Captured! Why money and payment must be open.

Since the dot com boom, online services have been delivered 'free' by venture capitalised projects to acclimatise and capture a user base before the real, revenue-generating business model kicks in. For services which depend for their value on the number of users it is especially important to arrive early in the marketplace with an attractive product.

Consider Facebook - the fact of all your friends being already on Facebook makes leaving like venturing out into the wilderness. Facebook then, could be considered as a natural monopoly, just as many essential industries are natural monopolies, like telecoms, rail, gas & electricity etc.

The privatisation wave of the 80s promised to broke up these monopolies and by introducing competition into the marketplaces, to increase efficiency. However the customers now experience highly confusing marketplaces & pricing structures and loyalty schemes as the cartels 'compete' for market share of what is essentially the same product. Consider how onerous it can be to find the best price for a train ticket, or to have to switch between providors as the prices change. Cynics of privatisation also point out that increased profits are not a sign of greater efficiency, but the direct result of increased prices, and that in practice the owners of these enterprises have every incentive to cut costs and strip assets and no incentive to please customers.

This long preamble is to set the stage to discuss another natural monopoly, payment networks, and the currencies used to settle debts within them.

Providors of money systems have the special power to issue credit i.e. to create money within the network, and of course to sever access to perceived miscreants. Legal tender laws all but enforce the monetary monopoly, and so the governance of such systems is especially important.

Why then, are we using money selectivelly created to maximise profit of the most powerful, most criminal institutions in society?

The banking system and its adopted child, the economics profession, do not acknowledge that banks are the de facto issuers of money and therefore that they have a duty to the economy and a duty to the users of the money. Instead, banks are masking grand-theft with mega-fraud and advising the government that the economy will collapse if the system is exposed to the light. And yet 97% of money is issued and guaranteed by these institutions. And the government will accept no other stuff else in payment of taxes.

The users of money have no where to turn. Complementary currencies are not nearly strong enough to rely on, so we accept the hikes in bank charges, increases in taxes, the cuts in spending, drops in pensions, falls in house prices, the inflation on essential goods rather than venture into the monetary wildernesses.

At Community Forge, we think, contrary to every government and bank and the world, that money systems belong in the commons, and consequently we have yet to develop a business model for our software! Rather than setting up structures to extract value from the users, Cforge seeks to give value to the users! The governance and the revenue of local systems must stay as close to the users as possible, rather

But just because a money system is alternative doesn't make it 'better'. When I looked into the B2B industry earlier this year I found various software providers competing to enclose the most customers in their walled gardens where they could be milked until their will to exchange dried up. Each software product captures its users by being incompatible with the competition. Almost all the software providors were driven by the same thirst for dollars, and users exchanging without money are hit for dollars both by the tax system, and by the trade network providors. So these commercial systems benefit their owners the most and rather than stimulating the economy, they provide only just enough incentive to the producers to participate.

Even where the software isn't driving the business - like Bartercard, the costs of exchange are discouragingly high, and customer satisfaction low.

Similar dynamics apply even amongst some nonprofit trading networks. In Brussels one software developer has given an instance of his software to every LETS in the city. They all depend absolutely on the developer because the code is not open source, and though he works for free, he wields his power over these captive groups, supporting and innovating only when he is interested, and obstructing those who express dissatisfaction. While enabling his users in one way, in another way he is tyranising them.

Nonprofit Community groups often lack proper knowledge to make software decisions. Scores of Time Banks in USA are hosted on a free system who's founders believe in "open source" conceptually yet do not publish the code. User satisfaction is high at the moment but users are subject to a governance process in which they have no official voice.

Even professional charitable organisations can restrict access to software in an attempt to improve the behaviour of the users in their eyes. The STROhalm foundation has for years has funded the open source banking software Cyclos, which has been used and abused by more and less successful ventures. With their forthcoming version 4, they will be experimenting with a new license. We will be able to run their software if and only if our reporting meets their transparency criteria. Maybe this will protect users from badly managed project, but it also raises the barrier to entry.

But software is supposed to be just a tool, like a hammer or a knife. Ultimately it should be up to humans and institutions - not tools - to measure trust, to govern, to insure, and to take risk and responsibility. How would you feel about a progressive shopkeeper who erased all the inches from the rulers to force his customers to use centimeters? Wouldn't he be usurping a decision which should be taken elsewhere?

This is why Community Forge insists on open source software for exchange networks. 'Open' means it is accessible

• to everyone without moral judgement
• We design software to allow innovation even if that makes accounting fraud easier, because accounting fraud is detectable and avoidable, but capture is a more serious, systemic problem.
• Then we follow up the software with teaching
• We try to make accounting easier to do (and to inspect)
• We trust that criminals are in the minority

By living from donations, and publishing code, Community Forge protects its users from itself; we cannot pushing up prices to increase our power.

Publishing the code is only the first step. Community Forge seeks ways that users might spread their dependency, and become more self reliant, for example by sourcing their own software developers. We are building a network of LETS groups which use the simplest possible configurations, and who support and train each other. We are also working in an ad hoc group of community currency software developers to define and eventually implement open APIs for payments, the marketplace, and for mobile phone apps. By publishing such APIs, the so-called natural monopoly is thrown open as diverse network infrastructures become interoperable.

Aside from collecting rent, lending money from nothing and taking the cream from a payments monopoly must be the quickest way to make a buck without risk and without doing actual productive work. Perhaps that's why the space is crowded with innovation and investment looking to profit and take control from a desperately unpopular banking sector. Genuinely open payment / currency systems struggle though to compete with better financed innovations. It is of utmost importance that we retain control of the wealth we create, and channel it towards the things we value, such as sustainability, sovereignty and transition. We should invest more in understanding and building accounting systems which serve their users and amplify local value creation, or be forever be subject to the insatiable psychopaths who own the existing financial infrastructure.