Pennies and paper, mountains of debt. When it comes to currency, we tend to think of dollars and cents. But in the age of social media, currency is a lot more complicated than just the change in your pocket.
Management consultant and startup guru Paige Arnof-Fenn has seen change firsthand. “The concept of currency, when I was a kid and first out of school, was a very literal translation,” she says. “Currency was the way you bought products and services. It was green dollars.
“Today, currency is about your social capital, it’s about the quality of your relationships and the number of people who respect you, trust you, think of you, that open your emails quickly, that return your phone calls in a timely manner.”
Wired.com editor Jeff Howe, who famously coined the term crowdsourcing, says the Internet has created “these new economies… where things like reputation, things like karma, begin to actually count for something.”
When everyone’s connected publicly, new facets of currency that emerge, and measurements of social standing change.
“In 20th-century US, for the most part, wealth correlated with social status,” says Alice Marwick, who studies the social effects of the Internet and new media. “So especially in the United States, you have a really big drive towards consumer success and capitalist success within that framework. When you get into the virtual world, what ends up becoming the status quo is attention and visibility. It’s about how much attention you can command, and how many people are listening to you.”
Howe agrees. “These new media metrics, Facebook friends or Twitter followers or karma points, simple reputation that you have on the New York Times or the Washington Post, these have real value.”
Trust, relationships and Klout – the Internet has created value out of interactions. It has bred a new set of buzzwords like “collaborative consumption,” “peer-to-peer marketplaces,” and “a sharing economy.” With social capital as a measure of value, the more trusted you are, the more you’ll reap rewards. All of a sudden trust becomes a form of currency. And that currency goes far beyond borrowing a power drill or a cup of sugar. It goes into politics and big business, where people are starting to demand transparency and honesty.
Consultant and author Mary Donohue has recognized the increasing importance of honesty, as trust is the only thing an individual or corporation can’t merely purchase. “We are totally switching in our economy,” she says. “We’ve gone as bad as we can possibly go. Leaders have lied, they’ve cheated, they’ve stolen. They’ve said, ‘I’ve lied, I’ve cheated, I’ve stolen,’ and no one’s put them in jail! Trust has become a form of currency because it’s the only thing that people can’t, and don’t, have. You can’t buy trust. And that’s where the Internet begins to play a really big role, social media begins to play a big role.”
As reputation becomes a form of capital, the platforms we network on are rapidly increasing in value. But how closely tied are these new currencies tied to real, traditional currency? And how will that influence how people take risks and pursue new ideas?
Arnof-Fenn is optimistic. She says, “the ecosystem for entrepreneurship is the strongest, I think, it’s ever been in history.”
Internet strategist Jesse Hirsh goes further, saying that the potential value of these new currencies are immeasurable. “The Internet economy is based on imagination, it’s based on the future, it’s based on our hopes and our dreams and desires. So as a result, it’s valuations know no limit. Because it speaks to our hopes, it speaks to our inner potential, which is infinite.”