The IBM Dollar
In 1994 Edward De Bono wrote a pamphlet called “The IBM Dollar”.
Dr. de Bono wrote that he looked forward to a time when:
“the successors to Bill Gates will have put
the successors to Alan Greenspan out of business”,
arguing in essence that it would be more efficient for companies to issue money than equity.
Edward de Bono argued that companies could raise money just as governments now do – by printing it.
Interestingly his original idea was that IBM dollar would be redeemable for IBM equipment. It would NOT be a fiat currency which by definition is redeemable for nothing.
For two decades everybody thought that the idea proposed by De Bono was just ridiculous.
20 years later suddenly people stopped laughing at it.
The Amazon Dollar
The invention and the rise of bitcoin creates a dangerous precedent for business. Some experts now think that companies such as Starbucks or Amazon are well placed in order to issue their own currency and run their own “shadow economies” with goods, benefits, services and savings which can be obtained with this money. These brands can very easily convince people that their currency has some solid intrinsic value (e.g. some coffee). This makes me think that Bitcoin is essentially just a well-known brand now, as the technological advancement of bitcoin is in fact very poor. As a brand, bitcoin will now have now to compete with other strong brands such as Amazon, Tesco or Orange.
The main route to get there is that quite possibly the boring business of loyalty points is likely to evolve into a real payment ecosystem. The Harvard Business Review had a paper about branded money in July 2013. Similarly Apple or mobile phone operators could easily convince young people to use their private currency: everybody understands that they can use it to get phone credit or with App store purchases.
Is It Legal?
Why wouldn’t governments just ban such private monetary anarchy?
- On the money side, it is probably very difficult to forbid creation of new forms of money nowadays.
- Arguably monetary diversity is a great thing to have as advocated by a renowned expert on monetary innovation Bernard Lietaer in this video (2011).
- Try to forbid this: Switzerland the WIR complementary currency which has been in operation for 80 years. Or the UK Brixton pound, even though systems like this have serious limitations (while bitcoin has none). The market cap of WIR is about 3 billion USD.
- Try to forbid bitcoin – well it is very difficult to forbid anything in the cyberspace. Moreover every country is looking at attracting some of these amazing bitcoin startups which we have. They want the future to happen on their territory.
- Governments are weak, companies such as Starbucks and Amazon are strong, and they will probably obtain what they want through lobbying.
- So nowadays people are openly encouraged rather than discouraged to run their homegrown currency in the same way other other people run blogs.
- In contrast, many jurisdictions will try to kill anything which has to do with stock markets.
- Ironically private money which you can redeem for nothing, such as bitcoin, is acceptable.
- However if this was equity or shares, well this is not OK, you are in trouble as discovered Voorhees, the creator of SatoshiDICE. It is NOT legal to actively solicit investors to buy shares in a company.
- In spite of this some companies such as Overstock and Bitshare are nevertheless trying to find ways to legal issue shares through crypto currency and DAO mechanisms.
- Money or stocks, it is in general useful to recall the pump and dump and investment scams are illegal and one can go to prison for that.
Question: How does 2. and 3. differ from encouraging people to buy bitcoins or Dogecoins? Isn’t it like selling a share in a distributed business which makes money by selling new coins to naive investors knowing that the monetary policy of these currencies is highly unorthodox and leads to serious problems? Maybe not. This however remains an interesting question which we will leave for now without answer.