Money is a promise to pay. If no one can be trusted to honor their obligation, the wh*** money concept collapses.
Futurist Bruce Sterling has come up with the concept of
reputation servers. The principle is that the net stores your obligation-honoring track record, makes it available to people who are considering being in business with you. People with a solid reputation have an easier time accessing credit. Insolvency rates go way down. Reputation-transparent local economies get a lot more solid, and are more prone to attracting investment. Grameen Bank built their case for microlending based on a system that kept insolvency rates well below 1%, and showed everybody that the world's poorest could be better at honoring their obligations than the rich. Reputation a****sment is so valuable to lenders that they buy it from companies like Dun&Bradstreet.
The problem, as always, is who shall watch the watchmen: how do you know you can trust reputation servers? The most promising model to keep track of reputation seems to be the "voting" model: whoever does business with person A rates the transaction, and uploads the rating into the server. This what eBay does. However, people who understand the algorhytms used by eBay to summarize a seller/buyer track record can game the system: for example, you can buy lots of objects for a few cents each to build a 100% reputation, then steal on the first big transaction. D.W. Chadwick at University of Kent discusses the issue at length in
this paper.
My take would be that vote-based reputation servers should not replace currency, at least for the time being. But, if they can be made costly to game, they can give a valuable contribution towards making credit cheap and easy to access for reliable people, while stabilizing the economy against confidence slumps.
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