Tagaltcurrency

Imagining a Bitcoin Alternative Built on Reputation Instead of Numbers

My latest for Wired:

Instead of using pure mathematics to prevent things like the same person spending the same money twice, Document Coin will rely on personal reputation to keep all transactions in order. And each unit of currency created using Document Coin could have different values in different situations. If you use a coin in one place, it might be worth more then if you use it in another. The goal, Anderson says, is to get people to completely rethink the entire idea of money. [...]

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.”

Ultimately, he hopes to get developers thinking about the social implications of crypto-currencies, and to get people to question the idea that everything needs to have a set, numeric value. “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,” he says. Document Coin’s usefulness as a real currency is limited, but Anderson does hope people will eventually want to use it. “If you build something, you don’t want to be disappointed if it succeeds,” he says. “You need to build things that you would be happy to see take off.”

Full Story: Wired: A New Digital Currency Whose Value Is Based on Your Reputation

Previously: My interview with Anderson about CouchDB

Alternative Currency Thriving in Greece

Yet another example of alternative currency thriving in a collapsed economy:

What rules the system has are designed to ensure the tems continue “to circulate, and work hard as a currency”, said Christos Pappionannou, a mechanical engineer who runs the network’s website using open-source software.

No one may hold more than 1,200 tems in the account “so people don’t start hoarding; once you reach the top limit you have to start using them.”

And no one may owe more than 300, so people “can’t get into debt, and have to start offering something”.

Businesses that are part of the network are allowed to do transactions partly in tems, and partly in euros; most offer a 50/50 part-exchange.

“We recognise that they have their fixed costs, they have to pay a rent and bills in euros,” said Pappionannou. “You could say that their ‘profit’ might be taken in Tems, to be reinvested in the network.”

Choupis said she thought the network would have grown even faster that it has if people were not so “frozen, in a state of fear. It’s like they’ve been hit over the head with a brick; they’re dizzy. And they’re cautious; they’re still thinking: ‘I need euros, how am I going to pay my bills?’ But as soon as people see how much they can do without money, they’re convinced.”

The Guardian: Greece on the breadline: cashless currency takes off

(via Brainsturbator)

The real question is not whether these types of systems work during times of economic crisis, but how they can persist once organizations like the World Bank step in to “restore order.”

See also: The New Currency War.

Second Life Founder Launches New Alternative Currency

CoffeeandPower utilizes a virtual currency. Users who sign up and give their cellphone numbers so they can receive SMS updates are automatically seeded with C$20 to get started. C$ is exchanged when goods are bought and sold. More can be purchased (at an exchange rate of US$0.75 for C$1) and users will be able to “cash out” as well. As many of the transactions on the site might be quite small, the virtual currency will help minimize transaction fees for every exchange. In other words, you can earn from C$ and then buy things on from other users without any fees.

Second, CoffeeandPower really emphasizes the community around this marketplace. That’s not a surprise when you think of Philip Rosedale’s work in creating the virtual world Second Life and its online community and economy. Users will be able to chat with each other, both in a public timeline and in private messaging and video chat.

ReadWriteWeb: Second Life Co-founder’s New Project CoffeeandPower: Exchange Virtual Currency for Real-World Tasks

Interview: How Bitcoin Created a Decentralized Crypto-Currency

Bitcoin

I interviewed one of the developers behind Bitcoin for ReadWriteWeb:

Bitcoin is an open source, peer-to-peer electronic currency created by Satoshi Nakamoto and maintained by a small team of developers. As part of what’s turning into an ongoing series on the distributed Web, I talked to contributor Gavin Andresen about how the software works. This is a technical overview. If you’re interested in an economic or political look at the software, you can read the Wikipedia entry or Niklas Blanchard’s essay on the project.

ReadWriteWeb: Interview: How Bitcoin Created a Decentralized Crypto-Currency

See also: The New Currency War

The Future of Money: It’s Flexible, Frictionless and (Almost) Free

future of money

Emphasis mine:

About 20 percent of all online transactions now take place over so-called alternative payment systems, according to consulting firm Javelin Strategy and Research. It expects that number to grow to nearly 30 percent in just three years.

But perhaps nobody is as ambitious as PayPal. In November, it further opened up its code, giving anyone with rudimentary programming skills access to the kind of technology and payment-industry experience that Ivey used to build Twitpay. The move could unleash a wave of innovation unlike any we’ve seen since self-publishing came to the Web. Two months after PayPal opened its platform, 15,000 developers had used it to create new payment services, sending $15 million through the company’s pipes. Software developer Big in Japan, whose ShopSavvy program lets people find an item’s cheapest price by scanning its barcode, used PayPal to add a “quick pay” button to its app. LiveOps, a call-center outsourcing firm, built a tool that streamlined payments to its operators, turning what had been a nightmare of invoicing and time-tracking into an automated process. Previously, anybody who wanted to create a service like this would have had to navigate a morass of state and federal regulations and licensing bodies. But now engineers can focus on building applications, while leaving the regulatory and risk-management issues to PayPal. “I can focus on the social side of the business and not on touching money,” as Ivey puts it.

Wired: The Future of Money: It’s Flexible, Frictionless and (Almost) Free

See also:

The New Currency War

And Technoccult posts tagged altcurrency.

Trade School: Will Barter for Skills

trade school - barter for skills

From now until the first of March, OurGoods, an online barter network, is running a pop-up storefront on the Lower East Side of Manhattan called Trade School, where entry into classes is based not on money or talent, but on meeting the needs of a particular teacher. And while some classes like grant writing and butter making have already filled up, there’s still plenty of room to learn more about irrational decision-making and chair-bound pilates, not to mention composting and improvisation.

Read More – Good.is: Trade School: Will Barter for Skills

(via Kristin Wolff)

South Korea considering virtual currency real

lineage shop

The Supreme Court acquitted two defendants in a case related to the legality of using cash to buy and sell cyber money for online games.

The court conditioned its ruling on the fact that the cyber money was earned through skill, not luck.

Supreme Court Justice Min Il-young ruled in favor of the suspects surnamed Kim and Lee.

The two allegedly purchased “Aden,” cyber money in an online multiplayer role-playing game “Lineage,” worth 234 million won ($207,558), which was lower than market price, through game item-trading Web sites.

JoongAng Daily: Supreme Court acquits two in cyber money game case

(via Theoretick)

Health Insurers Caught Paying Facebook Gamers Virtual Currency To Oppose Reform Bill

Health insurance industry trade groups opposed to President Obama’s health care reform bill are paying Facebook users fake money — called “virtual currency” — to send letters to Congress protesting the bill. [...]

Instead of asking the gamers to try a product the way Netflix would, “Get Health Reform Right” requires gamers to take a survey, which, upon completion, automatically sends the following email to their Congressional Rep:

“I am concerned a new government plan could cause me to lose the employer coverage I have today. More government bureaucracy will only create more problems, not solve the ones we have.”

Business Insider: Health Insurers Caught Paying Facebook Gamers Virtual Currency To Oppose Reform Bill

(via William Gibson)

I’m curious whether the answers to the survey have any impact on whether it sends a letter to congress.

Iraq’s mobile phone revolution

Asked to name the single biggest benefit of America’s invasion, many Iraqis fail to mention freedom or democracy but instead praise the advent of mobile phones, which were banned under Saddam Hussein. Many Iraqis seem to feel more liberated by them than by the prospect of elected resident government.

In the five years since the first network started up, the number of subscribers has soared to 20m (in a population of around 27m), while the electricity supply is hardly better than in Mr Hussein’s day. That is double the rate for Lebanon, where a civil war ended two decades ago and income per head is four times higher. [...]

They also became a tool of commerce. Reluctant to risk their lives by visiting a bank, many subscribers transferred money to each other by passing on the serial numbers of scratch cards charged with credit, like gift vouchers. Recipients simply add the credit to their account or sell it on to shops that sell the numbers at a slight discount from the original. This impromptu market has turned mobile-phone credit into a quasi-currency, undermining the traditional informal hawala banking system.

Economist: Better than freedom?

(via Chris Arkenberg)

Iceland’s currency stays afloat online

The in-game currency of EVE Online is the ISK. That’s right, the Icelandic króna. And where most multiplayer games have attempted to ban the translation of in-game assets to and from real-world money, EVE Online has not only permitted it but actively embraced it – so much so that daily speculation on world/game financial leverage is conducted openly on the official game web boards. As a result, the EVE Online ISK has remained fairly stable against virtually all the real currencies of the world for a few years now, fluctuating but not spiking, not crashing. There are people out there making an income, a real-life income, just handling the trades on the “floor”.

All of which is to say: Iceland has collapsed so thoroughly that at this point, its only economically viable export may very well be an internet spaceship game, and that internet spaceship game’s króna is for all intents and purposes a more real and valid and valuable currency than the actual country’s actual money.

Crisper: Signpost Says: “Welcome to the 21st Century”

(via Technovelgy via Theoretick)

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