Penny for a thought

Macro view of microeconomic transactions

Brian triggers a thought on “How Would The World Change If You Could Easily Send A Penny To Anyone?”

And that thought is — ‘ Why do we use currency ?’ ; Sure, there are millions of research papers on money and exchange value and all of that. But back to the basics - why do we need currency ?

Trade and commerce are mostly human interaction. We exchange materials and experiences. Behind each such exchange is the perception of ‘value’; a perception we create based on what we know, a.k.a ‘information’. Sometimes the perception is learnt from someone else( a repeatable thought pattern created by branding?), sometimes the perception is built along the way( often known as customer experience?) — either in the process of the early stages of the typical buyer cycle or in the actual process of rationally picking options. The currency we are exchanging is an ‘exchangeable value encoded chunk of information’ !!

Currency is ‘information’ — information technology will pave the path towards a more discernible path to interconnect micro and macroeconomics of the world around us.

The pursuit of the smallest unit of value exchange is quite like the pursuit of the smallest indivisible particle in physics. The ability to manipulate and work with those particles led us to the magic of nuclear physics and many other modern day miracles. If we can, through use of sensing and information storing devices, enable micro transactions, we will also enable a quantum leap of financial and economic energy around the world.

Operating at smaller and lower levels of exchange value, we’ll remove many forms of information symmetry that lead to variations in the assessment of value for materials and experiences. A combination of information and dynamics of interaction, will lead to better price discovery as well as improved access to ‘Just in Time’ capital in many capital starved parts of the world! Behavioral economics tells us that we tend to be at valuing what we can interact or engage with. So, microtransactions will make everyone an owner of some form of ‘Capital’ !

The pennies are our particles, little things that can unleash large amounts of kinetic energy from the vast potential of human interactions.