Altcoin Concepts: Alternative Units – Hours, Bushels
May 27, 2017 at 12:34 pm #236
As Tearo suggested, here a topic dealing with various units of account other than “money” or “currency”.
First, I will state that I am a Libertarian and tend very strongly to ‘free market’ economics. I believe that when economic and financial systems are fair, when there is little debt and free of inflation, then society as a whole grows more prosperous. The moral tone of society also is strengthened. On the other side, when a system if unfair, loaded with debt and has inflation built in then the society becomes disfunctional, grows poorer and more morally chaotic.
When asked by Congressman Ron Paul, “What is ‘money’?” Alan Greenspan replied, “Money is an intermediary. It is a claim on future production.”
This causes us to consider that “money” or “currency” (if you have it) may only be as useful as what it can bring us NEXT. If we “dis-intermediate” a transaction it boils down to a more sophisticated form of barter. IE – I trade you 0.05 Barrels of oil for 1.00 bushels of corn. We are used to using fiat currencies as denominators of the “price” of things, as well as the ‘go between’ during these transactions.
This type of system works pretty well when things are stable, but not so well when the system starts having difficulties. See Zimbabwe as an extreme example. And there is the problem of ‘starvation’ of supply of ‘money’ (or credit) in which a local population is held hostage to a lack of money or credit due to economic and financial situations half a globe away.
We do know that emphasizing local and fair trade very significantly increases local production and local wealth. People have and create wealth locally. When they can produce and trade in a fair system then everyone becomes more prosperous based on their productivity and creativity.
However, using a ‘currency’ and ‘credit’ system which is provided by a large national government or even a larger set of such currencies on a global scale can severely impact the ability of local people to conduct business between each other using and producing their own wealth and providing fair trade.
Local wealth can be “hours” of effort provided by a person. It can be the results of personal effort, such as a bushel of potatoes, a piece of fabricated work or a sonnet.
There are many areas where economic activity and productivity are very greatly reduced because there is no “money” and no “credit”. People sit idle because they have no “currency” to use to transact local business. This is one of the reasons that “micro-loans” became a popular avenue for assisting local production in far away locations. And they do work to stimulate local production and trade.
Anyway, I have an idea I would like to pilot related to a cryptocurrency designed around HOURS of WORK, to be used in a local area, town or city. Will post the concept in the next post.
May 27, 2017 at 12:37 pm #237
- This topic was modified 8 months, 4 weeks ago by pra. Reason: Update title, add tags
Since the 1970’s I have been interested in alternative currencies vs national fiats. Some of this was covered in the old pre-1982 Mother Earth News magazines. One such as a commodities based currency. Other forms have popped up here and there during times of economic and financial distress. One form that I liked was called the Ithaca Hour Community Currency: http://ithacahours.com/
The problem, of course, is inability to prevent over issuance of promises by individuals to others, which prevents adoption wider than just those you know and trust.
It just dawned on me today that most cryptocurrencies are focused on developing as currencies (money) or contracts, usually similar to your favorite fiat. I do not see any notable ones which focus on quantifying TIME as a unit of account. Ripple does provide for IOUs but the trust thing in terms of over commitments is left to the parties involved.
Cutting to the Chase: to create a pre-mined crypto which uses a blockchain for recording ownership, record transfers, wallet for use by individuals. Each coin represents an hour of work.
In my nascent concept the pre-mined coins are limited for use in a truly “local” area of operation (possibly a town or city) where people provide hours of work in exchange for the coins. Coins then can be exchanged for services or goods based on willingness of others in the community to participate. The rate of exchange is negotiated by the parties (IE professionals may wish more hour coins for their hour of work).
The initial sale of coins would be to Volunteer Organizations (or similar) who also act as gatekeeper/advocates for the system within their communities. The fiat “price” of these coins on sale to the volunteer groups would be low and would be set to recompense for development time, materials invested in establishing the coins, basic p2p network infrastructure, education and outreach programs, with a residual for upkeep.
The organizations would then provide the hour coins to those who volunteered to provide community service on a voluntary basis. This would begin the cycle of economic activity and exchange. Those who volunteered and received coins would then exchange the coins in the community for hours worked by other for them or goods offered in exchange. Wallets would be on smart phones.
This type of hour denominated coin could well be cloned for every community which would like to trade labor for labor, services or goods. The initial distribution of coins would be to those who showed community spirit and willingness to put their time to the benefit of the community, which does not have direct benefit to themselves for such volunteerism.
One benefit of using such hour denominated coins is that people’s time becomes the unit of account. Time really is a very personal dimension of wealth and determinism of the individual, and therefore is a good measure and a good unit of account as it regards to the preciousness of life.
At this point I am thinking of a coin name such as HourCoin and a symbol such as HCnnnnn where HC means HourCoin and nnnnn is the central zipcode for the locality. So, for Boston, HC02201.
Anyway, it seems to me we can do better for ourselves if we work with each other locally and based on the most fundamental unit of contribution we have, which is our time.May 27, 2017 at 12:56 pm #239
From Chronobank their front page:
Specifically, we want to create a revolution in short-term recruitment within key professions.
Looks like a similar unit of account, but focus on extra-local professional work done across the web vs what I am thinking which is entirely local to a societal unit of 1000+ people (large village to mid-sized town) or subgroup within a small to mid-size city.May 27, 2017 at 2:13 pm #241
LL, I would agree that a neighborhood or a village ‘digital scrip’ would be a very different animal than what Chronobank envisions. Seems worth a try.May 27, 2017 at 9:47 pm #252
During situations like economic depressions (either inflationary or deflationary) ‘local script’ often is resorted to until things shake out and return to some kind of normal.
Even in “ye olde days”, when localities had few silver or gold coins in circulation, script was used (with signatures) to tally credits and bills in silver and gold as units of account.
The great thing about blockchain is that it completely eliminates forgery, fraudulent manufacture of fake script, over issuance of script by either authorities or individuals, etc.
Another great thing about a limit on coins is that, over time, the coins become more valuable, hence people are given an incentive to save. Lending of coins for interest, based on real business cases, is also enabled. Consumption and extravagance are constrained. Thrift and productivity are encouraged.
May 28, 2017 at 7:20 pm #254
- This reply was modified 8 months, 4 weeks ago by LanguidLemer.
If I understand correctly, there is an initial “treasury” of hourcoins that is distributed among those who agree that one coin represents one hour of labour, right?
Then I suppose this would require pure proof of stake, so that those who buy into social agreement (i.e that coins represent time) are the ones who protect the network by keeping their wallets open. If you used proof of work, then processing power would be awarded with ability to command someone’s time and I’m not sure if that would work out.
But what prevents some one opting out and putting her coins to a cryptocurrency exchange where you could by hourcoins with BTC? How would that affect the system?May 29, 2017 at 4:19 pm #255
This can easily be done with a multi chain and hours as assets.
No need of pow or pos, just authorised miners to validate the transactions.
I’m don’t get the idea of locality. 1 hour work in city A should be equal worth as an hour in town B, isn’t ?June 1, 2017 at 7:17 am #257
Naruby, I feel that the notion of a community-based hour exchange is powerful for many social reasons. But also some of the purely economic challenges are addressed.
The prevailing wages, expected standard of living, and basic costs of food and shelter vary widely world-wide. Even in the same geographic region, these differ between city and country lifestyles, or even nearby neighborhoods. Relative cost and wage differential between the city and country is even higher in the developing nations.
Most common objection to equalizing the value of an hour of effort is framed in terms of the value of a skillset and experience, like comparing an hour of a brain surgeon’s time to that of a high school student in a summer job.
But regional differences are also non-negligible. College educated experienced professionals have complained about not being able to make it in Manhatten on a salary of $100,000, given inflated prices for housing. This issue is likely as severe in the center of London or Tokyo.
Given a number of forces slowing down regional mobility, such situations are likely to persist. Some of these forces may not be readily and promptly adjusted by the markets, if they relate to overcrowded housing markets, time zones, language barriers, local licensing.
$100K/year is roughly equivalent to $60/hour or more, once you factor in basic benefits. Such a level of compensation would provide for a very comfortable lifestyle in many regions, including pleasant locales in developed nations.
Taking out the regional differences by focusing locally may address some of these disparities in valuation.June 2, 2017 at 11:47 pm #261
YarkoL, yes there has to be consistency within the discovery, distribution and user community arrangements. My thought was that a good gate keeper for community focused currencies would (initially) be those how volunteer to help the community. But of course this should be decided by those who form the core adopter group, since which ever locality also has its own local temprement, values and perspectives.
Part of the problem for local community economics is the very ‘Borg-like Jello that smothers, which is the “currency” of the national entity. If your community is not competitive with the vacuum pull of the larger economy, then your community and land becomes a strip mine for the larger national (and international) system.
Resources and people get vacuumed out and an empty shell is left, even ghost towns.
So, the larger problem is the massive grinding system of systems with its own imperatives, that destroys all in its path which does not join in its priorities.
Local currencies may have tremendous benefit to free people to conduct their local lives independently from the larger context. In other words, “no thanks, we prefer to work together for the good not eat each other over roasting fires”.June 3, 2017 at 4:21 pm #262
I’ve did some experiments and confirmed my thought that you can create and distribute localised hour token via multi chain. Multichain lacks a decent UI, only browsers based wallet is available atm. If the practice coin project doesn’t have any development needs I’ll try to do something about that in my summer vacation.June 3, 2017 at 4:21 pm #263
I’ve did some experiments and confirmed my thought that you can create and distribute localised hour token via multi chain. Multichain lacks a decent UI, only browsers based wallet is available atm. If the practice coin project doesn’t have any development needs I’ll try to do something about that in my summer vacation.June 4, 2017 at 2:07 pm #264
LanguidLemer thanks for putting the problem in such concrete terms!
This kind of localized currency that gets value by representing amount of time I’m willing to work for you is really something to aspire towards as there is a huge demand for some kind of decentralized currency that can be easily moved around, implemented and adjusted to local circumstances.
However we are only beginning to understand the dynamics of weights and rewards that can be operative in such system, and the idea of cryptocurrency itself is very much focused on situation where no one knows each other and nobody trusts nobody – it’s quite a mental feat to try to see how these things can fit together…June 8, 2017 at 3:03 am #269
YarkoL, the inception of cryptocurrencies had a very strong emphasis on privacy and trustlessness. Both very important to keeping ourselves safe.
The one thing a blockchain accomplishes which is highly needed in a local money system is validation of coin issuance and possession.
In other, older manifestations of local currencies a central issuer was trusted to not abuse and multiply the script (inflation of supply).
In the Ithica Hours currency any individual could be an issuer was the trusted source. (essentially an IOU) But of course we can see how an undisciplined or unethical person could issue far more hours than they could possibly honor…thus destroying the trust.
The blockchain and peer to peer validation schema completely eliminates this problem. We know how many coins exist, how they were allocated, how to trade them and the only thing left is how people choose to adjust trading their goods/services based on relative value.
One way this could be reconciled would be for a guide to be published with suggested adjustments which the community believes are fair trade. This guide could then be adjusted annually or through a voting process (possibly using proof of stake).
In the older econometric measures a government would publish how many hours of average priced labor that a pair of shoes would cost or a loaf of bread or a new shirt. The community could receive recommendations for age old exchange rates to be used, and individual parties could adjust from there depending on their respective interests, surpluses or deficits.
- This reply was modified 8 months, 2 weeks ago by LanguidLemer.
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