly trade in?
Anyway, back on topic. all currency is a medium of exchange which functions as a representation and measure of the value that we collectively perceive of certain things. And of course profits and savings are mechanisms which allow for upward mobility and wealth building.
Money transfers signals. Here's the thing...there's a plethora of different types of signals that people are interested in. There's a lot of different kinds of value. There's monetary value, all the different kinds of natural resources, brand establishment, customer relationships, trust, social capital, skills, time, opportunity, etc. Just to name a few...
It's safe to say that one single type of currency probably doesn't have the innate capacity to carry all those different signals very well. And, no, various country's currencies don't really count as different types of currency. Nor do I think that Bitcoin is different enough to count as a whole new style of market signal. Sure, it's a little different but it still has much of the same features. That is, individuals who are early adopters or who get lucky can easily have their wealth amplified inordinately beyond others who worked just as hard or harder or who have even more value to offer.
Not all currencies are created equal. Currencies are what basically "represent" us. They reflect what type of person we are, how skilled we are, or how much work we do. Or, to put it more accurately, money is meant to reflect the perceived value that we create for others. It doesn't always seem to hold true though.
Is money fairly and accurately representing us? You can make your own assessment and come to your own conclusions.
My vision is that we can come up with at least one new kind of currency or credit system which has the innate quality of supporting the local, individual, unique value and opportunity that each and every one of us is capable of. And hopefully it can help us each gain access to those opportunities in ways that traditional money doesn't seem capable of.
"The future is already here — it's just not very evenly distributed." -William Gibson
Let's distribute the future a little more evenly, shall we?
Cheers to Optimization...
-Andrew
