Today’s advocates of blockchain and digital currencies describe the potential for more privacy, transparency, accountability, efficiency and competition in all forms of commerce, finance and bureaucracy. Some see blockchain as providing technologies for democracy itself, from elections to budgeting. While some claims seem overblown or premature, there are already some fascinating applications in the fields of logistics, inventory and supply chain management.

Despite these advances, there has been a growing backlash from opinion leaders as the technology’s drawbacks become better known. Perhaps you’ve heard that Bitcoin alone uses 0.25% of the world’s electricity? Other blockchain systems, such as Ethereum, use similar approaches that require computers to burn electricity unnecessarily. Perhaps you are concerned about the number of accidents, hacks and scams possible in this new space, where the law has not yet found its feet? Or you may have heard that crime and terror networks could use these technologies to transfer funds. Blockchains and digital currencies pose important questions to both their advocates and regulators.

Pioneers in the industry are alert to such concerns and have attempted collective self-regulation. The Brooklyn Project, an industry-wide initiative to support investor and consumer protection, was launched in November 2017.

“By acting responsibly today, we can help make sure we are collectively able to reap the benefits of this powerful technology tomorrow,” explained co-founder of Ethereum Joseph Lubin. The following month, a coalition of cryptocurrency organizations and investors representing $650m in market capitalization established Project Transparency. It seeks to protect investors by enabling more disclosure within the digital currency sector.

These initiatives are welcome, but neither address how the technology affects wider society and the environment. If this sector is going to disrupt incumbent organisations (management-speak for people losing their jobs) then the general public will soon ask what the upsides really are.

In recent months, many blockchain projects explicit about their social mission have launched. Bflow.io offers a system for reporting corporate sustainability. Alice.si strives for greater accountability from charities. Provenance.org tracks tuna from shore to plate, giving consumers confidence in sustainability. BitLandGlobal is seeking a step change in land registration by the rural poor. Specialist think-tank Blockchain for Good has been established to promote blockchain’s benefits for worthy causes. Nevertheless, on closer analysis, many of these ‘4good’ projects miss a crucial factor – the impact of their code itself.

Is it appropriate for people apparently seeking economic justice and equal opportunity to use a blockchain in which only heavily invested actors receive new tokens? Is it appropriate for those seeking to put a new medium of exchange in the hands of the masses to use a blockchain whose tokens are mostly hoarded by speculators? Is it appropriate for a carbon emissions reduction project to use a blockchain which emits as much CO2 as a small country?

These are not hypothetical examples. Most blockchain projects bolt a purpose onto code and governance systems that were designed without such public interests in mind. Just as it would not be acceptable to clear the ancient Borneo jungle to raise money for homeless orangutans, it should not be acceptable for a project to deploy socially regressive or climate-toxic code.

Fortunately, there is a new wave of mission-driven blockchain projects conscious about their total social impact. Initiatives like Holochain, Faircoin, Yetta and LocalPay explicitly connect their code base to their social cause. Faircoin uses a codebase that requires little electricity and allows the distribution of coins to socially useful projects. Providing the same smart contract functionality as Ethereum, the new Yetta blockchain is intended to be sustainable by design, with the low energy requirements of its codebase being moderated further by automated rewards for those nodes using renewable energy. It will also enable automated philanthropy to support the Sustainable Development Goals (SDGs).

Two of the most integral technology projects in this field take a post-blockchain approach. By sharing data and not using a single blockchain, Holochain reduces the energy and time involved, while avoiding being dependent on the decisions of unaccountable groups of computing “miners”, as so many blockchain projects are. Shunning digital tokens entirely, LocalPay runs on code that means its users in more than 300 local communities do not need to purchase or mine a currency to begin transacting. For them, currency is simply a unit that comes into being, for free, when they wish to trade.

These projects aren’t just putting lipstick on clones of existing projects. Their founders went back to the drawing board and created mission-driven roles for coders, entrepreneurs, investors, philanthropists, regulators and policymakers. They designed a technology to fit into an ecosystem, rather than to dominate it. They set up incentive structures for fair contributions and rewards. This generation of “integral blockchain” and digital currency initiatives aligns its codebase and internal governance with positive social and environmental outcomes. These projects strive to be an integral part of a healthy society, rather than ends-in-themselves.

Will blockchain technologies be killed in their infancy by regulators? Will they grow into monsters that consume energy while enabling tax evasion, crime and capital flight? Or could they provide meaningful services to humanity? Greater cross-sectoral dialogue and guidance is needed to help this last scenario emerge.

Originally posted in WeForum.org

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Q1 The consumerist model and our fossil resources have been stretched to their limits. What could be an alternative model of production?

Innovation can help us reign in the over-extraction of resources. This seafood tracing platform is being developed by @provenance

JT I’ve come to an inconvenient conclusion: production is not the purpose of life. I say inconvenient because many of us depend on industrial production, and its many support services, to earn the money we need to pay for daily life needs. But because the global economy has to grow just to survive, its hunger for energy and materials is insatiable. The growing complexity of it all is resource-hungry, too — think of all those interconnected global supply chains.

This conflict between a perpetual growth economy, and the biophysical limits of a living planet, is why the perpetual search for new forms of production – whether ‘clean’, ‘green’ or ‘circular’ – is not where our future lies.

Our future lies in a care-based economy that embodies a commitment to leave things better rather than extract value from the world as quickly as possible.

The good news is that a huge care economy already exists. So-called ‘non-market’ care work includes the essential activity people have always undertaken to raise and educate their families, take care of their land, and support each other in times of difficulty. Billions of people with low cash incomes meet daily life needs outside the money economy through traditional networks of reciprocity and gifts. They survive, and often prosper, within social systems based on kinship, sharing, and myriad ways to share resources.

In this parallel real world value arises from relationships., not from things. Value emerges when living entities – whether human beings, or living ecosystems – interact with each other in a healthy way.

Redirecting our attention from production, to care, is a matter of discovery, not invention. 

Millions of small-scale experiments, and new ways to meet daily life needs, are emerging throughout the world. The opportunity before us is to seek out these projects, and develop practical ways to help these new approaches thrive, and interconnect.

The physicist Ilya Prigogine put it beautifully. “When a system is far from equilibrium, small islands of coherence have the capacity to shift the entire system”.

So that’s our priority now: develop islands of coherence in our own situation – and connect with other islands when the need arises.

Q2 Design is proposing a new definition of ecology: civic ecology. Can you explain the concept?

The French company Natural Solutions develops apps like EcoBalade (above) that help citizens identify plants and other life-forms.

JT In the new economy that’s now emerging, care for life replaces our a preoccupation with money. Value is measured in terms of the health of living systems, and the land, air, and oceans that surround us.

Cities, in this context, are part of the natural world, not outside it. Civic ecology – also known as ecological urbanism – has emerged in response to this understanding of life as the ultimate value.

An ecological approach to the design of cities builds on some surprisingly good news. It turns out that there can be more biodiversity in cities than in cultivated rural areas that we think about as ‘nature’. 

Researchers who investigate disused industrial areas, rail yards, the edge of motorways, brownfield sites of all kinds, are finding all kinds of plants and beetles, insects, lichen, and other life, that they did not expect.

Civic ecology is technically challenging because so many variables are involved. Urban ecosystems are dynamic and interconnected, and interactions between human activity and living systems change over time. There is no one discipline of civic ecology; a variety of professions and discipline need to be involved: climatology, hydrology, geography, psychology, history, and art.

Stewarding the relationships between living organisms and their environment is not just a job for specialists. All citizens can be involved – and new tools are emerging to enable that. The French company Natural Solutions, for example, develops apps that guide citizens through their city and helps them identify the plants and other life-forms they encounter.

The English team at NatureBytes develops devices (above) – and teaches teaches digital skills – so that everyone, professional or amateur, can be an active conservationist.

Q3 What is empathy as a design tool?

JT Today’s challenges cannot successfully be addressed without the engagement of all the actors concerned. A variety of different stakeholders – formal and informal, big and small – need to to work together. The question – and it is also a design question – is how? Paying attention to the process by which groups work together is just as important as deciding what needs to be done, if not more so .

The Art of Invitation developed by Encounters Arts uses techniques from theatre, as well as the insights of psychology, to bring groups of people together who are diverse in age, experience and background.

Dealing with difference involves a lot of consensus building, active participation, and collective decision-making. All this takes time, and an approach to project work or local politics that involves endless meetings is neither attractive nor practicable for most people.

New ways of working together are needed that are shaped by the ways people live now – not the other way round. Participatory approaches are needed to convene diverse groups in ways that foster meaningful conversations among all the people who need to be involved.

An especially effective approach has been developed in England by Encounters Arts. Their Art of Invitation uses techniques from theatre, as well as the insights of psychology, to bring groups of people together who are diverse in age, experience and background.

The group’s facilitators – all artists – have developed groundbreaking approaches to inviting people to fashion a collective creative response to systemic challenges facing their communities.

Q4 
What is your definition of innovation in design?

JT Digital is a means. It is not not the destination. Data of all kinds have a role to play shaping how we interact with the world, but they are not the whole story.

At @IAAC in Barcelona, for example, their Smart Citizen platform enables citizens to monitor levels of air or noise pollution around their home or business. The system connects data, people and knowledge based on their location; the low power consumption of the device allows it to be placed on balconies and windowsills where power is provided by a solar panel or battery. Smart Citizen just one among a growing array of devices and platforms that can sense the world remotely – from the health of a tomato in Brazil, to bacteria in the stomach of a cow in Perthshire

This innovation is impressive – but a bigger question remains to be answered. How will this data contribute to the system transformation that we so urgently need?

The next step is to foster ecological literacy emotionally, and not just rationally. When we truly care about living systems, things will really begin to change.

Q5 What is your definition of innovation in design?

JT The word innovation has been devalued by a too-narrow focus on technology and data. Big Tech, and the investment community, interpret innovation to means the use of digital tools to financialise activities that used to be free: caring for our elders, growing food, learning, or playing.

A different approach assumes that the resources needed for food, clothing, or a roof over
our head, already exist . New types of local provisioning and self-governance systems are emerging all the time. Some of these resources are are to be found in the natural world, thanks to millions of years of natural evolution. Some are social practices learned by other societies and in other times.

Whatever their origin, an emerging care or social economy is being germinated in countless community initiatives, experimental projects, innovative organizations, and social movements. All these experiments can be enhanced by design.

Cooperation, and sharing resources, are a good example of a second kind of innovation in which the ways we cooperate, and the tools and platforms we use to do so, can be transformed by design.

The financial crisis of 2008, for example, triggered a plethora of experiments in alternative money and trading systems, and mutual credit schemes. Many of these experiments are place-based, and subject to local democratic control. An important new example is FairCoin – the world’s first democratically organised and eco-friendly crypto-currency. FairCoin is designed to be a digital currency for this new economic system.

end

My book How To Thrive In The Next Economy has been published in Italy by Postmedia: Progettare oggi il mondo di domani Ambiente, economia e sostenibilità

Photo by apple_pathways

The post When Value Arises From Relationships, Not From Things appeared first on P2P Foundation.

Together with Faircoin, the Holochain, the SolarCoin and the Heyerdal Mangrove Coin, this should be on the radar as a potential commons-based currency of the future.

Theoretical Underpinnings of the Duniter G1 project

(source)

A cryptocurrency system

“Duniter uses the crypto-currency concept introduced by Bitcoin, which is to use cryptographic tools such as signatures to create digital currencies. Duniter fits this definition, but it has completely different inspirations than Bitcoin — the Web of Trust and Universal Dividend — to do better than Bitcoin. Actually, Duniter has a reference to a theory called Relative Money Theory. This theory demonstrates that a currency which aims to respect each individual’s economic liberties MUST implement the Universal Dividend (a.k.a. Basic Income), which is the only way to avoid both spatial and temporal asymmetry toward money issuance.”

A space-time asymmetry

Space-time asymmetry refers to the relative access of individuals to newly created money. Concretely, all existing currencies (c. 2015) are both spatially and temporally asymmetrical for their users. Let’s take Bitcoin as an example to understand why.

Spatial-asymmetry

When new Bitcoins are created, only some Bitcoin users (the miners) are given new Bitcoins, while everyone else get nothing. We believe this is the first injustice.

However, some might say:

“but miners used their electricity and time to get it!”

… we would answer that their work shouldn’t have been rewarded by newly created Bitcoins. New Bitcoins should be distributed to the whole Bitcoin community. Miners should be rewared another way, but not by money issuance. Of course, Bitcoin can’t create money through Basic Income since Bitcoin users are not strongly identified, and one might benefit from money creation multiple times if he owned several wallets. Duniter gets rid of this problem completely by identifying its users and giving the same amount [of Basic Income] to everyone.

Temporal-asymmetry

Bitcoin has an absolute limit of 21 million BTC (its unit of currency), which means ever fewer bitcoins will be created over time until 0 are being generated. So, once the first adopters have mined every bitcoin, how will future joiners get Bitcoins? The answer — just like Euros or Dollars: to get money you have to work for the ones who already own it. We believe this is the second injustice. Every member of a monetary community should be equal with regard to earning money, and get the same relative amount of money over time, even if he is a late adopter. Duniter aims to fix this by making the Universal Dividend (a.k.a. UD) grow by the time according to precise rules, thus making members equal toward money issuance on a half-lifespan.

A solution

Bitcoin has taught us that it is possible to create a currency system allowing one to both create digital money and to exchange it without a central authority. What we need to change is the way money is issued so we finally have a symmetrical system. We need Bitcoin + Universal Dividend. But Universal Dividend implies that the community consists of only identified people. This is where the Web of Trust (WoT) comes into place. This concept, introduced by cryptography with the OpenPGP format, allows us to identify people in a decentralized manner. It works as follows: each person creates a personal identity that is linked to its cyptographic certificate. The identity must be confirmed by others members who use their own cryptographic key. It is that simple: people choose who is part of the community and who is not, not a central authority.

Duniter however won’t use OpenPGP for its cryptographic features: Elliptic Curves will be used instead for the conciseness of its generated keys and its pratical advantages. This requires that we specify our own Web of Trust mechanisms, but we think it is worth the effort.

The Blockchain

Bitcoin’s blockchain mechanism is important for two main reasons: synchronization and security. Duniter will benefit from these two features. However, Duniter’s blockchain is slightly different: it not only stores transactions, but community activity for defining the WoT. It also has a different Proof-of-Work (PoW) mechanism made possible by the WoT definition, providing a much more energy-efficient way to compute the blockchain.

Web of Trust

The Web of Trust is to be written in our shared public ledger, the blockchain, in just the same way Bitcoin’s transactions are written in Bitcoin’s blockchain, but for us it is the identity of people. Thus, the blockchain constitutes a space-time referential, where space is represented by individuals and time, provided by blockchain units, is the blocks. What we finally have is wot(t): the community at an instant, t.

Transactions

But that’s not all: the blockchain is also the place where transactions, the flow of money, are sequentially stored and define money ownership. In this area, Duniter looks quite a bit like Bitcoin: transactions take inputs (a.k.a. sources) and generate outputs. A transaction is a flow of money.

However, in Duniter inputs may be:

• money from another transaction [Bitcoin-like]
• money from a Universal Dividend [Duniter-specific]

As you can see, no generation transaction (where a miner earns Bitcoins for solving a block) exists in Duniter. This kind of transaction is replaced by Universal Dividend input. Outputs, on their hand, are always public keys, and not necessarily WoT members’ public keys: a company may also have a public key. This lead us to an important fact: companies are also able to use the currency.

Do note carefully that, even if they may participate, companies won’t be able to create money. Only individuals will be able to do it. This is a very important point.

Proof of Work

Like any P2P crypto-currency system, Duniter has a way to synchronize its peers when writing to the ledger (the blockchain). However, Duniter benefits from a different environment than other altcoins: an identified Web of Trust. This little difference has a tremendous impact: while Bitcoin has to make a global challenge using CPU resources to avoid just a few people from hijacking the blockchain, Duniter has the ability to rely on its members to write the blockchain. This allows us to both avoid the energy-wasting problem introduced by PoW and easily prevent the 51% attack in Duniter. Concretely, Duniter has a personalized challenge difficulty for each of its members that gets harder for the member who succeeds in writing a block, while it gets easier – until a given minimum – for the others. This mechanism ensures a rotation in the blockchain’s writing, while keeping the advantage of PoW for synchronizing the peers.

It can be noted too that, since a block does not provide extra money creation, members won’t be encouraged to compete to write the next block.

To summarize

Duniter’s blockchain can be compared to Bitcoin’s blockchain: a great book tracing the history of each membership inside the Community along with the transactions of its users. With the blockchain, we have the fundamental referential of the Relative Money Theory members (humans), and the flow of money through the transactions generated by the currency’s users.

A free economy

The goal of all this is to allow people to participate in a free economy thanks to a free currency. What is a free economy?

Relative Money Theory defines it through 4 economic freedoms:

1. The freedom to choose your currency system: because money should not be imposed
2. The freedom to access resources: because we all should have access to economic & monetary resources
3. The freedom to estimate and produce value: because value is a purely relative to each individual
4. The freedom to trade with the money: because we should not be limited by the avaible money supply

Those 4 economic freedoms should be understood together, not exclusively. Plus, “freedom” has to be understood as “non-nuisance”. So here, freedom does not mean the right to take all of a resource (like water source in a desert) so no more is available to the others. Now you get it, this is the goal: free economy through free currency.” (https://duniter.org/en/theoretical/)

Duniter and the Basic Income

From an interview with developer Gael by Tyler Prochazka:

How much of a basic income does Duniter include for each member ?

Duniter issues around 10 percent of new money each year. This new money is shared to all the members. The rhythm can be faster: for example, we can issue every day 0.026 percent of new money, and at the end of the year, it will be a growth of 10 percent.

Ten percent is not a number chosen randomly. It respects the symmetry in time. If a new user join the Duniter network in 35 years, he will start to issue the Universal Dividend at the same speed as we did before. Ten percent is calibrated so that in half a human life, 40 years, you create the same share of the monetary mass as every members did before. One should not be privileged and create a bigger share of money during his life just because he joined Duniter earlier or later.

What are the reasons Duniter is utilizing a basic income and how did the team first get introduced to the basic income concept?

I think most of the team discovered Basic Income before reading about the Relative Theory of Money. One of the biggest debate within basic income community is “how much should we give to individuals?”

The Relative Theory of Money demonstrate that to consider individuals equals and free, a money has to be issued symmetrically between individuals, in space and time. It means that it has to be issued by a Basic Income called Universal Dividend.

Yoland Bresson (an early advocate and participant in the Basic Income Earth Network), who wrote the preface of the Relative Theory of Money, is the author of the theory of “Time-Value”. Interesting enough, both theories, applied to the euro-zone, result in almost the same Universal Basic Income amount.

Another interesting thing is the Theorem of equivalence between a Libre Money and a Universal Basic Income. This demonstration states that a Universal Dividend, based on money issuance, is strictly equivalent to a Universal Basic Income based on a tax with a lower issuance rate of money. Basically, issuing 10 percent of new money each year is strictly the same as issuing three percent of new money and taxing seven percent of every accounts. But the Occam’s razor principle states that the simpler a system is, the better. The Universal Dividend is really simple: no taxation is required, no administration is necessary to check for the redistribution. It is only about issuing new money. And it is strictly equivalent to a Universal Basic Income!” (http://basicincome.org/news/2017/01/interview-time-digital-basic-income/)

Photo by Dusk/黃昏少年

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But what does this mean for fans of cooperation and a more sustainable, steady state, or circular economy? Is this is an opportunity to rebuild the resilience and community bonds that the original co-op coins offered our societies, by utilising new digital technology?

These days, the term “crypto currency” seems to have become synonymous with blockchain based currencies and the idea of an Initial Coin Offering (ICO) seems to be seen as a way to raise millions in “investment” from nothing more than a website and a white paper. At the Open Co-op we’ve been talking about alternative economic models, and digital currencies, for decades because we believe an alternative economy, which places people and the planet before profit is an essential part of the future. If the neoliberalist capitalist system remains the only option the future looks very bleak indeed. So we’re excited about all the experimentation that’s going on – and the range of alternative currencies being created. But we’re equally worried about the “crypto bubble”, sordid speculation and the insane energy consumption of Bitcoin, which has been (possibly dubiously) estimated to consume more power in 2020 than the entire world does today.

To be clear, a crypto currency does not have to based on the blockchain. A crypto currency is simply a currency that is cryptographically encrypted (meaning: encoded) to make it secure. So when we talk about crypto currencies here we do not just mean systems that use the blockchain, we mean any alternative, digital currency.

Equally, an ICO does not have to aim for wild increases in valuation, it’s simply a term that is used to describe the initial launch and distribution of a new, alternative currency. So when we talk about ICOs here we do not mean “ponzi schemes” or a means of raising huge amounts of money through crowd funding via speculative tokens, we mean launching and distributing a new, alternative currency.

These distinctions are important because if alternative currencies are to be taken seriously and facilitate a path to a more sustainable, steady state and circular economy then it is essential that these terms don’t get totally tarred by the Bitcoin bubble and blockchain brush.

A well designed Co-op Coin could catalyse the co-operative economy

The idea is simple; to run an ICO and create a co-op coin, with the specific purpose of facilitating the growth of the commons and the co-op economy.

There are so many alternative currencies out there already it seems important to do a quick review of the existing options:

• RChain co-operative is is building a platform for ‘scalable blockchain applications’. The Co-op is the organisation that develops the open-source RChain platform software, whilst RChain Holdings is a for-profit entity whose mission is to grow the ecosystem around the RChain platform.
• Colu Local Network is a blockchain based payment network that allows communities to issue their own currency and use it to incentivise merchants and consumers for buying and selling with fiat currency.
• Steem is an incentivised, blockchain based, public content platform. Their first app, Steemit, is a blogging platform featuring tokens which are distributed to content creators and curators daily as rewards, based on community voting.
• Slightly more on topic, Boyd Cohen is working on an ICO for the Collabor8 token with the goal of raising funding to create major platform coop infrastructure that can be used by platform cooperatives to shorten the runway to viability. The collabor8 ‘social currency’ seem particularly  interesting because it includes an element of social reputation…
• Bill Olivier also seems to cover a lot of the right ground in his doc on Co-operative Exchange Token, although he seems hampered by the belief that ICOs (as they commonly work) are not a plausible option for co-ops, whereas we believe an ICO can be designed to work ethically.
• FairCoin is one of the more ethically minded alternative currencies, which aims to “implement fair value exchange on a global level” using a unique “proof-of-cooperation mechanism”. Again, this is a blockchain based system but one which uses “collaboratively validated nodes” (CVNs) to secure the network. It’s a clever system but one which is still prone to speculation which undoubtedly undermines their proud claim that “FairCoin now is the the most ecological and resilient cryptocurrency”! Since their “air drop” (basically, dumping a load of coins around the internet to be picked up by whoever gets there first, with some limitations on claims per person) the “value” of a Faircoin has increased hugely and the community “claims” one Faircon is now worth €1.2. These claims about Faircoins’ value must be decided at  a General Assembly via “consensus reached through an open, participatory process of discussion. Not the invisible hands of the market…” and the other Fair ventures like the marketplace and their growing community of local nodes do make this a valid and vibrant economy. But since everyone involved in Faircoin obviously has a vested interest in its increasing valuation and since Faircoin can be traded on at least two exchanges it is just as prone to speculation as gold, or Bitcoin. In fact, their page on “value” includes a slightly humorous request for speculators to leave Faricoin alone: “If you just want to get rich soon and intend to “pump and bump” – please consider other AltCoins to speculate on.” Not the most robust means of securing a stable, inflation and speculation proof system!
• Coinsence is a platform for social collaboration that aims to “empower social and ecological engagement and support [by] building a collaborative, fair and sustainable economy”. Coinsence is new and only has a small community at the moment, but they seem to have a identified a clever model via which they issue different tokens to represent community currencies, voting rights and asset shares. Tokens can then be allocated by communities to provide incentives for ‘projects’, as well as being used as a means of exchange. These ‘social currencies’ have a limited store of value (making them less prone to hoarding and speculation) since they include high demurrage and transaction fees. The fees can be democratically re-invested into selected community projects. It’s not entirely clear how Coinsence secures the transactions, or if their technology is at all scalable but their model includes a lot of the right ingredients for a vibrant co-operative economy.
• Duniter is a crypto currency software system, which means it provides the ability to create currencies. Again, it’s blockchain based but its’ currency code includes a Universal Dividend (for currency creation and distribution) and is based on a clever concept; a Web of Trust via which each member is recognised (its identity is trusted – not its actions) if they satisfy the WoT rules which require the members to have enough signatures (links) from other members. These signatures (links) expire over time so the WoT is a clever way to ensure that people are who they say they are via social validation.

Then there’s a range of other middy interesting (again, all blockchain based) crypto currencies which are ‘backed’, or at least vaguely related, to other assets like solar panels and mangrove trees:

• Solarcoin is issued to owners of solar PV systems, for free, for every 1MWH (Megawatt hour) of electricity their PV system generates. Anyone can register their solar PV system with the SolarCoin Foundation and a typical 4kW domestic PV system could expect to earn just over 5 SolarCoins a year, every year over the 40 years the project will run. As government support for feed-in tariffs are withdrawn SolarCoin could become an important incentive to help encourage people to adopt greener energy – and/or another means to engage in wild speculation.
• The HCP coin for mangrove trees was helped into life by an ex JP Morgan banker and a guy who runs a “net positive” surf board company that is buying HCP coins to help his company become carbon positive. It’s another novel idea with clear, carbon reduction objectives but with worrying possibilities given a companies ability to ‘cash out’ from their carbon reducing investments.
• There’s not really anything co-operative, or particularly sustainable, about the TIME token but a list of this nature would not be complete without making reference to ChronoBank, who raised $5.4 Billion via their ICO. Aiming to “disrupt the HR / Recruitment industries” with a crypto currency based on the blockchain, they claim that “labour is abundant enough for everyone to have access to it, yet scarce enough to be valuable. It is the most tradeable resource in the real economy. Labour Hour tokens will tokenise this resource. Because they are backed by real labour, they are absolutely inflation-proof and have next to zero volatility” At the time of writing an hour of TIME was worth about $36 but the day before it was worth $32… Looking at the fluctuating value of the token over time seems to slightly undermine their “zero volatility” claim.

If you’re aware of other crypto currencies which are of interest to the co-op economy please let us know in the comments below.

What is clear from this list is that creating crypto currencies does not seem too hard. We can dream up a million ways to ‘back’ or link a currency to something, and there are just as many ways to distribute.

The hard part of currency design seems to be incentivising the type of economic activity which leads to the kind of world we want to live in and avoiding hoarding and speculation. The list above does not seem to include a single currency that is “speculation proof” or many ideas to addresses the speculation issue, other than Coinsence’s mention of high demurrage, which can cause other issues.

What’s wrong with speculation anyway?

Fans of crypto seems to be missing the fundamental point that any increase in value (of any cyrpto currency) is not really “money for free”. It is money we are borrowing (yet again) off the planet and future generations.

OK, so this “money” is not created as interest bearing debt (like most “normal” money) by banks. It is created by human perceptions instead. The global mindset imbues these newly created digital assets with virtual value via our subconscious belief in scarcity and our grotesque affinity for greed.

But when we “cash in” those perceptions by converting our digital coins to GBP or USD and spend them on (often finite) resources like land, or building materials, or solar PV – all of which have an environmental impact – we are using up those resources, quicker than we would have been able to do without crypto currencies.

You could argue that Solarcoins are incentivising the installation of PV, and that is a good thing

but, when their value increases, they are still extorting real tangible, natural, value (things like birds and forests and trees) into a mythical pool of financial value – and ultimately that will only ever speed up the destruction of the natural environment.

So let’s not get too hasty about imagining a scenario where PV is “more than free”. All our actions in the real world have environmental impacts and just because crypto currencies have found a new way to externalise those costs it does not mean we should be slapping ourselves on the back about it! It is our children and grandchildren that we are forcing to pay for this new, naked emperor.

It is essential to keep the true “costs” (including the power consumption issues) in mind when thinking about ethical alternative currencies.

Beyond blockchain – thinking outside the blocks

Of all the current crypto currency options Holo stands out because it based on the Holochain (a more efficient way of encoding transitions)  and it’s currency is not only going to be based on “mutual credit” but its also going to backed by computer processing power. It’s well worth watching this great video from Philip Beadle to get an idea of how blockchain works and the differences between Bitcoin, Etherium and Holochain – especially from an app building point of view.

Holo are just concluding a very successful crowdfunder which aims to provide the ‘bridging technology’ to bring holo into the mainstream. The ‘hosting boxes’ (holo ports) people have bought through the crowdfunder will allow non-technically minded people to simply plug a spare hard drive in to their router to provide storage capacity and processing power on the Holo network.

The Holo network is nothing short of true peer-to-peer. Meaning that users can access each others computers directly, without the need to go via Google’s or Amazon’s servers. In fact, they can host and runs applications on the Holo network, in much the same way as BitTorrent works. This provides incredible opportunities for scaling (as more peers join the network, everyone benefits from ‘the network effect’) and, equally as importantly, the opportunity to re-define how the applications that run on the network are designed to work; it solves the entire “net neutrality” issue completely. Holo, and the people behind it, have designed the Holo network to work in a more “user centric” way than the way the web works today.

The Holo ICO is a very HOT topic. Art Brock, one of the founders of the project, has written about building responsible crypto currencies and agrees that

Cryptocurrencies do not have to be gambling tokens created from nothing. They can be responsibly connected to assets, promises, or real-world value. They don’t have to re-create all the speculative money problems that they were supposed to be solving.

Currencies can be optimised to be a useful means of exchange, or a useful store of value, but rarely work well when trying to be both at the same time. “Holo fuel” (also known as HOT, or Holo Tokens) are designed to provide a medium of exchange on the Holo network. Their ICO requires users to buy HOT with ETH (another crypto currency).

Given that buying in to the Holo ICO with ETH will be at a specific price, we were keen to understand how the value of HOT has been calculated, how it hopes to avoid being linked in value to ETH and other crypto currency prices in the future, and how HOT will avoid suffering from speculation? We put the question to Jean Russell, project lead for the Holo ICO, who answered as follows:

HOT is set as 10k x ETH for the launch. But that is just the initial set. Once the network starts, then 1 HOT = 1 Holo fuel. And Holo fuel is about the value of hosting in Holo.

Surely there will arise an exchange that will convert ETH to Holo fuel, so they will be relational in some way. However, even if the Ethereum system collapses, Holo can continue and the value should not be negatively impacted. We believe that we will be much more than 10,000x faster/cheaper than Ethereum (mostly because that system in some ways was designed to be difficult and slow as part of the security). Our system is designed for scalability and resilience (DHT) so it should get better as it scales. Anti-fragile in fact.

The initial price (and the practical network value the community gives it) will be a gap that speculators can guess at. Thereafter though, it should remain fairly stable as it is really about the asset and the value of that asset in the marketplace.

I can’t give the deep philosophical explanation that Art can, but what I hear from him is that mutual credit along with asset-backing pretty much assures that it can’t be a gambling game of high stakes. Those who invest early when there is high risk of the platform getting off the ground will gain some benefit, yes. But then it should achieve a meta-stable state.

We have high hopes for Holo. With Holochain offering a viable alternative to blockchain it should, naturally, benefit from “second mover advantage” by learning a lot of lessons from its predecessor. The way it has been designed from a holographic, and sociocratic perspective seems to fit the requirements of a co-operative economy which distributes ownership and governance to the lowest possible levels.

If their ICO, which they are calling an “Initial Community Offering“, goes well it will be very interesting to see how this first major alternative to the blockchain based systems develops.

Launching a Co-op Coin?

If Holo is successful and a vibrant peer to peer community emerges, perhaps the Holo Network would be the place to launch a dedicated co-op coin? Much of the hard work, in terms of underlying infrastructure, will have been done so a launching a co-op coin on holo should not be as hard as starting from scratch. The main issues would be achieving agreement between a sufficient number of stakeholders about a co-op coins parameters, mainly it’s issuance and the management of supply and demand.

It seems to make sense that a co-op coin could only ever be spent at co-ops, thereby facilitating Principle 6 (co-operation between co-ops) by giving co-ops a specific currency in which to trade. Mutual credit also seems to provide a sensible means of managing supply and demand.

One idea for co-op currency creation could be to issue a set amount of Co-op Coins each month or year, to every member of every co-op that registers with the coin issuer. This would mean the coins are created and distributed as far and wide as possible, and provide a basic “co-op citizen’s income” whilst, at the same time, it would create a global directory of co-op members – something which would massively benefit the co-op economy.

Another, additional, idea to create co-op coins would be to issue an amount of co-op coins (again, to every member of every co-op that registers with the coin issuer) which have to be ‘spent’ into existence. If these coins could only be allocated to commons-building and co-op projects the Co-op Coin would incentivise the growth of co-ops and the commons. And once Co-op Coins have been “earned” in this way, the workers who completed the projects’ tasks would be able to spend the coins in any co-op, breathing further life into the co-op economy.

There are probably other, better ways to issue Co-op Coins and we’d be interested in your thoughts.

How should we enable the creation and distribution of new currency within the co-op economy?

Avoiding the speculation issue seems the hardest nut to crack. Even if there is no way to “cash out” a Co-op Coin via a currency exchange hungry co-operators might still look to exploit discounts on goods they could buy with co-op coins and sell elsewhere in traditional currencies. The only sure-fire way to avoid speculation seems to be for an economy to be ubiquitous and all encompassing, by providing everything a person needs and a method of transacting that is more efficient than all other options. Designing complimentary currencies, which satisfy the different needs to provide a “store of value” and a “medium of exchange” which work together in efficient symbiosis also seems essential for a sustainable economy.

With the right design it seems clear that a well managed ICO for a Co-op Coin could provide incredible funding opportunities for the co-operative economy. Imagine if the surplus of every co-op was converted into Co-op Coins and allocated to co-op building and commons-creation projects… Together we could create an alternative economic model to the extractive version that exists today; a clear path to a more co-operative world. Ignoring the possibilities of crypto currencies is no longer an option for anyone with an interest in a better future.

Photo by mulberrymint

Originally published in The Open Coop

The post Thinking outside the blocks: What would a co-op coin ICO look like? appeared first on P2P Foundation.

What the attainment of 1:1 signifies is a practical example of a successful deployment of a large-scale, cutting-edge technological venture connected to cooperativist organisations in the real world. It is at the forefront of connecting a desire for autonomy, with the advances offered by blockchain technology and digital currency. Moreover, it is precisely these radical principles that have lead to positive results: slow and realistic growth, basic anti-speculative measures in the management of the coin to avoid counter-productive fluctuations, and a focus on practical use in economic cooperative networks. This means on the one hand the necessity of asserting a different conception of success compared to the dubious benchmarks of today’s malfunctioning world, but also an acceptance of acting within the world as we find it, not as we might like it to be. This is the actual way to successfully change the world.

It is possible that the FairCoop project has found a way (I hesitate to use the term “third way” as that has been heavily tainted by Blairism in the UK at least) between the volatile anarcho-capitalist ‘disrupt everything and to hell with the consequences’ philosophy, and the governmental ‘protect the economic status quo at all costs’ attitude.

A utopian faith cannot be put in markets (which does not differ ideologically from the preconceptions of neo-liberalism); an equally Utopian faith cannot be put in the state, which was the error of most of 20th century radicalism. The true solution is to take the best from both sides: putting faith in the choices of individuals and decentralized networks, but refining this idea and focusing it via the conscious political decision-making of self-managed cooperatives. And on the other hand, political decisions have to be coherent and focused on a clear ethical difference from speculative and acquisitive methods, while also not needing to fit into the bureaucratic structures of the state and parliamentary campaigns.

Read the whole article here.

The post Theoretical Considerations on the Development of FairCoin appeared first on P2P Foundation.

The economic arguments are pretty compelling. Bitcoin is unable to cope with the transaction volume so users face long wait times or transaction fees sometimes in excess of $20 which greatly reduces its usefulness to the poor. Bitcoin was supposed to be decentralised, yet now 80% of mining power is under a single government which seems to disapprove of it. Bitcoin was hailed as the disintermediator of banks, yet banks are as vital to society as issuers of credit, which Bitcoin cannot do, being trustless. Other Bitcoin maximalist ideals about augmenting the role of gold are, in my opinion, grounded in flawed economics, and do nothing to improve the condition of humanity.

But all of these arguments are soft compared to the problem of Bitcoin’s energy consumption. This Bitcoin energy consumption index estimates (November 2017) Bitcoin uses more energy than the country of Ireland, and is rampaging up the country index; there is no meaningful upper limit on the power it could consume as it grows. While many such as Andreas Antonopolis predicted that the crypto-economy would be an ecosystem of many currencies, in the last six months we are seeing the opposite tendency as Bitcoin’s dominance (over other cryptocurrencies) is increasing.

Now that BTC is credibly going after smart contracts, high speed transactions, better privacy, and is winning hard-fork wars and institutional custody solutions – it's becoming safer to self-identify as a #BitcoinMaximalist. I am one, too! https://t.co/L68xyBIsMe

— Tuur Demeester (@TuurDemeester) November 17, 2017

The more hedge-funds pile into bitcoin, the more credible and the more valuable it gets, the more risk-averse money will pile in too, surely without regard for any environmental concerns or the knock-on effects for the economy, or indeed human rights.

It is clear that, like the US finance sector under Alan Greenspan, Bitcoin is optimised to grow, and has no capacity to regulate itself with respect to wider global concerns such as the environment. “Bitcoin launched private currencies into the mainstream, but it’s time to admit we made a mistake in not estimating how environmentally damaging it would become at scale,” explains the original ‘Professor Bitcoin’, Dr Jem Bendell.

That means Goldman Sachs’ optimism about Bitcoin’s price should be read not as cause for celebration but as the herald of an environmental disaster, comparable perhaps to the Kuwaiti oil fires in the aftermath of the first Gulf War.

There are more and more articles appearing to point this out, but not many are saying what can be done. Bitcoin would be harmless if all the mining was done with free Geothermal energy in Iceland. Who might invest in sufficient infrastructure to produce that quantity of geothermal energy?

The recent push to adopt Bitcoin Cash to reduce the transaction processing bottleneck does little to reduce wasted energy and would lead to mining being even more centralised. In theory, Bitcoin could switch to a proof-of-stake consensus model, but the vested interests and voters – the miners – would have to volunteer to write-off their own capital-intensive operation.

So unless or until Bitcoin bursts like a bubble, capital gains from Bitcoin should be regarded as ethically dubious as shares in Raytheon or Texaco, or blood diamonds.

Another approach then, could be the mass adoption of a more modern cryptocurrency with a better design. There are no shortage of superior candidates vying to take Bitcoin’s crown, my interest has been piqued by

• IOTA which is scalable and fast
• Faircoin with its participatory governance and proof-of-cooperation.
• Holochain which isn’t a blockchain at all
• Chia (Pre-ICO) with its proof-of-time and proof-of-diskspace

If there was sufficient feeling in the cryptocommunity that Bitcoin was toxic, we might see capital starting to divest into other coins, and new fortunes made as the money gradually convened around one or more other coins.

On the other hand, if this community does not conduct itself in a socially and environmentally responsible way, then are not governments justified in stepping in to regulate it? Is not excessive CO2 just as antisocial as oil spills and nuclear waste?

What we can do about this depends on who we are. Investors might diversify their portfolios, weighting more heavily the coins they want to win. Exchanges might create markets between different alt-coins rather than assuming all transactions are either to or from Bitcoin or ethereum. Fund managers could create ethical crypto-funds, meaning they avoid proof-of-work coins. Software developers could focus more on multi-currency support. Governments could distinguish between coins, perhaps continuing to clamp down on Bitcoin now and remaining undecided what to do with other coins. Bendell concludes “Bitcoin has served its purpose and we must move on with smarter and cleaner tech – either voluntarily or with government help”. We have much to thank Bitcoin for. And if getting rich without working was all that mattered then we could go full steam ahead. But in a planetary emergency, we cannot afford to get stuck on unhelpful ideologies. Almost everything Bitcoin stands for can be better advanced by our swarming around newer technologies.

Photo by coccinelle67

The post Time to bin Bitcoin? appeared first on P2P Foundation.

Photo by alf.melin

The radical experiment in community cryptocurrency, Faircoin, reached a milestone this week when the Faircoop assembly declared that it would sell and buy back coins from its members at parity with the Euro. This means that the cooperative maintains a pool of cash available for redeeming coins from active members who accepted them but cannot spend them. This gives confidence to traders and the coop also offers a much more stable (and easy to mentally calculate) rate than the free market.

I explain this strategy in more detail in my previous blog post.

This public attempt by a self identifying group to manage the market makes Faircoin unique amongst cryptocurrencies. As well as having an ‘official’ price used by the cooperative, Faircoin has a free-market price because it is publically traded like any other cryptocurrency. However Faircoop hopes that Faircoin holders will coordinate around a simple strategy of mutual benefit, in contrast to the every-man-for-himself attitude of the free market. The strategy involves holders simply committing to spend the coins, (or at least try to spend the coins!) on goods and services rather than selling them for cash or bitcoin, which generates no real economic activity. With that commitment Faircoop traders benefit both from immediate spending and people holding the coins to spend later when they hope the price is higher. Holding the coin, any asset in fact, reduces the supply and helps keep the price high. As the spending power goes up, many people feel richer and more inclined to spend and even donate.

The first chart shows Faircoin’s history against the Euro, with the straight brown line showing the official price struggling to stay above the rapidly rising free market price. (Click for more detail.) The second chart shows Faircoin keeping pace with bitcoin, which doubled over the last six months. It also shows volatility against Bitcoin reducing over the last 2 months. It also shows the free market price responding to the news of the official price, leaving me wondering whether the Coop had finally wrested control of the coin from the free market!

If the coop really does have control of the coin then the strategy for the official price must no longer be to follow Bittrex as that could create a feedback loop. Nor to push the official price up as high as the Bittrex will support. Faircoop’s aim is to be able to redeem the coins at the official price for all who ask, and that means reducing the redemption requirements by creating a real economy, where the coins circulate and facilitate trade rather than returning to their issuer. This is only possible to the extent that the coin is used for payments by producers of goods and services in the real economy.

Anyone can speculate on Faircoin by purchasing them in Bittrex where the market is somewhat liquid. But those who really want to participate should install a wallet, ensure you have the private keys somewhere safe, and buy from FairCoop at the official price (not more, of course, than you can afford to lose).

However your participation does not really begin until you supply goods and services for Faircoin, and/or demand goods and services for Faircoin, thus literally creating (the space for) a market around you. Admittedly trading is easier for those living in the footsteps of founder Enric Duran (Barcelona and Athens); but trying to use Faircoin anywhere is one way each of us can contribute to growing a solidarity economy! You should always trade at the current official rate (today 1EUR!), not at this minute’s Bittrex price. Using the official rate strengthens the shared story that this money is a collectively governed in the interests of stability and utility, (unlike say, Bitcoin) and that each transaction is greasing larger economic wheels!

And as the coins you don’t spend increase in value, remember that that you are merely the custodian of value which belongs to the whole community. How can the solidarity economy grow if unearned profits are liquidated? As the holder of several thousand Faircoins I am committed to spending my profits, not selling them!

Share the wealth! My Faircoin wallet is: fMLHHYFKrmYdJCHnczSzGEbMiDd7NgxiWZ

The post Faircoin reaches parity with Euro appeared first on P2P Foundation.

The software has been adapted by FairCoop developers with the help of Bob and Lynn to fit the needs of the project, one of the most important innovations being the introduction of FairCoin wallets within the software, which means that people can seamlessly be paid in the project’s own cryptocurrency for their work.

As the post points out:

Many hours of volunteer work have made it possible for us to reach the point where we are now. However, the growth of the FairCoop community and the corresponding increase of the value of our currency has put us in a position where collaborations can now be fairly remunerated when necessary. We have tried to find a scalable system in order to be able to respond to our growing needs in an open, fair, decentralized, horizontal and transparent way.

This highlights the ongoing success of the ‘hack’ of the cryptocurrency markets carried out by FairCoop: buy a cheap cryptocurrency in large quantities, and grow its value by creating a community around it, based on shared ethical values. Use the inevitable speculation taking place on the open markets in relation to its value as a positive – guarantee an ‘official price’ for merchants and consumers which maintains trust in, and stability of, the project, which in turn makes the coin seem a worthy investment, making its value rise again in a ‘virtuous circle’.

Once sufficient gains in value have been achieved (FairCoin is now above parity with the US$ and almost 1:1 with the Euro), the project has essentially funded itself to the point where developers can be paid to create open source software for the Commons, and the previously-voluntary activists can now receive remuneration. At this point the payments are still somewhat ‘symbolic’ as the consensus was to keep them low so as to avoid a possible overshoot of capacity. ‘Slow and steady’ is the project’s unofficial motto…

So the Open Coop Work is creating value for the Commons, and is entering a stage where it will be possible for activists to work full-time on the project, in a voluntary and non-hierarchical way, and be paid in an alternative, non-state currency (easily convertible to government currencies when required), and support themselves without having to seek work outside of the FairCoop ecosystem. In this way we can see the possible dawn of a new era where the chronic ‘work to live’ problem is finally solved, and people can dedicate all their time to working on projects close to their hearts, without having to compromise their values in order to pay for food and housing.

The OCW overall plan is considered a breakthrough in terms of organizing FairCoop’s work on a more stable basis, which will enable free and willing collaborations, empower commitment and the sharing of a common budget. It is therefore a plan that will provide a significant boost to the ecosystem; especially now that our common value is rising consistently we need to take advantage of that by expanding to a whole new dimension. The challenge is out there for all of us to grasp and participate even more actively in this amazing journey that’s been going on successfully for 3 years now!

As a participant in the project, I can report that the OCW schema really does work, even if it is necessarily chaotic and in need of streamlining at this early stage of its development (issues which are being worked on by dedicated devs – of which we need more, please contact us via the website for details if you are interested). It is extremely exciting (even if at times confusing!) being involved in a project which is at the forefront of so many innovations at once, and heartening to see that the original vision of the project is now beginning to come to fruition. Of course there is much more to be done, but having solidified this new way of coordinating cooperative work, progress should be even more dynamic in the future.

For more details about the OCW process itself, please see the blog post.

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After two years of development and testing, Faircoin’s blockchain is ready to change its consensus algorithm from Proof of Stake (PoS) to Proof of Cooperation (PoC). The PoC protocol has been argued to present significant advantages, in relation to energy consumption and control by its community.

The following post has been published by FairCoop on 18.07. 

Have you ever asked yourself why bitcoin uses such a huge amount of electricity? And why it is controlled by a small amount of mining farms? The new version of Faircoin is the complete opposite in that sense: it barely needs energy to confirm transactions (nodes can work with minimalist hardware, such as Raspberry Pi3 and similar) or to guarantee the security of the system. In addition, the use and distribution of FairCoin are based on social justice and equality criteria.

Unlike other cryptocurrencies, Faircoin 2 doesn’t involve mining or minting systems, which are based on competition. Transaction blocks are generated by Cooperatively Validated Nodes (CVNs). These nodes cooperate to maintain the security of the network. This is why we call the system Proof of Cooperation.

Faircoin is becoming the essential digital currency for a totally decentralized payments system that uses the minimum possible amount of processing power. Faircoin is the currency of a system that is being accepted by more and more people. It’s the basis for FairCoop, FairMarket, FreedomCoop and also now for Bank of the Commons an alternative banking cooperative of which Faircoop is one of the founders.

Faircoin is the fundamental element of a system that facilitates currency transfers at very low or zero cost between continents, countries, users and also between ordinary bank accounts. In the Faircoin ecosystem, collective intelligence creates useful tools that people can share, including point of sale systems for merchants, prepaid cards, instant currency exchange, exchanges to euros via ATMs, payment of direct receipts and all the banking services that have until now been in the hands of an elite.

Micropayments are an important tool to meet the needs of people’s real economies and for its use in regions and societies where money is scarce. Faircoin’s high network efficiency, the relationship between trusted nodes, minimal energy costs and, consequently very low transaction fees make Faircoin one of the best currencies for micropayments.

On the 18th July 2017, the 53.193.831 Faircoin in circulation was transferred to a new blockchain. From that date on no more coins will be created. This way, being a finite good it is anticipated that its value in respect to other currencies will grow alongside the progressive extension of its use in the real economy. This will be a big incentive to the community of Faircoin users and allowing for a level of self-management that will allow us to become progressively empowered to face the capitalist system based on infinite growth and loss of people’s purchasing power, in a constant struggle for the distribution of resources in the hands of a few.

Faircoin is an open, horizontal self-organized currency. The community decides, based on a previously established consensus in the online economic strategies group, when and in what proportion a revaluation should be realized. It is a transparent process according to the current situation. So it is a completely stable currency, which cannot be devalued and is absolutely reliable for its community of users in personal or commercial transactions. Its algorithm is based on Proof of Cooperation and contributes to the distribution of wealth by preventing the richest from producing more and more coins and getting richer and richer. It is probably the most important technological innovation in the field of blockchain technologies since the creation of Bitcoin. This outstanding contribution doesn’t come from a company or group of people with private interests but from a social movement!

“We have been planning, developing and testing the cryptographic algorithm for two years. Now is the time to switch to a Proof-of-Cooperation system, which is the most stable and trustworthy concept ever seen in the world of Blockchain.”
Thomas König, Faircoin’s lead developer.

One-fifth of all circulating faircoin were bought by Enric Duran in 2014 and donated to FairCoop. With the value generated by cooperative activity and for the common good, today its value already exceeds one million euros, and remain in a communal wallet used for various FairCoop social funds, such as the commons fund or the global south fund. With FairCoop, an entire self-sustaining ecosystem for a fair economy is being built.

“With FairCoop, we are building a partnership based on cooperation and mutual support. In this way, FairCoin is showing itself to be a key tool, with which to interconnect globally and finance the transition. With the arrival of the “Proof of Cooperation”, the code stands at an equal level to our political vision “
Enric Durán, activist in cooperative ecosystems and alternative economies.

The post FairCoin activates the first Cooperative Blockchain appeared first on P2P Foundation.

This year however, the project is in a different league. Instead of Enric’s periodically announcing the price on an obscure FairCoop noticeboard like a sovereign, there is now a lively chat group with 80 members. Their objective is twofold, 1) to propose the ‘official’ price of FairCoin to the FairCoop monthly assembly, and 2) to manage the free market price.

The price should increase slowly and steadily, in contrast to other cryptocurrencies which fail as money because they are volatile. They aim to build confidence attract long term investors who want their money to do social good. FairCoop is selling FairCoin at the official price and building a pile of Euros. Those Euros are not for spending but remain available to buy back FairCoins from members who accepted them but cannot spend them. They do not guarantee to redeem all FairCoin ever issued, why should they? They are just a private institution in a free market trading a commodity.

Insofar as coins are circulating they don’t need to be redeemed and only then can the pile of Euros be LENT (not spent) on something else. They are building their own bank, capitalised by the FairCoin in our wallets.

It is this manipulation for a purpose, within the free market, that makes FairCoin so interesting. Cryptocurrencies by their nature allow anyone to participate, but a motivated team with some resources should be able to ‘own’ or at least take control of a market for their own ends. They need to keep as many coins as possible in friendly hands, and of course to grow the list of vendors who accept FAIR, who can be reassured of a cash price from FairCoop.

Two years ago the ‘official’ FairCoop price had been 5x of the Bittrex price, and a few people kept the faith, but it was really only a handful of activist business who accepted it. But something, whether Enric’s persistence, or the whims of the free market, or a handful of self appointed market-managers, lifted the price, then in in May this year, there was a rush of money into crypto-markets, and FairCoin, with its low volume of trade benefited more than most.

Suddenly the free-market price was above the official price. FairCoop had to restrict its sales to prevent arbitrageurs eating the money pile.

This has been the situation for some weeks. The new price should be decided by the assembly. If (and when) the volatility can’t be managed and the official price drops, FairCoin holders will weather the storm, especially after having enjoyed a 20 fold increase in the free-market price.

This all means that suddenly there is a lot more money behind Faircoin. The team can more confidently offer cash redemption to more vendors and has more reserves with which to smooth the free market volatility. The official list of vendors is much improved on two years ago, though still rather weak. So saying, I was able to go to a wholefood store in Athens and buy more than I could carry!

FairCoop activists are also innovating on payment technologies possible in few other cryptocurrencies. They are able, with a Spanish partner, ChipChap, to convert FAIR into Euros and withdraw them from the ATM in one smooth action! The Bank of the Commons initiative aims to provide a multi-wallet solution for holding and moving between Euros, Bitcoin, FairCoin, and balances from local exchange systems.

So why not show some support by at least getting yourself a FairCoin wallet, proudly displaying this badge, and listing your trade on the Fairmarket.

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