Starting From Scratch: A Family-Sized Economy

A couple of weeks ago we floated the idea of our family having its own currency; provisionally called SNOFCOIN (based on our initials) it would provide—at the outset—a token system for earning and spending among ourselves. Obviously, with children involved we'd expect chores and leisure activities to drive the market, but it's intended to be about so much more.

We've never been into the idea of rewarding our children for helping out. Similarly we don't see time on the Playstation or watching television as things to be earned. And so this starting point—a simple token system—was only tied to these basic use cases to help get it established. What matters more is what we learn from it, because there's a lot to be learned.

Whatever happens with new currencies (and new economies) it's pretty safe to say that my children will grow up in a world with a different relationship to money. I don't expect the legacy currencies we have to go away any time soon, but I'm pretty sure that the changes we're seeing now will open up new ways to participate in the economy. And so, because we like to do things hands-on, we've decided to see where a currency for our family will take us.

I'll write more about how we get on—and what we learn from it—as the experiment progresses. But right now, there are a few things we need to consider:

1. How do we set the initial values of the currency?
2. How do we represent the currency (physical tokens and/or digital wallets)?
3. Where does the initial money come from and who controls it?
4. Can this currency be exchanged for other currencies and if so at what price(s)?
5. Can people outside our family use it or buy into it and why might they?

Some of these questions are potentially quite serious, but this is why we want to explore them by doing. We've already started to test out some simple functions and the implications are interesting; it took about four hours before my eldest daughter was paying the youngest to do work for her. And we've already had a few "discussions" about the exchange rate with the Euro.

What else should we be considering?