The Reversed Midas Touch

King Midas got famous from his ability to turn everything he touched into gold. Now it is time to start talking about the Reversed Midas Touch.

One of the mega trends we see is transparency. New layers of digital information are attached to basically everything, enabling us to innovate on top of that information. A typical example would be to understand the provenance of a can of tuna at the local supermarket. Tuna caught with illegal fishing methods, hurting dolphins in the process, is simply not sellable. Ergo, information affects price.

Another mega trend is our moving in the direction of digital/crypto currencies, i.e. digital versions of the money we have in our pockets. You could say that money already is digital (just a tiny part is made up of notes and coins). But it is old school digital, not new school.

The best know example of a new school currency is Bitcoin. However, the interesting part is not the Bitcoin, but the underlying blockchain technology; a public ledger of all transactions. Full transparency. While Bitcoins are debated, the blockchain is not and banks are currently going all in on this new tech kid on the block (no pun intended).

Now, what would happen if we had full digital transparency for all currencies, i.e. we could track every movement of every dollar, blockchain style? This prospect is scary to a lot of people (albeit for different reasons), complex as hell, easy to game, but in a sense fully doable. Let’s stay shy of the overall discussion and hone in on one of the potential effects.

What would happen if we knew from where the money came? Has the money touched environmentally degrading mining operations? Blood diamonds? Has it been put to work at the hands of certain villains? Weapons, tobacco, oil?

And the reverse; has it been put to good use? Has it fed children, participated in the building of our society or at least been used by honest, tax-paying citizens?

If there were no traces, that would be information too.

Money doesn’t smell, people say, but it does. That’s why money is being laundered. And we fight money laundering because in the grand scheme of things, we want people to do things that are beneficial to the world. Perhaps money could play a role that goes beyond its face value and attack the more subtle forms of reputation laundering and whitewashing where the underlying activities are detrimental.

Perhaps we would in the future have a grading of every specific US dollar, according to its degree of purity, amassed since its creation. It would not affect the face value, but the specific dollar would have other values attached. Much in the same way as the can of tuna we spoke about initially is more than just tuna.

What would happen if one part of future CSR would demand that companies do not accept dollar below a certain grade of purity or that has touched certain activities? Or that isn’t fully traceable, for that part. How would ordinary people use such a democratic and dynamic power? We have vastly different views on this planet what constitutes good or bad ethics, but our tools are blunt. Here is potentially a sharper one.

With a fully transparent system, such as the one displayed in the blockchain, we could leave it up to everyone to decide what is a good exchange rate between good and bad dollars. “So, you’re rich, but show me the true color of your money.” The market would rule also over money itself.

King Midas reputedly died from starvation. I wonder what a Reversed Midas Touch would lead to.

Johan Jorgensen