Philip’s Newsletter

Money is a surprisingly difficult thing to understand. In 2003, Second Life launched and included as a critical feature a digital currency designed to enable people building digital goods in the rapidly growing world to trade them with each other. Over the last 20 years, tens of billions of dollars have changed hands there, and as a result I/we got a crash course in how money actually works. As a result, I think about money a lot. I’m currently in the process of building a new kind of digital currency, built on many of the discoveries we made trying to help avatars from all over the world buy and sell things from each other in a way that was generally regarded as fair.

“Trust” is a word that is thrown around liberally in the discussion of money - it is even printed on our bills. Crypto uses it in reference to software… “in code we trust”. But the sort of trust I am talking about in this essay is the human, personal “I trust you” kind. A concrete example would be when you pay for a friend’s lunch, trusting that they will pay for yours next time. So if you trust your friend, you buy them lunch.

Cryptocurrency is interesting in that it started with the premise “no one can trust anyone”. As a side note: this was certainly an understandable perspective, given that it was immediately after a financial disaster in which US banks stole hundreds of billions of dollars and homes from helpless US citizens, perpetuating a global financial crisis for which they did not take responsibility and in the end actually profited from. But I digress.

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