A Troll is a member of a race of fearsome creatures from Norse mythology. Troll mythology is, in fact fairly complex but seems to resolve to common images of Neanderthal type people living under bridges who extort money from passersby, steal babies, and fear God.

In Internet slang, a troll is someone who posts inflammatory, extraneous, or off-topic messages in an online community, such as an online discussion forum, chat room, or blog, with the primary intent of provoking other users into a desired emotional response or of otherwise disrupting normal on-topic discussion [Wikipedia].

In the Intellectual Property world, a troll is an individual or business that holds patent or copyrights with no intention of developing the IP and every intention to enforce against infringement by those who do develop ideas.

Naturally, we seek to anticipate the future usage of the term Troll in a context of Social Capitalism. We can say that someone who was in a position to constrain Social Capitalism has the potential to engage in troll behavior.

The troll does benefit from the eventual success of traveler passing through the constraint; however, they create an unnecessary or non productive friction in a market. This can kill many business plans as troll fees and uncertainties need to be factored into the risks of doing business.

I am reminded of a legal system that facilitates litigation over education, negotiation, and cooperation. Social media has an inherent self-policing aspect that may threaten “regulators” in law and government who seek to hold exclusive vetting privilege over a social market.

I am reminded of advertisers who put lipstick on the pig by pretending to play up the whuffie, trust agent or engagement vibe, but instead lay Astroturf and buy up social media outlets. Spam is spam is spam.

I am reminded of Internet service providers that purposely slow down a connection and charge for speed that costs them less to keep open than to slow down. I am reminded of the demise of unlimited data packages for mobile Internet – now that the user is an addict, pull back the dosing in exchange for compliance.

In short, a social capital troll is any person or organization that seeks to CHANGE the online behavior of an individual and their community rather than EMPOWER the individual and their community to do what they would have done in the absence of the troll.

Fell free to add more for future posts on this subject……..

Cory Doctorow in Seattle sponsored by The Stranger (Newspaper)

Activist, Science fiction writer, and blogger Cory Doctorow spoke at in Seattle to a full house at the Sunset Tavern in Ballard. He performed a reading from his latest book, “For The Win”. Cory has an interesting sense of abstraction. He’ll spot a trend – or collection of trends – and extrapolates them into the future dutifully revealing all the complexities of the human condition.

For The Win

His reading centered on the “exploitation” of young adults who are hired to play online games where they work to achieve levels, rewards, virtual currency, and game status which is then sold to rich Western players. Some players become highly valued for their knowledge inventory of game world monsters, strategies, power points, and the uncanny ability to assess the knowledge inventory of their opponents who’ll get suckered into a virtual dual with predictable consequences. The kids literally “mine gold”. As always, gold corrupts the most innocent hearts resulting in situations and behaviors at least as strange as the game itself.

The Activist

Cory has long been an activist for digital publication rights and rules. Not surprisingly, the Q&A was dominated by privacy, security, and exploitation of information issues. Cory recently closed his Facebook Account which caused quite a stir in the blogsphere. Ironically, every big name in world-class privacy violation had recently been in the news for Mr. Doctorow to eloquently spit roast on an open flame. It was quite entertaining.

There is a reason that it’s called Monetization

While Mr. Doctorow did not specifically mention this, what struck me most was hearing him talk around this emerging battle for control of people’s information. While this idea is not new, the reasons behind it may be new. As Money is losing it’s capacity to store and control value, human knowledge is increasing it’s capacity to store and control value – this is hugely accelerated by social media. The desperate attempt to control people’s information is really a proxy for the desperate attempt to control knowledge, therefore to re-control the value that money once represented.

Unfortunately, controlling information also destroys value.

People actively participate and share on social media to achieve levels, rewards, and status which is then sold to corporations in the form of predictive marketing by third party aggregators like Facebook. Some people become highly valued for their knowledge inventory of real-world game perils, influencers, and social mavens and become celebrities of the craft. Many develop the uncanny ability to assess the knowledge inventory of their opponents who get suckered into a virtual dual with predictable results.

Suddenly the News started sounding like one of Cory’s Science Fiction Novels…

Event Sponsored by: The Stranger

Tara Hunt; Future of Money and Technology Summit 2010

In 1999, Cluetrain Manifesto flipped everything we knew about online behavior on it’s head. The integration of information being published on the Internet reached a tipping point indelibly articulated for all time by Doc Searles: “Markets are Conversations”

The Whuffie

In 2003, Cory Doctorow published Down and Out In The Magic Kingdom where he introduced the concept of Whuffie as a form of reputation currency that accounts for social value in a fictional future society. In Cory’s thesis, people who produce things that represent social value were awarded Whuffie. People who produce anti-social value were punished Whuffie. The twist was that everyone has equal say as to who is awarded Whuffie and who is punished Whuffie. In retrospect, the concept of Whuffie, stands today an important metaphor marking the beginning of the social media revolution.

The Whuffie Factor

In her book The Whuffie Factor (2009), Tara Hunt identifies the facts of a reputation backed exchange among real people, communities, companies, and social interactions – with all their associated human complexities. By the gift of wisdom or intuition, Tara’s choice of the modifier “Factor” is an important distinction. In mathematics, a “Factor” is a multiplier against some other quantity.

Social Capital

In Tara’s book, Whuffie is roughly synonymous with ‘new’ social capital - a hugely complex financial instrument that is currently emerging before the eyes of all practitioners of social media. In 2010, everyone still struggles to articulate social capital with a 1999 vocabulary of new conversations living in old financial markets. There simply is no word for the phenomenon of social media daily manifesting in so many new and valuable ways – it’s just too new.

Yes, Tara has critics, but most I believe are short sighted. The term “Whuffie” is as good a word as any, so deal with it. The term “Factor” is what Tara is really talking about, so lets move on.

Love ‘em or Hate ‘em, Whuffie is a Derivative.

From Wikipedia: a derivative is any agreement or contract that is not based on a real, or true, exchange ie: There is nothing tangible like money, or a product, that is being exchanged. For example, a person goes to the grocery store, exchanges a currency (money) for a commodity (say, an apple). The exchange is complete when both parties have something tangible.

If the purchaser had called the store and asked for the apple to be held for one hour while the purchaser drives to the store, and the seller agrees, then a derivative has been created. The agreement (derivative) is derived from a proposed exchange (trade money for apple in one hour, not now).

Infinite Possibilities

In short, the current value of the relationship is backed by the past and future value of the many other relationship(s) formed. The twist is that social media has vastly equalized people’s impact on the true value of relationships – this remains consistent with Doctorow’s thesis. Tara takes us a step further where the underlying asset can be generalized as simply “value” where the Whuffie Factor is a derivative against this value. This is consistent with Searles’ thesis.

Social Currency

In my opinion, The Whuffie Factor will become one of the seminal books of its time period. Indeed there are many excellent books in the genre of collecting, building, engaging, storing and exchanging trust, reputation, or influence in Social Media. What sets Tara’s book apart is that, like Doc and Cory, she had the guts to call it something real.

Elevate the conversation or get out of the way

Tara Hunt effectively nails this profound abstraction to the floor so that the rest of us can now walk through to define and articulate the Holy Grail of our generation; a true Social Currency. Bravo Tara, Bravo

To Accelerate Serendipity, that’s the Whuffie Factor.

Photo Source/Credit; Jesse Lara

The above video playlist consists of the full 6 parts of the expert panel discussing non-quantifiable exchanges as recorded on April 26 2010 at the Future of Money and Technology Summit in San Francisco. The complete video is about 55 minutes. I encourage you to watch it because very few discussions about the future of money approach the subject with as much experience, introspection, and clarity as this historic panel has.

This is not another doom-gloom room – but a truly optimistic model of a future financial system built on a platform of social media. These panelists represent some of the top thought leaders, visionaries, and practitioners in the area of “Local Social” – where nothing happens until the rubber meets the road. It was a great privilege for me to be a part of this esteemed group.

Panelists:

Tara Hunt; Social Media Strategist, Author: The Whuffie Factor
Daniel Robles, Director, The Ingenesist Project
Micki Krimmel, CEO; NeighborGoods
Chris Heuer, CEO, Social Media Club

Moderator: Tara Hunt

The future of Money and Technology Summit is one of the most important conferences to emerge as a result of the accelerated innovation and organizational re-structuring forming as a result of increasing constraints on the global financial system. We all look forward to another excellent conference next year!

What is a Non-quantifiable Exchange?

The term “Non-Quantifiable Exchanges” was the title of a panel session that I attended at the recent Future of Money and Technology Summit. In researching the subject, it appears that a “non-quantifiable exchange” is more notable for what it is not rather than what it is. Case in point – after the precursory Google Search, the term and a modern definition does not exist – but the room was full !?!?!

With all of the talk about cloud sourcing economies and romantic notions of emerging organic currencies, it would seems that people could just get along fine without a central mechanism for storage and exchange of value. Instead, each individual would assess the value of the transaction in terms of what it means to him or her. Currency could then take the form of a person’s reputation, productivity and general usefulness for assessing value and helping others to do so in their community (reference)

If it’s not an asset…or a liability, then what is it?

Traditional valuation systems for businesses immediately start tugging at a host of standard assumptions for measuring “performance” – many of which are no longer meaningful. Land, Labor, and capital cannot be deployed to the same efficacy whereas social capital, creative capital, and intellectual capital are being liberated to social media with astonishing results.

Nobody can produce an accurate ROI for social media, however, social media presence is becoming a substantial factor in the valuation of a company.

Likewise, reverse access to personal information about customers on Facebook is both the lifeblood and poison of new engagement marketing. The general public have become “external intangibles” to the business plan – where the heck is that on a balance sheet?

Goldman Sachs claims that those who bought their worst subprime products were sophisticated investors whose obligation it is to understand the quality of the underlying components. Their defense is that the customer failed, not the system of disclosure.…what? How long would Dell last if this had been their response for poor quality?

Cloud Economics or Inversion System?

Vapor is quantified by the balloon that contains it. A cloud is quantified by the weather system that surrounds it. The atmosphere is quantified by the mass of the planet and it’s proximity to a sun, and so on. Therefore, the term “non-quantifiable”, and the word “exchange”, are mutually exclusive. If there is an exchange, there is quantification.

Suppose I was to suggest that value stored in social currency may exceed the value stored by financial currency. The paradigm shift now becomes, who quantifies whom?

My new favorite rebuttal to any argument from economic ailment to political controversy is: “I’d like to see a social currency thrown into the mix”.

It is really convenient to have the same position on all issues; Health Care, Terrorism, abortion, financial meltdown, education reform, and political scandal – my response is the same. “I’d like to see a social currency thrown into the mix”.

What the heck am I talking about?

Several recent blogs articles (and here, and here, and here) have converged around the idea that social currency is something that people earn from being active in a community, network, or social organization. Social Currency in lauded upon the recipient in many forms such as Google juice, respect, engagement, trust, re-tweets, reputation, merit badges, check-ins, tokens, Whuffie, wiggly worms, etc…

Regardless of what you call it, all social currencies have a very unique characteristic that differentiates them from a financial currency. Social currencies reward high integrity and punish low integrity.

Social Currency can be earned or converted:

Organizing a community around a common goal is serving a need that government and corporations do not have to fulfill in their “Social Charter”. So it has value.

• Helping a neighbor find a job supplants the work of the government funded unemployment office.
• Helping an elderly neighbor with their shopping supplements the Department of Health and Human Services.
• Adopting a child alleviates expenditures in the foster care system, abortion, and possibly the courts and prisons.
• Helping local vendors stay afloat by organizing a community of group buying or groupons reduces the demands on bankruptcy courts and social services.

Social Currency can also be eliminated:

• Public servants and politicians who squander the trust of their constituents through acts of corruption and impropriety
• Corporations who decimate local priorities in favor of Wall Street priorities.
• Breaking the law, endangering others, neglect, fraud, breech of social contract .
• Consumption far in excess of social contribution.

Take any issue and apply social currency

The health care debate is an excellent example. First, let’s apply a social currency to all of the people voting on the bill. Next, let’s apply a social currency to everyone arguing against the bill. Next, let’s apply a social currency to everyone arguing in favor of the bill. Let that count establish the burden of proof of the argument.

Next, let’s pay for Health Care Reform in social currency, not financial currency. That means people with a surplus of social currency receive health care at a certain rate. People with a deficit of social currency receive health care at a different rate.

Finally, compensation to health care providers would also be biased by a social currency. Providers with a surplus of social currency are paid at a different rate than providers with a deficit of social currency.

What about cheaters?, who pays these subsidies? how do you count it?, It’s a job killer, corporations will go bankrupt, losers still lose, Holy cow, this messes everything up!!!!

Actually, it’s not much different than how we allocate money on a credit scoring basis. It’s not any more difficult to count than the blood-money coursing through the veins of an unvetted financial / insurance system. Most importantly, constraining a Financial Currency with a Social Currency sets up a whole new landscape of benchmarks and incentives that accelerate innovation, in effect, printing new currency.

That’s what I mean when I say; “I’d Like to see some Social Currency in the Mix”

Many people know that the events that inspired what now has become The Ingenesist Project originated with my personal observation and experience of the Mexican Peso Crisis as a visiting professor.  Very few people in America realize the implications of a real financial crisis and associated currency collapse. Unfortunately, many people in the World have – perhaps we should listen to their ideas.

The Good, the Bad, and the Ugly

As recently as 1999-2002, Argentina experienced the type of worst-case financial collapse that America narrowly avoided only a few months ago – but that may eventually happen. The simplest reality is that when things go really really bad, people need to continue trading among each other for basic needs using a functional and relevant currency.  When things are really good, people need a currency that reflects productivity, not debt – i.e., social capitalism priorities, not necessarily Wall Street capitalism priorities.

Ground Zero

It is not surprising to me that great applied currency applications would be  coming out of Argentina today.  The Whuffie Bank is an exciting new project that introduces a reputation based currency inspired by several science fiction authors of the past, specifically Cory Doctorow.   Likewise, the founders of the Whuffie Bank demonstrate the perfect combination of humility, openness, and inquisitiveness that is required in the emerging social media space.  Everyone realizes that the Whuffie is not a perfect currency, but the story has to start somewhere and TWB has something important to say.

I’ll talk more about the Whuffie Bank as I learn more.  First, it would be best to describe the origin of the term.  I lifted the following description from Wikipedia:

Whuffie is the ephemeral, reputation-based currency of Cory Doctorow’s science fiction novel, Down and Out in the Magic Kingdom. This book describes a post-scarcity economy: All the necessities (and most of the luxuries) of life are free for the taking. A person’s current Whuffie is instantly viewable to anyone, as everybody has a brain-implant giving them an interface with the Net. (Cory’s Blog)

The term has since seen some adoption as a synonym for Social capital, including its use in the title of the Tara Hunt book The Whuffie Factor.

The usual economic incentives have disappeared from the book’s world. Whuffie has replaced money, providing a motivation for people to do useful and creative things. A person’s Whuffie is a general measurement of his or her overall reputation, and Whuffie is lost and gained according to a person’s favorable or unfavorable actions. The question is, who determines which actions are favorable or unfavorable? In Down and Out, the answer is public opinion. Rudely pushing past someone on the sidewalk will definitely lose you points from them (and possibly bystanders who saw you), while composing a much-loved symphony will earn you Whuffie from everyone who enjoyed it.

A gross Whuffie score looks the same to everyone viewing it, but a weighted Whuffie score is subjective. This meta-Whuffie takes into account right-handed Whuffie (the amount given by people you like) and left-handed Whuffie (given by people you dislike). Another variety is pity Whuffie, given to those who are down on their luck.

In Down and Out, some judgments based on Whuffie are automatic and require no conscious thought; the same technology that allows brain dumps is used for weighting and for finding interesting things. As brain dumps allow machines to carry consciousness, the machines can do the thinking for the people and allow them to know automatically.[1]

There are few details in the book about how this system actually worked; most of the explanations given are very general, like this one: “Whuffie recaptured the true essence of money: in the old days, if you were broke but respected, you wouldn’t starve; contrariwise, if you were rich and hated, no sum could buy you security and peace. By measuring the thing that money really represented — your personal capital with your friends and neighbors — you more accurately gauged your success”.

A person with a score of 0 is just as capable of giving and revoking Whuffie as someone with a score of 1,000,000. The person with the million-point score would be invited to a lot more parties and shows and other exclusive and elite events, while his bottomed-out counterpart would get dirty looks from people on the bus and would probably not be allowed into any reputable clubs or restaurants. But both of their opinions on somebody else would count for the same amount of gross Whuffie.

Like all economic systems, Whuffie has effects that seem undesirable to many. For example, it might tend to favor popular speech at the expense of public discourse, and it could be frequently uninformative: if a person has a high Whuffie score, is it for guitar playing or auto repair? However, both of these are already the status quo under the existing capitalist system, and the concept of weighted Whuffie helps make better decisions on a person-by-person basis, and thus is more flexible than rating someone by their bank account. Also, the Whuffie system might keep a public history of how each person’s Whuffie was earned, unlike the secret origins of other people’s money in a capitalist system.