Two years ago I posted a bemused article on Faircoin, which was trading between some members of Faircoop at five times the price it was available on the free market. This was a social experiment being run by Enric Duran as part of his attempts to build a new financial system. It seemed to me a risky venture which depended not only on Duran’s integrity, but on everyone’s confidence in him. Our language abilities didn’t overlap sufficiently for me to be confident that he understood the market he was manipulating.
This year however, the project is in a different league. Instead of Enric’s periodically announcing the price on an obscure FairCoop noticeboard like a sovereign, there is now a lively chat group with 80 members. Their objective is twofold, 1) to propose the ‘official’ price of FairCoin to the FairCoop monthly assembly, and 2) to manage the free market price.
The price should increase slowly and steadily, in contrast to other cryptocurrencies which fail as money because they are volatile. They aim to build confidence attract long term investors who want their money to do social good. FairCoop is selling FairCoin at the official price and building a pile of Euros. Those Euros are not for spending but remain available to buy back FairCoins from members who accepted them but cannot spend them. They do not guarantee to redeem all FairCoin ever issued, why should they? They are just a private institution in a free market trading a commodity.
Insofar as coins are circulating they don’t need to be redeemed and only then can the pile of Euros be LENT (not spent) on something else. They are building their own bank, capitalised by the FairCoin in our wallets.
It is this manipulation for a purpose, within the free market, that makes FairCoin so interesting. Cryptocurrencies by their nature allow anyone to participate, but a motivated team with some resources should be able to ‘own’ or at least take control of a market for their own ends. They need to keep as many coins as possible in friendly hands, and of course to grow the list of vendors who accept FAIR, who can be reassured of a cash price from FairCoop.
Two years ago the ‘official’ FairCoop price had been 5x of the Bittrex price, and a few people kept the faith, but it was really only a handful of activist business who accepted it. But something, whether Enric’s persistence, or the whims of the free market, or a handful of self appointed market-managers, lifted the price, then in in May this year, there was a rush of money into crypto-markets, and FairCoin, with its low volume of trade benefited more than most.
Suddenly the free-market price was above the official price. FairCoop had to restrict its sales to prevent arbitrageurs eating the money pile.
This has been the situation for some weeks. The new price should be decided by the assembly. If (and when) the volatility can’t be managed and the official price drops, FairCoin holders will weather the storm, especially after having enjoyed a 20 fold increase in the free-market price.
This all means that suddenly there is a lot more money behind Faircoin. The team can more confidently offer cash redemption to more vendors and has more reserves with which to smooth the free market volatility. The official list of vendors is much improved on two years ago, though still rather weak. So saying, I was able to go to a wholefood store in Athens and buy more than I could carry!
FairCoop activists are also innovating on payment technologies possible in few other cryptocurrencies. They are able, with a Spanish partner, ChipChap, to convert FAIR into Euros and withdraw them from the ATM in one smooth action! The Bank of the Commons initiative aims to provide a multi-wallet solution for holding and moving between Euros, Bitcoin, FairCoin, and balances from local exchange systems.