Cryptocurrency? Let’s think more creatively

28 June 2018 14:46

Cryptocurrency? Let’s think more creatively

I forgot when was the last time I used banknotes or coins (I guess you do not remember when you used them either). We get and make payments in kroner, dollars, euros, yens, or whatever currency your state issues, but it could equally have been points – after all, all we see is just numbers on screens. This is not a big deal in itself, and history is full of examples of various things used as currency: animal skins, barley, cocoa beans, weapons… well, anything members of a particular society valued because they needed to use it in their lives. We do not really know (and probably will never know) for sure how people transitioned from this barter or barter-like systems to a more monetary system. Yet, I think it is fair to assume that no one issued centrally the very first representative money, that is, a medium of exchange that only represents value, but has almost no value on its own. Not a king, not a single temple, and fairly certainly, not a bank (I know that you know they had not existed yet).

Most probably, the first representative money was something that was in a relative shortage, had a standardized but aesthetically pleasing appearance, and was rather useless as a tool or food. Our monetary systems, however, are a direct descendent of a bit different type of money – the representative money that were issued centrally about 2600 years ago. The reasons for their wide acceptance are obvious: besides mere coercion, this has been the fastest route to get a medium of exchange universally recognized and (more or less) trusted.

The current wave of digitalization has opened new opportunities, and there is hardly anyone who has not heard of cryptocurrencies (“Bitcoin” has already become the new mantra). Their main characteristic relevant for this discussion is that they are decentralized: they do not require a central authority, and, as a result, have no connection to central banks or governments. Now, you might notice that this is, in some way, going back to the roots of representative money. To be honest, from the grand perspective, this is little more than going back to the roots – just a bit more state-of-the-art and on quite a larger scale.

According to the 19th century economist William Stanley Jevons, besides functioning as a medium of exchange, money functions also as a common measure of value, a standard of value, and a store of value. For very many people across time and space, this would invoke associations with gold, silver, diamonds, or similarly shiny stuff. Ironically, these, too, have as much real value as representative money (here, I am talking about value as something important in and for life). Considering that money has proved to be quite convenient, is there anything else that could perform the functions of money and have real value for everyone?

First, we have to identify what we actually exchange. In service research, there is a fast growing field of service design, which views market offerings not as tangible or intangible products, but as experiences: individuals and organizations just set up the stage for customers and provide artifacts that enable (always subjective) experiences. A bit different but not conflicting view comes from Vargo and Lusch, who have postulated in their service-dominant logic that the fundamental basis of exchange is service. For them, service is application of competences for the benefit of another party. An auto mechanic knows how to fix a teacher’s car, the teacher knows how to educate the auto mechanic’s child. When they apply their knowledge, they basically exchange their service. If it is not barter, money “mediate” this exchange. In most cases, the seller sets the price that the buyer either accepts or not, but price is never truly a guarantee of the good experience. There are also other pricing strategies – one of them being “pay what you want”, that is, buyers are free to pay any amount. The assumption is that customers will pay more if they like what they get, but this does not exclude that they can decide to pay nothing even if they truly enjoyed service. Could the current technological development enable a more objective evaluation of subjective experiences given that these experiences come from people servicing each other?

The only thing that mattered for one of the most famous English philosophers, Jeremy Bentham, was happiness, and by “happiness”, he meant no more than a predominance of pleasure over pain. Putting (in many cases eligible) criticism aside, the beauty of this principle is in its simplicity and universal applicability, even to other species. The amount of pleasure and pain is also relatively easy (or will very soon be relatively easy) to measure with gadgets. What if, instead of representative money, we will have a “happiness wallet” that will grow bigger based on the measurement of others’ experiences with our service? In this case, every recipient of service – that is, everyone - literally becomes the issuer of money. And what if we will have to pay from our “happiness wallet” for causing pain to others? Instead of using price that filters out the uncommitted or impoverished, providers may allow access to their service based on the minimum size of the happiness wallet, effectively filtering out bad guys.

Due to the space limits, I will let your imagination fly without my further assistance. For my part, I can easily imagine a healthier, more cooperative society with fewer bullies, fewer narcissistic leaders, more polite strangers, and more satisfied customers. I can also imagine a society where people with disorders characterized by troubles with social interaction and communication may become poor and require social welfare “payments”. Yet, we have already accumulated quite a large body of both scientific and philosophic literature, which, I believe can help us in thinking over possible challenges and taking a truly innovative step towards a happier society.

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