Saturday, March 7, 2015

Bitcoin and reputation economy in the future

The price of Bitcoin is rising recently. Some people indicated the influence of hyperinflation in Ukraine.

(This chart was generated via Kraken.)


Bitcoin is a crypt currency which has no central administrator. It was introduced several years ago. Nowadays, there are many exchanges all over the world. Its price is still volatile. Some months ago, it fell down by 50% from $400 to $200 per 1BTC, following the cracking case of BitStamp, a major exchange.


Notwithstanding the frequent scandals about it, Bitcoin is a revolutionary technology. It has no particular organization. It means that no one can damage the value of Bitcoin with a certain policy. Therefore, it becomes trustworthy at the financial crisis in a country. On the other hand, nobody can ensure the value of Bitcoin on their own. Such a contradictory character is one of the reasons Bitcoin is difficult to be understood.




The scheme of Bitcoin is not limited to digital currency. You can create your own currency with the architecture of Bitcoin, at least theoretically. Indeed, there are some internet services of issuing digital currency. GetGems, a new company developed a messenger application, issued a digital currency "Gems," as a token used in the application. You can transfer Gems to another person via the application. GetGems sold some amount of Gems in advance it released the application to gain a budget to develop the product. It this application becomes popular, the price of Gems will be raised.

Thus, anyone will be able to have their own currency. I heard that a blogger issued his token to deliver it to readers. The more his blog becomes popular, the more his token become valuable. As you know, this token is quite similar to the stockpile.

In the near future, everyone will issue their own stockpile. It means that the reputation of each person become visible. Stockpile is a symbol of trust and reputation. So is the money.

Toshio Okada, a Japanese commentator, prospected an era of "reputation economy." In his words, people in this era will exchange their reputation for something, instead of currency. For example, you cannot buy 100,000 active followers in Twitter for $100,000. In contrast, you will earn $100,000 with ease if you have 100,000 active followers. Thus, reputation will be more powerful than money, according to Okada.

Okada's opinion is noteworthy. Indeed, in ancient China, people needed good reputation to get a higher status. Mark Zuckerberg, the founder of Facebook also aims at the visualization of personality of each person. However, reputation itself is hardly to be measured. It is a disadvantage compared to the money.


Digital currency will overcome this problem. Bitcoin and relevant technology will open the door to the era of the reputation economy.

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