Information Currency and Information Engineering

Information currency (http://infoeng.sourceforge.net) and its applications.

Saturday, November 04, 2006

motivations and expectations for information currency

Information currency is intended to provide a new economic means to value information. This mechanism, unlike existing copyright schemes, is not based on coercive legal mechanisms. Unlike a number of other proposals for incentivizing information creation (such as FairShare), information currency incentivization is based on transferable financial instruments, enabling the market exchange of property instruments to be used to coordinate the management and use of information. The insights of Hayek on the use of knowledge in society suggest that market prices will make it possible to efficiently aggregate information about information into those prices. The perspective of Hayek implicity assumes a general equilibrium state where all information is known and knowable, but this is clearly not the case. Information currency will provide another practical example of the accuracy of praxeology, where market prices support estimates and provide after-the-fact validation for the actions of individuals.

The technology underlying information currency is similar to that for (unblinded) digital cash - with the difference that there is a distinct set of "digital cash" instruments corresponding to each unit of information that is managed by the information currency server. Unlike other quantitative indications of information value, such as number of links, or number of views, the price for information currency is associated with direct economic motivations (the amount of money that the IC can be sold for). This will make it useful for making critical decisions on an assisted or automatic basis, such as security-related decisions. With lots more software development, and the operation of sufficiently reliable institutions, it will be possible to use well-known financial engineering processes to coordinate the generation and utilization of information. This, it is expected, will enable new means for influencing human actions, given the central role of information and ideas in directing human action.

For right now, though, there's lots more software development to be done!

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