What is Merit Exchange?
By Alex Zorach, November 16th, 2008
People ask me this question all the time, and I never know exactly how to respond. I've found that it's easiest for me to answer by making analogies to things people already know. Most people use, or are at least familiar with websites such as Myspace, Facebook, and Craigslist. Fewer people have heard of complementary currency, or local currency, such as Ithaca Hours or LETS, but most people are familiar with the idea of barter, trading goods and services directly with others. A complementary currency allows people to trade with each other without having to barter directly, similarly to how money does.
Merit Exchange combines elements of:
- social networking
- classified ads
- complementary currency
- an invitation-based trust system
Its mission is to bring prosperity to all people, and it does this by encouraging them to provide for each other without needing to use conventional money. In a sense, Merit Exchange provides a way of coordinating volunteer work and donations in a balanced way so that all members benefit. Merit Exchange is innovative, implementing ideas that have not yet been explored in any system. Each of the new features in Merit Exchange has been included with a clear purpose in mind, using knowledge about what has worked in past systems, including economies, complementary currencies, and websites.
Users log in, create profiles, and locate and recruit people they know, building a network of friends. However, unlike most social networking sites, Merit Exchange centers around getting users to provide goods and services for each other. The social networking features are kept very simple.
One innovative feature that the site has is fine-tuned localization. One of the main goals of Merit Exchange is to connect people with others in their immediate vicinity: their neighbors and coworkers. Classified ads can be posted with fine-tuned locations such as coordinates on a map or a street address. Users with privacy concerns can limit the revealing of their location(s) to people in their friend network, or they can choose to post ads by broader categories such as zip code or city.
The cornerstone of Merit Exchange is the currency of merits (
m), which function like money in some ways, but are different from money in certain key ways. Like money in a bank account, users can transfer merits to each other, and check their balance at any time. Unlike money, however, transfers of merits are always voluntary. Merits are not legal tender and cannot be owed in any form of debt. Instead, merits are given as a "thank you" after someone has provided goods or services to you for free or for a reduced rate, or as a tip if someone gives you exceptional value or service. Merits can also be used in the place of regular money when the receiving party agrees to accept them in place of dollars. Merits are not valued in or backed by U.S. currency, and people are encouraged to find their own interpretation of the value of merits by considering how other people are valuing them, how much they can afford to give, and how much value they gain from an exchange.
Invitation-based trust system:
Merit Exchange is open by invitation only. Because Merit Exchange is based on cooperation and generosity, and revolves around local and personal connections, it is important that members have a strong degree of trust in other people they interact with on the site. Members are allowed to invite new members, and they are also held accountable for the actions of those they refer. This accountability system is designed both to ensure that members are serious about whom they invite and to whom they take time to explain how Merit Exchange works, and also to discourage scams or dishonest or greedy business practices that are common on more anonymous internet commerce sites.
The best way to answer the question of "What is Merit Exchange" is to use it. Soon we will be launching our site for testing. Until then, you can contact us with any questions you have.