I don't write about my research enough on the blog, mostly because I have so much to say on it - where to start? But today I want to share an analogy of how I think about the evolution of "currency."
I've started explaining these thoughts with an analogy. Start by thinking back to a plot or story line of a movie made in the 70s (or TV show). Most of those stories had very simple to follow plot lines: a single developing plot lines. Contrasted that with films and TV shows today which are filled with multiple main characters and complicated weaving story lines. Steven Johnson makes the point in his book "Everything bad is good for you," that these more complicated stories have made us smarter.
I think these complicated story lines have developed our attention as well. It's no longer difficult to follow multiple streams of content - asynchronously. It's not just challenging, but fun to follow multiple storylines in the same story. We expect it. We've trained ourselves to do it. And it's not just film/TV. It's with the internet, tabbed browsing and multiple apps. Multi-tasking and ADD/ADHD. We context switching and following these streams more than ever. And by increasing our participation in these activities, we're training our attention, we're changing the way we use our brain.
My research found five major trends impacting the Future of Transactions
- Mobile Transaction Technology is exploding. This not surprising to anyone following this industry. But we're watching the explosion of the hype-curve.
- Alternate Currencies (including gaming currencies like WoW Gold, corporate currencies like frequent flyer miles and social capital "currencies" like reputation and wuffie) are being used in their own niche communities. And some of these niche communities have very high transaction rates.
- Communities are being created around transactions. Whether this is in these niche communities with an alternate currency, within forums or craigslist for traditional economy transactions or non-financial transactions; communities are being/have been formed around transactions. The couch-surfing community is one example. Craigslist is another.
- Non-Financial Transactions create stronger bonds. When you have a community that is formed around non-financial transactions (like time-banks or swap/barter/pay it forward) the transactors create stronger bonds than if the transaction was only a financial transaction. Take the couch surfing example. You're more likely to become friends with someone you're staying with (whether they started out as a stranger, weak-link friend or strong-link friend) than not. If you're already friends, your friendship, most likely, gets stronger. I've watched this happen with me, personally; as well as found this theme run through my 1:1 interviews.
- We want to communicate more information with each transaction. We're rating our restaurant experiences on Yelp. Writing recommendations on LinkedIn. Giving feedback about people on Honestly. And the technology products for more fine grained communication about each transaction is getting developed. We want to share more information about each transactions we have - regardless of the kind of transaction.
This last trend is very important - and one of the most subtle. It goes back to the point I made earlier. It's the key understanding in the second half of my analogy.
We have our 70's plot line of making transactions. It's the money transaction, whether we make it in cash, credit, paypal, etc. But we've got this extra mental bandwidth available, bandwidth that we've been increasing in ourselves because we use it in other parts of our lives. We're no longer satisfied with the binary transaction (money flowing one way or the other), what I call the 70s single plot line of transactions. We want to share more information about these transactions - AND 1) we have the mental bandwidth (which we've trained on other activities I mentioned above) to pay attention to it and 2) we have the technology that enables us to somewhat track some of these things.
Those with extra bandwidth (more attention streams) have the desire to collect, cultivate, track and use these additional "currencies."
These currencies will not and do not replace the existing traditional economy/transaction mechanism. I do not believe the old model will be replaced by any of these new models. Instead, these additional currencies, embrace and extend meaning and value of the transactions.
I can't cash out my LinkedIn recommendations to pay my rent. But, those recommendations do/will/might influence my traditional economy cash flow (e.g. how much I get paid, the number of jobs I get, increase or decrease opportunities, etc.). Those recommendations are a piece of the transaction-data. Some transaction-data can't be cashed out in the traditional sense. Others might and do.
The key points to get here are
- Transaction data is an additional layer of information of the "financial" transaction.
- There is a strong desire to share/create transaction-data (it's all user generated content).
- This desire seems to come from both our increased mental bandwidth and shifting cultural values (let me get all spiral dynamics on you next time).
Add a crummy economy after a boom time, where people are creatively looking for ways to get their needs met and you have a perfect storm for creative currencies. What we're watching happen here is the evolution of currency. But it's not evolving in one direction and there are other things influencing this space. This is just the first of many growing pains as these concepts grow, mature, fracture, devolve and just maybe evolve into something that currenly doesn't exist.
NOTE: I would like to thank Art Brock, Stan Stalnacker, Tara Hunt, Micki Krimmel, Anna Metcalf, Eric Harris-Braun, Danger Ranger and Autumn Rooney for their contribution to my research. Conversations with each of these people have significantly influenced my thoughts in this area.