I recently published a video suggesting that Social currency is backed by Time as part of my series on Social Capitalism. I made the argument that time is the true scarce commodity because it is not easy to debase, counterfeit, or forge; it is therefore the perfect basis for a currency.
Still, a few people always come back with the idea that influence, reputation, game tokens, tweets and more recently “checking in” (a la Foursquare), are all social currencies – citing the experts, of course.
There are several problems with this. First, none are really scarce – I can find an honest person anywhere. None are actually commodities because nobody is deploying the identical influence as any another person.
The idea that “currency” as the storage and exchange of value is also insufficient – a glass of water stores value as does a digital camera or a even a goat. Nobody in Silicon Valley is twittering feverishly about the latest surprise goat farm acquisition.
Indeed influence and reputation are valuable and may act like a financial Instrument but until the purveyors come out and actually describe it as such, I need to call them on their choice of words – and I have. A typical response is, “Well, uh, you know what I mean”. My response: “…And, uh, you DON’T know what you mean?”
Beanie babies, tulip bulbs, and CDOs were financial instruments too. Seriously kids, clarification is extremely important because the consequences of misconception, especially in this important emerging subject area, are tangible. Real people trying to make the wrong ideas real actionable are wasting their real precious time.
Here is what they mean to say:
a Derivative is something whose value is derived from the value of something else. So when we talk about influence, the value of a person’s influence can be derived from the value of many things. If you are in a burning building, the influence of the firefighter is different than an endorsement from Shaq, yet both may be valuable at different times.
The premise of my argument is that the basis of all currency is in Time. Time is limited for everyone. A good reputation saves people time. The right influence applied in the right places at the right time saves people time. Passion, purpose, productivity and persistence are measures of how someone spends their time. Checking in at the trendy hotspot on foursquare is an expression and commitment of time. Co-location is a function of place and time. Like love, the value of time is in the eyes of the beholder. Valuable yes, currency, no.
Talk about how your product lives in time and you’ll earn all the social currency that it’s worth – not the other way around.