15 Nov 2014

Reputation is Orthogonal to Exchange

in Currencies, Currency Design, Exchange, Gift Economies, Reputation

It feels like it's been a long time since I've posted about any of the principles of currency design that I've discovered in designing, building and launching currencies over the past 10 – 20 years.

This one seems worth specific mention, since it seems like such a frighteningly common mistake that everyone makes as they start to break out of the old school money model just a little bit.

It's tempting to blame Cory Doctorow's Down and Out in the Magic Kingdom for setting this precedent in his depiction of Whuffie. I appreciate that he was at least creating a post-scarcity / post-monetary vision. But I don't think he started this problem, it’s just that many people fall prey to the same pattern of thinking because it's like the money we know.

Here’s the crux of it. Reputation currencies do NOT operate the same way as monetary currencies. Period.