Sacred Capital Founder Talks Blockchain as a Reputational Wealth System
Reputational Wealth Could Change The Financial World For The Better
In the status quo, wealth is a difficult metric to come to understand. While someone could theoretically have thousands of dollars of debt lurking beneath the surface, unpaid and ignored, they could appear to be rich by their bank accounts. And while someone could appear to be poor initially, they could have zero debt—a massive feat in the fast-moving and credit-heavy financial world of 2018.
Additionally, a lack of reputational factor in the wealth of an individual means that, in raw theory, it benefits the individual to not spend, produce, or sell items in the economy. It would make the most sense for an individual with average wealth to spend only what he needs, saving the rest for emergencies, or for a large expenditure down the road. But if everyone in a given economy felt this same way, the economic growth of that community would stagnate. Participation in a wide variety of sectors is an essential component of economic growth in any community, economy, or even country.
Luckily, blockchain technology may be working towards a solution to this vexing paradox. Several organizations in 2018 have been working towards the integration of blockchain technologies into local economies for the purpose of creating a reputational finance and socially-charged system of economics. Bancor has worked to allow communities to come up with their own currencies, and Ono’s new blockchain social network awards financial prizes for contributions to the World Wide Web.
But perhaps the most daring and world-changing blockchain goal is the one shared by Sacred Capital and its founder, Siddarth Sthalekar. In an interview with magazine Finance Magnates, the tech professional outlined his company’s dream of completely revamping the way that the world views the concept of wealth and money.
Out With The Old
First, Siddarth said, the world needs to recognize that current financial and economic systems in the status quo are incredibly outdated. He elaborated that the current way of doing financial business lacks several additional dimensions, or divisions that could really help to make the process smoother and more effective.
The way that this might happen, he stated, comes through the use of blockchain technology, and even cryptocurrencies. Many of the problems he has with the current status quo is that the current system relies on fiat currencies, or currencies that have worth simply because the in-power government related to the currency says they do.
In With The New
In order to respond to the needs of a rapidly changing world economy, this executive believes that the power of the blockchain must be harnessed in order to create the “underlying social fabric” which he believes underscores every successful economic transaction. This fabric, according to the professional, is typically a reputation system.
The reputation can be derived from several places. For one, the system doing the distribution of the tokens, or the blockchain or startup, needs to have some sort of reputation with the people. One this reputation is given to the organization or to the distributed ledger, there is innate value that people associate the coin from the blockchain with. This value would typically have come from a centralized source, mostly a government.
But the most important aspect of reputation is actually linked to the personal identity of the people doing the transaction. In Sid’s ideal world, the reputation is the currency. According to Sacred Capital, reputation is the ideal way to be able to do business, because it id non-transferrable, diverse, and, most importantly, it is not a zero-sum way of doing business. If someone were to use their reputation to do something bad, they lose that reputation.