We all want and need money. However, for many services, paying actual dollars is inefficient. The transaction costs are too high.

So we need a system whereas perfect strangers can make deals at a very small transaction cost. For this purpose, people use punk money:

  • You publicly promise a favor in exchange for a service, you may stipulate the terms.
  • The Web records your transaction.
  • Your public reputation guarantees the transaction.

Six months ago, I needed a particular piece of software. In exchange for the code, I promised to promote a web site on the Google+ social network. Joshua Grochow won the contract and I owe him.

Punk money should also be able to solve more systemic problems. For example, it is often hard to find good reviewers for research papers. To solve this problem, we create an intermediary between the authors and the reviewers (e.g., a conference or a journal). This intermediary is often supported by a larger organization (e.g., a publisher) seeking financial gain.

As an alternative, I published the following open contract in the spirit of punk money:

  1.  Write a research paper in my general area of expertise.
  2. Send me the paper.
  3. I will read it in a reasonable delay (not 3 freaking months), or tell you that I’m too busy. (If your paper is really bad, I might also ignore you, politely.)
  4. I will give you feedback.
  5. At some point, I might feel that the paper is quite good, and then I will publicly say so, putting my reputation on the line.

In exchange, you have to mention me in the acknowledgements.

So far one researcher took me up on this offer and I reviewed his paper (privately) within a few weeks. If many researchers adopted a similar open contract, we could create a workable lightweight alternative for scientific publishing. It will not replace journals or conferences, but it is also nearly free compared to the current system.

The famous mathematician Doron Zeilberger has used this punk approach to validate some of his research papers. Indeed, he has a set of papers that only appear on his web site. He validates some of them by asking other mathematicians to review his work. The net result is that you can probably trust these papers, after all some established mathematicians were willing to vouch for the work. Journals cannot offer anything better. In exchange, he acknowledges the other researchers. The transaction happens without an intermediary.

Of course, you could apply the same type of contracts to any type of publication. Perhaps you are willing to review books or novels, and promote them in exchange for some favor. Perhaps you are willing to provide code reviews for open source projects. And so on.

The concept is entirely general. Maybe there is an annoying bug in your favorite open source web browser, and while you cannot fix it yourself, you would be willing to put a bounty. What could it be? Maybe you are willing to have a pizza delivered to the house of the programmer who provides the fix. Or maybe you will post a poem in honor of whoever fixed the problem.

Punk money has three major characteristics:

  • There is no real intermediary other than the Web. Or rather, the intermediary is light and easily replaceable.
  • There is a written record.
  • It is an explicit credit system, not free labor.

In contrast, a site like Stack Overflow allows you to ask a question for free. People who do the hard work of providing a detailed answer get clown money (e.g., reputation points). The intermediary (the owner of Stack Overflow) is not easily replaceable: it is an essential component of the system. Such specialized sites work amazingly well for specific problems, but punk money has far broader potential.

Note: I think there should be a Wikipedia article on punk money. It should trace back the origin of the term and provide sufficient context so that it stands a chance of meeting Wikipedia standards. I am too lazy too do it, but if you do it I will update this blog post with a link to the new entry and, if you wish, a note crediting your effort.

Further reading: See punkmoney.org for a related tool.

Update regarding taxation: The trades I have in mind are already happening without any fiscal consideration. I already review research papers, that’s a service I render. I also benefit from this service when I submit a research paper. I also support open source software (including handling bug reports) while benefiting from the open source software services of others (e.g., Linux). Yet there is no taxation involved.

Update regarding the word “currency”: What I describe is a credit system, not a currency. I used the word currency in my title because it sounded good.

5 Comments

  1. Gee, you need a reputation to make famous people read your paper. It will probably more efficient than random reviewers, but not everybody would get access to the system. A peer reviewing journal is more egalitarian with this respect. You are getting a free lawyer. She may be not so good, but she is free.

    Comment by Itman — 25/4/2012 @ 13:53

  2. Isn’t this called bartering?

    Comment by Carson Chow — 26/4/2012 @ 15:15

  3. @Carson

    It is a credit system, not barter. Barter assumes no trust between the individuals. Credit is founded on a trust mechanism.

    Comment by Daniel Lemire — 26/4/2012 @ 15:18

  4. Thanks for making sense of punk money. You might want to add that the whole system is twitter based. You spend and receive promises by tweet.

    The creator of punk money is Eli Gothill of

    http://www.webisteme.com/blog/

    Comment by Sepp — 30/4/2012 @ 10:53

  5. @Sepp

    Thanks. As I wrote, I think someone ought to write a Wikipedia article for it.

    Comment by Daniel Lemire — 30/4/2012 @ 11:02

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