#PunkMoney Pilots an Alternative Currency using Twitter
Everywhere you look—the Republican primaries, Occupy Wall Street, the media—the spotlight is on fixing the economy. Some critics have charged that the economy, as we know it, never really worked in the first place—and that alternative money systems might be more equitable. You may have heard of Ithaca Hours, the experimental time-based local currency that began circulating in a city in upstate New York in the early nineties; the currency is still in operation nearly two decades later. There are also “time banks” popping up around the U.S. that operate on a similar philosophy: people barter chunks of labor time in exchange for services or goods.
Another, newly-launched, Twitter-based alternative currency called PunkMoney is attempting to leverage online tools to create an exchange circuit that subverts existing ones. The idea behind it is that you tweet to someone a promise—such as, “I will take you out to dinner,” or, “Mowing your lawn next week,” and then that person can redeem the promise at any time, or before a certain date that you specify; the person can also transfer the promise to another person. The tweets are tracked on the PunkMoney site, creating a record of the promise. London-based Eli Gothill was inspired partly by Occupy Wall Street to start PunkMoney as an example of how people can form economic relations without using structures created by government or large corporations. Below, Gothill shares with Dowser the ideas behind PunkMoney, how it works, and where he hopes it will go.
Dowser: What motivated you to create PunkMoney?
Gothill: Punkmoney wouldn’t have happened without [anthropologist] David Graeber’s [recent book] on debt. It made me think differently about money. PunkMoney tries to challenge our conventional ideas about what money is, and show how we can re-envision money. One idea from Graeber that influenced PunkMoney is the history of peer-to-peer money which has been forgotten by economics. There are many examples of money created by people as opposed to states or banks: Graeber writes about bills of exchange that existed in England, or credit notes between merchants in the Indian Ocean. As capitalism took hold and power became consolidated, the state and banking system clamped down on these forms of money, particularly in England, and we see today, a few hundred years later, that hardly anybody knows that these types of money existed. There isn’t a very good theoretical understanding of what they were and why they had advantages over more centralized forms of currency. I think there’s potentially a theory of peer to peer money that someone should try to create, but Graeber sketched it out a little bit.
When did PunkMoney get started?
I created PunkMoney around the time of Occupy Wall Street, in October.
Was that a coincidence?
No. I actually wrote PunkMoney in New York. I was there going to a conference for Contact, which is an interesting event bringing together innovators and technologists, who are interested in a peer-to-peer future. Occupy was going on at same time so I went down there and found it quite inspiring. So, the site is a baby of that period last year when people were thinking in revolutionary terms. My particular interest is monetary systems, and the design of money is a big factor in why we’ve had a massive financial crisis, and the fact that there are alternative money systems is not really discussed outside of more radical circles. Whenever people talk about fixing the crisis, they talk about tweaks to existing models—better regulations, for example, or higher reserve requirements. There’s no discussion about completely rethinking money and how it’s created.
What is the mechanism that makes PunkMoney function online?
You can look at a currency as a kind of recorded statement. In PunkMoney those statements are promises. There’s a whole category of money based on promises—government money is a promised discount in equivalent amount from your tax liability, or bank credit is a promise to pay you on demand. So PunkMoney consists of promises between people as opposed to between people and institutions or states. It’s entirely trust-based, and between peers, so it requires or encourages community. The only way that this money has value is if people trust each other. Reciprocation is not essential to it—it can be entirely one way or based on reciprocation of uneven value, and that’s an important dimension of Graeber’s thinking, how economies work on three different principles, exchange, hierarchy, and communism, but not in totalities—elements of these categories can co-exist.
How does the trust money transfer list help PunkMoney function?
That’s an idea that’s still developing. The basic idea is when you say you’re gonna transfer PunkMoney it implies that the person you’re transferring it to is happy with that. If Sally promises Bob a coffee and Bob gives it to Bill, Sally might not be happy about that, because maybe she trusts Bob more than Bill. That was one of the interesting problems that arose. And the trust list is part of that solution—it makes transfers limited to a community. So, if you say, I’m happy to transfer this note anywhere within the Occupy Wall Street community, you’ve made it less problematic because people in that community have reputations and they’re interconnected.
But is that list exclusive or does it have requirements for joining?
So the second question is, how do you define what a community is, and how do you do it in a way that’s not very political? It’s possible using trust grabs—the idea is you start off with some seed users, and then on Twitter you create a list for that group and you put in it the people who you think are also in that. And they do the same, and so on. And then PunkMoney can crawl those lists from the starting points we give it–and there’s a peer-to-peer way, somewhat, of defining the boundaries of community. So, if Bill turns out to be a free-rider or an untrustworthy individual, you can go to the person who listed Bill and say that Bill seems like he shouldn’t be part of the community.
It sounds like a contentious process—there’s no objective way to decide who’s in and who’s not in the community. This has been an issue with Occupy Wall Street—they have debated whether they can exclude members who pose risks to the community in a significant way.
There’s always a subjective dimension about who should be involved in a community. The important thing is to have transparent mechanisms for dealing with it. But the potential to become unlisted is an incentive for people to be honorable. The long-term goal is to enable PunkMoney to support lots of types of communities.
How would it do that?
It would be cool if anybody could create a community through a hashtag. Essentially you would use the tools I’ve been describing to crawl your own community list, and by doing that you’re establishing these trust communities where PunkMoney can flow easily. PunkMoney can become a tool for community-building by encouraging people to gift to each other.
Why would I use PunkMoney, though, within a community, if I could just say to someone I trust, ‘Hey, I’ll buy you a beer tomorrow,’ or something like that?
PunkMoney is not for high-trust relationships; it’s intended more for people you have some links to–you know each other somewhat. I’m trying to see whether you can use PunkMoney as a tool to create more trust and stronger relationships.
How are you evaluating the success of the project so far?
Right now, it’s a prototype and it works, but I’m working toward a more robust system, with better community management. I built PunkMoney as a proof of concept, but people do use it a bit. And people talk about it more than they use it. The idea seems to resonate with people. But the actual usage might not be quite there yet; it will take some time. The common usage now is, ‘here’s my commitment: I’ll take you out for beer, and you make it public’—and then it’s up to them to take you up on it. It’s popular in the alternative finance community, in London and abroad. Thinking about how to evolve PunkMoney is quite delicate because I don’t want to mess up what’s good and overcomplicate it. I have dozens of ideas but I’m pretty conservative about anything I do, because there’s something in it that works.
Interview has been edited and condensed.