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Introduction to Currencies

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Currency vs. Money

Currencies are symbolic tools we use to manage currents. They can function in a number of independent capacities: as a unit of measure, store of value, token of status and a medium of exchange, etc. 

Monetary currency or money is a common way of bundling currency capacities to create a medium of exchange for a commercial economy. It is a small portion of the full spectrum of possible currency designs.


Busting out of our Boundaries... Powerful perspectives on currency

Currencies as Records of Currents

We use currencies as records of currents...

We are in the lazy habit of thinking that the flow of the currency in a transaction is the one that matters instead of the actual flow of goods, services, resources, knowledge or participation which flows COUNTER to an exchange currency.

Those real-world currents shaped and enabled by currencies are what make them so valuable and powerful.

The currency itself is actually just a flow of information. But there are two reasons we myopically focus our attention on the currency flow as if it is the one that matters: 

1) We are big-brained, symbol-using creatures, and it's much simpler to us to deal with those nice clean symbols than the actual sloppy flows -- dollars are easier to account for than time, random quantities of random things and other stuff which is difficult to count (such as the state of relationships), and

2) The REAL flow is an event which happens in a moment and is gone. If you were NOT there to witness the service being performed, the good being exchanged, or the participation of that person, then once that moment has passed, the only consistent way we have of knowing what occurred is the record we keep of the event. We use currencies to keep records of currents.

I believe this is the single MOST CRITICAL CONCEPT for currency practitioners to grasp. It allows us to break out of bad habits of thinking about currencies in very outdated ways (such as believing they have or should have intrinsic value because precious metals were once used as coins). This allows us to see currencies for what they truly are: formal systems which shape, enable and measure currents which allow communities to interact with those currents.

Let me paint a more concrete picture. Imagine being out for a walk in the snow, and you see a set of small animal tracks where it bounded out from under a hedge and crossed a field toward another shrub. Then you see them end in a sudden deep indentation, with some wingtip marks on extending out from either side. These tracks tell a story -- a flow of resources and relationships that took place in that field.

Of course, the story itself has passed. All we have left are the tracks. But the tracks can tell quite a lot to the right set of eyes: what types of animals were involved, how long ago it happened, which direction the bird flew off, etc. This is the role that currencies play in our economy. Actual currents of resources and relationships occurred and currencies are the tracks they left behind. The tracks are very informative to the right eyes, so we use them to make business and policy decisions.

Different currencies leave different tracks. The design of the currency makes certain things visible and leaves others invisible. It also determines who has what ranges of movement and track-laying powers.

LETS and Time Dollars have flows of currencies as units are transferred from account to account even if they are a mutual credit currency with a NET total of zero units at all times. Individual account balances are not necessarily zero, and the changes of these balances tell a story about relationships and resources as they moved within the community. It is those counter-flows which the currencies enabled and also the different mobility and track-laying powers that they gave to people who may be disenfranchised from dollar access.

The real power that we gain from these insights is that MONEY is not the only kind of CURRENCY. There are many other currencies that we use. We know that we use currencies as a medium of exchange, but also as units of account or measure, as stores of value, and even as tokens of status, worth or reputation.

Our real power as currency practitioners comes in understanding how we currently use these tools in our communities to lay value-tracks and all the ways that currencies can (and should) be used to track our stories of value.

We value excellence in a chosen domain. For many, winning an Olympic Gold Medal stands as the ultimate symbol of achievement within a sport. But it is not the gold that makes it valuable. In fact, different gold medals have been traded and sold. Their price has been determined by who won it when and how noteworthy their accomplishments were. Olympic medals are a token of status currency which tell us a story about races which have long been run.

Even though they can’t be traded, the points, scores and times achieved in each Olympic competition are also currencies which tell a more detailed and nuanced story of participation which has passed. The possibility of winning a Gold Medal shapes the flow of participation of millions of athletes all over the world. Scores are our official way of keeping TRACK. There is a formalized system of agreements about what counts and how it is counted. Certain people or roles are the ones allowed to ISSUE scores and medals. You cannot issue them yourself.

Anyway, I don’t want to wax at length about the various non-monetary currencies we actually use and why they are in fact currencies, there will probably be disagreement enough over this one example.

But let me leave you with one thought. There is incredible power in this model of understanding currencies which is largely untapped. Money is so powerful, because it is a currency, not just because it is a medium of exchange. Currencies are the means by we collectively interact with real flows of real resources. Healthy design and implementation of truly powerful currencies at all levels of endeavor gives us so much more than we get from money substitutes.


Currency Token Life Cycle
Currency Token Life Cycle:
The life cycle for each unit of a currency which starts with Issuance, then goes through Transaction, Conversion & Retirement

A currency system defines these stages for its constituent tokens.  Sometimes the rules for a stage may be that no activitiy is allowed in that stage.  For example, most reputation currencies (such as a college degree) cannot be traded/transacted.  All currencies require rules for issuance but may exclude functions of any or all of the latter 3 stages.

  1. Issuance
  2. Transaction
  3. Conversion/Co-Function
  4. Retirement/Redemption


Examples of every day currencies which we just don't think of that way (bus passes, movie tickets, coupons, certifications, degrees/credits/grades, titles, gold medals, etc.)



Why we care about shaping currents... Keeping Living Systems Alive



Difference between currencies and currents / map vs. territory


Maybe a link to the interactive map of currency design decision tree

Wheeled by Wagn v. 1.18.1

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