Coffee & Power, the experimental “meta-company” that lets remote workers hire each other for small jobs, has decided to drop its virtual currency in exchange for regular old U.S. dollars. The change will have no impact on functionality or in-progress jobs; it’s simply intended to make Coffee & Power easier to adopt. Existing balances in the virtual C$ will be automatically converted to US$.
Coffee & Power was founded by Second Life creator Philip Rosedale, whose interest in virtual currencies built a thriving economy in that virtual world. But for Coffee & Power, whose users do real-world work, Rosedale thinks a real-world currency will be easier to understand.
When Coffee & Power launched, Rosedale hoped the “sticky” nature of virtual currencies would stimulate more work. He says buying into virtual currencies – even when the exchange rate is 1-to-1 as C$ were – is an investment in the community, encouraging reinvestment rather than cashing out.
Coffee & Power charges a 15% transaction fee for money withdrawn from the system, which is how the company makes money. There’s no fee to add money, so the decision to drop the virtual currency is intended to reduce the friction even further.
Rosedale says the change is “only a brand issue.” The key aspect of Coffee & Power’s economy, he says, “is the ability to earn money and then re-spend it on others without needing to put in money of your own.” Until users withdraw money, there are no fees, so C&P workers can participate, create value and spend it without even needing a credit card. This functionality is unaffected. “For now,” Rosedale says, “it seems more likely that people will understand and start using the service if it looks like dollars.”
Last December, Coffee & Power’s first real-world workclub outside San Francisco opened in Santa Monica, Calif. It’s currently working on expanding to the Portland, Ore. and Chicago, Ill. areas. Coffee & Power is available anywhere, but the physical workclubs provide workspaces and community hubs for its members.
