3 Drawbacks of Reputation as Currency

We talked about how reputation as currency on the web has the potential to be quite powerful. But there are drawbacks to using reputation so fluently. Here are three:

1. You Can’t Have a Bad Day.
Our current economy uses money as a currency, which is great because you don’t need to know or trust me to exchange value. With money as a currency, it doesn’t matter if you’re in a good mood all the time or if you snap at the Home Depot cashier or not. It’s an impersonal exchange.

Reputation, on the other hand, doesn’t allow such flexibility. In fact, your reputation’s value is based solely on so-called “good” actions which are defined by a larger system’s expectations rather than what benefits your individual values or goals.

Reputation as the web’s currency (currently in use as the reviews you left on Amazon, your eBay seller ranking, your Klout score, etc.) sounds great until we realize it is a universal truth that you can’t have pleasure without pain.

People do have bad days (even on the Internet). More than that, people make mistakes and fail often. A system that ignores the very basis of how we learn and solely focuses on the positive is a difficult system to keep up with.

2. You Can Be Someone Different Entirely.
Which leads us to the next issue… reputation as currency forces everyone online to fit into a certain mold and exhibit certain behaviors until we have a web dripping in happiness. And a bunch of trolls. People can create a web presence that has nothing to do with their true selves. And on the flip side, they’re also forced to create anonymous profiles to express their real ideas.

Either way, people can create and manipulate who they are and their reputation easier than ever. That’s important because reputation is based on trust, and the more that we force people to be different than who they are, the more difficult it will be to rely on reputation as reasonable indicator of credibility.

3. You Have To Be Large and In Charge.
Trust development is being outstripped by technology. Whereas trust used to occur over a period of time as a result of working closely with another, now we feel like we can “trust” someone with a quick glance at their Google trail. And that’s a problem for the un-plugged.

“The people who have the highest reputation scores are usually the people who are the most public,” argues Paul Adams. Those who are willing to live their life more freely on the Internet are the reputation winners. No one is re-tweeting your stellar shoe recommendation to the stranger on the Metro. If you’re building relationships in real life or want to maintain some semblance of privacy, too bad.

Online reputation is inherently unbalanced toward the happy, fake and loud. It’s good enough for now, but if we want our social architecture to scale in any sort of useful or meaningful way, we need to re-program how reputation works on the web.