Honour

“The great powers of the world may have done wonders in giving the world an industrial and military look, but the great gift still has to come from Africa – giving the world a more human face.” – Steve Biko

There’s money to be made here! Any kind of money you like, and as much of it as you need.

I’ve redesigned honour.community and redeployed the contracts on Ethereum mainnet. I want to give money a more human face. It’s free to use, and I encourage you to explore what weirder forms of programmable money might look like while everyone else tries to convince you that stablecoins or tokenised stocks are going to change the world.

The full story

I’ve been in pain recently. Part of the diagnostic process required a biopsy. Settling the various accounts with hospital administration has been doubly painful. No-one bears responsibility for how the system operates, and each functionary in the chain can only ensure that the hospital profits at the expense of the human patients it is meant to serve.

The experience has left me feeling angry, isolated, and taken advantage of. The few humans I did interact with were helpless. I ended up feeling disdain for most of them. These are difficult emotions to experience, and not helpful in any healing process. I guess it is part of what people mean when they say that our medical systems can fix many physical symptoms, but not the emotional, psychological, and spiritual aspects of most dis-ease.

In processing all this, I’ve been sitting with the time-honoured maxim that beneath almost all anger there is sadness. What am I really sad about that manifests as anger about my experiences in hospital?

I am sad we haven’t yet succeeded in making better money.

Some of my emotion arises out of how deposits, the charges from various doctors, accounting, and refunds are handled. I’m angry that money gets in the way of humane interaction, compassion, care, and healing. How our money works–what our money is–actively prevents the stated purpose of the medical system which depends on it. This applies across most industries. It is just starkly personal when it comes to medicine.

What’s the use?

So, what is our money? It’s mostly debt. But we get confused about this, because it appears as cash in our wallet, or a positive balance in our bank account. It seems like a good thing to accumulate. The more you have, the more power you have and the more people you can persuade to do stuff for you. The more fancy medical treatment you can afford.

But the money itself is created out of debt. Keep that in mind while I digress briefly.

It is not uncommon to hear that cryptocurrencies still haven’t found a real use case, but this misses the very obvious, though abstract, point that money is the real use case. Specifically, cryptocurrencies are tools for hosting economically meaningful conversations about what money is and what we can program it to become.

It’s important that this is seen as many conversations–ongoing, communal processes–rather than as definitive statements. It is not a dialogue if one side just states that Bitcoin (or any other technology/network/token) is the best kind of money. It is more interesting to investigate together what sociopolitical and economic effects arise from different programmes for money.

These conversations uncover how money might work differently. x*y = k as a means of organising exchange is one such example. Deployed as Uniswap, this introduces a genuinely new paradigm for exchange, which is an ancient human institution. As we use it, we discover both its strengths and limitations. It is not that having fixed reserves in a pool, the ratio of which are used to discover price, is a strictly better method for exchanging goods. But it is better in certain instances than anything else in history (for instance, low liquidity markets).

Perpetual swaps are another example. These are about a specific kind of exchange called futures trading. Perps expand the set of financial primitives we have for exchanging stuff across time. Again, they don’t solve everything about such trades, but they do significantly shift the conversation about what is possible, and how we might organise relationships with duration.

As we host global, open, permissionless conversations about what money is, we naturally innovate on how money works in particular ways: exchange and futures being two relatively easy examples to point at. There are more. Consider Cycles and the open clearing protocol. Clearing may not be as familiar to everyone as exchange and futures are, but it is also a very old human institution with a fascinating history. And we can make it more available, and more effective (i.e. clear more debt with less currency) by virtue of how we program money.

As Ethan points out when describing Cycles, if you program a protocol well enough, it can host any number of different monies: fiat, crypto, memecoins or anything else people are willing to accept. And this isn’t for any moral reason. The more people willing to accept weird currencies, the more overall debt the graph can clear. There is an economic incentive to include those you would otherwise find unacceptable, which is fascinating.

It is what it is

I think the three above examples represent profound shifts in how money works, which will only become more obvious in the fullness of time. But where is the work that asks people to reimagine from first principles what money actually is? This question is the root of my sadness.

I have known this for a long time. I have worked on this question, on and off, for many years. It led me to design Honour.

The idea is simple. Money is mostly created from debt. What if we represent that directly? Rather than privileging a few with the ability to create money from debt, and then distribute it as “assets” to the rest of us, why not let anyone create money when they need to represent a debt, and destroy that money when the debt is settled?

We can hijack existing cryptocurrency infrastructure, like the ERC20 token standard, and just tell different stories about what balances are, and who can mint and burn tokens when.

Your balance represents your debts. Tokens are minted only when someone else accepts your proposal that they take on debt. Tokens are burned when you forgive someone else and they accept it. All transactions require mutual consent. No tokens are ever actually transferred. It is totally free to use, in the sense of both beer and speech.

And that’s basically it. With just these rules, we arrive at a different kind of money altogether. It is one inspired by mutual credit networks of the kind that David Graeber studied. It is a conversation about what programs we run when creating money and who gets to do so, rather than how we exchange, trade in time, or clear debt with it.

I know that changing people’s minds about what money actually is will take generations, and so have deployed the contract on Ethereum, where it is likely to outlive me.

I don’t think HON is supposed to be the “money of the future” or anything like that. In fact, if you were to ask me about the beautiful world my heart knows is possible, one feature is that the programs people run when using money are more explicitly prosocial and inclusive, and less alienating.

HON is one kind of money that I can imagine programming. It is well suited to communal use where the effort to price something not pegged to any fiat currency (and with no underlying collateral) can be offset by the trust you have in the people with whom you are transacting. It is well suited to repeat interactions, with low miscommunication, between friends. Obviously, this is not the only context in which we transact, and so HON is not suited to all contexts.

However, it is my distinct hope that having this kind of money in the world does have the recursive effect of seeding the conditions for more transactions like this and less transactions with strangers with whom you explicitly do not want to form an ongoing relationship. Both have their place: what is at issue in my world is the balance between them.

What really matters is the friends we made along the way, and HON is designed such that using it makes it easier to find good friends.

An invitation

Designing Honour felt inspired in a way that is difficult to write about without making some implicit claims which I don't want to. HON cannot save the world. At best, it can invite you into greater responsibility for your world, and the many worlds your world touches.

I think this is a profound, and profoundly human, invitation. If the hospital administrator had been encouraged by the system within which they work to take more responsibility, then the way we interacted would have been radically different. We might have even become friends.

HON is the kind of money that I want my children, and their children, and their children’s children (and so on) to be able to use, if they so choose. Maybe it is impossible to imagine medical systems (or even just simple point-of-sale systems) that ever integrate such money, but weirder things have happened. All I know is that my current responsibility is to keep this project alive in a world predisposed to overlook it.

I commit to keep working on Honour. The latest version reduces dependencies on any third-party software providers, and redesigns the whole experience so that transacting with HON is more intuitive and delightful. There is still so much more that can be done. But a lot of that requires you, yes you!, to play with it.

Go on, become a friend. Help me find a community who can give meaning to the phrase, “Let’s make money better.”

Love is worth nothing until tested by its own defeat. I realized that love, even if it ends in defeat, gives you a kind of honour; but without love, you have no honour at all. I think that is what I misunderstood all my life. Love is to enable you to transcend defeat. – Creina Alcock