Better uses for blockchain #1: community resilience
Right now, every proverbial man and his equally proverbial dog seem to be interested in blockchain… Which is fair enough… It’s an interesting and powerful technology, which has already shown clear potential to be a great enabler for the new and the next.
This article first appeared on the authors Linkedin.
The big question is how we use it.
We’ve got an ever-growing plethora of cryptocurrencies. BitCoin, Ethereum, LiteCoin, Varyon, seemingly unending hundreds of others. The good, the bad and the ugly. The ICO has been, apparently, the way forward for fundraising. Notwithstanding the fact that most cryptocurrencies have no clear and practical use beyond speculation, and their issuances can look and smell suspiciously like parboiled Ponzi schemes. Even Venezuela has gone there, as a country; not surprising in its current context, though only time will tell whether the Petro will be the kind of positive innovation that nation clearly needs it to be.
The big corporates want to get on the bandwagon. Blockchain’s power and potential as a distributed ledger system has caught their eye. Non-currency projects proliferate.
Everyone from serial corruption-enabler Goldman Sachs to shipping giant Maersk are getting in on the act (yes, you did pass a Maersk container on a truck earlier today). This generally seems to fall under one of a few common application categories: “cryptocurrency for speculators”, “banking regulation compliance”, “better management for logistics and supply chains”, or “security and transparency for credentials”, for example. Yet even the most innovative and hard-driven of these projects can be read as ‘more of the same’; corporates using a promising new technology to improve their already-hefty bottom line. Which is what the big players do, of course. We can hardly fault them for it.
But there are better, more positive applications for the technology than common-and-garden profiteering. The UN is developing a system that will improve how its humanitarian aid supply chain works. A consortium (including Coke, surprisingly) is looking at ways to use blockchain to ensure that their supply chain is exploitation-free. And witness a joint project between Manchester University and BUPA; business case notwithstanding, that has real potential to help patients. There is immense potential for blockchain tech to supercharge decentralisation and democratisation in pretty much anything which requires transaction event tracking.
What interests me the most, however, is the potential junction between progressive economics and blockchain. I believe, absolutely, that this is where blockchain can shine. Done the right way, blockchain-utilising projects can enable a new era of democratic finance.
I won’t belabour the progressive economic theory. Thomas H. Greco has been one of the greatest proponents of a better economic future for all of us, and his work provides some insightful exposition of both the need and the potential. There’s plenty of further reading on platforms like openDemocracy, too.
I’ve been involved in a progressive crypto project recently, CrowdBucks, which has carried a torch on this, and made some progress. That’s now feeding into an international initiative looking at ways to enable Ethereum to underpin a global progressive finance model. This is a good project, and it has positive potential. Still, it leaves me with questions.
The big kahuna is “how do you gain universal agreement on liquidity for this model?” And universal agreement is needed; if it’s to supplant the power of the neoliberal order, it needs to have the support and participation of a very wide grassroots base of communities, people and business, all with different needs, interests and views. And there are other, deeper questions that flow from that conundrum. The depth and reach of centralisation. Democratic decision-making, and the risk that there might not be enough of it. How the infrastructure is built, maintained, regulated and mutualised. I’m no longer certain that a single-currency approach can provide the answers that are needed for a genuinely progressive model. I’ve taken to putting my nerd hat on and referring to this as a “One Ring” approach.
I believe that the way to solve this is by focusing on community currencies. Local money, like the Bristol Pound and La Duome, is already achieving remarkable things for communities. We’re seeing a growth in local money being used for local investment, and therefore in community resilience. A localised financial system is one that people can trust and buy into. It’s one that protects community money from being misused or siphoned out by profiteers, without being intrinsically protectionist.
But these currencies don’t ‘talk to’ each other. You can’t trade a bottle of French wine for a sack of Somerset potatoes using community currencies and be certain that you’re helping the value stay in the producer communities. To me, that’s the place we really need to get to if we’re going to follow through on building a more progressive international economy.
So, that’s what I’m looking at doing. And that’s where I think that blockchain can be the enabler we need it to be. I’m building an organisation called InTACC, the International Trading Alliance for Community Currencies. Once it’s up and running (which is going to take a while, I’ll be honest), InTACC’s platform will enable local businesses to buy and sell from one community currency to another.
But, I hear you say, what about currency speculation? Won’t this just be another silly little variation on the whole forex ridiculousness?
That, my friend, is the magic of blockchain. We can use the technology to build a platform which means no money changes hands. The community currencies aren’t traded; they don’t have to be listed in that way at all, thankfully. There’s no need to mess about with fiat currency. We can use a blockchain-based approach to establish and maintain a mutualised record of aggregate trade between communities. That means that different and diverse communities have their own mutual credit record. No need to get the big banks involved at all. Everybody knows and understands who owes whom, what; nobody owes the banks a single penny from it.
Meanwhile, each community currency maintains its own liquidity standard, which is reinforced by the credit and trust record that the InTACC platform maintains. And we keep that transparent, so that any member of the community can see what’s going on. Everything is mutualised and democratic. It’s a social contract writ large, between communities, for their own benefit. And it’s one that I believe can and will blaze a trail for others to follow; a well-regulated co-operative network, open, accountable and community-controlled.
The kink in the road at this point is that fiat currency is still needed to pay the bills for most of us, including for InTACC itself. At least until the InTACC platform has federated enough community currencies that it’s realistic to be almost anywhere in the world and choose to be paid in local currency. When that extra pillar of the global economy has been built, we’ll all be able to pay the bills in ways that don’t eventually drain money into someone’s bloated Jersey/Swiss/Cayman Islands bank account.
So, this is the ‘begging bowl’ moment: anyone out there fancy doing a bit of venture philanthropy? InTACC needs funding. I need to be able to buy hardware, pay people, and probably (very grudgingly) hand over some money to a property developer for some office space. InTACC is being built in the community interest, for all of us, on a strategic timeline, so it would be great to hear from you if you want to do some real change-making with your money and you’re not too concerned about getting it back again. Of course, you’re welcome to jog on if you’re a self-certified member of global 1% looking to get a bit richer.
There are alternatives to the kind of open and co-operative model InTACC stands for. That’s pre-occupied me, too. What will happen when the big banks decide to create their own cryptocurrencies and trading networks? Blockchain can and will enable that. Who will build, maintain, regulate and operate these networks, and in whose interest? How will they be used when the profit motive is the over-riding priority? How transparent and accountable will these networks be? I can’t help but believe that InTACC’s ‘competition’, such as it will be, will come from institutions which absolutely do not prioritise the real needs of our communities and our shared world. The big banks don’t exactly have a good track record on this kind of stuff.
I think we face a clear choice . It’s a choice between financial oligarchy, or financial democracy. Maybe we can add financial anarchism to that list, too; the good kind of anarchism, a design for life based on co-operating communities working together for mutual benefit, under rules everyone participates in formulating.
Economic inequality and injustice is the defining crisis of our time. I believe that we can and must choose a better way forward, a more progressive global economy. That’s what InTACC will stand for, and that’s why it’s the one of the solutions we need for our shared future.