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Trust Is The New Currency

The Trust Economy

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Trust Is The New Currency

Why do people stop at red lights?Why do people stop at red lights? Sure there is the fear of possible punishment from lawenforcement if you don’t. And there is the risk of being hit by someone coming the other way.But a mass disobedience by all the people encountering any given red light could obviateeither of those in a moment. But that doesn’t happen. 99.99% of the time, people stop.

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Trust Is The New Currency

Cooperation is how we surviveI submit that the primary reason they do is a conditioned understanding of the value ofcooperative trust in a social system. My stopping on red gives someone else a chance to go;and the mutual stopping of others allows me to go in my turn. Through this unspoken butpowerful social transaction, we all get where we are going faster and more efficiently.

Sure the punishment and injury threats strongly reinforce this behavior, but I still believe atits core is an innate knowledge, programmed into us by evolution, that cooperation based ontrust aids the survival and thriving of our species.

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Trust Is The New Currency

Trust and Collaborative ConsumptionAll economies are built on a similar social trust in some form.

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Trust Is The New Currency

Industrial EconomyIn the capitalist economies of the Industrial Age, we were asked to place that trust in largeinstitutions, primarily banks that control the capital and governments that regulate its flow.While that economic model built great and mighty things, it also thrived on scarcity and finitegames resulting in a few big winners and lots of lesser players (or losers).

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Trust Is The New Currency

Connected EconomyIn the emerging connected economy trust and the capital that flows from it are increasinglydecentralized and distributed. Now it is possible for virtually anyone to become a center oftrust and reputation in any given field. And from that center can flow capital (in all forms, notjust money) and power/influence.

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Trust Is The New Currency

Rachel Botsman: Collaborative Consumption"Collaborative Consumption: A social and economic system driven by network technologiesthat enable the sharing and exchange of assets from spaces to skills to cars in ways and on ascale never possible before."

- Rachel Botsman

(from http://youtu.be/kTqgiF4HmgQ)

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Trust Is The New Currency

Exchanged Space: AirBNBAirBNB is an online service that connects people with extra space (from a spare bedroom to aspare medieval castle) with people looking for a place to stay in a particular city. It has takenoff incredibly, with people now in 192 countries willing to open their homes and spare spacesto strangers.

At the core of the success of AirBNB is an effective trust rating system based on reviews.Both guest and host can be reviewed. The benefit for hosts is obvious, but what is differentand powerful here is the benefit for guests from such a rating system. A frequent guest whoearns a high rating can command special deals and preferences from potential future hosts.Reputation has its perks.

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Trust Is The New Currency

Online Networks Build Economies of TrustAccording to Ms. Botsman, ”It’s about empowering people to make meaningful connections,connections that are enabling us to rediscover a humanness that we’ve lost somewherealong the way…Instead of consuming to beat the Jones’s, consuming to get to know theJones’s.”

A study by the Pew Research Center found that “the typical internet user is more than twiceas likely as others to feel that people can be trusted.” Online connections really do helpestablish reputation which turns into the power of trust.

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Trust Is The New Currency

Reputation Is Contextual & Needs ScoringJust because you’re trustworthy in one thing doesn’t mean you are in another. An individual’s“Reputation Capital [is] the worth of her reputation–intentions, capabilities, andvalues–across communities and marketplaces.” Rachel Botsman envisions that in thenot-distant future there will be apps that will allow us to access the earned reputation ofindividuals across a broad array of categories.

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Trust Is The New Currency

Reputation As CurrencyThere are already startups working on this. Reputation will become the most powerfulcurrency in the 21st century. And it will make a number of staples of the 20th centuryindustrial economy obsolete: credit scores, resumes, headhunting services among them.

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Trust Is The New Currency

A Future of Wuffie?All individuals in Cory Doctorow's novel Down & Out in the Magic Kingdom have implantedbrain chips that are able to transmit and record wuffie. Wuffie is simply the cumulative scoreof reputation garnered from others who have encountered you. If you do something amazingor beneficial, your wuffie will go up. Be rude to someone or break a promise, and your wuffiemay go down. Wuffie can be consciously sent to another, but most transactions take placeautomatically and unconsciously as the brain chips simply measure and transmit thesentiments of one human being toward another.

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Trust Is The New Currency

AuthorRank Trust ScoringAuthor Rank (sometimes expressed as “AuthorRank” in homage to Google’s PageRank) is acommunity-created term for something Google has talked about, in patents and elsewhere,for several years now. The idea of Author Rank is to use Authorship to trace the social signalspointing at a given author’s content on a given topic and score the author in that topic by theamount of social trust signals directed toward it. Most importantly for our reputation creditdiscussion here, more important than how many people engage with a given piece of contentis who does. If a person who also has a high trust ranking for “Google search” often interactsfavorably with my Google search-related content, that will count for more for me in that topicthan a lot of non-authoritative people doing the same. The resulting score would serve as aboost to the author in the search results when people search for the topic

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Trust Is The New Currency

Building Wuffie in a Reputation EconomyIf reputation is the currency of the new economy, how does one build up such capital. Someof the ways should be obvious from our current experience. Create a high-quality product orservice. Provide exceptional customer service. Deliver more than is promised.

But there is another factor which I think will be many times more powerful in the connectedeconomy than it was in the industrial economy: the power of giving it away.

In the connected economy, giving away will be a major way of directly earning capital. Notthe old-style capital of money or money-related credit, but the new capital of reputation. Bygiving in ways meaningful and helpful to others in online communities, they begin to sendmajor wuffie your way as they share your content, rate you favorably on rating services, andrecommend you to their friends. And as we saw above in the Google example, the web ismaturing in a way that can rapidly expand and spread the capital value of such good

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reputation.

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Trust Is The New Currency

A Trust Economy Fosters AbundanceWhat are you doing right now to build your reputational capital in the emerging connectedeconomy?

(This Haiku Deck is based on my more extensive article "Trust: The Currency of the NewEconomy" athttp://newmedialeaders.com/community/trust-the-currency-of-the-new-economy-423/)