I’ve written several articles here on HackerNoon about the concept of Karma. I’ve always thought of Karma as a type of currency, deriving it from the functioning of monetary systems. A few days ago, I applied for the World Grant program, and while filling out the forms, I was reminded of an approach that I will present in more detail in this article.
The Gamification of Helping Others
Gamification is a very powerful motivating force. Many people run kilometers or learn a language just to earn a few digital badges. The idea almost suggests itself: what if we tried to gamify helping others? If we could encourage people, even just a little, to do good for others, it would make the world a much better place.
The idea isn’t entirely new. In 2009, Philip Rosedale (CTO of SecondLife) launched a startup called LoveMachine Inc., where, among other things, developers could ‘send love’ to each other. If someone wanted to express their gratitude to a colleague, they could send them love, which was like a badge that was publicly visible on the developer’s profile. This was, of course, a very simple way of gamifying acts of kindness, but it was very inspiring to me at the time (the company has since shut down, so it’s only accessible via the Internet Archive).
My other major inspiration is the protagonist of Charles Stross’s novel Accelerando, Manfred Macx, who lived a prosperous life entirely without money, essentially based on favors. Is this really possible? Could one live without money, relying solely on mutual favors?”
Economy of Favors
In fact, the favor economy is the most natural form of economy. Doing favors is so fundamental that we don’t even consider it a business transaction, though that’s essentially what it is. When we do a favor for a friend, it’s perfectly reasonable to expect that in a similar situation, they would do the same for us. If favor-giving is always one-sided, we eventually feel taken advantage of, and the friendship often deteriorates. While this isn’t as precisely measurable as money, we subconsciously keep a ‘cognitive ledger’ of favors.
About 2 million years ago, our ancestors lived in small communities and got along just fine without money. People would go hunting together, and if someone returned empty-handed from gathering, others would help them. In return, if someone else needed help, the community would support them. The economy of favors, therefore, works very well in small communities, but it has a significant limitation: it requires personal acquaintance. When the participants in a business transaction don’t know each other, or the transaction involves multiple people, the process becomes entirely untraceable, and the ‘cognitive ledger’ no longer works. This is why barter trade was established and, eventually, money. I have an entire article on the history of money. For those interested in a more detailed exploration of how money developed and what it really is, it might be worth a read.
Karma: The Modernized Version of the Economy of Favors
If we want to build an economy with a different dynamic, we need to return to the roots. In this sense, Bitcoin or other cryptocurrencies are not true alternatives to the current monetary system. They are speculative assets, much like national currencies, with the difference being that they aren’t issued by any one country. If we want to change the dynamics of the economy, we need to go further back in time to the concept of the economy of favors.
As I mentioned earlier, the limitation of the economy of favors stems from the limitations of the ‘cognitive ledger.’ Favor transactions only work between people who know each other well personally. This is a significant limitation. If we could replace the ‘cognitive ledger’ with a global ledger, it would remove this barrier. Fortunately, we already have such a technology: the blockchain.
By definition, the blockchain is a global ledger operated and owned by the community. It cannot be censored or tampered with. It is the perfect tool to extend the reach of the economy of favors from a small local community to the entire world.
How does Karma work?
Since I’ve already written a very detailed article on how Karma works from a technological perspective, here I’ll only provide a brief overview, highlighting the parts that are new to the concept.
From a technological perspective, Karma is an ERC20 token, so it works with any Ethereum-compatible wallet. Sending Karma to anyone is as simple as sending any other ERC20 token.
One major difference from other ERC20 tokens is that Karma never runs out. In this sense, it’s not like money; it’s more like love.
Although Karma never runs out, it’s still not wise to spend it limitlessly, because all outgoing and incoming Karma transactions are public. This visibility shows how much kindness someone has offered to others and how much they’ve received in return. If someone has a lot of ‘outgoing’ Karma but little ‘incoming’ Karma, it means they’ve received more favors than they’ve given, which could negatively impact how others perceive them. Ideally, there should be a balance between ‘incoming’ and ‘outgoing’ Karma.
The truly exciting feature of Karma is that transactions form a directed weighted graph, where cycles can emerge. Let’s say we pick up a hitchhiker (let’s call him Tom) and give him a ride, for which he sends us Karma in gratitude. A few months later, Tom finds a lost kitten and, based on the tag on its collar, returns it to its owner, Alice, who gives Tom Karma as a thank-you. At her workplace, Alice helps her colleague John solve a problem, and John, in turn, gives her Karma in appreciation. Years later, we get a flat tire and don’t have a jack. Fortunately, another driver stops to help us—it’s John. We send him Karma in gratitude, and the circle is complete. Imagine seeing in the app how the help we gave Tom years ago when we gave him a ride, eventually made its way back to us. This is where the name ‘Karma’ comes from.
The philosophy of Karma, in short, is: do good things, and good things will happen to you. The Karma system visualizes this process and simultaneously incentivizes users to do good for others.
Since Karma is not tied to the monetary system, it’s entirely up to us how much Karma we reward for a favor. As a general guideline, we might say that one hour of work is worth 100 Karma. However, if someone does us a big favor, we could give them 200 Karma for just 10 minutes of work, or if we feel it was a small favor, we could give only 50 Karma for an hour of work. It’s completely up to us how we value a fellow person’s favor.
The basic requirement for the system to function is that each person can only have one profile, thus preventing Sybil attacks. If this condition is not met, anyone could create a new profile if their incoming and outgoing Karma balance is off, or use fake profiles to send Karma to themselves, misleading others. The perfect solution to this problem is WorldID, which provides a unique identifier linked to an iris, ensuring that each person can only have one WorldID. I’ve written a detailed article on how WorldID works.
Alongside WorldID, other elements of the World ecosystem provide an ideal foundation for Karma. WorldChain, World’s own Optimism-based L2 solution, is a perfect choice for running the system. On this chain, people with validated WorldIDs can execute transactions for free. The World App includes a built-in wallet necessary for ERC20 transactions, and the visual UI can be made accessible through a Mini App.
So, is Karma money or not?
One of the great lessons of the Bitcoin revolution, for me, is that money is whatever we consider it to be. If a group accepts something as money, then it is money. Money is nothing more than a social contract. In this sense, Karma can also function as money. Let’s look at an example of how Karma could replace money.
If we want to get somewhere by car, we could call an Uber and pay the driver. However, we could also find someone who’s heading in the same direction and ask them to give us a ride in exchange for Karma. A whole ‘favor-based Uber’ service could be built on this idea. Similarly, a ‘favor-based Airbnb’ and other services are also conceivable. In small local communities, Karma could even fully replace money. Since all Karma transactions are permanently and publicly visible on each person’s profile, and everyone can only have one profile, Karma accounting becomes a very serious matter. We can think of it as a kind of credit system where the collateral is our unique profile and reputation. In some cases, this could even be a more substantial guarantee than a person’s wealth.
Summary
Although Karma can be derived from the monetary system, the goal has always been to create something better. Something that can’t be speculated on, accumulated, or increase social inequality. That’s what Karma is— a system that gamifies helping others and encourages people to do good for one another. If the concept proves even slightly workable and fulfills its promise, then it has been worth pursuing. Through Karma, perhaps the world can become a slightly better place…
