Extending blockchain technology to host customizable and interoperable community currencies

Gustav R.B. Friis and Florian Glaser

* Brainbot Technologies AG, Mainz

** Karlsruhe Institute of Technology (KIT), Karlsruhe

The goal of this paper is to propose an open platform for secure and interoperable virtual community currencies. We follow the established information systems design-science approach to develop a prototype that aims to combine best practices for building mutual-credit community currencies with the unique features of blockchain technology. The result is a specification of an open Internet platform that enables users to join and to host customized community currencies. The hosted currencies can be classified as credit-based future type of money with decentralized issuance. Furthermore, we describe how the transparency, security and interoperability properties of blockchain technology offer a solution to the inherent problems of existing, centrally operated community currency software. The characteristics of the prototype and its ability to fulfil the design-objectives are examined by a relative evaluation against existing payment and currency systems like Bitcoin, LETS and M-Pesa.

Article Friis Glaser

To cite this article: Friis, G. and Glaser, F. (2018) ‘Extending Blockchain Technology to host Customizable and Interoperable Community Currencies’ International Journal of Community Currency Research 2018 Volume 22 (Summer) 71-84 <www.ijccr.net> ISSN 1325-9547. DOI: http://dx.doi.org/10.15133/j.ijccr.2018.017

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The “commodity – money – commodity” Mutual Credit Complementary Currency System. Marxian money to promote community trade and market economy

Samo Kavčič

Šercerjeva ul.26, 4240 Radovljica, Slovenia. E-mail: kavcic917@gmail.com

Abstract

The Mutual Credit Currency System, this most radical form of endogenous money, was evaluated and compared with Marx’s Commodity-Money-Commodity requirement.  A simple simulation of a small community closed loop economy was used to illustrate the functioning of two types of mutual credit currency systems. The first, dubbed MCSG, behaved according to the specifications and recommendations of the mutual credit currency system’s founding fathers, Riegel and Greco. The second, dubbed the Komoko Monetary System, or abbreviated to KMS, was a sub-type of the mutual credit currency system with some additional restrictions and one additional liberty. The main restriction introduced in the KMS was that it almost exclusively supported the exchange of only newly produced goods and services. The liberty introduced is forecast-based credit allocation. It was shown that the MCSG has an inconsistency that could potentially lead to instability. The restrictions applied within the KMS can provide a remedy for this potential flaw, while at the same time rendering the KMS compliant with Marx’s requirement. The monetary control measures applicable in KMS were discussed, which guarantee robustness and stability and make KMS a true complement to the official fractional reserve banking.

Keywords

Mutual credit system  , Commodity – money – commodity, Cash flow forecast, Currency circuit,  Monetary control,  Endogenous money

Article kavcic pdf

To cite this article: International Journal of Community Currency Research 20 (Summer) 41-53. <www.ijccr.net>  ISSN  1325-9547. http://dx.doi.org/10.15133/j.ijccr.2016.003

Virtual social currencies for unemployed people: social networks and job market access

Complementary currencies are developing all around the world, taking various forms (material or immaterial) and fulfilling various functions. They are frequently introduced in order to promote local economy development and to fight against social exclusion. In this paper, we analyze the particular case of virtual currency circulation inside a local community of unemployed people. We elaborate a model on the assumptions that the organization of LETS and the circulation of complementary currencies have two properties: (i) they help unemployed workers to overcome the double coincidence of want necessity of an informal sector founded on barter exchange; (ii) they contribute to maintain and develop unemployed workers’ skills and employability. We study the global properties of a job market associating traditional short-term and long-term unemployment to the organization of LETS. Using a search theoretic model, we find that the initial level of trust of agents in the complementary currency(cies) but also the effective properties of this(ese) currency(cies) inside the LETS are crucial for LETS to survive and become permanent. We also find that if the stationary equilibrium of the job-market includes LETS, then LETS have a positive influence on the rate of employment, on the expected utility of employed workers, and are Pareto improving when the benchmark case is a job market without any LETS.

Maëlle Della Peruta  and Dominique Torre

IJCCR 2015 Della Peruta Torre

To cite this article: Della Peruta, M. and Torre, D., (2015) ‘Virtual social currencies for unemployed people: social networks and job market access’ International Journal of Community Currency Research 19 (Summer) 31-41  <www.ijccr.net> ISSN 1325-9547 http://dx.doi.org/10.15133/j.ijccr.2015.004

Improving Complementary Currency Interchange By A Regional Hub-Solution

Groups involved in complementary currencies (CC’s) that push for an interchange between their member-currencies are not yet a favourite subject in the existing CC-grassroots movement. One reason could be the existing doubts of activists that such structures might be non-transparent, support instability, raise corruption or be a gate for the comeback of the ruling system of limitless inequality. On the other side, an interchange could open bigger markets, add more diversity or raise the number of participants above a critical number for long term survival. The authors present the case of the region of Zurich, Switzerland, where a council of different CC-organizations was founded. As a result a new software platform cc-hub was developed to bundle regional LET systems. The platform is based on the open source Online Banking software, Cyclos, and covers many possible needs of a regionally or purpose-linked network of CC’s. It is able to support interchange, improve the efficiency of clearing and help to build up the necessary resilience for long term stability. It could serve as a model for cooperation between small neighbouring CC’s, for organizational improvement and additional economical benefit. But to verify such benefits will be a subject of further research.

Lucas Huber and Jens Martignoni

 

To cite this article: Huber, L. and Martignoni, J. (2013) ‘Improving Complementary Currency Interchange By A Regional Hub-Solution’ International Journal of Community Currency Research 17 (A) 1-7  <www.ijccr.net>  ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2013.001

IJCCR 2013 Huber Martignoni

Local Exchange Trading Systems in Central European post-Communist Countries

This paper gives information about Local Exchange Trade Systems in the region of former Czechoslovakia, Poland and Hungary. The transition to a market economy proceeded in different ways in these countries, but similar histories in the last century (communism under Soviet influence) led to only small differences among the countries in the level of motivation and power of their civil societies – and subsequently, in the vitality of LETS circles. In the Czech Republic, the first LETS circle was established in 1999; however, none is active at present. Similarly, in the Slovak Republic, out of 10 to 15 LETS circles formed between 2000 and 2005, only one works at the present time. LETS in Poland developed in the early 90’s but soon declined even though a few groups are still active today. LETS in Hungary was very passive, but there have been new signs and initiatives since 2004.  The possible reasons for such LETS developments in the so-called Visegrad countries are also discussed in this paper.

Jelínek P., Szalay Zs. and Konečný A

To cite this article: Jelínek P., Szalay Zs. and Konečný A. (2012) ‘Local Exchange Trading Systems in Central European post-Communist Countries’ International Journal of Community Currency Research 16 (D) 116-123  <www.ijccr.net> ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2012.018

IJCCR 2012 Jelinek

A comparison in transaction efficiency between dispersive and concentrated money creation

In this paper, we have compared concentrated creation of money with dispersive creation of money, and try to show, by using the results of computer simulation, the advantage of the method of dispersive money creation embodied into LETS in comparison with concentrated money creation. However, both ways of money creation have particular merits and demerits. We also estimate the effect of different rules for restricting the upper limits of debits of all participants in LETS on the rate of realized transactions in order to prevent free riding. First, we give an overview of LETS. Second, we show, using a computer simulation, the advantage of the method of dispersive money creation compared to concentrated money creation. Finally, we have demonstrated the validity of the ‘transaction indexation method’ to set the rules of determining the upper limit of debits in LETS to avoid free riding and to enhance transaction efficiency

Nozomi Kichiji and Makoto Nishibe

IJCCR 2012 Kichiji Nishibe

To cite this article: Kichiji, N. and Nishibe, M. (2012) ‘A comparison in transaction efficiency between dispersive and concentrated money creation’ International Journal of Community Currency Research 16 (D) 49-57 <www.ijccr.net> ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2012.011

IJCCR 2012 Elvins

Time for Each Other: Working Towards a Complementary Currency Model to Serve the Anti-Poverty Policies of the Municipality of Landgraaf, the Netherlands

In 2007, the Dutch municipality of Landgraaf requested an investigation into whether a community currency could support its anti-poverty policies. The literature research assembled empirical data on scrip, LETS and Time Banks. Their effects were evaluated against a set of specific goals: poverty relief, provision of care, social integration and return of long-term unemployed to the labour market. Complementary currencies have still to prove themselves on all objectives, and the last one is particularly hard to achieve. However, for the most part, the systems being investigated have not been set up in a professional way or with longer-term finances available. With these prerequisites in place, and a formal, trustworthy organisation taking the initiative, a complementary currency could still be a useful policy instrument. A Time Bank-like construction would work best, with a professional broker and a limited working area.

Miranda van Kuik Volume 13(2009) A3-18

IJCCRvol13(2009)pp3-18vanKuik

To cite this article: van Kuik, M. (2009) ‘Time for Each Other: Working Towards a Complementary Currency Model to Serve the Anti-Poverty Policies of the Municipality of Landgraaf, the Netherlands’ International Journal of Community Currency Research 13 3-18 <www.ijccr.net> ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2009.002