Is Influence the Real Value of Currency?

Money. It’s what makes the world go around. Whether you think of it as a measure of success or a byproduct of it to serve as a tool to realize your passions, it’s still a critical element of modern society. People need it, businesses want it; governments bow down to the suppliers of it and most would agree that it is synonymous with power in our modern society.

However, in the wake of recent financial meltdowns, bailouts, and the emergence of new online constructs that both remove the frictions as described in this Wired Article, and innovations in microlending, p2p financing, digicash and virtual goods, can what we’ve accepted about money still ring true? Is it possible that in a networked planet with measurable intangible value systems might just reinvent the model of money itself?

Consider Doug Rushkoff’s history lesson on abundance-based currency vs. the scarcity based model we’ve come to accept. Why is it that the few control the many by a set of rules and standards invented by them without our collective input? Rules that haven’t really applied since the feudal kings imprinted money with their images to wield power away from the citizens who traded based on their real product output.  Why is this still the norm of how the world works today? Consider also what is already happening in a multibillion market for virtual goods in games, to intangible value of brands and then ask yourself what is the relevance of a gold standard when the ability to create gold is in our immediate nanotech future? Do you pay a premium for something because it’s really scarce, or are you influenced by the intangibles of that purchase decision?

The answer might be as simple as Influence=Currency.

It’s what we’ve known about influence all along. Except that now, socially networked systems can account for the intangibility of influence because the technology is letting us. Let’s look at three key factors in this mix and then decide for yourself if Influence IS the New Currency or not:

Influence=Leadership=Currency
We buy things from those whose ideologies align with ours. We love Apple because we also believe that we can change the status quo, for those who helped usher in Barack Obama, it’s because of the shared belief of hope and change. In short, we elevate market leaders to power because of the way they influence us, not because they “pay” us in the traditional sense. Their currency is social. It’s what they use to achieve their respective dent in the universe. Interestingly, with the proliferation of digital networks like Facebook, our currency is increasingly becoming about social influence too. If you get retweeted often on Twitter, brands want to align with you and give you free products and services to talk about. If you move up the influence chain within a virtual game like World of Warcraft, there is a market with people wanting to pay you cold hard cash for your in game “abilities”. If you are a power user on a location-based social network like Fourquare, you are rewarded with discounts and freebies when you “check-in” to a particular area. How different is that than paying you?

Technical Frictions are Getting Out of the Way
P2P lending services like Zopa may be just a novelty now, and digicash players like Obopay, Zong, and gWallet are just fringe novelties for the technorati, but a billion plus people connected online may just redefine banking using these constructs. Virtual cash startups are revving their engines now to participate in a frictionless transaction economy where merchant fees will soon be a thing of the past. Early adopters like AMEX who recently acquired Revolution Money are already on it, and as technology evolves to smart systems talking to one another, the middleman model of underwriting the value of money will seem as archaic as bartering chickens for a bag of salt. Paypal is already integrating with Facebook for us to “Pay with Facebook” soon, and chances are, the value of what makes your currency more valuable than mine is not going to be determined by Forex regulations, but the actual social influence I have in my network through the stuff my friends and I “Like”. Confusing? What if I told you that the actions you do for free like sharing, saving and commenting would one day be worth points that you could convert into real goods and services? As traditional mass marketing practices become a relic from the industrial economy, people like myself are already inventing solutions that marketers are willing to pay for right now. Your influence is now worth cash because technology is finally getting out of the way.

Reinvention is Imminent
How long will we put up with These Fuc*ing Guys as satirized by Jon Stewart of the Daily Show? When the world was less connected and virtual digicash was just a dream, one could argue that that’s just the way the world works and some things never change. However, today the market incentives for removing transactional frictions, and leveraging social influence to create value is much too lucrative for both individuals and institutions to accept the status quo. From reinventing the media model to exchanging credits for smart energy, the next big shifts of our progress as a civilization depend on making value tangible to the way people understand it in a connected world. Why do we need a degree in economics to understand WTF a GDP in Parity means when all it really means is what your particular currency brand can buy you vs. what you’re getting for it at the exchange rate. There’s no reason to have multiple meanings of the same thing if value is calculated directly by your creditworthiness deemed valid by your influence in your social network.

While it’s evident that I’m neither an economist or a subject matter expert in this area, the signs I’ve pointed to here is evident of the undercurrent of something about to change here. Money as we knew it will probably not be the money our children transact with when they get to be our age, and that can be a great thing to finally move us forward to a brighter future. Thoughts?