Next Generation Money

Thanks to the invention of the Internet, Money does not have to behave the same way that it did 1000 years ago. Our outdated concept of money left over from so long ago is hurting us now, creating tremendous pain and agony for millions (perhaps billions) of people all over the globe — and it’s only getting worse, year after year. Serious problems such as poverty have NEVER been solved, under the current financial systems of the world.

Humanity now has a super-powerful tool, the Internet, which we can utilize to build the next monetary system if we feel like it. The Internet gives us instant communication with everyone and anyone, all around the world. It gives every person the ability to broadcast to millions of others — an ability previously reserved only for the elite — World Leaders, and Hollywood.

But we have the Internet now. We can literally invent ANYTHING as our new money — we can decide ANY WAY that we want it to work — and simply by behaving that way, by following the new rules of money that we invent, we can lift ourselves out of poverty, out of financial doom, to a new level of success never seen before in all the history of the world.

When you play a game of Monopoly (or better yet CashFlow 101, or PayDay) you are temporarily redefining what money is by using in-game play money. The rules in these games are clearly different than how money works in the real world. Since every player understands and (usually) agrees on how those fake-money-units work, so the game progresses, and everyone has an enjoyable time (usually): buying and selling things, paying taxes, buying real estate, “doodads” like boats, etc. Surprisingly, this is a good example of what I’m talking about — an agreed upon system that’s different in some way from our current money system, and thus has different benefits. This different system works only because everyone has agreed on these different rules. Somebody invented the rules and documented them, and every player follows them. Everyone knows you magically get handed “starting money” at the beginning of the game, nobody ever seems to be surprised by that— even though such a thing NEVER HAPPENS with our current world money system. Nobody suddenly hands you a bunch of cash in the real world “to get started in the new year”, in our society! Wouldn’t we all be surprised if that ever happened! But it could, if that was part of the rules, a set of rules that were well thought out and made sense, and every participant agreed on the rules… think about that for a moment.

Principles of a New Money System

There are an infinite number of ways of creating and managing a new monetary system. These are principles that I think are the most important.

  1. Payment Amount for Work Performed is Voted on by Others
  2. Payment System has a Source and a Sink
  3. People make more money the better they work
  4. Payment System is Infinitely Expandable/Contractible
  5. Payment System is Peer to Peer — No Central Clearinghouse
  6. Investing and Leverage achieved thru Teaching

See if you can visualize this system working in the real world. Imagine it operating like a machine, and see it working successfully. Watch it dispassionately, like viewing the gears of a running clock. What adjustments will be needed to make this work?

1. Payment Amount for Work Performed is Voted on by Others

When a person performs some work, such as creating a product and giving it to someone who needs it, or performing service for someone who needs it, they need to be reimbursed for their work. But they themselves are too close to the work to judge how much they should be paid for it — they are personally involved in it — they’re too close to the problem, so they are ineligible to decide how much it’s worth. But another person who was not there, not personally involved, may not understand exactly how much value the work created, or how much effort was put into it; so they aren’t perfectly qualified to decide its value, either. (Besides, a single person could be persuaded to choose a higher value or lower value depending on many factors; including their own happiness/anger/emotional state at that particular moment.)

The solution is to implement a voting system to protect against as much personal bias as possible — both conscious bias, and unconscious bias. It needs to involve as many outside people not related to the person & project, who can provide a distant balanced view and decision about the value of the work performed.

So what is the best voting system we’ve ever invented, to help in this way? The best system I’ve ever seen personally is the Slashdot Voting System.

The kind of system we need is one where a number of people (at least 5–20 people) review all the materials related to some work that was performed, to evaluate the value of that work, and type in what they believe to be the monetary value of the work, without being able to see the values other people have entered.

Then a moderation system needs to kick in where other unrelated individuals can review a number of the voting results for this person & work performed— these moderators are voting on whether the numbers make sense to them — they mark whether a particular vote was too high, or too low. Too high means that the person who did the work was paid too much for the work done; too low means they weren’t paid enough.

Then, there can be a meta-moderation system where individuals can review a number of these Moderation decisions described above, and vote only “Yea” or “Nay” — whether the decision made by the moderator was acceptable or not acceptable.

The individual performing the work (and the person receiving the results of the work) must take pictures or videos, and write details about the work that was done, why it was needed, who is affected by it and how, how long it took, etc., and post all this to a common Internet site which everyone can access, specially designed to store, search, and view these things. This is the evidence, the documentation, the “artifacts” of the completed work.

A system like this will surely take some getting used to, but has a lot of benefits. All of this, combined, has the result of:

  • producing the best value for the work performed, as an average of all values provided (throwing out highest and lowest) — with small adjustments made for moderator input, but only for moderations that were meta-moderated “yea”. The “nay” moderations are discarded.
  • “karma” rating values are assigned to each person voting, including all moderators. Voters and moderators gain or lose karma points based on how well they perform, as decided by moderators and meta-moderators, respectively. Any person with too low of a karma rating will not be offered as many opportunities for voting/moderating, and their votes will be weighted less until their karma is brought back up to good numbers again. This limits the damage caused by out-of-control and hateful people. It also limits the ability of people to be bribed for voting certain ways — individuals voting too positively for the individual will lose karma and lose their power to vote over time.
  • I intentionally did not give any specific numbers here — those are really “tuneable parameters” and will have to be experimented with to determine good values over time.
  • A normal work-day for everyone will be: do your normal work, but also spend 5–10 minutes Moderating other’s work, and Meta-moderating some other people’s Moderations. With a good user-interface, this sort of thing can take very little time to do a great amount of good for others in society.
  • People will feel good about participating in the most democratic system ever invented, they will be able to reflect back upon those people they voted/moderated, and how things turned out for all involved.
  • People will understand that for themselves to be paid for work they do, others must vote/moderate for them; so they will directly see why it is important for themselves to vote/moderate others.
  • People will understand not to help others get over-paid, because they don’t want those people taking too much money from themselves, for any given type of work they need done. People will understand not to cause others get under-paid, because they themselves don’t want to be under-paid by others, for work that they do in the future.

But where does the money come from to pay this person for the work they did, once the value is decided by the system?

2. Payment System has a Source and a Sink

Each person is paid a finite amount of money at the beginning of a time-period, say, 1 day. The amount they’re paid is variable, and depends largely on the good works they’ve done in the past, with most-recent-past weighing more heavily than distant-past. There is also a minimum amount paid, so that no matter what, the person can afford to eat food, wear clothing, live in a minimal apartment or house, have rudamentary access to the Internet.

So in a sense, the money paid to the individual who performed some work was created out of thin air at some time in the past, and now is added to their bank account as payment for the work they performed.

There is a similar concept in electronics — electronic circuits have a “source” and a “sink” or “ground” (“earth” in the UK). A power source such as a battery is usually applied to those two points in the circuit, to create a voltage potential across those points, which drives the electronics to do their thing. Very often, the sink of one circuit feeds the source of another circuit.

One electronic circuit doesn’t care how much electricity any other circuits have; just as long its own source has enough of the right kind of electricity, it can keep operating.

Money can operate the same way, if we decide it does!

3. People make more money the better they work

The more valuable the work is that you perform, the more you get paid — as defined by everyone else except you. The world can decide the greatness of the work you do — which is excellent feedback to you, to know which of the things you’re good at, are the most valuable to Humanity. Humanity votes on your capability and usefulness with every payment, so you can adjust to changes over time, and do the best work you can, to help the most, and be paid the most.

Thus there always is a direct correlation between how much you make and how great the work is you’re doing. No more “I’d love help, but I can’t get paid enough to do that.” The world will step up to make sure all needs get met, because of this dynamic adjustable payment system.

Are there not enough teachers in a certain area? If they’re in high demand, the price goes up, causing other people to see that value, and want to switch over to doing that kind of work if they can, increasing the work force doing that type of work, lowering the price of it to balance out. Similar checks and balances to a modern economic system’s “supply and demand”.

4. Payment System is Infinitely Expandable/ Collapsible

Because money is made “out of thin air” for each person each time period (day), when you have more people, there’s more money to go around. And when you have fewer people, there’s less money to go around. Which is perfect. No need for inflation, deflation, bubbles, giant losses, and all the emotional pain and agony and other craziness of our outdated financial systems.

5. Payment System is Peer-to-Peer — No Central Clearing House

With a system like this there is no need for a central bank or federal reserve. No need for a government controlling anything. We needed that in the past, but it’s unnecessary with this system. The system moderates itself, expanding and contracting as needed, automatically.

6. Investing and Leverage achieved thru Teaching

In our current financial system, one way to “get ahead” is thru investing and leverage. Investments are when you have your money working for you — creating more money that you can use in the future. Leverage is the idea that your money can have many times its own power — thru debt borrowing, usually, in the hopes that the investment’s value increases in the future. Leverage works for you when values increase, and work against you when values decrease. It ends up being a huge gamble, this leveraging of your investments; is our economy crashing, or improving, day to day, next month, next year? Because it’s nearly impossible to predict the future, it’s nearly impossible to be assured of gaining value thru leverage for all except the very largest investors.

Investments are important, today, for retirement — when you’re too old to work (to be of value to others), you’ll still be alive, in fact you will probably live another 10–20 years, or 30, from age 60–65 through the rest of your life, be it 70, 80, 90 years old, or older. How can you be sure you will have money to eat food, buy clothing, get medical help, and have a place to live, without being a burden on your family and society? Investments are the modern way of guaranteeing you have “passive income” in retirement. It’s so difficult to manage, though, in today’s society, it’s easy to make huge mistakes that risks your happiness of life in retirement; and it changes year to year. Modern retirees cannot make as much income from Social Security and other means, as retirees from 20–30 years ago. It’s a sad truth that over time, a lot of the automatic ways of surviving in retirement are slowly dwindling, leaving more and more up to the folly of investing.

In this new financial system, there is no such thing as “investing”, so how can you manage to survive in retirement? The answer is Training.

When you teach others the practical knowledge of your expertise, once you are very good at what you do, you will inherit a small percentage of income that those people make, for the rest of your life, like a passive income. So for example, if you’re working making 20-units of money today, that creates no passive income for retirement. But if you teach 1 person how you do what you do, then each time they successfully make money in that same field, you will automatically receive let’s say 1% of what they make. This 1% is not subtracted from their income — it’s simply added to your income (“value from thin air” again). So, when you retire, if you were able to teach 50 people what you do, and they continue working in that field, you will receive 1% of each of their incomes, which is maybe half of what you made while working. If you can teach 100 people, that’s roughly 100% of what you made while working; and so on.

Out of 10 people you teach, maybe 5 of them really continue doing that work years later. But also, one of them becomes a teacher themselves — and so you get 1% of their 1%, or 2-levels-removed passive income! You brought them into the world of work that you used to do — and they had such a powerful impact on society, they’re making passive income from the teaching they’ve done. Because you were instrumental in their training, you get a slice of their slice as well.

Of course the numbers here are just examples, and surely will need to be changed and adjusted, to fit society properly. Maybe it’s way too hard for someone to train 100 people in their lifetime. Maybe it’s way too easy. Or maybe less than 5 out of 10 people continue on the same work; maybe it’s only 1 person out of 10 who’s still doing that work many years later. Adjustments will certainly have to be made to the algorithm before it’s perfect.

A lot of this does depend on cooperation. When Humanity is ready to cooperate for a better life, they will be able to actualize systems like this for far greater happiness and success, more than anything we have seen before.

This is just one proposal for a working financial system that could revolutionize economics as we know it, and thrust our society into the true twenty-first century.