6 Ways Community Currencies Could Learn From Bitcoin by Joel Dietz
Alternative currency evangelists have long had a tough, uphill battle to fight. Despite some notable current examples, including Berkshares, Chiemgauer, and Brixton Pound, many community currencies have a hard time getting started, and gradually fizzle out after time due to lack of enthusiasm. Bitcoin, on the other hand, hasn’t stopped growing. Why is this? What can we learn?
Some people would say that “Bitcoin” is based on greed and we shouldn’t even consider it. If that’s you, stop here. But for most of us, there are things we can learn from the success of Bitcoin, the technology which has captured the spotlight of the mainstream media and catapulted digital currency onto the world stage.
If you are still listening, here are some things that community currencies could learn from the tremendous success of Bitcoin:
An open ecosystem. As I note in this old piece on open source software ecosystems (http://www.shareable.net/blog/how-to-build-a-vibrant-open-source-community), building an ecosystem means facilitating revenue stream for people engaged in that ecosystem. There’s a general principle here of “the more you put in, the more you take out.” An open and flexible system with revenue streams incentivizes people to put in a lot of time upfront, with the knowledge that this could be worth something more later. If you want to involve a lot of talented and motivated people, you need to offer them that upside.
Deep technological innovation. There are a lot of inefficiencies everywhere, and progress is made by building infrastructure that improves the experience of people, by making their everyday lives better. This offers obvious improvement. It’s also exciting. This encompasses usability, fees, infrastructural costs, and durabilty. Don’t just offer them something different. Offer them something that is better.
Focus on progress, not protest. There’s a fundamental difference between opting-out of a system with various deficiencies and building a new reality that improves upon the old system and eliminates some of the deficiencies. Most people want this latter category. It grows faster and meets a wider audience.
You need money to go against money. Sometimes there’s an unspoken assumption in the community currency world that capital accumulation is bad. However, as anyone involved in lobbying, patent law, or any other contested area knows, lots of hurdles have high capital costs to overcome. Allowing people to accumulate capital from these dynamics (like Rick Falwinge, founder of the Pirate party), puts people with a greater possibility of real influence in these contested areas.
Dangle that carrot. Whatever you may think about greed in the abstract, it’s a fact that humans move faster when there is a clear personal upside for them. Like a stockmarket or private investment, Bitcoin offers early adopters the benefit of sharing in the upside of the growth of the Bitcoin. That gets people to move when otherwise they would drag their feet. This dynamic can have a lot of bad aspects, but at it’s best it shares in the same sportsman spirit that was once celebrated at the birth of the olympic games.
Engage with global enthusiasts. Anything that wants to have a global reach needs to start small and grow fast. Bitcoin achieves this by engaging closely with the type of people who think that governments can’t always be trusted to monitor the amount of currency in circulation. As it turns out, this is an enthusiastic group of people, ranging from diehard anarchists to old school goldbugs. That’s a good recipe for seeding a project and a good way to grow further.
Bringing the local-global continuum is a recipe for global success. Attaching real revenue streams takes it from a volunteer enthusiast audience to the possibility of a globally influential ecosystem that can even set policy agendas, instead of leaving them to inertia, or, worse, “too big to fail” banks.
Leaving things open allows people to make their own reality, rather than forcing them to fit into some predefined system. New businesses can spring up, and everyone can benefit. It’s a recipe for empowering democracy at the global level.
It worked for the global yoga movement, and it can work for community currencies. If anything, Bitcoin teaches us that the time is now.