In this post I put the corruption and squabbling within IRTA into context and move back to the future, explaining again as I did in my first post, the fundamental issues that the industry will need to face in the coming decades. It’s not an Association, nor is it software, it’s a currency war – nothing less, nothing more.
In this series on Barter I’ve focussed a lot on Bartercard’s secret deal with IRTA for exclusive endorsement of their software solution as supposedly the world’s best. In spite of Ron Whitney’s incredibly naive and corrupt glowing endorsement sribbled together for Paul Bolte’s coup, it’s nowhere near that, in fact I’ve recently learned from a Bartercard insider [see comments] that not only is it old and very ‘average’, it’s even called “Webturtle” internally, due to its lack of speed!
Red face – Bartercard and Co!
Controlling the industry
The power-move attempted by Bartercard and IRTA to take over the barter industry, while clearly a Kamikaze move that rivals Don Quixote‘s tomfoolery, is doomed for a raft of reasons, but it indicates the thinking behind those industry leaders – they want to control the industry. They smell money and getting a universal platform (such as Bartercard plans in their Prospectus) is their [pipe]dream. They think that controlling the software is the key. It’s not BTW but I’ll get to that in a minute.
There’s nothing new to this thinking for others have coveted a global barter currency/trading platform, but it is one of the reasons why [apart from their obsession with getting off the GETS platform] Ron Whitney and Annette Riggs have been desperate to puff Universal Currency to get UC out there and into the bigger global field. It’s driven by a quest for money, and power . . . greed . . . and will probably be seen in due course to have caused IRTA a major setback in 2014! Ironicly it’s also the exact same pipedream that conman Daniel Evans claimed that he already had with his Ormita fraud I effectively ended earlier this same year!
When you look beyond the headlines of the day, since time immemorial wars (representing the power) have been fought over the money – currencies. Somebody invades somebody else. Somebody tramples over someone else. It’s always the power/money thing . . . always.
The USD is up against the EURO, the BRIC . . . whatever . . . at the end of the day . . . it’s a currency war!
This is the nature of the power/money beast.
There is no difference within the Barter industry. Companies are all vying for supremacy in this space. They want to be seen as the biggest, the best, the most trustworthy and so on. Why? Because they want to win the war and get people to use THEIR currency so that they can have the power and the money.
At this point I don’t judge this – I just state it as fact – and because it is so important, I’ll repeat it:
Conflict and controversy within the barter industry may be over shonky deals, or corruption or lies, or self-interest or good/bad software or politics or ethics and so on but at the end of the day it always comes down to power and money – it is a currency war. Whose currency will have the upper hand?
In my first post in this series about Barter I made two important statements. Observers should consider them long and hard, for they hold the key to understanding the future. I said:
- Multiple currencies will undermine the existing trade exchange business models
- The solution is to restructure a typical trade exchange, splitting the marketing and currency roles
This thinking is treachery to the mindset of the traditional Trade Exchange owner on many counts but it is vital that the industry grapples with this concept which I state again more clearly:
When punters have a choice of currency they will gravitate to where they can use their preferred currency.
The future holds MORE currencies in circulation NOT LESS. Barter exchanges who attempt to protect their patch and enforce usage of their own currency will experience increased competition and will ultimately shrink to fractions of their previous business.
This is ESPECIALLY the case when Trade Exchanges have inflation (usually through high levels of deficit spending) and EVEN MORE ESPECIALLY when the punters cannot see the basis on which the valuation has been made.
Loss in Credibility
As the credibility of the USD, and other legal tender currencies falls, people will increasingly turn to currencies that they can trust, and viewing the basis for which that trust is granted is CRITICAL. More and more people will be wanting to see the validation of a currency they use. Open Source forms of currencies, with credit in the commons, is the way of the future in this regard.
Trade Exchanges who simply say, “Trust us, you don’t need to know . . . one XX Trade Dollar equals one USD” will find it increasingly difficult to retain credibility. The current saga with Universal Currency is a perfect example of this. My take is that Universal Currency should devalue by 50% overnight, right now. Putting that another way, my take is that the UC Dollar is overvalued by 200%. Putting it yet another way, 50% of its backing is dud – spin – fluff – deceit – whatever else you want to call it.
Aside from any fraud issues, such loss of credibility when the facts get widely known (and rest assured they certainly will) will hit exchange owner after exchange owner with serious loss of confidence in the currencies that the industry currently peddles. In the Australasian region Bartercard has a lot to answer for in this sense.
I had a notable conversation with Ron Whitney, Executive Director of IRTA a while back in which he was talking about the relative awareness of barter in the Australasian business place compared to the North American one. He told me that New Zealand topped the world at some 40% awareness, whereas less than 1% of North American businesses knew about it. What I was able to help Ron understand however was that 39.9% of that 40% was NEGATIVE awareness as people had been bouncing out of and off Bartercard for twenty years! In a small country like New Zealand that is a MAJOR problem, not a success story, for the word spreads very quickly! I know this for I am from New Zealand and traded with Bartercard Dollars for decades myself.
The loss in credibility from the shonky operators, hiding deficit spending, milking their systems and creating inflation at their members’ cost is now impossible to reverse. Give IRTA another 50 years and the results will be the same . . . unless people can see the key information people will simply not trust ANY money (let alone barter ‘funny money’) because of their past experiences and the entire finance industries track record.
The big picture
Ownership and Control business models have been under serious threat in the last decade and a half as Brand and Influence business models have taken over. Google’s dominance in their field was the first success story. The FOSS (Free and Open Source) software movement is another obvious example.
The difference is that with traditional Own & Control models you have a comparatively inflexible top-down structure. The Brand and Influence models however offer a flat, bottom-up structure using smart technology and a strong brand. Google doesn’t OWN the world’s information but it does MANAGE the world’s information. Therein lies the crucial difference, and therefore the key to the future.
Barter and Trade Exchanges that want to survive, must move away from OWN and CONTROL business models into BRAND and INFLUENCE models. Survivors will need to open their books and/or incorporate multipls currencies into their offering. Those that will thrive will be dedicated to use other currencies than their own. The big thought for the day however is that the real winners of the next decade or two will not even have their own currency!
In the Barter industry a traditional Trade Exchange will own, guard and protect two things: its MEMBERship list and their own CURRENCY. This double-up has been their strength for decades providing rich pickings on the commissions on trade volume business model, however in the future this will be the industries weakness as the two components inevitably separate.
When multiple currencies become the norm (and the arrival of Bitcoin has put this move into hyperdrive) Trade Exchanges who push their own currency over the currencies that their members want to use will suffer – badly.
There are different factors involved and different ways to tackle this problem, which BTW is also an opportunity.
1. Restructure Income Streams
The first step will be to restructure a traditional Trade Exchange to receive income streams other than from turnover of their own currency. There is an infinite way to do this and people are sure to be creative – membership systems, with or without social networking are just one option. Hybrid options can be introduced in staged manner so as not to destroy existing business models but the key point is to remove the exchange’s reliance upon their own currency for income.
2. Permit alternative currencies
The second factor is to permit the trading of alternative (and of course potentially competing) currencies. This will be a scary move for some; apostasy for others and opportunity for the flexible, forward-thinking. This is also a technical matter as well as a structural matter but there are solutions available and some exchanges have proven this to work already. It’s not a simple thing and has huge ramifications in many areas BUT owners should at least wrestle with the issue in order to protect their business and cope with the changing future.
3. Use/promote other currencies
Exchanges that are established with, or who can use, or who can transition to a pure, trusted, third party [perhaps Open Source] currency, whatever that currency may be, will protect themselves into the future and thrive in the modern post-Bitcoin world.
The fundamental shift away from a Barter/Trade Exchange operating its own currency to one of a networker, business generator, trade co-ordinator, or a marketing services company (using another currency) is the way of the future.
A smart Trade Exchange that can find ways to profit from the use of another respected currency with its own value-adds and associated services will be doing to this industry what Google did to advertising and what Open Source did to the software industry.
Looking back a decade from now, they will be the winners, and the people and businesses like Bartercard with their litany of lies and hugely inflated currency, IRTA and their corrupt struggling UC solution and anyone else that thinks that barter software is the key to the future will be long gone, or certainly the has-beens of the industry.
In the next (and final) post in this current series on Barter I will be summarising the entire contents of these 24 posts (61,075 words) down into one easy-to-read document. A big thank you to all who have followed my writings and given me support, ideas, raw data, graphics, corrections, enhancements, commentary, encouragement and various forms of feedback. You’ve all been great! Standby for my summary shortly . . .
The Barter Series
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