Community money systems

Raven274
By Raven274 on Sun, Feb 2, 2014 - 7:49pm

It's been quite a while since I haunted this site, but just read the following post elsewhere and thought it might be of interest to you folks.

https://xrptalk.org/topic/1176-neo-xenia-ripple-more-communitarian-than-...

Raven

7 Comments

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2387
community money

I read the longish post... it rambles through several ideas, one of which is the idea of local currency.  I have spent some time in the past trying to understand what makes these currencies, like Berkshire bucks, or Burlington (VT) Bread tick.  Frankly, my conclusion is that these efforts are misplaced.  These money systems always purport keep money local... and while re-localization must happen, it doesn't take a local money system to do it.  Just do it... buy local, spend local, become part of the local economy. 

My acid test for any money system is this;  what is the creation mechanism?  How is new money created, and how is scarcity insured?

For this Bristol money, you can try to figure that out from here;

http://bristolpound.org/what

Key Facts

  • Bristol Pounds are purchased for sterling and can be spent with business members. See our Business Directory for where you can spend Bristol Pounds*
  • Bristol Pounds are spent just like pounds sterling with £B1 equal in value to £1 sterling.
  • Each Bristol Pound is backed pound for pound by sterling deposits, so taking part incurs no more financial risk than is generally the case when depositing money with an authorised and regulated institution.
  • The Bristol Pound is a complimentary currency, designed to work alongside sterling, not replace it.
  • Business accounts are available to traders that are independently owned and based in or around Bristol

So, the Bristol pound is tied to the Pound Sterling (in value) and is backed pound-for-pound with Pound Sterling deposits.  So really... what is the point I ask?  It can (and will be) devalued right alongside the "real"  Pound.  There is nothing that appeals to me here... it just seems a monumental waste of time when the same ends could be met by a broader campaign for relocalization sans the funny money.   

The writer also seems to think we need banks and fiat currency... and he is obviously a player in Ripple.  Here is what I think of Ripple;

  http://ripplescam.org/

Bitcoin, Gold, and Silver... now that's money!

Debt money is the vector for debt slavery.  Debt money wants to grow exponentially so that the system can remain functional (banks getting paid back) because that growth helps cover up the dynamic instability inherent in debt money;  There is no mechanism to create the interest that needs to be paid back.. just the principle.  Total debt runs away from total money in the system.  

Want to fix debt-based fiat?  Easy;  1)  End the FED   2)  For all money borrowed in to existence .. i.e. for all new debt created... co-create the money needed to pay the interest (this could be estimated somehow for variable rate debt) and then distribute it back to all people in the money system.  This is the right way to drop money from helicopters... because now debt is not running away from money in the system.  Regular folks are getting first access to newly created money so that they are not as hurt by any remaining inflationary tendencies.  This would be an incremental democratization of the benefits of debt-based fiat money away from the 1% and back toward the 99%... and that's why it would never happen.        

Raven274's picture
Raven274
Status: Member (Offline)
Joined: Feb 17 2009
Posts: 3
local currency

Ah well,

Just posted as an interesting viewpoint from the emerging digital currency arena.

Just a couple of points "and he is obviously a player in Ripple", well yes, but then goldbugs comment about PM's, shouldn't they?

ripplescam has been so often and so comprehensively debunked  elsewhere it's not really worth further comment.

I am interested in ripple et al but am not a "player"

With that I shall retire back into the undergrowth for another 4 years

Goodwill to all

 

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2387
More on Ripple...

Ripple fails my acid test;  what is the creation mechanism?

Ripple has it's own native "currency" called XRP.  Here is what we know about the mechanism for creation and distribution of XRP;

XRP is the native currency of the Ripple network. It only exists within the Ripple system. XRP are currently divisible to 6 decimal places. The smallest unit is called a drop with 1 million drops equaling 1 XRP.[15] The founders of Ripple Labs created 100 billion XRP at Ripple's inception. No more can be created according to the rules of the Ripple protocol. Of the 100 billion created, 20 billion XRP were retained by the creators, seeders, venture capital companies and other founders. The remaining 80 billion were gifted to Ripple Labs. Ripple Labs intends to distribute 55 of that 80 billion XRP to charitable organizations, users and strategic partners. Ripple Labs will retain the remaining 25 billion.[16][17][18][19]

http://en.wikipedia.org/wiki/Ripple_%28payment_protocol%29

The only thing that can be said for Ripple is that it is (somewhat) scarce by design... beyond this, it is money that is controlled by Corporate interests.  You can argue that these interests are benign.. but you cannot argue that the Ripple currency is democratized... it is clearly not.  Whereas the elegance of Bitcoin is that the rewards of mining create the efforts by computer owners that underlie the distributed network that maintains the blockchain, the founders of Ripple picture themselves as seeding this network by giving away XRP to get it going... will this work?  If it does, who is to say that the XRP on the sidelines won't come gushing to cash out? 

XRP is needing heavy selling right now... which is why I am making a strong statement here.  Bitcoin is an organic phenom.... XRP is Corporate.  Here is how I see it;

All XRP that will ever exist have been created.. and they are, or will be, in the hands of various entities.  Only a tiny fraction of these trade freely now, setting the market rate for XRP.  All Bitcoin that have been created are free to trade... a statement that is not true for XRP.  There is no way to predict how these XRP will find their way onto the market, at what rate over time.  The Corp. interests that hold these XRP will hold in their hands the future value of your XRP if you are holding them as currency....  Good luck with that. 

Robbieboy's picture
Robbieboy
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Joined: Feb 5 2014
Posts: 2
Hi Jim, I wrote the original

Hi Jim, I wrote the original post and just stopped by here since our mutual friend posted a link. I thought I'd post a reply to your comment.

i think you've missed the point of the original post, it seeks to explain a world in which Ripple has already gone viral and the positive outcomes that could arise from it. It's not really designed to argue the point: 'come join us'. In other words I am preaching to the converted, not trying to deceive to bring people in because I am 'obviously a player in Ripple'. I'm not that much of a player in Ripple. I wish lol.

Just to address a couple of your points/concerns:

- The Bristol Pound example was really only designed to illustrate that local currencies have been allowed to thrive, because many doubt that governments would even allow this. You can ignore it if you like.

- Anyone citing the ripplescam site in 2014 must be so out of touch with the cryptocurrency scene that any following comment they make they should really be dismissed out of hand, but since you bothered to read my longish post I'll give you the humour.

- The EASY End the FED! BS is a nonesense and we both know it. I'm talking about actual scenarios in my post not fantasies from alex jones 2011 podcasts. Ending the fed is not going to happen unless the fed and fiat currency are seriously diminished in importance and that will only happen gradually from the ground up, through a system like ripple or bitcoin overtaking fiat. It won't happen overnight, and it won't happen through Ron Paul's preaching. You say gold and silver and bitcoin are real money but ripple is not, this shows a lot of misunderstanding about bitcoin and ripple. Firstly you ignore the elitist nature of bitcoin, the fact that satoshi ran away with millions of bitcoin and the fact that the major bitcoin players are all in bed with the fed. Bitcoin has a lot of problems my friend and my post addresses the reasons why ripple would in the end make a more organic system, but i'm not sure you've read the arguments properly, you certainly don't address them. As for gold and silver, well they are great for personal wealth but one can't throw gold across the ocean to pay someone in china, they are simply impractical for everyday usage.

 

 

 

 

Robbieboy's picture
Robbieboy
Status: Member (Offline)
Joined: Feb 5 2014
Posts: 2
Jim H wrote: Ripple fails my
Jim H wrote:

Ripple fails my acid test;  what is the creation mechanism?

Ripple has it's own native "currency" called XRP.  Here is what we know about the mechanism for creation and distribution of XRP;

XRP is the native currency of the Ripple network. It only exists within the Ripple system. XRP are currently divisible to 6 decimal places. The smallest unit is called a drop with 1 million drops equaling 1 XRP.[15] The founders of Ripple Labs created 100 billion XRP at Ripple's inception. No more can be created according to the rules of the Ripple protocol. Of the 100 billion created, 20 billion XRP were retained by the creators, seeders, venture capital companies and other founders. The remaining 80 billion were gifted to Ripple Labs. Ripple Labs intends to distribute 55 of that 80 billion XRP to charitable organizations, users and strategic partners. Ripple Labs will retain the remaining 25 billion.[16][17][18][19]

http://en.wikipedia.org/wiki/Ripple_%28payment_protocol%29

The only thing that can be said for Ripple is that it is (somewhat) scarce by design... beyond this, it is money that is controlled by Corporate interests.  You can argue that these interests are benign.. but you cannot argue that the Ripple currency is democratized... it is clearly not.  Whereas the elegance of Bitcoin is that the rewards of mining create the efforts by computer owners that underlie the distributed network that maintains the blockchain, the founders of Ripple picture themselves as seeding this network by giving away XRP to get it going... will this work?  If it does, who is to say that the XRP on the sidelines won't come gushing to cash out? 

XRP is needing heavy selling right now... which is why I am making a strong statement here.  Bitcoin is an organic phenom.... XRP is Corporate.  Here is how I see it;

All XRP that will ever exist have been created.. and they are, or will be, in the hands of various entities.  Only a tiny fraction of these trade freely now, setting the market rate for XRP.  All Bitcoin that have been created are free to trade... a statement that is not true for XRP.  There is no way to predict how these XRP will find their way onto the market, at what rate over time.  The Corp. interests that hold these XRP will hold in their hands the future value of your XRP if you are holding them as currency....  Good luck with that. 

 

Again it is clear you haven't read my post properly. The summation is that yes bitcoin appears to be organic now but that it will eventually trend towards the corporate whereas with ripple this situation will be reversed. Your 'acid test' for currency creation seems pointless in relation to bitcoin where already the only people capable of meaningfully mining bitcoin are corporations, or certainly cartels. Bitcoin mining is definitely outside the domain of the average joe and hasn't been for some years now. And there's nothing to say that Satoshi and the others on the sidelines of bitcoin wont come 'gushing out' with all their millions of btc.

I thank you for your response but please get up to date with the crypto scene and at least read my post properly before you make such forceful counterclaims.

Raven274's picture
Raven274
Status: Member (Offline)
Joined: Feb 17 2009
Posts: 3
I really tried to leave, but

I really tried to leave, but willpower=breaking strain>kitkat

My take from Robbie's post was far more to to do with the ripple protocol as opposed to the value or not of xrp's(the intrinsic ripple currency). I'm assuming this is not the forum to discuss the relative merits of various crypto currencies but rather how developments in this arena might benefit those of us who believe the status quo is fundamentally flawed. Although barter in a small community is both practical and has a positive role in community building, there can be no doubt that it has limitations. It seems to me that a protocol such as ripple might add convenience at the local level while providing a bridge to the wider world.

Bitcoin and it's successor variants provide an elegant and innovative alternative to fiat currencies but suffer significant drawbacks when viewed as either a day to day  micro payment vehicle or a convenient bridge to more wide spread commerce.

Assuming the availability of both electricity and data communications, what I need as the member of a relatively small community is the ability to transfer, at minimal/zero cost, units of value. At the same time I  might wish, from time to time, to engage in commerce with an external entity in a currency of their choosing.

Under these circumstances I envisage setting up a trust line with the village pub for transactions involving carrots, pork and beer and a separate trust line  with my local bank to facilitate payment of my tax obligations to the jurisdiction in which I reside. ( The trust lines are in place so that tax rebates appear a beer credits :-))

Dwig's picture
Dwig
Status: Silver Member (Offline)
Joined: Mar 5 2009
Posts: 141
Local currencies, and Ripple

On local currencies:

Local currencies, of a sort, are already being used widely, in the form of various sorts of "loyalty rewards".  For example, you can get a discount coupon for a local restaurant.  If a friend of yours wants to eat there, you can exchange the coupon for something else you'd rather have at the moment.

The main impetus for local currencies has always been problems with the national currency.  For example, when Argentina was dumped into "austerity" in the early 2000s, several local currencies sprang up, because of the deflation of the national currency.  One decent survey is Peter North's book "Local Money", which discusses the pros and cons of various forms of local exchange mechanisms.  Thomas Greco presents a larger picture, including mutual credit systems like the Swiss WIR system.  See https://realcurrencies.wordpress.com/2012/04/19/the-swiss-wir-or-how-to-... for an advocacy piece, with some references to demurrage currencies inspired by Silvio Gesell.  Also, http://www.huffingtonpost.com/jacqui-dunne/rethinking-money_b_2268797.html gives a good discussion of the WiR, with wider implications.  (Her book with Bernard Lietaer, linked to at the bottom of the article, is also worth a read, if you're interested in the topic.)

On Ripple (which pretty clearly is not a local currency):

From a quick visit to "Getting Started with Ripple" in https://ripple.com/guide/, it looks like a currency is only one part of the system (see the description of "Ripple’s three primary parts"), and it looks like it might be intended to serve as a sort of reserve currency to support exchange among national currencies. 

The core of it is presented in https://ripple.com/wiki/Introduction.  How it works as a payment system is described in https://ripple.com/wiki/Ripple_for_Users (note there's no mention of XRP).  The role of XRP shows up in https://ripple.com/wiki/Reserves,  A discussion of the similarities, differences, and possible interactions between Ripple and Bitcoin is in https://ripple.com/wiki/Introduction_to_Ripple_for_Bitcoiners

Since "Ripple Labs created 100 billion XRP within the Ripple network, and that amount will never increase.", it wouldn't be suitable as a fiat currency, and it seems that it also prevents the expansion of the system beyond a certain point.

Ripple should probably be discussed in the main section, rather than here on the Community Building group.

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