A journalist has decided to take the idea of programmable currencies to the next level and build an open-sourced, non-monetary reputational economy. Created as an incentive for people to push blockchain technology further than fintech, we take a look at the YKarma experiment and the potential uses it can have.
“Blockchain Is Boring Now”
Lamenting the fact that cryptocurrencies have only been used to reiterate traditional monetary systems, a journalist decided to take its underlying technology and use it in an innovative and somewhat unusual way.
Jon Evans, a columnist at TechCrunch and published author, pointed out that programmable currencies could enable entirely new categories of economies to be built. Those economies could, in theory, reject the assumptions traditionally associated with the transferring and storing of value.
To put the idea to the test, Evans created, in his own words, an experimental, open-sourced, non-monetary economy. This economy would be blockchain-based and quantify reputation as a spendable currency, Evans wrote.
How Does it Work?
The project, named YKarma, has a relatively simple concept, not unlike a gift economy. According to TechCrunch, every person in the community is allotted “karma coins” to distribute each week. This is done in order to transform reputation into a measurable, spendable currency.
All of the karma coins received are to be given to other people before they can be used. The received coins could then be spent on various rewards previously established within the community.
According to the YKarma Manifesto, the project’s currency would have zero monetary value. The coins would be minted and airdropped to all of the community’s members each week and remain worthless unless given to another person.
When spent, the coins wouldn’t be transferred but destroyed. That means that the coins are taken out of the economy forever after they’ve been spent. An interesting fact to note is that as the network scales, the coins would decay in value.
The author also made sure to differentiate YKarma, a reputational economy, from national reputation systems such as the social credit system in China. Evans argues that modeling reputation as a private spendable currency is an interesting idea worthy of experimentation, while a national system is a “dystopia waiting to happen.”
YKarma currently runs on a private Proof-of-Authority blockchain, the Manifesto explained, as running it on the public Ethereum blockchain would be too expensive. A public network would also limit scalability, as the data storage requirements and the number of transactions could quickly exceed Ethereum’s capability.
The Real Life Uses for YKarma?
Evans described YKarma as more of performance art than actual working software. The project is still in its development phase and the ultimate goal is to get as many developers as possible working on its new iterations.
“What I’d really like to see is a wave of experimentation with wholly new economic structures and incentivization systems,” Evans wrote in the YKarma manifesto. He explained that the main obstacle blockchain faces from venturing into new economic structures are the people working on it. “[They] are more interested in getting rich in the cryptocurrency casino or building decentralized versions of existing centralized services,” he said.
And while one could criticize the project as being more communist than utopian, Evans pointed out that there could be quite a few real-world uses for YKarma. For example, companies could use the platform to set up rewards for their employees, offering vacation days or other office perks.
The platform could also be used by nonprofit and charity organizations – those why are deemed the most deserving by the community could receive gifts, incentivizing both donors and volunteers. Respected influencers could have an efficient channel through which they would receive free gifts from brands.