Monday, 13 February 2012

Personal Currency

Creating a virtual Currency

A few years ago I created a virtual currency. The unit of currency was the Favour, with 100 Favours to a Blessing. Each member of the community was issued with 10 Favours on the 20th of March, (this was actually for a company.) The company was growing, (number of staff) at about 10%, and the central bank was automated, but effectively was the board of directors.

So what was being traded? Shifts, holidays, cover, lunch, (so mostly time but also expertise.) This all seemed fine but controlling the supply of money was broken. Once someone had spent their Favours how did they acquire more. How were Favours used by those that amassed them. Those that ended up with the largest collection of Favours tended to be the same people that did not need to spend them.

Each shift had a value in Favours and could be traded. So who sets the price?

The money supply

If more Favours were issued then the value of the Favours in the market would drop.
The first solution was to enable any person, (not even members of staff but customers and suppliers) to be able to purchase Favours. The interesting thing was that being all digital it was possible for someone to individually price their Favours and even price them depending on who was buying. This meant that the central bank did not have to sell money for there to be a supply.

Why stop at one currency?

At the end of the day all money, after some exchange rate, is the value of a good or service. Many goods are fungible, (one apple is the same as another from the same tree.)  Ever service has a skill level, and the higher the skill level the more specialised the server has to be. Even those with expert level can provide two very different services, (two master cooks can both provide a meal, but one may clean-as-they-go and the other may leave the kitchen a mess.) This leads to skill groups that collect or join associated skills. Each of us can learn more each day, but there are only 24 hours in a day. This means that our time has a value. If we work twenty hours a day for seven days then our service quality, (for most people) will drop as sleep has a value.

Personal Currency


This lead to Personal Currency. Each person could sell their currency at any price that they wanted, and link it to a service. The only egalitarian unit is the Babylonian second.
So my personal currency for general computer work would be 10 seconds per second. This gives a velocity. (10s/s). The greater the velocity the greater the rate at which I will accomplish the task. So my personal currency for interior decorating should be 0.01s/s, (because I have no talent for it) but is actually 100s/s because I have no interest in that work. (Everyone has a price; For everything!)

Skill compatibility

So imagine two people, (Alice and Bob) that can both walk-a-dog or baby-sit or write-a-computer program. Alice programs in Scala, c and Python. Bob programs in Scala, c++ and Perl. Bob likes dog-walking and does not like baby-sitting. Alice prefers baby-sitting but does not mind dog-walking.

So we want someone to walk our dog. Who do we pick? Alice or Bob can walk-a-dog and so mostly we go for the person that charges less, (lets leave out personal relationships because that gets complicated quickly.)

Now we want someone to debug a function to our existing company program. It is written in c. Bob charges less for c++ than Alice charges, and though they are not the same language, Bob can probably find the bug for us.

Now we need a new function writing in Scala. Who do we pick?

These examples show that each person needs to be able to enter a skill and those shopping need to be able to know what level they are at. This is where peer review comes in.

Bob enters his skill and the level that he thinks that he is at. Alice works in the same department and works with Bob for a few years. She can comment on Bob's Scala work, but really, as a potential customer I just want a number, but we need a fuzzy match against skills themselves.

Now we need something translating into Latin. Both Alice and Bob did Latin at school and Bob got grade A- and Alice for B+. That was ten years ago and since then Alice has become a member of a group that meets once a month and spends the whole evening only speaking in Latin. Bob has not used his Latin at all.

Is it written language or spoken language?

There are many variables to take into account and they change with time. Imagine searching for the right person in an open market. Either the system has to be very good at fuzzy matching needs to skills or the person searching has to know the equivalence of Scala and Java.

Customer review

If a customer gives Bob a bad review then how should that impact his score? It depends on the customers own skill level and interests. If the customer is Alice's half-sister Anne and Anne thinks that she is helping Alice by giving her "competitor" a negative review then we should reduce the impact of Anne's view. But Anne and Alice do not have the same last name so matching people to families is not automatic, (we don't have the computing power for DNA comparisons.)

Your desktop computer breaks. Everyone knows someone that is, "a whizz with computers." In my experience that can be anything from, better-than-the-person-making-the-claim all the way up to the likes of Moxie and Shevek.

[ I once had a boiler installed by a master-plumber and he had two men working with him. The master was clearly competent, but the attention to detail of the other two
even though they were sticking to tasks well within their skill set, was terrible. The next factor was the breaking of a verbal contract. I had negotiated with the salesman that the plumbers would install a new dishwasher at the same time. (I had the dishwasher delivered the day before so it was ready.) I explained that had it been simply a matter of connecting to existing pipes I would have done it myself, and he assured me that it would not be a problem - he said that it would be included in the original quote. Once the boiler was installed I was given the, "the dishwasher isn't on the docket" argument and
immediately a passable relationship went sour. I can clearly rate all four people and give another rating for the company as a whole, "Avoid!" and a sixth for the on-site team, "Shoddy." (I've since had two plumbers in to fix the job.)
This little anecdote is here to demonstrate that reviewing is a skill in itself. Had this happened to someone else, (as I'm sure it has) then one review could taint the skills of the master-plumber, who was perfectly good at joining two copper pipes. ]

The solution that I came up with was weighting the reviews based on the relative skill level of the reviewer. (Then the reviews needed to be weighted by a, "was this helpful" vote.)

This highlights what I have been arguing for years, that practical experience, (phronesis) is far more important than theoretical knowledge, (episteme). In the end the customer should not be interested in which school taught you the skill or the grade that you achieved at the time, but your present skill level, (techne) and the quality of your work, (arete-eunoia).

Skill Levels

We could define skill levels into some standard, but with two people both being competent we might need some greater granularity.
  1. Ignorant
  2. Know about, ("heard of" level.)
  3. Novice
  4. Beginner
  5. Competent
    • 4.1 Level I Bob 2001, Alice 1999
    • 4.2 Level II Bob 2003, Alice 2010
  6. Proficient
  7. Expert
This is where an Elo rating system comes in. ERS is a relative ranking system invented for chess, (but used for any competitive sporting event from weichi-go to racing-car drivers.) How much better than me is the worlds top chess player?  Easy: today Magnus Carlsen is 2835 and I am 1678. So 1157 Elo better. Now I could charge half as much as him for chess lessons, but he might be too busy with tournaments to teach, or you might be Swedish and he might, for Norwegian nationalistic reasons, refuse to teach you. If we were talking about painting your house then location and geographical factors come into play, (less so with chess which can be taught over the Internet via web-cam.)

The second half to this is wisdom vs knowledge vs smarts. Knowledge, as I see it, covers a subject, (e.g. trees.) You can know the names and germination and have read all sorts of things. Wisdom is more general, and could cover cultivation and farming. Smarts are much finer: Do you have extensive experience designing, planning, implementing and managing a commercial forest? These would not be the same smarts as a forest ranger even though the two may have broadly overlapping knowledge and roughly overlapping wisdom.

I am a computer professional

Probably not. A professional has to be accredited with a governing body. This would include medical doctors, accountants, lawyers, (obviously there are many more.)
(Certainly lawyers know that time == money with their billable hours.)

All of the people that I know that work in computing, (even if they are qualified professionals in other fields) are computer artisans. Even with qualifications, there is no guarantee of talent, beyond the ability to pass an exam.

A solution for Earth

This works on a small scale: Everyone one knows how good everyone else is at each task, or can estimate how good they would be at any given task. How do we

  1. Scale this up to the whole planet
  2. Ensure the security of the system cryptographically
  3. Create it such that it is distributed, but seamlessly interlocking.
  4. As portable as a mobile phone but without the risks
(A PGP key can have an image of the owner embedded in it. Want a new image? Create a new key, add the image and sign it using your old key. Then revoke the old key. All of this can be done publicly, and with no more computing power than is found in a mobile phone.)

Traditionally the system was word-of-mouth. Then it became curriculum vitae, anchored with references. This might have worked for an industrial age, but the future will require something a little better, (unless some form of telepathy is achieved.)

So it might be true that time = money, but as a potential customer I would like to know the probable quality of work before I look in my wallet or at my watch.

This post is dedicated to people with the smarts, like today's birthday boy.

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