Saturday, July 18, 2009


This post is part two of a four part series about OPEN CURRENCIES. In part one, I talked about the need for an "open transport network." For the purposes of this post I will assume that as a base.

So what happens after we have a transport network in which any currency is allowed to make transactions? That sounds great, but as we all know there are countless different types of currency. How can we make sure the transport network knows how to deal with them all?


Before getting into how a transport network could interact with rules, I want to make an assertion. On this blog, we define currencies as "
formal information systems that allow communities to interact with flows." Doesn't that sound a little like "keeping score?" When we keep score, we measure a flow of something that happened in a game. We then base our game play on the record of those flows. With this in mind, we make the assertion that the rules that define a currency share a deep structure with the rules that define a game. A currency is a game we play together to build wealth (thanks Eric for that insight). Our community decides to count things in certain ways that make visible the things that our community values. From this point of view, monetary currencies make up only a tiny part of the currency spectrum (thanks Art for that analogy). The currency spectrum includes everything from voting, grades, diplomas, Fair Trade Certified badges, movie tickets, etc.

So why go into a rant about the expanded definition of currency here? Because, what really makes all these currencies interesting is how they interact. My credit score tells the bank how much and under what terms to lend me money. Two currencies interacting in a formal structure. So let's consider this in the light of OPEN.

The first aspect of OPEN RULES is that the users should know the rules of the games they are playing. Do you know how your credit score is calculated? I don't. I didn't agree to that game, and I don't even know the rules. In fact, how could I legitimately consent to play a game, unless I knew the rules?

Consider this: there are two types of games. One is where knowledge of the rules is not expert knowledge, and mastery comes from understanding the patterns of the game. Chess is one such example. The rules are pretty simple, but mastery is not. The other type is when the rules of the game become so complicated that mastery of the game is synonymous with mastery of the rules. Are these fun or even fair games? This how bankers (and lawyers) gain their power. They know more about the rules than the rest of us.

So, the first part of OPEN RULES is the premise that in order for people to legitimately consent to be part of any social game (or currency), the rules must be readily available and relatively easy to understand (not in legalese).


Let's return to the analogy of chess. Chess did not always have the same rules. In fact, it has been evolving in stages since the 6th century. It wasn't until the late 15th century that the rules of chess, as we know them today, came into being. Consider how this evolution happened. Did a monarch decree that all chess must be played a certain way? No. Did an official "chess committee" form, research the best possible rules, and then impose them on the rest of us? Clearly not. Instead, the players themselves were constantly experimenting with new rules, and sometimes these experiments caught on because they made the game more fun. Chess has open rules. I am free to use a chess board and make up any rules I like. If enough people like my new rules, they will play the game that way. The game of chess is still evolving to this day. Check out these modern experiments: four-player chess, 3d chess

Currencies need to be able to evolve in the same way: not controlled from a central committee, but emerging from the creativity of the users. Open source software allows programmers to "fork" a piece of software if they want to change something. If the changes are liked by the community of users, they are adopted. Open Rules in a currency allow users to "fork" a currency in the same way. If I don't like the rules of a given currency, I can start a new currency with rules I do like and invite others to play with me. If those rules allow us to build more wealth, they will catch on in the same way that new rules of chess caught on. It might also be the case that the currency evolves to fit two separate niches, and that's fine too. There will be an endless variety of currencies that fill specific niches.

Another reason why Open Transport is paramount is to ensure that new experiments aren't excluded. But how can an Open Transport network accommodate an endless stream of new rule sets? There clearly needs to be a standard (and extensible) language in which we can express rules. This is analogous to HTTP and HTML. HTTP transports resources, and HTML is the language browsers understand that tells them how to display resources. We need a "currency browser" that gives users the ability to play in any type of game they choose. This "browser" or client, could live on a cellphone or a computer, but wherever it was, it could interact with other clients. Think about it, I can use my iPhone to post a picture to Facebook, and Firefox on my laptop allows me to see the picture later.

This language for expressing currency must not be owned by anyone. It must be completely open to all, so evolution in the language itself can proceed in the same way as evolution in the currencies that are expressed within it.

The MetaCurrency project is germinating just such a language. For more information click here.

In short, we believe allowing people to self-determine when generating, choosing, and adapting rule sets will unleash an unprecedented wave of social creativity. We clearly need new and creative approaches to counting, valuing, and exchanging resources if we are to solve 21st century problems. We must not shoot ourselves in the foot by making closed rules that don't allow for evolution. The "complementary currency" community must not make the mistake of turning itself into a specialized class who exclude new approaches from closed systems. We need to let in any and all rule sets and trust that durable solutions will emerge over time. We need OPEN CURRENCY NOW!

To be continued...

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