Governments and civil society have now also joined the quest and are actively exploring the potential of DLTs to create transformative social change. Experiments are underway to leverage blockchain technologies to address major societal challenges – from homelessness in New York City to the Rohyingya crisis in Myanmar to government corruption around the world. At the same time, a growing backlash to the newest ‘shiny object’ in the technology for good space is gaining ground.   

At this year’s The Impacts of Civic Technology Conference (TICTeC), organized by mySociety in Lisbon, the GovLab’s Stefaan Verhulst and Andrew Young joined the Engine Room’s Nicole Anand, the Natural Resource Governance Institute’s Anders Pedersen, and ITS-Rio’s Marco Konopacki to consider whether or not Blockchain can truly deliver on its promise for creating civic change.

For the GovLab’s contribution to the panel, we shared early findings from our Blockchange: Blockchain for Social Change initiative. Blockchange, funded by the Rockefeller Foundation, seeks to develop a deeper understanding of the promise and practice of DLTs in addressing public problems – with a particular focus on the lack, the role and the establishment of trusted identities – through a set of detailed case-studies. Such insights may help us develop operational guidelines on when blockchain technology may be appropriate and what design principles should guide the future use of DLTs for good.

Our presentation covered four key areas (Full presentation here):

1. The evolving package of attributes present in Blockchain technologies: on-going experimentation, development and investment has lead to the realization that there is no one blockchain technology. Rather there are several variations of attributes that provide for different technological scenarios. Some of these attributes remain foundational -– such as immutability, (guaranteed) integrity, and distributed resilience – while others have evolved as optional including disintermediation, transparency, and accessibility. By focusing on the attributes we can transcend the noise that is emerging from having too many well funded start-ups that seek to pitch their package of attributes as the solution;
2. The three varieties of Blockchain for social change use cases: Most of the pilots and use cases where DLTs are being used to improve society and people’s lives can be categorized along three varieties of applications:

1. Track and Trace applications. For instance: 
   1. Versiart creates verifiable, digital certificates for art and collectibles which helps buyers ensure each piece’s provenance.
   2. Grassroots Cooperative along with Heifer USA created a blockchain-powered app that allows every package of chicken marketed and sold by Grassroots to be traced on the Ethereum blockchain.
   3. Everledger works with stakeholders across the diamond supply chain to track diamonds from mine to store.
   4. Ripe is working with Sweetgreen to use blockchain and IoT sensors to track crop growth, yielding higher-quality produce and providing better information for farmers, food distributors, restaurants, and consumers.    
2. Smart Contracting applications. For instance:
   1. In Indonesia, Carbon Conservation and Dappbase have created smart contracts that will distribute rewards to villages that can prove the successful reduction of incidences of forest fires.
   2. Alice has built Ethereum-based smart contracts for a donation project that supports 15 homeless people in London. The smart contracts ensure donations are released only when pre-determined project goals are met.
   3. Bext360 utilizes smart contracts to pay coffee farmers fairly and immediately based on a price determined through weighing and analyzing beans by the Bext360 machine at the source.  
3. Identity applications. For instance:
   1. The State of Illinois is working with Evernym to digitize birth certificates, thus giving individuals a digital identity from birth.
   2. BanQu creates an economic passport for previously unbanked populations by using blockchain to record economic and financial transactions, purchase goods, and prove their existence in global supply chains.
   3. In 2015, AID:Tech piloted a project working with Syrian refugees in Lebanon to distribute over 500 donor aid cards that were tied to non-forgeable identities.
   4. uPort provides digital identities for residents of Zug, Switzerland to use for governmental services.

1. The promise of trusted Identity: the potential to establish a trusted identity turns out to be foundational for using blockchain technologies for social change. At the same time identity emerges from a process (involving, for instance, provisioning, authentication, administration, authorization and auditing) and it is key to assess at what stage of the ID lifecycle DLTs provide an advantage vis-a-vis other ID technologies; and how the maturity of the blockchain technology toward addressing the ID challenge. 

1. Finally, we seek to translate current findings into

• Operational conditions that can enable the public and civic sector at-large to determine when “to blockchain” including:
  • The need for a clear problem definition (as opposed to certain situations where DLT solutions are in search of a problem);
  • The presence of information asymmetries and high transaction costs incentivize change. (“The Market of Lemons” problem);
  • The availability of (high quality) digital records;
  • The lack of availability of credible and alternative disclosure technologies;
  • Deficiency (or efficiency) of (trusted) intermediaries in the space.
• Design principles that can increase the likelihood of societal benefit when using Blockchain for identity projects (see picture) .

In the coming months, we will continue to share our findings from the Blockchange project in a number of forms – including a series of case studies, additional presentations and infographics, and an operational field guide for designing and implementing Blockchain projects to address challenges across the identity lifecycle.

The GovLab, in collaboration with the , is also delighted to announce a new initiative aimed at taking stock of the promise, practice and challenge of the use of Blockchain in the extractives sector. The project is focused in particular on DLTs as they relate to beneficial ownership, licensing and contracting transparency, and commodity trading transparency. This fall, we will share a collection of Blockchain for extractives case studies, as well as a report summarizing if, when, and how Blockchain can provide value across the extractives decision chain.

If you are interested in collaborating on our work to increase our understanding of Blockchain’s real potential for social change, or if you have any feedback on this presentation of early findings, please contact [email protected].

The post If, When and How Blockchain Technologies Can Provide Civic Change appeared first on P2P Foundation.

10 years since the financial crash we’ve learned that there exists in the US not just one economy, but many, as well as many kinds of economic actors. From platform cooperatives to cryptocurrency, people are continuously building economic alternatives. So says Nathan Schneider, crusader for collective ownership and author of “Everything for Everyone: the Radical Tradition That Is Shaping The Next Economy.” Plus, professor and author Virginia Eubanks on how government and corporations are erasing social services through unequal digital practices.

Photo by Lukyclover

The post The Next Economy: worker led for public interest appeared first on P2P Foundation.

To understand them and what they’re fighting for, it’s important to understand the system they’re challenging.

Our money system is underpinned by national central banks and treasuries that issue foundational “base” money. This includes the physical cash in our wallets and also reserves, the special forms of digital money that commercial banks hold in their central bank accounts, which are inaccessible to us.

These commercial banks then boost the money supply by issuing a second layer of money on top of the central bank money layer, through a process called credit creation of money (sometimes called “fractional reserve banking”) to create commercial bank money, which we see as bank deposits in our bank accounts.

The details are subtle and complex ― especially at the international level ― but the interaction of these players issuing money and taking it out of circulation makes the money supply expand and contract as if it were breathing. Monetary reform groups target different elements of this. Here are five of them.

1. Government Money Warriors

Stephanie Kelton, professor of public policy and economics at Stony Brook University, is one of the leading lights of modern monetary theory.

We say that the sun rises, but in reality the sun stays fixed and the illusion of sunrise is created by the Earth turning. Modern monetary theory argues that a similar delusion occurs in our thinking about government money ― we often claim that a federal government “raises money” through taxation and then spends it, but actually it is government institutions that originally issue money by spending it into existence and then withdrawing it from circulation by demanding it back in taxation. If the government issues money, then why would it have to raise money by asking for it back?

The idea that a federal government can run out of money like an ordinary household or business is an illusion, argue advocates of modern monetary theory. A government can only run out of money if it either does not issue its own sovereign currency (like the European nations, which have opted for the euro) or if an artificial political limit has been placed on how much money it can issue. In the latter situation, governments must first recall money via tax (and other means) before reissuing it elsewhere.

This is why modern monetary theory advocates are incredulous about conservatives who want to block spending on education and health care by saying we don’t have the money to pay for it. “Governments with monopoly control over their currency can always pay for their policy priorities,” says Pavlina Tcherneva, an economics professor at the Levy Economics Institute at New York’s Bard College.

Under modern monetary theory, if there are unemployed people who want to work and material resources for them to work with, a federal government can issue new money without causing inflation because the increase in money supply will be met with an increase in production. “The goal is to use the public purse to serve the broad public interest without accelerating inflation,” said Stephanie Kelton, professor of public policy and economics at Stony Brook University and former senior adviser to Sen. Bernie Sanders (I-Vt.).

2. Bank Money Reformers

Bank money reformers want to target the powers of commercial banks to create money.

Other reformers target the commercial bank money system. They argue it creates economic instability, over-indebtedness and concentration of power in the hands of banks ― the very banks that led us into the 2008 financial crisis.

Bank money reform groups include the American Monetary Institute, Positive Money, and the International Movement for Monetary Reform.

Commercial banks create new money when they issue loans. The moderate wing of the bank reform movement argues that, because the government grants them this privilege, banks should be subject to greater democratic scrutiny over their lending. The hard-line wing believes bank creation of money should be banned altogether.

The movement to curtail bank money is politically more diverse than modern monetary theory; it’s been supported by certain libertarians, including the late economist Murray Rothbard, neoclassical economists such as Irving Fisher, as well as left-wing proponents, such as the U.K.’s Green Party, which believes bank money-creation leads to environmental crises and corporate domination.

Their prescriptions are not uniform: Positive Money, a research and campaigning organization in Britain, calls for the power to create money to be granted exclusively to a democratic, accountable and transparent public body, creating a “sovereign money” system in which we might all have our own accounts at the central bank. This is distinguished from full-reserve banking, which would require your bank to have the reserves to fully back your account.

3. Cryptocurrency Crusaders

The Bitcoin logo on display at the Consensus 2018 blockchain technology conference in New York City on May 16.

Cryptocurrency crusaders not only reject both national and bank money systems, but also reject the entire concept of credit money (money that is “created from nothing” through law or social agreement), calling for it to be replaced with “commodity money” (money that is “created from something” through production). They have inherited the baton from “goldbugs,” who called for gold to be money.

The movement, which began with Bitcoin, argues that the best money system is one that’s outside of human politics. This comes from a philosophical tradition that says systems should be governed by the boundaries of God, physics or math, rather than laws set by politicians. With gold, for example, these natural boundaries would be geology: how much gold can be found and extracted. In Bitcoin’s case, the boundary comes from the fact that the digital system sets a hard limit on how much digital money can be issued and then forces participants to “mine” it as if it were a commodity.

Because Bitcoin hard-liners believe true money is a limited-supply good that must be extracted through production, they claim that fiat money ― created by banks or countries ― is artificial or deceitful money under the control of corrupt powers. There’s a puritanical edge to these cryptocurrency crusaders, who mistrust human institutions and trust in an abstract ‘godlike’ order of mathematics and markets.

While theories like MMT hinge on collective human political institutions, crypto crusaders see politics as foolish. This distrustful attitude shows: The movement sometimes seems as much at war with itself as with the fiat money system, with bitter in-fights between supporters of different crypto-tokens.

They are, however, the richest of all monetary reformers, with many crypto users having ironically become millionaires in the fiat currency they claim to dislike so much.

4. The Localists

A note worth 10 Brixton pounds, an alternative currency in London, is illustrated with an image of David Bowie.

There’s a whole history of alternative non-government money prior to cryptocurrency. These original alternative currency variants include mutual credit systems, timebanks (where time is used to measure how many credits you earn), local community currencies, such as the U.K.-based Brixton pound, and systems like the Swiss Wir, a currency used between businesses.

The tradition is also skeptical of large-scale government-bank money systems, but rather than calling for them to be replaced by a robotic algorithm, they believe small-scale communities should take control to issue money locally.

Unlike cryptocurrency advocates, they have no problem with money being “created out of nothing.” Rather they have a problem with who gets to do that and at what scale. They believe large-scale systems alienate people and dissolve close-knit communities.

A mutual credit system like Sardex in Sardinia, for example, does not reject the idea of money expanding and contracting, but it brings together an island community to decide on what terms that occurs.

While the other movements are outspoken, local complementary currency enthusiasts are often humble and below-the-radar, working for low pay to build resilient community structures.

“Local currencies change how money is issued,” says Duncan McCann of the New Economics Foundation, “how it circulates and what it can be spent on in order to re-localize economies, encourage environmental behaviour, and promote small businesses.”

The crypto-credit alliance looks to merge older, alternative currency systems with blockchain technology.

5. The Crypto-Credit Alliance: Mutual credit meets blockchain technology

This is the least-known or developed of the movements, but is perhaps the most exciting. Nascent initiatives, such as Trustlines, Holochain, Sikoba, Waba and Defterhane, seek to hybridize older alternative currency systems like mutual credit with the blockchain architectures that underpin cryptocurrencies. They share common ground with both modern monetary theorists, who also see commodity money as regressive, and cryptocurrency advocates, who wish to bypass the government.

Cryptocurrency unleashed a lot of creativity, but much has been wasted on toxic speculation. On the other hand, localist mutual credit movements have powerful ideas but often struggle to get heard or to spread. Crypto-credit innovators are exploring the creative possibilities of merging these two to solve flaws in both.

Originally published in the Huffington Post

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The Political Economy of the Common. Ed. by Andrea Fumagalli

(as yet untranslated Italian-language book)

Economia politica del comune, collects a series of essays, mostly published elsewhere, which summarize his analysis of post-crisis contemporary capitalism.

Capitalism has changed. Andrea Fumagalli says so. And he said that, for a long time, his school; the tradition of autonomy, starting from the early writings of Mario Tronti and Raniero Panzieri of the sixties, passing through the intellectually fertile experience of Potere Operaio of the seventies and the brilliant analysis of post-Fordism and the new figure of the social worker ‘of the eighties, always with the analysis firmly anchored in the thought of the now internationally recognized master of the Italian Theory Antonio Negri, has developed a Marxism for the digital age, focused on the Grundrisse, and in particular on the famous’ fragment on the machines ‘, more than on Capital. Together with Christian Marazzi and Maurizio Lazzarato, Andrea Fumagalli is the person who most contributed to this perspective, adding a solid empirical basis based on his experience as a professional economist.

The new book by Andrea, Economia politica del comune, collects a series of essays, mostly published elsewhere, which summarize his analysis of post-crisis contemporary capitalism. For the author, the scenario of the last ten years has been a strengthening of a model of biocapitalism where capitalist exploitation is based no longer on the mere theft of working time in factories or on the appropriation of intellectual production – in the form of technological innovation or intellectual property, central to the analysis of cognitive capitalism – but now on the subsumption – that is, the inclusion and putting to work – of the deepest dimensions of the human condition, such as those related to affections or relationships, particularly when they are articulated through the ubiquitous connectivity of smartphones and social media, and even to life itself as an object of biotechnology.

The man-machine union, visible and potential object of criticism or sabotage in the Fordist factories, has now progressed to become part of the human condition and in this way capable of making life itself – la nuda vita, Agamben would say – in its dimensions pre and post human, in vitro as well as in silico, object of appropriation and capitalist valorization.

In biocapitalism, production is based on putting the commons to work, a concept that is different from that of common goods, even if these are part of it, but which also refers to that life in common – made up of elements such as language, the gestures, the affections, the corporality and the relationships – which now, through digital technologies, is potentially put to work in its most varied manifestations: the freelancer who organizes his temporary cooperation with a team for a specific project, the Airbnb guest who strives to offer a positive stay experience or the teenager who posts a selfie with her favorite brand on Instagram.

Capitalist valorization has also progressed far beyond the Marxian model of the bourgeois drinker of the worker’ sweat. Financial markets play an increasingly central role and, through the financialization of life and productive relations, operate like giant vacuum cleaners that suck up crumbs of surplus value from the global productive and reproductive factory – the credit card, the shipping insurance required in the just-in-time value-chain – to then redistribute them, without transparency or democratic regulation, on financial markets. In this situation in which the socialization of the productive forces, the commons that constitute the true source of value – has now left the greedy pockets of the individual bourgeois to circulate on the financial markets in the form of digitized data – communism is already with us, only that does not belong to us. Biocapitalism represents the realization of the communism of capital, the famous concept taken up by Antonio Negri – and by Marx who, although he never uses it, mentions this possibility in the Grundrisse.

What to do then, comrades? There is no longer a factory to be sabotaged, nor a winter palace to be conquered. But, Andrea suggests, we can re-appropriate the tools in the hands of the capitalist class: finance and money. The currency, – writes Andrea – is now a direct expression of capitalist power, without the intermediation of the state. Andrea proposes the creation of coins and alternative financial instruments, suggesting the use of the seductive technology of the crypto-currencies: blokchain and bitcoin, which are able to establish circuits of valorization external to global finance; it would be desirable for a new currency of the commons suitable to finance a new welfare of the commons, triggering processes of local redistribution of wealth, to then let them grow and acquire more and more powerful autonomy. A strategy similar to that of the autonomy of the eighties, the age of the Hakim Beyi’s TAZ’s, the golden age of the Italian centri sociali of the nineties that, among other things, Andrea recognizes as his main source of inspiration.

The book offers a theoretical sum by one of the main representatives not only of the contemporary Marxist thought but of one of its most fruitful veins. As such it should be seen, in particular the introductory essay “The premise and Twenty thesis on bio-cognitive capitalism”, which sums up the subject with admirable clarity. For me it was a very fruitful reading: Andrea is and always has been, since its brilliant analysis of the new forms of self-employment of the second generation in 1994, a Master.

At the same time I think that the book a little exaggerate the grip and power of bio-capitalism. The result is a totalitarian image, where every human activity is immediately subsumed and exploited, from pedaling for Deliveroo to being on Facebook, and, using the same logic – why not -, playing soccer is actually a way to help reproduce the basics of the football market that exploits the fans as well as the television audience. What to me it sounds “weird”, however, it is the astonishing ineffectiveness of contemporary capitalism in exploiting the common which has partly generated. Facebook, Airbnb and Amazon earnings all in all modest, Uber and Deliveroo are at a loss, start-up incubators around the world are abandoning the cash for equity model, finding that they do not make a lot of money by incubating start-ups. Above all, there is a lack of innovation and ideas: large multinational companies have liquid reserves of unprecedented historical size – Apple announces a stock buy back of $ 100 billion – and no one seems able to find profitable use of big data or algorithms that go beyond the completion of the advertising targeting or the advice of other songs you may like on Spotify.

Capitalism like that will definitely not be able to survive the radical challenges that await us as we begin to cross the Anthropocene. To paraphrase another great master of Italian postwar Marxism, Giovanni Arrighi, the problem is not that the cognitive biocapitalism exploits our life, but that it isn’t able to do it well enough. I say this because as long as there is exploitation at least there is a rationality to criticize or sabotage. Instead contemporary biocapitalism looks increasingly like a rotting body that no one has the power to take away, as the German sociologist Wolfgang Streeck claims. In this context, the alternative currency will certainly contribute to creating alternative valorisation circuits. My intuition is that the protagonists of this process are not so much those of Macao or Teatro Valle, but rather the entrepreneurs of that pirate modernity that now connects the small Chinese factories with the needs of the popular classes of Lagos or Tangier, passing through Piazza Garibaldi of Naples.

Photo by Lanpernas .

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Aaron Fernando: Blockchain has become one of those buzzwords that commands attention and carries a powerful social glow, yet in the likes of similar buzzwords that have attained such a prized status, it has lost much of its meaning. Blockchain has become a catchall term for just about any digital ledger system regardless of crucial variations in its design. With so many blockchain projects ranging from social impact initiatives to opportunistic marketing ploys, it can be difficult to discern which projects hold real potential. For this reason, here’s a deep dive on blockchain applications in our niche: social impact.

The volatility in the price of cryptocurrencies doesn’t matter to restaurateur Helena Fabiankovic, who started Baba’s Pierogies in Brooklyn with her partner Robert in 2015. Yet she and her business are already positioned to reap the real-world benefits of the technology that underpins these digital currencies — the blockchain — and they will be at the forefront  of a sustainable, community-based peer-to-peer energy revolution because of it.

So what does a restaurateur have to do with the blockchain and local energy? Fabiankovic is one of the early participants in the Brooklyn Microgrid, a project of the startup LO3 Energy that uses a combination of innovative technologies — blockchain and smart meters — to operate a virtual microgrid in the borough of Brooklyn in New York City, New York. This microgrid enables residents to buy and sell green energy directly to their neighbors at much better rates than if they only interacted with centralized utility providers.

Photo of Helena Fabianokovic of Baba’s Pierogies courtesy of LO3

Just as we don’t pay much attention to the critical infrastructure that powers our digital world and exists just out of sight — from the Automated Clearing House (ACH), which undergirds our financial system, to the undersea cables that enable the Internet to be globally useful, blockchain is likely to change our lives in ways that will eventually be invisible. In the sharing economy, we have traditionally just used existing infrastructure and built platforms and services on top of it. Considering that those undersea cables are owned by private companies with their own motives and that the locations of ACH data centers are heavily classified, there is a lot to be desired in terms of transparency, resilience, and independence from self-interested third parties. That’s where open-source, decentralized infrastructure of the blockchain for the sharing economy offers much promise and potential.

In the case of Brooklyn Microgrid, which is part of an emerging model for shared energy use via the blockchain, this decentralized infrastructure would allow residents like Fabiankovic to save money and make sustainable choices. Shared ownership and community financing for green infrastructure like solar panels is part of the model. “Everyone can pay a different amount and you can get a proportional amount of energy that’s put off by the panel, based on how much that you own,” says Scott Kessler, director of business development at LO3. “It’s really just a way of crowdfunding an asset.”

The type of blockchain used by the Brooklyn Microgrid makes it possible to collect and communicate data from smart meters every second, so that the price of electricity can be updated in real time and users will still transact with each other using U.S. dollars. The core idea of the Brooklyn Microgrid is to utilize a tailored blockchain to align energy consumption with energy production, and to do this with rapidly-updated price information that then changes behavior around energy.

One of the Brooklyn Microgrid’s core goals is to upend traditional energy pricing and change people’s energy use by adjusting pricing in real time. All of this happens on a local level, between neighbors. “I really like the idea of the community sourcing energy to one another,” Fabiankovic says. “I thought it was a smart way of sourcing energy, and we try our best to maintain sustainability as well, whenever we can. So this is just another way to do that.”

Localizing the energy grid is indeed a smart way of sourcing energy that also offers a way to reduce a neighborhood’s carbon footprint. “What we’re trying to do is create a real tight market that reflects the time value and the locational value of where energy is used,” says Scott Kessler, director of business development at LO3. The Brooklyn Microgrid utilizes LO3’s hardware, but it’s the blockchain-based software that really does the legwork, providing a kind of infrastructure layer for the energy-sharing economy. LO3 is not the only organization doing this — groups like Power Ledger, Swytch, and WePower, are experimenting with other versions of blockchain-based P2P energy grids.

Photo of LO3 founder Lawrence Orsini, courtesy of LO3

What exactly is a blockchain?

Before diving further into the uses of the blockchain in shared enterprises, let’s take a quick look at how exactly this emerging technology operates. In its original form, the term blockchain refers to a type of database that is permanent, public, distributed and uses cryptography for security. Here, distributed means that multiple computers simultaneously update and store data once they have come to a consensus about which data makes the cut. Permanent and public means that all changes to this type of database will be visible to all, going back to the moment the database was started.

Yet there are exceptions, and the term blockchain is becoming increasingly vague as many networks marketed as using “blockchain” are often not public or distributed in any meaningful way. Crucially, not all blockchains have a native cryptocurrency, which are the exchangeable digital money-like units with a market price. For blockchains that do have a native cryptocurrency, units of cryptocurrency are usually issued into existence as incentives for running and securing the network. This occurs either through a process of repeated, energy-intensive computations called “mining” or through other means.

Mining has fueled criticism about some blockchains’ enormous use of electricity, especially mining on the Bitcoin blockchain which eats up more energy than many countries. The practice of mining however, is becoming outdated as more efficient mechanisms of securing blockchains crop up. Moreover, as demonstrated by up-and-coming sharing economy entities that utilize blockchains, the technology isn’t limited just for speculative assets like Bitcoin or other cryptocurrencies. Organizations around the globe are finding innovative ways to use blockchain for as a mechanism for good, providing the powerful rails that the sharing economy of the future runs on.

Blockchain for a better economy

One organization creating these rails is Origin, which is working to reduce the cost, difficulty, and barriers to entry for building marketplaces, enabling people to build truly peer-to-peer marketplaces on the blockchain. In creating this kind of decentralized underpinning, blockchains offer communities alternatives to one-size-fits all solutions and economies of scale.

“Decentralization will enable people to self-organize and have more unique or highly-localized offerings,” says Coleman Maher, who handles Origin’s partnerships. “It’s convenient from a user experience perspective, in some ways, that AirBnB is the exact same experience in San Francisco as it is in Rio de Janeiro as it is in Tokyo. But all those cities have different cultural environments, regulatory environments, and different specialized, local concerns. It doesn’t really make sense that the same organization is running the home-share market in these three, vastly different cities. We think it makes sense that home-sharers host self-organized get-togethers and say, ‘Hey, we want to have our own home-sharing decentralized marketplace that’s fair to us and fair to our guests. We don’t want to have to play by AirBnB’s rules.'”

Another crucial part of the sharing economy infrastructure is financial infrastructure. Consider the two billion unbanked and underbanked adults around the world. Can blockchain benefit them as well? WeTrust is one of the blockchain startups working to do this, and has already put out a lending circle product on Ethereum, the second most popular blockchain after Bitcoin.

Lending circles (also called money pools, tandas, susus, chit funds, and a whole lot of other things depending where in the world you are) facilitate shared community finance and peer-to-peer credit for those who do not have the ability to take out bank loans. Plus, lending circles have “been around and used by millions of unbanked people for millennia,” says Jake Kuczeruk, former director of partnerships at WeTrust. Lending circles are democratic and allow people to lend to their peers without requiring any financial institution to mediate them — practically, at least. Regulation is another story. Still, “most of these circles are being done with cash, with fiat currency, which obviously has some real safety and security issues, not to mention just being crazy inconvenient,” Kuczeruk says.

Since blockchain can deal with these issues, reduce administrative costs, and increase transparency, WeTrust sees potential in applying this technology to people’s existing behavior around finances. “We’re realistic here,” he says. “Bitcoin and blockchain technology in general only have about a 15 million person ecosystem. Obviously the global unbanked/underbanked aren’t really familiar with this technology yet … But now we’ve reached a point where it’s like ‘Hey, this is live. Let’s sit down together, we’ll walk you though this.’ Because at the end of the day, we want to make this as easy to use as Venmo.”

Other startups are taking a different approach. Companies like Kora are making the blockchain immediately accessible to populations in need of financial services by finding ways to integrate it with technologies they already use, such as mobile phones.

In addition to creating what is effectively an open-source payments infrastructure, Kora has been working directly with a range of groups — from farmers in Nigeria to coffee producers in Peru to a cooperative in Bangladesh — to make financial products that are accessible and work for groups that may otherwise go without them. The blockchain allows these groups to access financial services at a lower cost, increase transparency around where their funds are and how they get used, and allow projects to scale up more easily. “We just think about what users need, and then blockchain just happens to be a nice way to get there,” Maomao Hu, co-founder and chief operating officer of Kora, says.

Kora staff member with farmers. Photo courtesy of Kora

Plus, the types of groups that stand to gain the most by integrating blockchain into their daily lives are very often the existing sharing economy entities that were disadvantaged by traditional finance and market forces. “Everywhere we go, the co-op has become a centerpiece,” Hu says. “They’re a really powerful structure for raising economies of scale, locally. The blockchain is actually this really powerful tool that almost overlaps, word for word, with some of the academic research that’s been done on co-ops.”

Another player using blockchain in the financial inclusion space is Moeda, a cooperative crypto-credit banking platform. “Moeda provides a transparent impact investment platform to impact investors and a banking-as-a-service platform to entrepreneurs who will be receiving loans to not only fund, but to scale and grow their businesses,” Taynaah Reis, CEO of Moeda, told Shareable in 2017. “In turn, their local communities will directly benefit.” Moeda has provided a round of microloans and seed funding for businesses in Brazil, and has partnered with a network of agricultural cooperatives in Brazil called Unicafes to do so.

Not all that glitters is digital gold

But there are still quite a few reasons to be wary of using blockchains. Emin Gün Sirer is computer science professor at Cornell University and co-director of the Initiative For Cryptocurrencies & Contracts (IC3), a group of academics and researchers working on cryptocurrency and blockchain development. Sirer created a digital distributed currency, Karma, that predated Bitcoin and is also familiar with the sharing economy and its reluctance to embrace blockchain. “Deep down, the underlying ethos is different,” says Sirer, about the two worlds. “In one, you have these highly individualistic, highly profit-driven people and they want to make money. And in the other, you have the exact opposite type of people. They want to make the world a better place and they don’t care about personal monetary compensation, typically.” But, Sirer explains that many in the latter “have a bootstrapping problem, they find it difficult to raise money.”

“But at the intersection of these two worlds are fantastic ideas. If you can come up with something that is easy to bootstrap, that does have some incentives built in for the people operating the schemes, and also makes the world a better place — then we’re talking. And we’re beginning to see such projects.” Some, like Chelsea Rustrum, co-author of the book “It’s a Shareable Life” and a contributor to Shareable, are focused on reconciling these two worlds so that they can work together. Rustrum started a group called Blockchain for Good which runs regular meetups in the San Francisco Bay Area and New York City and has also organized around diversifying this space, since women are severely underrepresented in the blockchain space, and minorities are still underrepresented in the tech industry.

Blockchain for Good meet up photo courtesy of Chelsea Rustrum

But other problems still exist. This ecosystem is still rapidly emerging. As such, applications and code are getting deployed as fast as possible by startups that feel acute pressure to move first — lest they allow competitors to swoop in, dominate a niche, and lock them out of the market. This rapid pace has made it particularly easy to lose funds due to hacks resulting from bugs in code and mistakes, in addition to scams and phishing attacks that prey on those new to the ecosystem.

Furthermore, the regulatory environment around assets issued and sold on a blockchain remains highly uncertain, and laws are playing out differently across countries and individual states. Decisions about whether certain types of blockchain assets are securities, commodities, money, or a new asset class are still being made and are changing over time. On top of that, a few Initial Coin Offerings (ICOs) have been outright scams, and many others are nothing more than honest, but inadequate ideas presented in a whitepaper, along with a website and some team photos.

Blockchain for cities

Still, the idea of crowdfunding on the blockchain goes beyond ICOs. Cities are finding innovative ways to use the blockchain to raise and distribute funds for public projects. In the U.S., the city of Berkeley in California announced that it would be using blockchain as the backbone for municipal bonds, allowing for more flexible funding for small directed projects, along with increased transparency. Importantly, this model would allow the less-wealthy residents of cities to peer-fund small projects in their locality and receive a financial benefit from doing so. “Normally, because the bonds are so expensive — these fiduciary firms  looking to scale their profits,” says Ben Bartlett, Vice Mayor of Berkeley. “They disallow small projects. You have to pay $100 million [to issue a bond], and things like that. But this way you can issue a bond for something small like a firetruck.” And that’s exactly what Berkeley is planning on doing.

Photo of Berkeley City Council meeting by Scott Morris

Separately, the City of Austin recently announced that it plans on using blockchain technology to provide identity services to its homeless population, simplifying the process of offering services and benefits to a demographic that frequently runs into obstacles due to lack of identity.

This is where the concept of a self-sovereign identity comes in. Simply put, a self-sovereign identity on the blockchain is a permanent identity that can only be accessed in full by the person or entity to whom it belongs, yet portions of that identity can be shown to any individual, organization, or agency whenever it becomes relevant. Since self-sovereign identities are decentralized and encrypted, identity theft or incidents like last-year’s Equifax hack become much less of a problem.

The existence of self-sovereign identities could allow individuals and small organizations to verify information about each other without having to go through third parties, again facilitating peer-to-peer uses. For example, instead of waiting on a credit report for a rental application, a landlord would be able to verify an applicant’s rental payment history, after the applicant chooses to authorize the landlord to see that information. Furthermore, the existence of self-sovereign identities would allow startups, NGOs, and government agencies to provide services to beneficiaries  and vulnerable populations while granting agency and protections to recipients of those services.

Blockchain for education and aid

One organization moving toward implementing a self-sovereign identity indirectly by providing a different set of services first is Amply near Cape Town, South Africa. Similar to the way a person could fund a new fire truck in Berkeley, they might also fund an educational center facilitated by blockchain. In Durban, some early childhood development centers receive government subsidies based on how many children attend its programs, but to date, the recordkeeping for these centers have been done on hand, on paper. As a result, the quality of the data is quite low and reporting is cumbersome.

Amply’s smartphone app simplifies the process of recording student attendance, and the organization aims to increase the app’s versatility via blockchain in quite a few ways. “The longer term goal, also here is that each child and staff member gets a decentralized identity (a DID). That identity, we hope, will eventually build up to become a self-sovereign identity,” explains Joyce Zhang, project lead at Amply.

By using a blockchain to track specific outcomes, Amply and partner organization ixo will make it significantly easier and more transparent for the South African government, nonprofits, and individual donors to measure and track impact with high levels of precision. If widely adopted, this won’t just make it easier for entities to see where their funds have the greatest cost-to-impact ratios, but it will vastly simplify and enable the sharing of impact data and information about what works between organizations and across borders — all while protecting the sensitive information of vulnerable populations.

Photo courtesy of Amply

Potential donors can decide that “this is a really cool project, I want to donate $100,” says Zhang, who is also the program manager at ixo. “And then for those attendances, instead of the teachers getting it from the government, they can get it from private funders or whoever else is using this system.”

One of the main aspects of the blockchain is that when any type of information gets put onto it, it is unfeasible and nearly impossible to alter or delete that information at a later time. On a secure blockchain, a record is a record and it always will be.

Blockchain as a public good

This is particularly useful for certain purposes that have nothing to do with transactions or markets, such as sharing information in the face of censorship from powerful or moneyed adversaries. The journalism platform Civil is tapping into this potential to permanently secure information in the public domain. Once something is published on Civil (planned to launch later this year), the platform enables a permanent archive of the content to be logged in the Ethereum blockchain so that no one — hackers, new management, or unsympathetic government — can alter or delete that content for private gain.

This is not a theoretical threat. In 2016, the Hungarian newspaper Nepszabadsag (People’s Freedom) was abruptly shut down and all of its records were taken offline in retaliation for its criticism of Hungary’s Prime Minister Viktor Orban. Closer to home, the Trump administration has taken down the Environmental Protection Agency’s climate change webpages, though its archives are still available.

In fact, the founders of the Civil platform created this functionality in response to incidents faced by local websites recently. In a post Daniel Kinsley, engineering lead at Civil, wrote that, “In 2017 alone, DNAinfo and Gothamist, two of the leading, local news-focused publications in the U.S., were abruptly shut down by their billionaire owner. Eight years of archives were taken down in a single day, and were only restored after vociferous public protest.” Yet by storing or backing up journalistic on decentralized blockchains, inadvertent censorship of this sort, as well as purposeful censorship will be much less of an issue.

Today’s media makes it nearly impossible to be level-headed about the potential for blockchain. It has a few reputations, all of which are extreme: blockchain as a technological panacea; blockchain as the driver of an apocalyptic crypto-bubble fueled by speculators, scammers, and ponzi schemers; blockchain as a force of revolution that will overthrow governments and bring entrenched industry incumbents to their knees.

It’s possible that certain aspects of of all of these visions will be realized, but eventually much of the sound and fury will subside, outlived and overtaken by the use cases that actually serve people on a day-to day level. Originally conceived as a peer-to-peer technology, the brunt of blockchain’s potential still lies in its ability to serve as the technological underpinning for the sharing economy and facilitate financial inclusion, information sharing, and even democratic self-governance and local governance.

When we find ourselves in a world fully immersed in blockchain, we will find that it is a permanently transformed one — one where cooperatives, schools, and neighborhood groups have many of the same technological advantages as governments and multinational corporations. But it will also one be a world that we take for granted and just seems normal — as normal as today’s world of electric light, wireless internet, and satellites in space.

Header image of the Brooklyn Microgrid project courtesy of LO3

Curious to learn more about the projects mentioned in this piece? Read these Q&As for a deeper dive:

• A blockchain for farmers and co-ops: Q&A with Kora’s Maomao Hu​
• Blockchain and the potential for local P2P power: Q&A with LO3 Energy
• Civic crowdfunding with the blockchain: Q&A with Berkeley vice mayor Ben Bartlett
• Blockchain for education in South Africa: Q&A with Joyce Zhang from ixo and Amply
• Blockchain-powered journalism: Q&A with Matt Coolidge of Civil

Do you have any leads for stories about how other organizations are using blockchain for good? Contribute your ideas to Shareable’s Collaborative Storytelling Project. And sign up for our weekly newsletter to stay on top of upcoming events and reader engagement projects around this story and more.

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Can FOSS stem the tide towards the commodification of agricultural knowledge?

Gabriel Ash: Acting against the grain of current economic and political structures and offering both valuable access and inspiring ideas about collaboration, the sharing of ‘the commons,’ and the future of work, these FOSS-modelled schemes are unlikely to be the last of their kind. But if they are to realize their full potential, it is essential that both the lessons of the history of FOSS, and differences in context between IT and agriculture, as well as the impact of the quarter century that separates the two moments in time, become subjects of reflection.

The reality of FOSS is significantly more complicated that the simple distinction between open and proprietary. In many products—the Android phone, for example—‘open’ and ‘closed’ elements co-exist, and tiered commercial projects with an Open Source base and proprietary additions are common. Furthermore, ‘open’ itself is a continuum, with various licensing schemes offering a range of different degrees of control. If FOSS models become widespread, forms of accommodation between open and proprietary technologies are likely to emerge in agriculture as well, which could further advance the interests of agribusiness at the expense of farmers. It matters therefore how and to what ends FOSS schemes engage and mobilize users and producers.

Blueprints for agricultural technology and machinery can be found on websites like FarmHack or Atelier Paysan (CCO)

The history of the evolution of agricultural knowledge is also more complicated than a simple binary between proprietary and public. The Green Revolution replaced the informal, tacit knowledge of farmers with formal, scientific knowledge that was nevertheless organized as public knowledge, primary through institutions of research and higher learning. This phase of development elicited resistance and criticism for both the damage to farmers and ecosystems, primarily in the Third World, and for the denigration of centuries of accumulated local knowledge. This conflict was instrumental in the emergence of agroecology as a discipline[1] as well as in a range of efforts to foster better interactions between scientists and farmers.[2]

A second process that began shifting funding, control, and eventually the ownership of knowledge from the public to the private sector occurred later. In contrast to agriculture, software development never had the equivalent of farmers, and FOSS emerged purely out of resistance to the second process. This difference implies that FOSS-inspired schemes in agriculture could be more complex and resilient, and potentially more effective alternatives. But it also opens more room for misaligned interests and internal conflicts.

The ideas of unfettered collaboration and democratic creativity that FOSS schemes invoke are not external to the development of the privatized knowledge economy and its attendant intensification of intellectual property rights. Workforce creativity, technological innovation, intellectual property rights, and economic growth are widely perceived today by policy makers as linked.[3] By advancing ideas of knowledge as common and knowledge production as free, FOSS-inspired schemes expose some of the internal contradictions of a model of economic growth premised on profiting from immaterial labour and the control and selling of knowledge. But they will not buck the trend towards privatized hi-tech agriculture alone.

Agriculture, however, may offer unique opportunities for linking FOSS-inspired schemes with other forms of engagement and mobilization on issues such as environmentalism and farmers’ and peasants’ rights, and the different ways each of the latter raises the question of the commons. Let these projects be the early shoots of a wide wave of reflection, experimentation, and mobilization around these questions.

Read part 1 of this series here.

[1] Gliessman S.R. (2015) Agroecology: the ecology of sustainable food systems, 3rd Ed., CRC Press, Taylor & Francis, New York, USA, p. 28.

[2] World Bank (2006) Global – International Assessment of Agricultural Science and Technology for Development (IAASTD) Project. Washington, DC: World Bank http://documents.worldbank.org/curated/en/753791468314375364/Global-International-Assessment-of-Agricultural-Science-and-Technology-for-Development-IAASTD-Project , pp. 65-68.

[3] See Barry (2008), pp. 42-43.

The post Democratising AgTech? Agriculture and the Digital Commons | Part 2 appeared first on P2P Foundation.

Gabriel Ash: Recently, a number of initiatives defending free access to agricultural knowledge have emerged. FarmHack, Atelier Paysan, The Open Seeds Initiative, and Open Source Seeds advance alternatives to the proprietary knowledge model of industrial farming based on ideas drawn from Free/Open Source Software. These initiatives respond to current trends in agricultural development and raise questions about its direction; they express an emergent concern for the commons against the drive to privatize knowledge. But why now? What is Free/Open Source Software (FOSS)? How is the FOSS model applied to agriculture? Finally, what are the opportunities and pitfalls such schemes present?[1]

Why now?

Artificial Intelligence, Big Data, blockchain, cryptocurrencies—these are today’s ‘hot’ investment trends. The hi-tech ventures that seek to deploy these technologies receive the bulk of new investment in start-ups as well as media attention. The dominance of Information Technologies affects agriculture in two ways: First, an investment gold rush is building up in ‘Agritech,’ around buzzwords such as ‘smart farming’ or ‘precision agriculture,’ and a crop of companies that seek to make agriculture more efficient and profitable with information technologies such as drone and satellite imagery analysis, cloud based data collection, digital exchanges, etc. One gets a sense of the magnitude of the forces unleashed from browsing the offerings of start-up accelerators such as EIT.  Second, businesses, regulators, politicians, NGOs, and the media adopt vocabulary, goals, expectations, and ‘common sense’ derived from Information Technology, which are then applied to agriculture.[2]

The dominance of Information Technology and its tendency to shape other industries as well as law and regulation is not simply the outcome of “market forces.” Both the US and the EU have long promoted the dissemination of Information and Communication Technology (ICT) and the adoption of new intellectual property rights to support it. Thus, “the 2005 Spring European Council called knowledge and innovation the engines of sustainable growth…it is essential to build a fully inclusive information society, based on the widespread use of information and communication technologies (ICT) in public services, SMEs and households.” According to António Guterres, United Nations Secretary-General, “we want to ensure that big data will bring the big impact that so many people need.” It is taken for granted by policy makers that innovation and growth depend on commodified, proprietary knowledge, which in turn require reforming and unifying intellectual property rights.[3]

With the growing visibility of ICT, the policy drive for hi-tech innovation, and the push to commodify and privatise knowledge, alternative practices that first emerged within ICT—notably Free/Open Source Software—have also migrated into the mainstream, inspiring projects such the Creative Commons and Free Culture. They are also gaining a presence in agriculture.

What is Free/Open Source Software (FOSS)?

FOSS emerged in the 1980s among computer scientists and engineers who resented the way commercial constraints interfered with the norms of unfettered collaboration and exchange of information that prevail in science. In 1985, Richard Stallman created the Free Software Foundation (FSF), which launched the GNU project of free software tools. Breaking with the habits of commercial development, the software was written by volunteers in open collaboration over the internet and gave users full access to the source code as well as the right to freely share, tinker with and modify the program.

The FSF introduced a new relation between software producers and users, the General Public License (GPL), which effectively “hacks” copyright law to create the very opposite of a property right, a resource that obliges its users to place the fruits of their own labour in a shared common domain. By mandating that all derivative works must be distributed with the same license, this property of the GPL, called ‘copyleft’, prevents the appropriation and integration of free software in a proprietary product and guarantees that the code will remain free and open to users.

Although inspired initially by ideals of openness and freedom, FOSS did not evolve as a radical challenge to proprietary software. Companies large and small soon began investing important sums in open source development, creating new business models around it. In 1998, the shift toward as a more business-friendly model was formalized with the establishment of Open Source Initiative. Today the trend for new projects is towards licenses that eschew copyleft.

There is a perception that FOSS is US-centric. This is true insofar as the powerful US tech industry has shaped its major trends, but with important qualifications. Not only are there numerous European organizations promoting FOSS, but European countries, especially France and Germany, provide a surprisingly large number of participants. Furthermore, a number of Third World countries and public institutions have embraced it for political reasons.

FOSS is undoubtedly a success story. Its products, including heavyweights such as the operating system Linux and the ubiquitous PHP, MySQL, and Apache, power much of the web, and major ITC companies rely on it. It is also a realm of empowerment and meaning for the skilled programmers who contribute to it, one that implicitly invokes new forms of collective creativity, unfettered by the structures of intellectual property that support the expansion of the ‘information society’ and its attendant commodification of knowledge. Yet FOSS has not delivered on the utopian aspirations that are often invested in it. It has not subverted the dominant proprietary industrial structures, nor has it ushered a society of empowered technology users/creators. In David Barry’s words, FOSS remains “precariously balanced between the need for a common public form in which innovation and creativity can blossom and the reliance, to a large extent, on private corporations…” that push forward the commodification and enclosure of knowledge.[4]

Blueprints for agricultural technology and machinery can be found on websites like FarmHack or Atelier Paysan (CCO)

FOSS-inspired initiatives in Agriculture

Mechanized farm equipment manufacturers such as John Deer progressively moved toward digitized, software-controlled components that require authorized software access to repair, as well as restrictive contracts that forbid repairs and modifications. This inspired hackers, first in Eastern Europe, then in the US, to develop and share hacked versions of the control software, circumventing the manufacturers’ protections. In the US, farmers who used those hacked versions joined a larger movement demanding legislation to protect ‘the right to repair.’[5]

Addressing similar concerns from a different direction, FarmHack, established in 2010 and describing itself as “a worldwide community of farmers that build and modify our own tools,” draws inspiration from the hacking culture of FOSS to promote low-cost, open farm technology. Participants share designs for farm tools and license them under ‘copyleft’ licenses. FarmHack seeks to “light the spark for a collaborative, self-governing community that builds its own capacity and content, rather than following a traditional cycle of raising money to fund top-down knowledge generation.”

In France, Atelier Paysan was set up in 2011 with a similar basic concept, offering “an on-line platform for collaboratively developing methods and practices to reclaim farming skills and achieve self-sufficiency in relation to the tools and machinery used in organic farming.” Unlike FarmHack, whose off-line presence is limited to meetups, Atelier Paysan is organized as a cooperative that owns a certain amount of equipment and provides workshops to farmers. Atelier Paysan publishes its collaborators’ design under the same creative commons ‘copyleft’ license.

The enclosure and commodification of plant genome through patenting, licensing, and hybridization have spurred similar efforts. The Open Source Seed Initiative, a US organization created in 2012, describes itself as “inspired by the free and open source software movement that has provided alternatives to proprietary software,” with the goal “to free the seed – to make sure that the genes in at least some seed can never be locked away from use by intellectual property rights.” After initially trying and failing to devise a legally enforceable license, OSSI opted for a short pledge that is printed on all seed packages: “…you have the freedom to use these OSSI- Pledged seeds in any way you choose. In return, you pledge not to restrict others’ use of these seeds or their derivatives by patents or other means, and to include this Pledge with any transfer of these seeds or their derivatives.” As of today, OSSI’s list of pledged seeds numbers over 400 varieties.

Last year, a second open seeds initiative was unveiled in Germany, Open Source Seeds, which has its institutional roots in ecological agricultural development in the Third World. Unlike FOSS copyright-based licenses, OSS license was devised under German civil contract law. The license, which is copyleft and includes derivatives, aims at combating market concentration. As one can expect for an organization that operates for less than a year, only five open source varieties are listed so far, all tomatoes.

Part 2 will question whether FOSS can stem the tide towards the commodification of agricultural knowledge. 

Gabriel Ash is a translator, software developer, writer, activist, and filmmaker. He lives now in Geneva, Switzerland

[1] The account of FOSS below is highly indebted to David Berry’s excellent analysis in Berry, D. (2008) Copy, Rip, Burn: The Politics of Copyleft and Open Source, Pluto Press, London.

[2] See the European Conference on Precision Agriculture Sponsors, the European Parliament report on Precision Agriculture and the Future of Farming in Europe, the European Commission’s Communication on Future of Food and Farming .

[3] See European Commission (2005), p.4.

[4] Berry (2008), p. 144;

[5] See The Repair Association  and Nebraska’s Fair Repair Bill

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Holo: The evolution of cloud computing

Holo Value Proposition

Holo is launching a peer-to-peer app hosting marketplace.

Today, application developers usually pay Amazon or some other big corporation to serve their app or website to visitors.

Holo enables anyone to compete with Amazon for this business by offering the spare computing capacity on their own laptop, desktop or other computer. When their computer hosts an application, the developer pays them instead of Amazon.

Just like Airbnb enables people to rent spare bedrooms to help pay their mortgage, Holo enables people to rent their computer’s spare storage and processing power to help pay for their internet access, or even their computer itself.

Holo does to spare computing capacity what Airbnb did for spare bedrooms

And there is actually a LOT of spare capacity out there. In fact, globally, the idle storage and processing power sitting unused in our laptops and desktops dwarfs even the infrastructure of the largest cloud computing company.

Holo will do to that enormous spare computing capacity what Airbnb did to spare bedrooms.

Except, with Holo, you won’t find yourself cleaning sheets all the time. Here, your computer does the work and you reap the reward.

Application hosting is the cash cow of the third most valuable company on earth

And this isn’t a small market. For instance, Amazon is the third most valuable company on the planet, and though their app hosting division, AWS, accounts for just 10% of their revenues, it generates more profit than the entire rest of the company… combined. In other words, AWS is the cash cow of Amazon. And they are just one of several gigantic companies in the space. So… yes, hosting is a big business — and getting bigger.

Why you should Participate

If you are trying to decide whether you want to participate in this ecosystem, we can make it even more blunt:

Holo might do to the cash cow of the third largest company on the planet, what Uber did to Taxis.

Except, unlike Uber, with Holo, 99% of the money goes straight to the people whose machines are doing the work. That’s right. In exchange for orchestrating all of this, we take just a 1% cut.

Sound familiar? It might. People have dreamed of this for years. It was even the plot of an HBO show last season. But two new innovations from Holo are enabling us to, as Forbes recently put it, “turn internet fiction into reality.” Those two innovations are Holochain and Holo Fuel.

Holochain

First, Holochain is a new way of running truly peer-to-peer applications that makes it so that my computer doesn’t necessarily have to “store” all of the content in an application in order to be able to serve that content. Instead, my machine can quickly retrieve anything I need right when I need it. It’s “just in time” content delivery. And when my computer then serves that content to a visitor, I get paid.

Folks around the globe have been building apps on Holochain Alpha (“the adventurer” release) since October. Holochain Beta is coming soon.

Holochain is live now and apps are actively being built and run on it. Holochain gives Holo a competitive advantage by giving it a collaborative advantage. And thanks to the care with which we designed Holochain, the World Economic Forum called Holochain one “of the most integral technology projects” in the blockchain space, pointing out that we “aren’t just putting lipstick on clones of existing projects” but have actually gone “back to the drawing board and created mission-driven roles for coders, entrepreneurs, investors, philanthropists, regulators and policymakers.” We’ve taken some of the most widely used technologies of the last two decades and combined them in a novel way. Holochain combines the efficient peer-to-peer data storage model (DHT) that bitTorrent uses with the tamper resistant logs (Hash Chains) that blockchains use and the agent centric approach (each agent has their own perspective and signs their own actions) that Git uses. We think of Holochain as an evolution of blockchain, because it solves so many of the problems that have plagued blockchain over the past decade, including scale, speed, cost, adaptability and composability.

One thing to note is that unlike Holo, Holochain itself is not a platform. It is a pattern. Like HTML. We are giving it away to the world for free. It is open source. It does not require web servers. Or miners. Or cryptocurrency. Every user of a particular app, runs that app, showing up as both user and host. Holo is making use of this “holochain” pattern and is reaping the efficiency and resilience benefits that result.

Holo fuel

Holo fuel. It isn’t actually fuel. It’s for fueling hosting.

Second, Holo fuel is a new crypto-accounting system that enables us to process transactions in parallel, rather than in sequence. That means that Holo can handle millions or billions of simultaneous transactions. Moreover, because Holo fuel is so efficient, we can process transactions for even very small amounts such as a payment of a penny. And though this might look foreign if you are only familiar with blockchain “token” based types of cryptocurrencies, it isn’t exactly untested. We’re applying a centuries old double-entry accounting system called Mutual Credit. And now we’re getting to use Holochain and cryptography to distribute, secure and extend the capabilities of this tried and true accounting system.

Holo Currency Pricing

We’ve been compared by others to Ethereum, the blockchain based computing network that is worth hundreds of billions of dollars at present. So we did some benchmark testing. We built and tested several applications so we could see how costly it was to perform computation on Ethereum vs. Holo.

The result: depending on the app, Holo is somewhere between one-hundred-thousand and one-million times more efficient than Ethereum. For more details, check out our benchmarking walk through.

So when we decided to pre-sell Hosting services on Holo with an Initial Community Offering, we wanted to accomplish two things:

First, put our money where our mouth is. Second, create a margin gap to enable a two-sided marketplace to emerge.

PUTTING OUR MONEY WHERE OUR MOUTH IS

We have drawn a line in the sand and are offering to host applications WITH OUR OWN COMPUTERS for 10,000 times cheaper than Ethereum.

This makes visceral just how much more elegant the design of Holo and Holochain are relative to Ethereum and Blockchain.

If computing services were cars, for the same amount of money that it would take to buy a Remote Control car on Ethereum, you could buy a real car on Holo. And that car would be a Lamborghini. That is what a 10,000 times price difference looks like ($40 vs $400,000).

CREATING A TWO-SIDED MARKET

Second, It also makes visible that we are UNDER-PROMISING what our network can deliver. We wanted to ensure that there was room for those who step up to participate in Holo as developers and hosts, to get rewarded for doing so. The gap between our “100,000 x” or “1,000,000 x” better benchmark performances and our “10,000 x” offer leaves room for Hosts to enter the market and underbid our price.

We expect that a competitive market will form, and because it will cost hosts five or fifteen or fifty times less than our price point to provide hosting, other hosts will be able to underbid us and win hosting contracts.

And when those hosts price their offerings competitively in order to attract more business, holders of Holo fuel will likely be able get two, or ten or twenty times as much computing power as even the price at which we were offering to provide it ourselves.

In other words, that same amount of Holo fuel that would have bought you an RC car on Ethereum, starts to deliver two, or five or ten Lamborghini’s worth of value (not that we’d spend our money stockpiling Lambo’s, but you get the point).

That creates a win-win-win. A win for hosts. A win for developers. A win for us.

Of course, it won’t exactly be a win for everybody.

Ethereum for instance. It probably won’t be a win for them. If a competitor enters the market and starts offering similar services for, let’s say 50,000 times cheaper than you are able to provide, what do you think will happen to demand for their services. And what would a drop in demand for ETH services do to their currency?

How HOT is related to Holo fuel

Because Holo isn’t live yet (our ICO is focused on funding the software development for it), we needed to raise funds through an existing, and established channel. Ethereum ERC20 tokens have been the standard way of running an ICO for the last year or two. The Holo Token or HOT is an ERC20 token on the Ethereum blockchain and will be redeemable for Holo fuel once Holo goes live. This redemption will happen at a conversion rate of 1 HOT = 1 unit of Holo fuel (HOLO). Holders of HOT will need to redeem HOT for HOLO within 6 months of the launch of the network. You can think of it like a coupon that expires if you don’t redeem it in time.

Again, Holo fuel is the utility credit currency that application owners can use to pay for hosting services on the Holo network.

We estimate that the Holo network will go live sometime in Q3 of this year. In other words, we are aiming to launch Holo in July, August or September.

When a host provides hosting services for an app, that app’s owner pays for that hosting using Holo fuel. So if you have an application and want it hosted (served to non-peer visitors) via Holo, you need to buy Holo fuel from somebody so you can pay your hosts. The Initial Community Offering we are currently running is a pre-sale of the currency that will be used in our system. The purchase and redemption of ERC20 HoloTokens is how people are acquiring Holo fuel. After the close of the pre-sale, people will buy Holo fuel from others that have purchased it from us, earned it themselves through hosting etc. For more details, see our Green Paper. People with Holo will be able to use it themselves, or sell it to others who want hosting services, or, if they earned it through hosting, redeem it with the Holo organization in exchange for other currencies.

To be clear, Holochain applications do not need to use Holo when they are just interacting amongst peers (others who are also running the same application).

But not everyone is going to install Holochain on day one.

So how do you reach “the masses” when the masses have not yet installed the new empowering peer-to-peer apps of the future? You let them interact with those apps through a pattern they are familiar with: opening a browser and typing in a URL.

Holo hosts serve out websites to anyone with a browser, thus creating a bridge back to the “old” internet that everyone, even my grandparents are used to by now. (To be fair, Jerry, Jacqueline, George, and Algreta are fairly savvy when it comes to the internet, but I digress).

When a host creates this sort of bridge by hosting on behalf of an application, the app owner pays them, just like that app owner today might pay Amazon Web Services to host their app.

Some describe this hosting process as being similar to the mining that happens in Blockchain. However, whereas “mining” is an arms race to see who can waste the most electricity doing useless work in hopes of winning a lottery, hosting consists of serving applications or webpages on behalf of customers that are willing to pay for that hosting service. It is way more useful, way more cost effective and vastly more environmentally friendly. For instance, the HoloPorts that we have been making available through our top trending IndieGoGo campaign, use about as much electricity as a lightbulb.

Matt’s Snarky Takeaway

For those that don’t want to take the time to understand this evolution of cloud computing, no hard feelings. Seriously. We played with remote control cars when we were kids too. They were fun.

But you might want to ask yourself, “if these folks are on to something, and they do manage to cut the cost of distributed computing by 20,000 or 100,000 or 200,000 times…

do I really still want to be HODLing ETH?”

More info:

Holo Website

ICO Purchasing and Stats

Holochain Website

Holochain Code

More Technical Overview of Holo

Technical Walkthrough of Holochain

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Hull is one of those cities, like Swindon and Slough, that’s long been the butt of jokes – like the one about the guy that typed ‘Hell’ instead of ‘Hull’ into his Sat-Nav, but still got there – it’s not that funny, or even really justified.

In the 2003 book of Crap Towns Hull came in at number one but so did London in 2013 whilst Hull dropped out of the top 50. This year, though, Hull is the UK City of Culture but it still has some major needs: a 2015 survey by the City Council found that over half the population lived in the most deprived areas of the country.

“Most deprived areas” don’t normally spawn innovation and the City Council’s main solution was to throw £100 million of its capital reserves into civic improvements to overhaul Hull’s image, and to cosy up to Siemens in an attempt to secure more jobs. Meanwhile, while other people poke fun about #CityofCulture2017, a small group of truly community minded ‘hactivists’ have set to work at the real cutting edge of social development to “unlock the hidden value in Hull’s economy”.

Enter David Shepherdson and Lisa Bovill, from Kaini Industries, an initiative which sprang out of a 2014 piece of research, funded by Hull City Council, that explored how the disruptive technology underpinning bitcoin could be facilitate a local currency to support communities in Hull affected by poverty. After a few years of development and community outreach they launched Hullcoin which enables people who engage with charities and community groups across the city of Hull to earn digital coins by volunteering and undertaking activities that benefit themselves. Hullcoins can then be redeemed as discounts against all sorts of things at over 140 participating retailers across the City. Hull City Council and the NHS are both supporting the project, as is the University, Hull College group and the Department of Work & Pensions.

How does the Hullcoin economy work?

Kanini Industries ‘mined’ 10 million Hullcoins – a quick non-energy-intensive process that took about 30 minutes (because it did not requires the competitive ‘proof of work’ process associated with Bitcoin). Kaini Industries then run due diligence on any local community groups that wish to issue coins, to ensure they promote activities which “create a better community”, and allocate them “bundles” of coins – normally in batches of 500. These community organisations, health and employment services then issue individual coins to people for volunteering or helping themselves or others to “create a better community”. People with Hullcoins can then redeem them at participating retailers across the City in return for discounts on goods and services of between 5 and 50%. The retailers can then choose what to do with the coins, either re-issuing them as employee rewards, to loyal customers as discounts on future purchases, or they can donate them back to a community group or charity to help stimulate the local economy even more. Kiani industries monitor the amount of coins in circulation and have an agreement with the council to take some offline, if required, to help manage supply and demand.

It’s a truly novel idea which uses the blockchain to empower Hull’s real assets, it’s people, by placing a direct and tangible value on community support, self betterment and volunteering – the key aspects of mutual aid which are so critical to community development but so often ignored or undervalued in modern society.

Hullcoin is the first initiative of its kind to utilise blockchain in this way. The project is still only in private beta at the moment and the developers are keen to “iron out the glitches” which will prevent the system from scaling. But if their forthcoming crowdfunder, scheduled for April 1st 2018 (hopefully the date won’t be too off-putting!) is a success they have plans to white-label the system for other cities at which point it could really provide a pathway out of poverty for millions of people.

The concept of Hullcoin has many similarities to Covestment, a term coined by Jordan Bober and Michael Linton, the inventor of LETS, to describe a means of “financing the future and creating economic resilience by weaving innovations in network currencies, crowdfunding and community microlending”. In Covestment, companies issue currency (or ‘discount vouchers’ if you like) to a Community Covestment Fund from which members of the community can buy the local currency with regular money. The Covestment fund uses the cash to provide loans to local entrepreneurs and businesses, and people use their local currency to obtain discounts when they shop at the businesses which backed the currency at the start (see diagram below). In exactly the same way as Hullcoin the result is a stimulation of the money supply and hence local economy.

The recent surge in interest in new forms of money makes experiments like Hullcoin and ideas like Covestment highly topical and what’s most exciting is that we don’t need to wait for the government to wake up to the possibilities. These are ideas which we can start experimenting with right now – to take control of our local economies and make them work for the benefit of everyone.

Lisa Bovill, one of the developers at Hullcoin will be speaking at the OPEN 2018 conference on “collaborative technology for the cooperative economy” in July and it will be fascinating to hear how the project is progressing and the impact it is having for the people of Hull. If our hunch is right it has probably already had a more direct impact on less privileged people’s lives than a single cent of the £100million the City Council “invested” in beautifying the city. Watch the 3 min video featuring Bob Clark from the BBC to see how chuffed Bob is to get 15% off his brisket pie – that’s the real “hidden value” – right there.

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We talk to Brett Scott the alternative financial activist about the opportunities and challenges of transforming the economy.

Your work can be described as economic anthropology, an attempt to explore the historical origins and current approaches to economics. How cultural is our economic system?

I come from an anthropology background and one of the main ways anthropologists try to understand systems is by immersing themselves in them to understand the perspective of those involved. Sometimes that is called participant observation – participating in something while observing it. You can blend those elements in different ways: Hardcore anthropology can be weighted towards extreme participation with less structured observation, really immersing yourself. Some old-school anthropology is more weighted towards observation than participation, making it more prone to a ‘judging’ outlook.

The discipline of Economics has traditionally tried to fit economic activity into universal theories. The attempt to fit all societies over time into a single theory requires a level of abstraction that is often quite disconnected from actual practice, or how people experience themselves in economies. Anthropology, on the other hand, is more attuned to describing the differences between people – the specificities and variations – and more interested in showing the ways people have provisioned themselves over time, rather than just asserting that people have always traded as ‘self-interested agents’ on markets. In essence, Economics takes one form of economic activity, forged in a particular historical and political context, and implies that this is the only form of economic activity.

Also, economics as a discipline tends to make a strange distinction between economics and politics, as if the political sphere and economic sphere can be meaningfully separated from each other. Holistic forms of anthropology, though, would explore how different economic systems are formed in or imply different political or cultural systems – how they are all interlinked.

One of the insights that came out of anthropology and historical studies is that states cannot be meaningfully separated from our modern concept of markets. That is to say, market-based thinking was enabled by, or expanded by, modern states. Within traditional Economics, self-interest is presented as natural, timeless, and inevitable. If you look at the economist Adam Smith, he makes this assumption that people have always traded with each other since the beginning of time. Whereas, history and anthropology point out many instances of societies that do not rely on trade, or do not even have private property regimes, and that have completely alternative ways to provision themselves.

It is only in the context of modern state formations that you see the emergence of the modern conception of ‘markets’. In the time of Adam Smith, modern states had already formed and he was blind to the fact that many features of economies he was observing couldn’t really exist outside of that context. So economic anthropology and history will try to situate the economy within specific political and cultural epochs.

Modern academia has attempted to create discrete disciplines to describe and understand reality, such as politics, economics, psychology, and so on. But in your everyday life no-one experiences these things as separate from each other. You don’t experience your psychology as distinct from a decision to participate in a particular form of economic activity. They are all fused into one experience. So all economic activity is intensely cultural and political. It is concerned with the distribution of resources, your ability to act in a society. The idea that there is some realm of economic activity that is separate from culture is, frankly, bullshit.

If we change our culture, can we then transform the economy?

If you come from a strict Marxist background, you’d probably tend to say the material world conditions culture, or that the underlying relations of production support a ‘superstructure’ of beliefs and institutions. So the tendency – more or less – is to see cultural systems as being a reflection of the underlying economic situation. The question then is, “Can you change your underlying economic situation by altering your culture?” And yes, it probably is possible. But it is a complex process and I’m not sure I have a coherent answer. Within economic reform movements you have some people who say things like ‘all we need to do is make people think differently to effect change’, but that jars against the reality that every single day people need to enter an economy that has a particular structure, regardless of what they think. It’s not obvious what the link between changing people’s worldviews and changing economic structure is.

Take a look at small credit unions or local currencies. People are trying to think and behave differently – act out a different culture – but in reality they remain stuck within the vortex of a much more powerful economy. Sure, if everyone, at once, changed the way they behaved, you could probably change an economic system, but there is a huge coordination problem there. It seems more likely that change is a messy and contradictory process, driven by some things we consciously choose – like small changes in behaviour – and others that we do not, such as technological changes. It’s unpredictable. The Internet, for instance, has opened up new possibilities, but also created opportunities for new monopolies of power.

To shift the question slightly, we could ask, “How do you shift culture within a large financial institution, such as Goldman Sachs?” These institutions are huge, with like 35,000 employees. They have to go into work every day and keep doing the same thing. Even if individuals within the institution want to change their own personal behaviour, the day to day pressures and requirements won’t allow it. So if you wanted to change the culture you would have to press pause on the organisation for, say, three weeks, and then go around and convince everyone in it to behave differently. But there’s no way in hell that they can press pause, so any attempt to change culture has to happen on the fly, incrementally. But these cultures get locked into these institutions, and when it gets toxic they find it very hard to change it. Here’s an analogy: imagine you have a computer that has a load of viruses, but to get rid of them  will require a complete time-consuming reformatting. Now imagine you need to use it every day, and it’s not an option to be without it for a week, so you just keep using it. Likewise, we need to reformat financial institutions, but often we’re just superficially patching them up.

Access to capital is probably the most powerful dimension of our financial system. How can communities have more control over the circulation of capital at this stage?

The financial system as it stands, in most countries, operates at a large scale. It has centralising tendencies that give financial institutions lots of market power, and these large banks are also closely connected to government. In general, these banks find it easier and more profitable to deal with other large-scale players, directing capital to large corporations or large infrastructure projects, for example. Or else they invest in large numbers of standardised financial products that can be sold at scale, such as mortgages. They don’t have much ability, or desire, to sensitively respond to the niche needs of small-scale communities.

So how do you change that? Short of restructuring the entire system so such power does not exist, there are interim approaches such as banking regulation and reform. For example, you might lobby for quotas on banks to get them to support the real economy and smaller businesses.

Then there are attempts to bypass or augment the mainstream banks. This includes, for example, building community banking systems or municipal banks. Local banking advocates will insist that if you have a small financial institution rooted in an area, it is far more likely to serve local interests. In this debate, countries like Germany are often mentioned, as they have an older and more established system of local and regional banking. Co-operative banks are another approach. The idea is to change the ownership structure of banks to produce better outcomes, bearing in mind that co-operative banks often work at large scales and need not be local in orientation.

Then there are the local currency movements. This approach is not necessarily about accessing or raising capital, but creating economic exchange between people. This is different to raising money for a business. That said, mutual credit systems are currency systems, but they also provide access to short-term small-scale credit. They don’t solve the problem of accessing large-scale investment, but they can be very effective at allowing small businesses to trade on credit. Sardex in Sardinia is a good example.

A mutual credit system is when a network of people create an economic network and then set up a system to record when members give energy, labour or goods to another member of the network. The member who receives the labour goes negative, and the person who gave it goes positive. It’s essentially a ledger system for recording obligations between people. Members go in and out of credit and debt with each other. Over time, this is basically what a monetary system is: I contribute things, but I also needs things. When I contribute to the system I get positive credit, when I need things I am using up my credits or going into debt. This creates a cycle between members.You can create these networks with, say, 150 people, and I think they are one of the most undervalued approaches within local currency movements.

So there is local banking, local currencies, mutual credit, but there are also systems like community shares, which allow you to raise equity finance by offering shares to your local community. These have been relatively successful on a small scale.

You also have to bear in mind that is has been quite a while since there have been coherent communities in the UK. We often talk about ‘community’, but in London people often don’t know each other in their own neighbourhoods. There is a whole raft of work around community cohesion that is required before we even start to develop ways for communities to finance themselves.

I think with all of these things you have to have serious commitment. There are a lot of people trying to design local economic strategies that are volunteer-led or part-time. I’m not against small timebanks or other volunteer-led schemes, but they are not a serious challenges to the economic system. In the case of Sardex, it is a serious attempt to build a parallel currency system, and one that also integrates into the normal system. Recently I’ve become interested in the Greater London Mutual, and the network of new regional banks supported by the Community Savings Bank Association, which look like serious attempts to build local and co-operative banking.

If you can combine these alternatives with banking reform and policy changes, putting pressure on the existing banking system, you can then start to make a difference.

More recently you’ve been exploring what you call the ‘dash to a cashless society’. Could you explain how this offers new surveillance opportunities to private companies and governments, and how you understand the social consequences?

The term cashless society is a euphemistic way of saying the ‘bank payment society’. Within this system you need a bank account and you have to ask banks to facilitate payments. In a cashless society you always have to go through a financial institution.

Think about the traditional story given in any Economics course. A market is made up by two basic players – a buyer and a seller. The buyer gives money tokens to the seller who hands over tangible goods or services. In a cashless society, however, there is the introduction of a third player between every transaction – the money-passer, who moves money between the buyer and the seller in exchange for a fee. These payments intermediaries include the card companies and banks, who run the underlying infrastructure to allow this. So the ‘cashless society’ is an economic system that is predicated on every transaction passing through the banking system and groups like Visa and Mastercard.

There are a lot of institutions lobbying for this system – the banks themselves and digital payment companies who facilitate the movement of money between bank accounts. Then there is the state that can see many advantages to this. In particular it allows them to monitor all transactions. If you’re forced to use digital payment systems, all of your transactions are recorded and leave a data trail. This data can then be analysed. They are interested in this for anti-terrorism and crime detection, but also to monitor tax. There are also monetary policy interests, in particular the ability to introduce negative interest rates.

So the implications are far more than data about transactions, and it’s not just states that find this useful, but corporations, too. Large technology companies, like Google and Amazon, are trying to build payment infrastructure to expand their data monopolies and gain ever deeper insights into people’s economic behaviour. For example, big web platforms often are in the advertising business, but struggle to prove whether adverts convert into sales. So one endgame for some of these large technology companies is to discover the correlation between the adverts you see and how much you spend. So they have an obvious interest in receiving and analysing that data, and if they can track what you spend, they can also develop more efficient advertising.

Another endgame is machine learning and predictive analytics that try to predict, and ultimately steer, people’s behaviours. Banks themselves are interested in this approach, using data to influence behaviour.

There is no cashless society at present, but there is a big political push for it. In this context, it is interesting to explore crypto-currencies that create some form of counter power.

Blockchain technology has been offered up as one of the most recent transformative technologies, with use in supply chains, payment exchange, and its ability to decentralise the control of data. How do you see the political implications of this technology?

Blockchain is multi-layered. At its base, the original version, blockchain technology is essentially a means for a network of strangers to keep track of their positions relative to each other, without a central intermediary. In the case of Bitcoin, it is about keeping track of money tokens. The concept can be applied more broadly though.

Why is blockchain seen as a profound shift in technology? If you walk out in the street, right now, wherever you are, you are going to see a group of people you do not know – strangers. You don’t necessarily distrust them, but there is no easy way to extend your trust. Traditionally, the way we would deal with this is through state law – such as consumer protection laws – and big third-party institutions and corporations who mediate between these interactions. I can walk into a shop and buy something without needing to know the seller personally.

Then blockchain emerged as a technology that could facilitate transactions between people without requiring intermediary institutions. People have historically been able to do that in small-scale situations, but blockchain tech enables this at large scale. The first version of this was Bitcoin, which is a system that enables people to move tokens between each other without relying upon banks. Unlike the banking system, where transactions are recorded on private ledgers controlled by an oligopoly of banks, whose permission you require to move money around, Bitcoin is based on a public ledger that is updated by special players in a peer to peer network.

The second wave of blockchain – such as the Ethereum system – took the same concept, but moved towards developing more complex interactions between people beyond the exchange of money tokens. In particular they added the ability to deploy automated agents onto the network, which they – somewhat misleadingly – refer to as ‘smart contracts’. In Bitcoin you assume all players on the network are humans who make their own decisions about whether to send tokens. The automated ‘smart contract’ agents of Ethereum though, are like robots, forced to do certain things when members of the network interact with them. For example, if you want to raise money for a company, you can programme a smart contract to automatically send a share to someone who sends it money. To understand this, imagine a vending machine. It is an automated agent. You give it money and it gives you a drink. It has no choice. Now imagine this kind of thing in digital form. If you start to link these ‘smart contract’ entities together you can automate all sorts of interactions.

The third wave of blockchain tech – which is being hyped right now – is the corporate use of the technology. The first two waves were open systems in which anyone could join and, theoretically, everyone had the same rights. In wave three, which is known as private, closed or ‘permissioned’ blockchains, institutions or groups of institutions control who is able to join the system, and can give users different rights and powers within the system. This fundamentally changes the entire ethos. They’re just trying to make more efficient versions of business as usual. Banks, for example, already collectively run certain shared systems for things like payments, and they currently see private blockchain systems – or ‘distributed ledger technology’ – as just a more efficient way to do the same thing. So if American Express says it’s ‘using blockchain’, they’re going to be building a closed system, and this makes it confusing for the public, who often don’t know there is a difference between the open systems and closed systems.

So, to give an example, when I was working within the derivatives market, two traders would agree a deal – let’s say a trader at Goldman Sachs would do a deal with a trader at Barclays – but once they’d done that they report it to their separate back office staff, who would do all the dirty work of having to make the transfers and make sure both traders had recorded the same details about the deal. This takes time, and each bank has different systems that don’t necessarily jive with each other. So the interest for large banks is in finding ways to automate the coordination between themselves, so that they can fire all their back office staff who do the reconciliation work.

What is important here is the distinction between open public and closed private blockchain systems. That said, you could also use closed systems to launch co-operatives. If you were trying to create a co-operative version of Uber, a closed blockchain system could be very useful. So drivers could get together to coordinate themselves. So there is interesting potential.

With the Paradise Papers we are reminded again how tax policy and legislation is often written by the legal teams of large companies who are offshoring their assets and profits. This is a clear example of big finance’s political power. What are the opportunities for us to transform the policy and legal environment?

We are used to this tacky distinction between ‘states vs markets’, but I start from the assumption that there has always been a symbiosis between states and markets. The state creates the underlying structures that enable large-scale markets to operate. If you accept that, you can then think about which market players the state prioritises. Do they favour the large corporate players or the small players and ordinary citizens? This is kind of the historical battle between conservatives and labour: is the state there to facilitate the owners of capital, the CEOs, the elite entrepreneurs, or is it there to protect those with less market power, the employees and marginalised? The state is always going to be captured – the question really is who has captured it? Is it a corporate state, or a citizen’s state? This is a dynamic that goes back and forth.

I do think there are opportunities to transform the policy and legal landscape, and it has happened over the years. It is a fickle system, though. A positive policy change can be reversed by a new government, like a law to separate safe banking to risky banking that then gets repealed. In the long-term the ideal is to try build systems that do not rely on external regulation, but that have positive principles built into their DNA. I’d not give up on financial reform, but it’s difficult. I’ve just come back from spending time with Finance Watch in Brussels: they lobby for the public interest in finance, but they are outnumbered by highly paid private lobbyists that the financial industry deploys. They have to fight day to day against the odds.

In terms of the Paradise Papers, I feel there has been a political turn in the tax avoidance debate. I think there have been gains for tax justice groups. At the same time, there has also been a fatigue among the general public. We hear about new scandals frequently, but there is only so much outrage people can express. This is a long-term fight, not something you can win in quickly. So stick in there and enjoy the ride.

Alternative financial activists, such as the Robin Hood Co-operative and Debt Jubilee, use ‘traditional’ financial tools to challenge the system. How do you understand the strategic relationship between financial protest, financial reform, and the creation of new financial institutions, tools, and services?

Finance activism, financial reform, and alternative financial should, like you say, align with each other. I think they do, but those within these groups do not often attempt to overtly work together. Partially because of funding structures. If you are a critical artist exploring finance, like Paolo Cirio, his funding stream will come from arts funding bodies. And then if you’re FinanceWatch, your funding comes from NGOs and EU sources. This means they’re often having to play into different institutional spheres that don’t allow much overlap.

Also the energy required to work towards different campaigns means focusing obsessively on certain priorities. If your whole world is lobbying in Brussels or Westminster, you may become dismissive or intolerant of the direct action strategies of activists scaling the Houses of Parliament. There are cultural differences within financial reform and they don’t always recognise each other’s value. Sometimes because they are competing for media attention, funding and legitimacy.

But when I zoom out and think about how we will create financial change, I see all of these approaches playing a role. Financial activism and protest is very effective at getting media attention – Occupy Movement, Move your Money campaign, UK Uncut were very good at getting headlines and asking for extreme changes. This then creates space for more centrist organisations to draw up more technical proposals for financial reform. They come through with more palatable demands, which can create change.

The same with climate change movements. Earth First or Greenpeace open space for less overtly activist sustainable finance groups – like CarbonTracker – to come and make technical proposals. You have to zoom out to see the politics – take alternative finance platforms like peer-to-peer lending. Mainstream policymakers struggle to directly attack big banks, and may find it easier to support the alternative finance sector as a way to indirectly weaken banks. The alternative finance sector in the UK has actually been quite good at ‘playing the state’, presenting themselves as a useful alternative to address the shortcomings of the traditional finance giants.

On the extreme end of financial activism, there is little crossover with more ‘respectable’ alternative finance entrepreneurs. If you take Enric Duran, or the Robin Hood Co-op, they have no interest in reforming finance. They are trying to create parallel systems that do not rely on the current system. It’s not like the divestment campaigns, or ethical banking system, which are trying to reform the current system, and that’s an important distinction.

The divestment campaigns are an interesting case study. These campaigners are often criticised by those within more mainstream sustainable finance circles as lacking nuance or being counterproductive. But the divestment organisations have been great at driving the debate on unsustainable investment in a more public way. They actually indirectly support the work done by the technical sustainable finance community. The student activists are creating a space for more technical changes to be introduced.

Since I specialise in not specialising, it makes it easier for me to to see the points of intersection. There needs to be more people who hop between different approaches, overtly spending more time in different communities. The technology community, the localist community, the policy community, the artistic community, and so on. Hybrid approaches are often the most interesting.

Brett Scott is a journalist, campaigner and the author of The Heretic’s Guide to Global Finance: Hacking the Future of Money (Pluto, 2013). He writes for publications such as the Guardian, New Scientist, Wired Magazine and CNN. He is a Senior Fellow of the Finance Innovation Lab, and helps facilitate a course on power and design at the University of the Arts London.

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Follow Brett on Twitter at @suitpossum

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Published in STIR magazine no.20, Winter 2018

Illustration by Nick Taylor

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