An Introduction To Social Currency
(Due credit: I first saw the phrase social currency on Aaron Wall’s blog, SEO Book, which is really worth a visit.)
First, listen to the audio. That’s where the meat is.
I don’t think it’s a secret that, over the past several months, my traffic has increased tremendously, and that my income has been increasingly earned online. So I wanted to take advantage of what I have learned to help others build trust, or social currency, online.
Social currency is the raw essence of relationships. In an economy of abundance (aka, a post scarcity economy) such as the web (aka, “there’s always enough to go around”), none of us are playing a zero-sum game; if I send some visitors to you, it doesn’t mean I’m losing traffic, links, or listeners. In fact, it’s often quite the contrary.
The idea that, once you have placed a significant amount of your reputation and resources online, it is no longer necessary for you to deal in real dollars– that dealing in relationships is now the key to your success.
Honestly, this was a very difficult subject to write about, so I ended up having no choice but to record audio to express it, which I suggest you check out (just click the link to download or listen).
So what’s the lesson, what’s the point of this post? As I see it, one thing, and one thing only. I invite you, dear reader, to stop thinking in terms of earnings through your blog or podcast– stop thinking about sponsorships, AdSense, or anything else, and start thinking in terms of relationships. I believe the rest will take care of itself.
Other relevant links: Social capital, Post scarcity economy, Google economy, Content as a medium for interaction. Additional: Anji recommends Why Paris Hilton Is Famous.
Pssssst, are you new here? You might want to pick up my RSS feed, it'll let you know when I put up new stuff. Thanks!
Filed by Julien at 12:56 am under 
That sounds a lot like Whuffie, something Cory Doctorow wrote about back in 2003.
http://en.wikipedia.org/wiki/Whuffie
Yep, I reference whuffie in the audio. Should’ve added a link to it too, thanks.
Awesome Post man. Good things to know!
Social Currency? You mean like the Credit Rating trait in CoC?
This was a great post Julien.
I wanted to let you know that I first read the post via RSS in google reader. As I was looking at the post in google reader I DID NOT see the audio that is part of this post.
I clicked over to the post because I wanted to post a comment. That is when I saw the flash player, and listened to the audio.
Hope this heads up helps in some way.
-N
you can ping my whuffie anytime, baby.
sorry, couldn’t resist!
seriously, though, this concept reminds me of something i read/heard from god knows where last year about how paris hilton became successful by using her media time to make positive mentions of other people, like what designer she was wearing or cool club she was or whatever… someone else here must have read that, too.
the you-scratch-my-back-and-i’ll-scratch-yours is a model that never fails to work, really.
anji: seriously, if that’s what paris hilton said, it’s fucking genius.
neil: i fixed it. thanks for the update.
ah, i found the paris hilton post i was referring to!
Julien Smith explains how to make money online. Brilliant. I reverse engineered some of the economics, sir!
http://www.financialaidpodcast.com/2007/02/07/julien-smith-explains-how-to-make-money-online/
[…] Julien Smith wrote a very insightful post (and audio blog, be sure to check that out too) about social currency, and Chris Penn made the point even better. I want to say that the basic idea is give and you will recieve, but while there’s something about that in the theory, it can’t be dumbed down so easily. You should be reading Julien’s and Chris’s posts. They know what they’re talking about. I’m just listening. […]
I’m fascinated by this stuff. In particular, how we establish trust, reputation, and value in a time when time and space don’t matter as much. Yet the value in relationships is as much, if not more important, than they were in the days when business was done by shaking hands with the banker down the street.
Reputations can be lost by one innocently stupid move from time to time, yet isn’t the length of the relationship and the depth of the relationship what will ultimately matter?
How do you forgive and forget online? What will haunt you forever? And is it this sense of “damage your reputation and you damage your career” that will begin to quickly make this new media space perhaps more authentic? Originals may be rare, but you can spot them in a second, like Julien. Anything false and arbitrary is called out on the carpet pretty quickly.
Taking it to the next illogical level…
http://www.financialaidpodcast.com/2007/02/11/new-media-30-social-currency-as-a-real-currency/
[…] In my opinion, Julien is succeeding in the social media space because he understands the economics of abundance. He practices his own gift economy by sharing links, content, and building a personal brand of his experiences. […]
[…] With all of this Web 2.0 activity still building, I’ve been thinking about Cory Doctorow’s concept of whuffie or social currency (from his great short story Down and Out in the Magic Kingdom) quite a bit. The idea being that you can “pay” others with a mythical currency based on reputation, not gold. Those with high reputations (creators of cool stuff, humanitarians, or *shudder* American Idle) gather whuffie, which they can use to purchase stuff. Those with low reputations (eBay scammers, spammers, or *ideally* American Idle) have less whuffie, and have to struggle to gain reputation in order to move back up the whuffie ladder. […]