The Future of Money is Abundance

We now enjoy an abundance of information goods unparalleled in history, thanks to the negligible marginal cost of distribution allowed by the internet. This has in turn disrupted old markets for such goods, and spurred exciting business model innovations. Forward-thinking companies are now working out ways to share value for free, and to leverage the resulting gains in attention and reputation to make money in the marketplace. While businesses react to a logic of abundant production, and work out how to adapt their models, there is another area which has received less attention: abundance-based currencies.

By ‘abundance’ in this context, we don’t mean ‘free’ in the sense of ‘free beer,’ but rather ‘free speech.’ The ideal of abundance-based money is that it can be created by anyone according to need, and an agreed system of rules which regulates its value. In other words, money which is rooted in abundance is scarce, in the sense that there is always a limited supply, however it is never artificially scarce. ‘Money’ in this context, is simply a means of payment, which can be created by anyone who needs it, as long as they follow the rules of the currency’s community of users.

Abundance-based money

Abundance-based money has existed for a long time. According to some accounts, the use of debt-based ledger-money can be traced to Ancient Mesopotamia, long before the rise of commodity money. In the Mesopotamian system, ‘money’ simply expressed a relation of debt between an individual to the community of users. A ledger of payments was kept by a local authority, who also set prices. When a person wanted to buy from another producer, the money needed was created as a book entry: a corresponding ‘credit’ was given to the producer, and a ‘debit’ to the consumer. The money used for the transaction did not have any existence prior to the transaction: it was created to fulfil a transactional need. With this credit, the producer could then purchase what he needed from other producers, and so on.

In the late middle ages in Europe, local forms of currency were based on deposits of grain. A producer took their grain to a grain store, and was given a receipt. This receipt could then be used around the community to purchase goods and services – a small part was torn off for each transaction. The paper money could be redeemed for grain at any time, which assured the perception of its value. Each year, as grain perished, the value of the paper money would diminish through a kind of organic demurrage, which ensured that it was spent, rather than hoarded.

There is quite a profound lesson in both of these monetary systems. In both cases, anybody who needs money can create some: they just need to create and provide value to others, according to agreed rules. The money to pay the person is created as a book keeping entry, or a paper note denoting a quantity of grain. The book keeping entry or the receipt are symbols of value delivered, and a credit redeemable on the rest of the community. This is a radically different mindset in comparison to the dominant paradigm of money today.

Scarcity-based money can of course be earned by providing value in the market place, but there are artificially limited opportunities to do so. Perhaps this can be best appreciated by observing a common social problem: unemployment. While there is no question that there is plenty of socially valuable work to be done, and many millions of people ready and able to do it, there is still large unemployment. This circumstance is not brought about by a lack of demand for the labour which millions could provide, but rather by a lack of money to pay for it. Matters might be quite different if the supply of money were abundant relative to need: in other words, the inability to trade one’s labour in the market place was not constrained by an information problem, caused by a shortage of monetary symbols.

From one point of view, money which can be produced by anyone sounds like a bad idea. A constantly expanding money supply would see demand swell and outstrip supply, causing prices to rise. However, the stability of such systems of money in the past depended on the basis for money issuance. Inflation results from the issue of money without a corresponding increase in wealth output into the economy. If money is always issued in such a way that a corresponding amount of wealth is created, supply rises to meet demand, and inflation is controlled. Under a mutual credit system, buyers and sellers negotiate prices as they do under a scarce money system. The resulting increase in the money supply is constrained by the buyer’s obligation to settle his own negative balance. This actually leads to a more flexible and resilient money supply: money is no longer controlled by bank lending, with its irrational cycle of expansion and contraction and speculative bubbles, but by the needs and constraints of actual producers and consumers, the ‘real economy.’

So, one of the next big steps for the future of money is to establish money based in abundance, in the sense that the supply of money will not be artificially limited, but flexible and responsive to need. Many efforts in this way are under way. LETS is quite an old form of mutual credit which works within small communities. Scaling mutual credit systems brings challenges, such as working out how to limit overdrafts to protect against free riders, prevent stagnation through accumulation of positive balances, and how to interact with a wider ecology of mutual credit systems. Some projects such as Ripple, Community Forge, and Open Money are attempting to resolve these questions with a wide range of innovative proposals.


Now that I have mentioned one way in which the money of the future may be based on abundance, in the form of mutual credit, it is worth considering a different dynamic: demonetisation. Goods and services do not always flow through market transactions. Indeed, other forms of exchange, such as gift economies, prevail in other areas of economic life, such as families and informal favour networks between professionals. One of the current trends, also engendered by the internet, which will shape the future of money is, paradoxically, our diminished reliance on money to meet our needs. There are three trends driving demonetisation: an increase in opportunities to meet our needs without money, decreasing motivation to earn money, and economic instability.

There is a growing proliferation of web-based platforms which allow for goods and services to flow according to more or less formal gift economies, without the need for money, or much less of it. This so-called ‘Collaborative Consumption’ trend is leading to big changes in the way we access things we want and need. On the one hand, services which allow people to gift each other places to stay, used products and favours to their local communities are supplanting traditional monetary purchases. A cash strapped traveller can now Couch Surf for free, rather than pay for a hostel. On the other hand, peer-to-peer rental services are relieving individuals of the burden of ownership. The average power drill, it is said, is used for only 9 minutes in its entire life. Cars go unused for 23 hours of the day, on average. Platforms which tap into idling capacity and allow individuals to rent out or hire what they need, discourage a culture of ownership and therefore lessen reliance on money.

The second trend driving demonetisation is the diminishing appeal of extrinsically motivated labour. In the 20th century, being a ‘company man’ (and later on, ‘company woman’) meant that our lives were defined by our work. Our needs were primarily met by doing work which was not usually intrinsically rewarding, but which paid a salary at the end of the month. Today, the opportunities for intrinsically rewarding production have massively increased, thanks to the internet and the low material costs of production and distribution. Gregory Rader has pointed out that as opportunities to do rewarding work increase, our desire to work in extrinsically motivated work for money beyond our ability to satisfy basic needs diminishes. We may begin to see individuals choosing to work less, and have less disposable income, while enjoying opportunities to create more. At the same time, our reliance on money to meet basic needs will continue to fall anyway.

Finally, this trend will be further driven by economic instability. Unemployment is already high, while many millions work more than they would like, to ensure a secure place in institutions which are increasingly precarious. Over time, the increasing risk of being over-specialised and wedded to a particular production process will make full-time work less attractive.

Abundance-based currencies

Reputation, reputation, reputation. – Shakespeare

Why this talk of demonetisation in the middle of an article about abundance-based money? Part of the reason for the detour is to help frame the next big dimension of the future of money, in the domain of currencies. A currency, as I’ve argued elsewhere, is a broader class than money. Any symbol which is issued according to a set of rules, and which mediates the flow of value in an economy, is a type of currency, including money itself. University diplomas, eBay reputation points, and food label certifications are all currencies.

While our reliance on money will decrease, our reliance on these broader types of currencies will increase. This is because it is currencies – of reputation, reciprocity, trustworthiness – which mediate the flow of goods and services in gift economies, peer-to-peer rental services, and other types of product reuse markets such as eBay.

Reputation systems have been referred to as the unsung heroes of Collaborative Consumption models. It is easy to see why they represent a big shift in the way we buy, sell, borrow, lend, give and receive: the measurement of intangible social capital which ordinarily mediates such transactions in a local setting allows these patterns of exchange to scale. You would not ordinarily rent your car to a stranger, but you might if this person had a reputation currency you were willing to recognise, such as positive ratings and references in a peer-to-peer car rental site. In the same way, it’s much easier to allow a stranger to stay in your house for free if you have access to their Couch Surfer reputation.

Currencies which measure these previously intangible social assets allow scaling beyond traditional limits, establishing relationships of exchange between people who would not otherwise have reason to trust each other.* The power of Couch Surfer’s reputation system is demonstrated by the fact that individuals can receive accommodation from total strangers, on the strength of their reputation earned from encounters in totally different parts of the world.

Apart from scalability, currencies in the broader sense change market dynamics. If one individual is able to receive guests into their homes through Couch Surfer, even without a realistic expectation of reciprocation from the guest, it is partly from generosity, of course. However, the currency amplifies this motivation, since it gives the host a reward for their gift. This reward is increased reputation in the Couch Surfing community. Reputation is of course intrinsically valuable in its own right: we tend to value the experience of being seen as trustworthy, helpful or otherwise generous. In addition, reputation is something which the host can leverage to become a guest themselves. A history of generosity on Couch Surfer helps the individual to receive gifts of accommodation back, from other people.

Currencies which measure social capital in such systems of exchange are in fact abundance-based: they can be created by anyone, according to need and an agreed set of rules. That is: anybody who wants to gain a reputation currency to leverage in the future can do so, simply by providing value in a recognised system of exchange. The abundance mentality is assured by the fact that our ability to earn such currencies depends only on our capacity to create value for others.

Such currencies represent powerful innovations, and are already changing the way we access goods and services, and decreasing our reliance on money. There is still some way to go, however, before they reach their full potential. The main limitations of reputatation or reciprocation metrics is that they are siloed within existing exchange systems. If I were to join a different accommodation gift economy than Couch Surfer, I would have to rebuild my reputation from scratch. In a similar vein, if I wanted to borrow a power tool in a peer-to-peer tool rental scheme, but had no reputation in it, it would be an innovative leap to leverage my car-rental reputation earned on a different site instead. After all – if I can look after someone’s car well enough and return it, it’s likely that I will do the same with a power-tool.

The need to abstract reputation systems from their individual silos is therefore the next area of innovation. It will partly manifest by the creation of common APIs to allow services to connect to each other, and tap into their respective currency services. In doing so, issues of data quality and interoperability may arise. This will give rise to many interesting attempts at integration and abstraction which I hope to write about in future. This is a current goal of the Metacurrency project.

Having explored two ideas of abundance-based money: transactional money issued as mutual credit, and abundance-based social capital currencies, it is worth noting how they will interact. This has already been alluded to in relation to peer-to-peer rentals. Part of the power of currency systems is that they will allows us to navigate traditional monetary transactions more prudently. Imagine if, before renting a home, you were able to check your landlords’s reputation score. Likewise, before buying a valuable good on eBay, we are already able to check the reputation of the seller. Such currencies not only help us make wiser purchasing choices, they also encourage the kind of behaviours consumers want. Landlords have a vested interest in treating their tenants fairly, if their tenants have an opportunity to impact on their reputation. The ability of currencies like these to regulate the flow of goods and services in the market economy will be a key feature of monetary innovation, imposing a kind of social, as well as ecological regulation of markets according to a layer of quantified social currency.


These are just some ideas about how money and currency will shift into an abundance paradigm, which will in turn change our economic consciousness as economic exchange is itself transformed. I don’t think I have done anything except scratch the surface of this topic – which I hope to return to again. There are many details which I’ve had to skip over for brevity, but hopefully it provides a sense of a possible future for money. To be continued…

Find Out More

On this blog

A Broader Definition of Currency

The Economics of Abundant Production


Rising Income Inequality and Shifting Identities – Gregory Rader

Radical Abundance: How we get past ‘Free’ (Talk) – Douglas Rushkoff

Debt: The First 5000 Years - David Graeber

* Regular readers will see that I am contradicting an earlier post here, in which I argued that gift economies don’t scale because of their peculiar logic. It turns out that gift economies for homogenous goods do not suffer from the same fungibility problems as heterogenous gift economies. To be picked up in another post.

3 Responses to “The Future of Money is Abundance”

  • Delightful post.

    On a related note, the spread of sensors may help drive a rapid move away from individual purchases of sharable goods, in favor of a more sharing-oriented economy of abundance.

    If I want to borrow today a garden tiller or a lawn tractor for our back yard, for example, my neighbors may now hesitate a bit due to concern that the borrower inadvertently may cause damage to their machine.

    As more tools gain built-in sensors and readout displays, that barrier will ease. It will be possible for people in a neighborhood or a sharing circle to do a pre- and post-borrowing readout of the condition of a shared item. This will make it easier for all to settle any concerns over (mis)use of the equipment.

    Such a system may also tie in with reputation-based personal or local currencies. Those who return borrowed machines in better shape than they received them might earn reputation credits for this.

    How to accelerate such trends? Proponents of a more sharing-oriented economy might accelerate its arrival, by communicating their interest in built-in sensors to manufacturers of a wide range of high price, potentially sharable goods.

    Pooled pledges by individuals (via to favor aligned manufacturers would likely strike a chord for innovative firms that would like to disrupt complacent incumbent firms in their markets.

    What do you think?



    • Hi Mark,

      What you describe sounds like something part of a wider trend, the rise of the Internet of Things. This is the use of sensors to connect all kinds of objects into the internet, thus allow data harvesting, and automated control…

      In the context of social currencies it’s an interesting idea, as it removes some of the subjectivity about something’s being ‘broken’ while lent. That being said I would be cautious about seeing such sensors as a panacea. Will sensors be able to detect scratches on a car’s paint work? And more importantly, what happens when sensors break – will we need meta-sensors to watch over the sensors? ;-)

      Glad you enjoyed the posts and thanks for the comment!


  • Really interesting. I’ve been blogging about abundance / scarcity and currencies for a few years. It’s been a long time I had’nt the chance to read something refreshing!
    Thank you.
    I find interesting the mix you do between exchange currency and reputational currencies, exploring how both could go abundant and see with the other factor at play; collab consumption, economic situation etc…

    Just to be a bit precise, when you say “The ideal of abundance-based money is that it can be created by anyone according to need, and an agreed system of rules which regulates its value.”

    > according to need = sufficient.

    This is a sufficient currency, not an abundant one. The opposite of scarce is sufficient would say Lietaer.
    Abundant would be created in quantity superior to the needs.

    It is unbelievable how much we still have to create with this new world and it’s new properties..

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