I think the present limitation has more to do with the fact that karma is dolled out anonymously, which means there's no way to back up the legitimacy of your earnings from the status of your upvoters. It doesn't matter if karma is infinite, because there are a finite number of socially approved participants. This is why national currencies have value in the first place: because valuable organizations/individuals use them to transfer wealth. Money is just a communications medium, after all. One stuck in a pre-web mentality. Existing web currency manipulation systems are as primitive as a YouTube that only played TV in your web browser.

If you make karma transferable and allow negative values (thus creating debt and preventing runaway inflation), you could offer a genuine relativistic currency, in that individuals could back up the worth of their unit independently, without relying on trust in someone else (e.g. the state apparatus).

you don't fix the exchange rate, you let the market determine it. As the amount of karma increases it's possible for a value to decrease. But given how the dollar is doing, who knows what would happen.

here's a game theoretic explanation of why that's no good: okay, fine, let's have an exchange rate where karma gets less valuable as the amount of total karma increases.

then me and my friend will upmod each other 1 karma, because we're each gaining 1 whole karma, but the devaluation we're causing is only losing us a fraction of a karma. With these incentives, everyone will upmod ... and the value of a karma point will tend towards zero.

>the reason a Euro or USD has value is because there is a limited supply of them.

I thought thanks to Bernanke there is unlimited supply of USD.

I'm inclined to agree.

Moreover, the US government basically prints money all the time... (in the metaphorical sense)

> (in the metaphorical sense)

Literal, as well. Paper money wears out and needs replacing.

Karma is backed by gold didn't you know?