First Bank of Whuffie – reputation economics gets real

Paul Raven @ 17-09-2009

Cory Doctorow is the latest to join the hallowed ranks of science fiction authors whose ideas have become reality, though not for some cool gadget or super-weapon. The Whuffie Bank is a non-profit start-up that has taken its name and concept from Doctorow’s Down And Out in the Magic Kingdom novel – a currency based entirely on reputation. [via pretty much everyone, though I saw it first from Chairman Bruce]

The startup is hoping to promote change in the web by rewarding users with a positive impact on the web with this karma-like digital currency. The service will monitor your activity across various websites, including things like comments, posts, and more. When you complete positive actions, you gain Whuffies, and you lose them when you do something that the organization deems to be detrimental. The company hopes that as we use the web more and more in our day-to-day life this positivity will extend beyond the web.

[…]

The algorithm takes into account ‘public endorsements’, or the number of times a user’s tweets are retweeted, or a Facebook post is Liked. It also takes into account who is making the endorsement, and the content in the messages that are being posted. You can make offers to other users using Whuffies as payment (for example, I could ask someone to help me draw a logo, offering 100 Whuffies as payment).

It’s a fascinating idea, and running it as a side-supplement to regular currency is far more likely to succeed than a pure reputation economy… indeed, the way The Whuffie Bank are pitching it, it’s more like an attempt to formalise the invisible transactions of kudos that already occur in the web’s interlinking clades and cultures.

But it’s still pretty deeply flawed, I think, because the metrics it’s using are too easily gamed, and have hugely diffferent values from group to group. Think of how the web PR shills on Twitter constantly retweet each other like some acoustically-perfect echo chamber, or how some people in your Facebook network will blithely click the “Like” button on every Mafia Wars announcement they see. I think the problem is one of scale: a reputation currency can only work across a group that’s small enough to have a real idea of who and what every participant is and does. Trying to make it global – or even national – is probably a doomed enterprise; it might work for small city-states or large towns, though, alongside a time-based currency like LETS.

That said, I still believe there’s a useful idea at the core of the Whuffie concept – it’s something I’ve been kicking around ever since reading Down And Out…, and when I finally start squeezing some fiction writing time back into my schedule, a modified version be appearing in my own stories. What do you think – is reputation quantifiable? And how could we measure it accurately enough to trade on it?

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5 Responses to “First Bank of Whuffie – reputation economics gets real”

  1. Jonathan M says:

    I’ve often thought that you would have to think long and hard to come up with an economic model more unjust and dehumanising than capitalism but I think this is pretty much it.

    This seems to rely upon the rather naive (and very early-00s) assumption that online popularity and recognition is a flat meritocracy. If you do something good, then the kudos will flow. This is simply not true.

    Firstly, what is good is largely a matter of perspective. One person’s searing and necessary critique is another’s trolling while one person’s brilliant meme is another’s pointless eye-candy. Any attempt to quantify that kind of kudos would result in a flat popularity contest.

    Secondly, it ignores the fact that the reality of the internet is that if you’re successful, you pretty much stay successful. Cracked are occasionally funny and insightful but if hooked up to a system such as this they would become overnight kudos millionaires. The same goes for the big video game sites despite the fact that they’re all largely corrupt and intellectually vacant compared to the excellent work done on some of the blogs.

    Thirdly, as you rightly point out, you can do the equivalent of SEOing to make yourself better off than you would otherwise be, This also ignores the fact that different online groupings interact in very different ways. Not everyone tweets their blog posts, has a facebook account or comment on each others’ blogs.

    It is astonishingly naive to think that people doing good stuff online get the kudos they deserve. It’s just as naive as believing that if you’re a good person and you work hard, eventually you will get rich. Human nature and the world simply do not operate in such fair and utopian terms.

  2. Ian Sales says:

    Isn’t there another sf novel, besides Doctorow’s, which uses a currency based on reputation? I vaguely recall reading it in one, and I know I’ve not read Down and Out in the Magic Kingdom.

  3. Tim Stevens says:

    Reminds of the ‘kudos’ which attaches to individual and group actions of the Dwellers in Iain M. Banks’ The Algebraist, published in 2004, the year after Down & Out. Kudos is not strictly tradeable, but important in determining social status and economic arrangements, etc – same as us, then.

  4. Jason Stoddard says:

    All you have to do is read Adam Rakunas’ story, The Right People, published right here at Futurismic, to understand how any reputation-based system can (and will) be gamed.

  5. FTLNewsFeed says:

    Whuffie was a bad idea in the book and it’s a bad idea here. In the book it was just a replacement for money with all of its evils still attached. People were greedy over it, it was not a true measure of a man, and it caused people to do stupid things like murder each other. Basically just a re-branding of money.