The dollar ($) is down against the Euro (€) and the Pound (£). Not to worry. In the future, we’ll be creating our own currency. Let’s call it “money-me.” Enabled by the Internet, communities of interest are creating their own money systems and using them to trade for goods and services. These peer-to-peer “monetary” systems offer unique payback and facilitate forms of commerce that benefit our individual lives and global societies considerably.
Today's Internet-fueled Third Wave information age creates more options and opportunities for money to evolve. We all know how PayPal and WebMoney are fueling “mass” Internet commerce. Fewer may know about e-dinar, a fully gold- and silver-backed Internet electronic payment system.
Since the e-dinar system provides instant settlement (cleared funds are instantaneously transferred from the payer’s to the payee’s account without requiring third-party intermediaries), the digital currency enables “custom” Internet commerce in concert with Islamic law, which does not permit the use of a promise of payment as a medium of exchange.
Another example is the NOPPES currency in Amsterdam. It functions as a medium of exchange for trade and as a way that members of their community support each other’s activities. For instance, a member may earn currency by doing carpentry for one person, and spend it later on elder care with another member. NOPPES is one form of a Local Exchange Trading Systems (LETS) -- local, non-profit exchange networks in which goods and services can be traded without the need for printed currency.
These systems are in operation around the world. There are over 400 LETS schemes in the U.K. alone, like the Rheidol currency of the CyFLe Aberystwyth community in Aberystwyth, Wales. This isn't just bartering. Members get Rheidols for what they do, and they can then spend with anyone else in the system. CyFLe Aberystwyth has also set up inter-trading agreements and a currency exchange process with neighboring community currency systems. Community members browse an online directory of services, as well as the latest offers and wants, or they send and receive offers via email.
North America has many similar systems in operation, such as the BerkShares in western Massachusetts, Ithaca Hours in New York, and Calgary Dollars in Alberta, Canada.
Businesses have been providing customized currency for years -- U.S. shoppers will spend about $25 billion this year on gift cards. But increasingly, individuals are using the Internet to take this customization further.
Today, if you receive a gift card that is not to your liking, you can sell or barter it at Swapagift.com. Frequent flyer miles, another form of custom currency, also are going digital. There are now Internet-based markets for monetizing and exchanging the 14.2 trillion airline miles in existence (at 2-cent value per mile, they’re a $280 billion “money-me”).
It used to be simple: The government issued currency and we spent it. We’ve already seen the Internet-enabled proliferation of new custom forms of money. In the future we will see an even greater shift toward digital currency. Smaller groups, and even individuals, will be creating and exchanging currencies for their diverse needs.
As the “official” economy becomes more unstable, we may see more of our commerce drive toward Internet-based currency systems, with a whole new set of risks we don’t yet understand. However, there will also be a whole new set of benefits to the individuals that “old money” just can’t provide.
— By Steven Kenney, Partner at Toffler Associates