Startup of the Day: Currensee

Traders are a funny bunch. They don’t speak English. They speak — how can I describe it? — Trenglish. It’s trader English, all numbers and shorthand.

The sort of fraternity of traders makes for an implicit social network, so it makes sense to build a virtual one to facilitate trading. That’s the idea behind Currensee, a new site launched this week.

Currensee allows for trading of, duh, currencies via social networks. Users make “friends” with other traders, and the trader groups can share information, benchmark performance, and generally shoot the shit.

The site has an interesting business model. Traders identify their broker-dealer, and broker-dealers end up paying Currensee for the leads — or at least that’s what I gleaned from the site.

This whole notion of social network trading has legs, I think. After all, a financial trade is nothing more than one party making an agreement with another party. There is no reason why that trust between parties can’t be built up through an electronic medium. With social network-centric programming becoming more ubiquitous, it will become increasingly easy to adapt that technology for financial trading.

Markets have their place, but so do “darker” channels for transactions. For all the transparency that social networks provide, trading through a social network will likely have less transparency. For example, on Currensee trades are visible to a person’s social network, not to all Currensee members. That’s different from, say, Nasdaq, which publishes data on all the market’s trades.

Is this good or bad? Right now, it is tough to tell. The step is for Currensee to gain traction among traders. And those traders are, as I mentioned, a funny bunch indeed.