We are so obsessed with our bank account balance being positive that we forget it is a very crude measure of our value in a society. Three persons with a net worth of $0 could have this balance for very different reasons:
- one person may have borrowed $1M many years ago and have just finished paying it back;
- one person may have just opened an account with no deposited money, nor borrowed money.
- one person may have borrowed 100 times $1,000 and paid each time back.
Same balance, but very different levels of value and risk contributed.
On how to improve the account balance, there is a lot we can learn from exchanges not based on bank money, such as time banks, bartering networks or gift circles.
The San Francisco Time Bank for instance shows the balance, but also the hours received and given:
The sharing Web site Neighborhood goods accounts for the money you saved your friends by allowing to borrow your goods (and, I believe, until recently the money your friends saved you).
Finally, Martien van Steenbergen proposes a very elegant measure of trust: the number of times you’ve changed the sign of your balance i.e. the number of times your balance went through zero.
greco refers to a useful “reflux rate” metric for determining credit limits. it seems a slightly simpler measurement of credits earned per time interval would be helpful in some cases.
I'm affraid that the “cross zero” model could be fairly easily manipulated, by making small transactions back and forth when a person is close to their own zero line. And anyway, why should those transaction be more wothfull than if, lets say, you make the same transactions when your own balance is bit more on the positive side? But the idea of a trustspace itself, is a great one.
Personally, i'm in favour of “personal currencies”, such as the Ripple model. In those, your “trustspace” depends on how many of your friends trust your ability to pay back your personal currency, that you create each time you trade it for some service: http://blogit.helsinki.fi/aivomassaa/social_mon…
9 min video explaining Ripple: http://www.youtube.com/watch?v=ySzqM5dpF7s
The well-being of the society requires trade happening. Even if someone is able to manipulate how many times the cross zero, they still have contributed positively to society while minimizing risk by trading.
I like Ripple too, but as a payment routing protocol that alleviates the need for a hierarchical, centralized, known single path of settlement. On the other hand, I think that specifying credit limits for each of your friends seems unpractical. Most people in the real world seem to be quite happy to leave this to a credit intermediary.
What a painful name! but yes, it's a valuable metric that could be displayed on a profile page.
Note I'm not talking about credit limits here, as I think it is difficult to come up with a rule that will work w/o human input in all context. I see these metrics more as various “visualizations” that can help people make decisions about trading with or gifting someone.
In most cases, yes, but the cross zero model does leave room for people who might try to scam the system (by build enough trust to take one big credit they never intend to pay back). But yea, there are many things you good look for to calculate the trustspace; total ammount of transactions probably being one of the most important ones.
Hmm, maybe i should study the protocol more, but i don't understand how is Ripple centralized or hierarchical? I agree it's quite complex for new users to understand at first, but this could be alleviated by good default setting (e.g. 20€ per friend trust limits).
There's a San Francisco Time Bank? What's the website?
http://timebank.sfbace.org/