Last night I had a dream. I was checking my Google account. I was checking how many ‘Googles’ I still had there. They summed up to 2200 ‘Googles’ most of them I had bought from Google about 18 months back for 3000 USD.
Yes, that was what Google could do with them: sell them and buy them back – but in several different currencies and of course in many different countries at a rate which Google fixed daily.
And for me, what were they good for? Well I can transfer them to other peoples Google accounts and receive some good, services or other benefits from them, so use them as a virtual currency. So as long as I move in the Google economic space I will not need to deal with any local currencies. But I can always change them back if I am in a need for some real tangible Euros, Greenbacks or whatever kind of money to buy me bread, wine and cheese.
3000 USD for 18 months on the Google account – isn’t that dead money? Or did Google pay interests? No Google did not – at least in my dream. They obviously tried to do everything not to be considered as a bank in order not getting strangled by the multitude of manifold and multiplying local and not so local regulations increasingly imposed on any financial institutions.
But instead just one right-click away from my Google account balance I was lucky to take advantage of a plethora of service offerings from 3rd party providers most of them real banks. They were ranked & sorted according a Google provided rating. Here I quickly and conveniently found an institution which offered me an attractive interest rate for the period when I blocked the amount in favor of them.
After I awoke at 5:30 a.m. to get up and hit my jogging trail like I use to do it every Sunday & holiday morning I had some time to reflect my dream and check it for real world applicability …
Could something like that ever work? Hmmm, at least we would have to trust Google even much more than we do it now already. There is an increasing number of prophets around warning us not to sell our souls to Google – well at least the soul data. Using our Google accounts for pseudo-financial transactions could even top their horror scenarios.
And there are some technical issues to be solved too. E.g. fixing exchange rates: the value of a ‘Google’ would have to be related to the values of other currencies or goods on a global scale. Goods like precious metals and other commodities, energy or computing power or the like to my opinion would be best. Unfortunately I do have no idea how to build such a system.
What’s about currencies? If we would think about a kind of weighted mean of the – let’s say 10 – major currencies of the world immediately the ‘special drawing rights’ (SDR) come into mind. SDRs are used as a unit of account by the IMF and several other international organizations. Indeed just recently Zhou Xiaochuan, governor of the People's Bank of China proposed using the SDR as a worldwide reserve currency in place of the dollar as a world reserve currency. I think everybody can imagine how much politics is involved the assignment of currency weight in the basket. Moreover there are no really reliable and hence comparable macroeconomic indicators around to base them on transparently. Ok, but Google could just do it the Google way. And you may trust them or not, No one is forced to trade in ‘Googles’.
Similar issues might arise with the mentioned rating of 3rd party providers, banks and the like. The only way to reach consensus here would be not to try it at all but to impose again the ‘Google way’. This procedure even wouldn’t necessarily exclude basing the system of transparent rules.
Those ‘Googles’ – I called them virtual currency – would they be considered as a currency or not? So would Google then become a financial institution after all or not? Well – while jogging along the banks of the river Elbe in the early morning mist of May 1st – the insight grew, that this might be the point where my falls even shortest. Would it be of much benefit to have just another of these so shaky banks?
Moreover, imagine, Google would become the supra-national almighty and now even financial monster. Isn’t it enough already?
Well, on the other hand, Nations and the few feeble trans-national organizations did not perform much better and didn’t earn more credits as the recent crisis has taught us.
And besides them whom else than Google could we imagine to make this dream happen.
Well, it was just a (night) dream and would I not have written it down immediately even I would not remember it now.