[Written for users of Community Forge software]
It's thirteen years since Bitcoin launched and created an entirely new alternative currency movement. Bitcoin's original white paper called it not a money system, but a payment system. The innovative 'blockchain' technology behind it, allowed anyone to download a free wallet, connect to the network, and 'move tokens' to any other wallet in the network. Unlike a ledger in a bank, or in any one computer, those payments could not be prevented by politicians, sysadmins, or hackers. Nor could the ledger be destroyed because there were so many copies of it everywhere. It certainly does allow payment without banks and this possibly could excites many in the LETS community. It called itself 'trustless' system because it was not necessary to trust any individual or institution. In fact the ideology which most closely identified with Bitcoin was anarcho-capitalism, which preached that property should be absolute and inviolable, and that government should not able or allowed to regulate property or trade. In other words, it takes all the most regressive aspects of the prevailing neoliberal ideology and amplifies them.
Before you can make a payment in Bitcoin, you must acquire tokens. The system cannot use fiat money because fiat money only exists in the form of cash and on the ledgers of banks. Bitcoin could not apply for a banking license because it has no institution and no country, and banks are required to 'know your customer' and report suspicious activity. So the new technology had to decide how to issue an accounting unit into some accounts before anyone would be able to pay. The ingenious solution was to issue the units as a reward to those who invested their processing power (basically electricity) to keep the network secure. These units have no value, because they have no use, and cannot be redeemed for anything. Their value is anchored to nothing, so the 'price' of these units in dollars is determined purely by supply and demand. Unfortunately that means the price was extremely volatile and the whole history of Bitcoin has been one of speculation.
In this last decade some people speculating on blockchains have made a lot of money, and people proposing even the stupidest projects have been lavishly financed by new philanthropists, venture capitalists and speculators.
There have been and continue to be, attempts to build community currencies, even LETS on blockchains, many by people who have no experience. But for several reasons, blockchains are not ideal for community currencies:
- Blockchains are very very secure, but at the cost of usability. Accounts have long password and there is no way to recover the password if lost.
- The super-security is part of that trustless ethic, but in LETS we believe in building trust with other humans, rather than building machines so we don't have to trust humans. Its true that some LETS have had data disasters, but that hasn't been the end of the world because at the end of the day, LETS is not only about accounting.
- A community currency is much more than a payment system. In our Community Forge software, the accounting part of it is maybe 10% of all the site's functionality. So no effort is saved.
- Blockchain software is hard to change (almost immutable) and the languages and coding standards are evolving quickly quickly changing field. Resilient and independent communities who want their software to reflect their changing needs must not be held to ransom by super-specialist software engineers.
The LETS movement has had a twilight atmosphere since I first encountered it in 2003, and needs and deserves a new lease of life. The practices it embodies, helping neighbours, serving each other, living locally, balancing production and consumption and ultimately building community, put to shame the prevailing economic systems which are ravaging our world. In my opinion though, blockchain tech, and its surrounding anti-human politics, money-for-nothing aspirations, and shitty economics (I didn't talk about that) have literally nothing to offer the LETS movement - not even money, because money always comes with someone else's agenda.
I'm working on a way that LETS can become a global network which will rival Bitcoin in ways that it's most ardent supporters won't even understand! The Credit Commons Protocol (French)scales the principles, methods and values of LETS into a single (potentially global) system. It allows individuals and groups, (and groups of groups etc.) to record credits and debts on ledgers they own and control, using their own units of account, and their own software, while remaining independent of any outside governing authority. The question I want to pose to members of LETS is whether they want to coordinate globally and become greater than the sum of their parts.