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.

Comments

Paper tracked barter

[msobkow]

This sounds like paper-tracked barter, with a delayed payment on half of the deal. Which is kind of the key problem that money was intended to solve -- money can be traded for *anything*, not just what the issuer has that is of value. This ends up being a throwback to the days of "store scrip", only even more limited.

An interesting experiment, but ultimately futile and pointless.

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.