You say:

“It’s as ridiculous as having a hundred developers stand in a circle and pay the person to their left $1.”

Interestingly, that’s just how the Fed do it. They print a dollar, lend it to someone who has a plan for it, or spend it with someone who will do something useful for the country.

In each case, the expectation is that that someone will do the same — pass it on, either as a loan or in payment for something they find useful. It is not the ownership of the dollar that supports useful activity — it is the transmission of the dollar from one to another. The dollar was created out of thin air, but the things people will do for each other are real — and they will do real things for that dollar because they trust that there is a sufficiently large pool of people who will do all sorts of real things for that dollar when they have a need. And eventually, the dollar finds its way back to the Fed — who destroy it. And print another one (or another ten).

A dollar is not a real thing — it is simply a token which embodies, in a quantised way, the trust the community of dollar users has in the continued existence of a dollar market which offers satisfaction of desire.

It isn’t ridiculous at all — it is how the economy works.

Admittedly, this is the happy, benign version of this story — David Graeber’s ‘Debt, the first 5000 years’ has more detail — but it will serve us here.

So, what’s to stop coders just doing that? Simple, it’s the fact that, to get a dollar (a real one), you have to get it from the Fed. You have to either incur a debt or do something someone else wants — which is usually not what you are passionate about doing. And because of this, the dollar can’t go round and round the ring, supporting everyone — at some point, someone has to do something the Fed wants — go and buy a quart of milk, or buy some electricity — and that’s it for our happy little circle.

Actually, it’s worse than this, because all the money is lent at interest — the Fed aren’t happy getting their dollar back after seeing everyone happily busy at their passion, doing good for the community — oh no. They want a dollar and ten cents back. Which means someone has to have borrowed another dollar already — and you can see how we’re on this treadmill which makes it hard to do your real work.

The problem, it turns out, is the supply of currency — which is run as a monopoly. It’s the same with ETH or BTC (although here the monopoly is the algorithm, not an institution); to get it, you have to do something someone else wants done, or borrow it and pay back with interest.

So you’re right — getting coders to pay each other in a big circle is not going to work. But that’s not because it’s a ridiculous idea; as I hope I’ve convinced you, it’s exactly how everything gets done (everything that works through the market, at least; loving children and cooking dinner and giving people hugs and that sort of stuff has happily not yet been entirely commoditised).

So, thought experiment.

1/ Code Sponsor creates a currency token (call it CSP). It’s just information.

2/ Code Sponsor invents a metric, calculated from Git data points (commits, stars, forks, rate of issue resolution — you name it).

3/ Based on this metric, CSPs are credited to the project/coder. At the same time, CodeSponsor’s account in CSPs is reduced. CodeSponsor runs a deficit, but who cares? It’s a negative number in a db, that’s all.

4/ Code Sponsor sends messages to every coder it credits, telling them of their balance, and encouraging them to download a little app that gives access to their wallet. The app also tells them the metric that CSP awards are calculated on. If they want more CSP, they know what to do — work at their passion.

• At this point, the typical coder may well think — ‘BS! What can I do with CSP?’. They may check to see if it is some sort of tradable cryptocurrency (it isn’t, not yet, and certainly not in dollars). Nevertheless, enough are intrigued to keep tabs on it.

5/ Then, once we have some feeling of traction (1000 coders with balances, let’s say), the app is upgraded. Now, coders can post ‘wants’ and ‘offers’ — stuff they will do for, or want from other coders — priced in CSP.

• Now, we have a little marketplace, and a reasonable number of coders with funds (actually, they don’t need funds, but we’ll get to that later; people are used to a positive balance in an account feeling good).

6/ If this works, then a few coders will get help with their projects from other coders, and some CSP will move backwards and forwards. This improves the metrics of the coders involved. Code Sponsor continues to dish out CSP according to the metric, and runs a site where all metrics and all balances are published. Coders who participate in the scheme are seeing more CSP. Coders with the highest turnover of CSP are seen to be doing better (in terms of more credits from the centre), than those with high balances but low turnover. Participation in the market is what works.

• OK, OK, I hear you say; but I can‘t pay for milk or electricity with this stuff, can I? I can‘t even pay for hosting with this stuff, can’t pay for domain names. Why should I bother?

7/ Well here’s where it gets interesting. Code Sponsor starts doing some outreach work, talking to providers who sell things that even OSS coders have to pay for — domain names, hosting, graphic design work — closely related work that normally has to be paid for in $$. Code Sponsor manages to get a few of these people to take 10% of their charges in CSP — on the basis that there are coders, smart coders, who will work for CSP. The market grows in turnover and in diversity. Code Sponsor starts to take a little percentage of each CSP trade as a fee. It now has a huge deficit, but there is the glimmer of a ‘business model’.

• By the way, this isn’t a surprise — the business plan has been published all along. Around about now, too, another part of the plan comes into action — governance. You see, this market only operates on the basis of shared trust in its continuation and hope about its growth and healthy direction. So now Code Sponsor becomes a co-operative — offering shares (possibly in $$ at this point — there will be some need for these), developing good shared decision-making etc etc.

8/ Keeping an eye on the metrics, the point arrives (if the market is growing) at which the automatic ‘pump priming’ credits begin to taper off. To earn CSP in the future, coders will increasingly have to trade CSP. In a growing, code-work related market, this shouldn’t be a problem. However, there is no certain need to ‘earn’ CSP. Remember that Code Sponsor has been running a large deficit. Well, any member in good standing can run a deficit, if they need to. There’s no interest payable (and none paid on positives either). There will be a carefully calculated credit limit (based on published algorithms).

Right, that’s enough of that — time to clear up some points:

• this is not a coin-currency — it’s a mutual-credit system. Creation of currency information units is managed on the basis of careful monitoring of the CSP economy, but unit creation does not occur on the basis of any debt or obligation.
• This is a crypto-currency — in the sense that each user’s app will perform crypto-accounting to guarantee the integrity of its trading record and balance. The most obvious platform to use for this would be holochain.
• The question of whether CSP can ever be used to buy milk (in other words, whether it is ever going to be officially tradable against the dollar) is a moot point, which would be decided by the governance model.
• This is, as I have described it, a non-capitalist model. Large positive balances of CSP are pointless — they don’t earn interest, and if anyone needs a chunk of CSP, they can get it by raising a negative balance, so a large positive gives you no excess power. If this annoys you — if you want it to be more capitalist, then the rules can be tweaked; but remember, a currency is all about trust. If it smells as if you are ripping the community off, trust (and the value of the currency) will collapse.

How does this sit with you? I’d love to know.