Distributed Ledger Technology

The Psychology of Money

Written by Shelly Duncan

I started my crypto journey a little over two years ago and I’ll be upfront – it was entirely because of a blogging platform called Steem. Now I like to blog – I do it on occasion for my employer and I run three personal interest blogs and a business blog. Now many thousands, possibly even millions can attest to the fact that it is hard thankless work trying to monetize your blog. So the Steem platform was very appealing to me and as a natural extension from that moving on to it’s offshoot – Whaleshares.

I work in the IT industry, specifically, my background is virtualisation, mobility and cloud…before anyone even knew it was cloud. Australia was always pretty much at the forefront of the adoption of these technologies.. When it comes to blockchain or distributed ledger technology (DLT) we’ve been pretty slow on the uptake until very recently. And in the case of cryptocurrency (which I know is not the be all and end of DLT)

I’ve sat at round tables with some pretty damn intelligent people in my industry, whose brains work at a speed of knots I couldn’t hope to keep up with. Yet mention blockchain to them and most of them start floundering. They admit there could be some practical use for the platform, though most struggle to understand just what that is at this stage.

And if you mention cryptocurrency then your credibility as an intelligent human being seems to fly right out the window…”Oh, it’s a scam” “that’s just a pyramid scheme” “it’s a money laundering platform”. I’m sure you’ve heard them all before and probably more.

Okay, sure, there are probably some bad eggs in the crypto world… but that’s true of anything that humans have ever had anything to do with – some people will always try to game any system in order to get the best outcome for themselves regardless of the impact on others. So let’s just set that aside for the moment because frankly, scams, laundering, pyramid schemes and fraud are not solely the domain of digital currencies. I don’t recall we got rid of cash because the FBI caught Al Capone. (On a somewhat relevant side note, people get concerned that those who use crypto for money laundering purposes won’t be able to be caught. Capone was actually caught for tax evasion, not laundering).

But I digress. These arguments aside, the other big argument against crypto is that it is essentially being created out of nothing. I hear “But there’s nothing backing it” a lot. Once upon a time in a galaxy far far away, money was backed by physical resources. The government would look at what they were pretty sure was in the ground and decide on what value they think that might one day be worth and create money based on that (Ok a very simplified view but basically it). This is a commodity backed currency. This is where a lot of people’s brain stops when it comes to the value of our money. That’s surprising because most governments now have fiat, a currency without intrinsic value that is established as “money by government regulation”, no resources needed.

Hang on, that sounds suspiciously like the government is making up money out of nothing!!! That can’t be right!

The point is, people need to fundamentally change their way of thinking if cryptocurrency is to go mainstream (leaving aside other roadblocks such as the technical difficulties of setting up wallets for people who won’t even use an ATM)

The crypto blogging and social sharing sites such as Steem, Whaleshares and Dlike are perfect examples of how a currency can be backed by value other than commodities or debt. A user can set up a community and a related coin and reward those coins to people who add specific value to that community. Different communities will see value in different things and people are rewarded when they contribute. Let’s call this contribution value. Who is to say that this is the wrong way to create currency as opposed to what the governments currently do?

Having said that, It makes sense that right now governments are wary of crypto – they struggle to regulate it and tax it… but believe me when they work it out they will be all over it. While crypto fanatics are often anti-regulation, a world without any means total chaos… neither end of the spectrum is ideal.

One huge benefit I see around creating currencies that are driven by contribution value is that it changes the psychology around money.

Research done by Paul Piff of Berekely university studies the impact of money on human behaviour – we are talking fiat money in this case. It can drastically change our behaviour and not always for the better..

When we feel wealthy, Piff concludes, we need other people less. In the real world, when people have less money, they rely more heavily on their social relationships to get by. Therefore interpersonal relations are prioritised. The rich, by contrast, can buy themselves peace, quiet and space – plus a solution to most problems. There’s nothing like a fat wallet to cheer you up in a crisis. But that tends to isolate them from others’ experiences. Source

Now, look at a platform such as Whaleshares. It’s a platform that aims to increase interpersonal relationships – and reward people for doing so.

Look at some of the projects that are around such as Mana, Aidcoin, Bithope to name a few. Crypto gives us the potential to become more empathetic, more community driven, more engaged and more connected. That’s not even looking at the benefit of being able to have complete transparency into charitable donations, potentially encouraging more people to give.

And no, I don’t think crypto is going to “solve world poverty” but it certainly encourages people to look outside the box and for that matter themselves to help find a solution.

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Step outside the charity sphere for a moment and even in terms of investment and business, it is helping us make connections in ways not possible previously.

To give you an example my husband and I hold a token called Relex Life . Essentially, partnering with Aura Inhalables as the manufacturer, Relex Life provides a platform for people (who do not have to hold the token) to come up with an idea for a supplement or pharmaceutical inhalable product. Token holders can then crowdfund inhalables they see value in or would like to develop and sell.

We have been fortunate to be the creators of the first one to be funded – A Stop Smoking Aid, which starts development in the next week. And we are now setting up a corporation to distribute the product along with the other investors, some of whom are big business people with proven track records, opening up a world of opportunity that we never ever would have been able to access, others investors are like us – Joe Bloggs down the road. But in this endeavour, we become partners all working for the same outcome.

The entire underlying principle of cryptocurrency is one of connection and co-operation. Cryptocurrency has the ability to distribute wealth more evenly. The gap between the haves and have-nots get smaller. People become partners in a co-operative economy.

Of course, all this being said, humans are involved so there is always the likelihood people will use their new found cryptopower for evil.

But crypto gives us a chance to be better and I for one can’t wait to see where it leads.

Thanks for reading!

If you want to learn more about Paul Piff’s study about how people behave when they feel wealthy (via a rigged game of Monopoly) check out his entertaining TED talk – Does Money Make You Mean?

About the author

Shelly Duncan

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