I spent some time this morning thinking through how someone could go about actually deploying a local cryptocurrency to their neighborhood. It wouldn’t be easy.
It might become necessary.
Give this analysis a read to understand what's coming. We're potentially facing a global financial collapse that hasn't even been dreamed of before, but we now have solutions which just might work.
I'll start with an example from my own neighborhood of what might be possible. I live in a gated community where everyone has an ID card with their picture on it. A registration site could be built where they upload a scan of their card along with a picture of them holding the card and a note with today’s date. That would prevent a Sybil attack, but getting people to actually do it would be tricky. The central HOA office would have to push for it or make it "mandatory" for it to reach critical mass in the neighborhood.
A community on Hive could be created for the neighborhood and the onboarding process could give everyone Hive accounts. If I started using my resource credits for this, I could start saving up account creation tokens to make this possible as nothing on a blockchain is free. I could delegate Hive Power to an account controlled by the HOA office for the community which could then vote up posts by members so they could start earning Hive tokens (currently worth about a quarter each).
A portion of the HOA fees could go to creating an endowment for the neighborhood to buy up more Hive tokens to increase the voting power of the main account to increase the portion of the Hive rewards pool going to the neighborhood per vote.
As part of the onboarding process, each neighbor could write an introduce yourself post which explains what things they do to add value to their society. It wouldn’t just be their "job", but everything they are passionate about and everything others might be interested in rewarding them for. For example, maybe they grow a lot of cucumbers and have extra for sale. 🙂 Maybe they cut hair. Maybe they have children’s clothes they can sell. Maybe they do consulting. Maybe they give massages. They would put it all out there along with their rates for the services they provide.
It would kind of be like a Nextdoor app but with cryptocurrency built in (Nextdoor isn’t availability in Puerto Rico). Using Hive’s escrow system, they could start a local marketplace. Imagine how many interesting people with great skills are right here in this neighborhood, but we just don’t know about each other? We could finally fulfill this original vision that got me so excited about this blockchain in the first place.
You could even take it a step further and create your own neighborhood token via the Steem Engine system. Each registered person could get a distribution of tokens and could offer their services at a discount if partially paid for in that token. Each validated trade (via community upvotes) involving the token would then release additional tokens to both parties involved in the trade. Before joining the market place as a buyer or seller, a bond would have to be put up (meaning tokens locked into a smart contract) which would be lost if they tried to defraud the system with fake transactions just to earn the bonus. Upvotes, downvotes, and comments could be used to build a reputation score within the community. Those who expose any fraud would earn the bond and the accounts involved in the fraud would be banned from the marketplace for a period of time. If they write an apology letter to the community, over time, they can join back in with a higher bond.
I know this all sounds complicated and the chances of it happening are very low, but consider the alternative in a full financial collapse, hyper inflation situation. Imagine there is no work and money itself has no value (see Venezuela and similar examples throughout history). Either people get desperate or they learn how to work together. In an extreme situation, people could rip up their lawns and grow food for sale in tokens.
This image shows the true reality of financial value:
It’s shared story telling.
What if our local communities started believing new stories they directly impact with their efforts and skills?
What if they built on Hive?
If this idea interests you and you think you could actually pull something like this off within your neighborhood, please leave some additional thoughts in the comments or make your own posts and link to them. If you're serious, I might even consider sending some delegations your way to get the project started. Let's come up with a hashtag for is well. Something like #HiveToSurvive or #HiveNeighbors or #HiveBailout.
Get me some ideas flowing in the comments.
Hey Luke,
I like the idea of running a #HiveToSurvive experiment in some capacity here in Malaysia. However, as you quite correctly pointed out, the chances are slim and it's not easy to mobilise, educate, coordinate an entire community (even a small gated community) unless they are firstly united with a strong common need. Money only becomes a problem when it stops working. Problem is, when it does stop working... it's already too late.
There is one group, however, I think will onboard on this very quickly. There are 250,000 displaced refugees in Kuala Lumpur who have no legal identities or status to get proper jobs in the country. I came to know of a small group of 50+ refugees; some with families and kids. The men often earn cash at construction sites, the women earn cash via odd jobs; and unfortunately get harrassed by the police and its not uncommon that a significant portion of whatever they have goes to paying bribes and avoid jail... justified or not.
I've always wanted to help them in some way. I'm just unsure...
The more I think of it, this sounds like a really big project. In order to make this work, they would need:
What do you think? Do you know anyone who has done this before in Southeast Asia or in other places of the world?... so I don't have to reinvent the wheel. Just apply what works and make things happen.
Hey Buzz. You're asking all the right questions, and I don't have any easy answers. As I said, it's a hard problem, and I don't know of many great examples as solutions. Does the community you mention have smart phones? Do they have reliable internet connection? This stuff will need to be solved as well.
Yes the breadwinners usually have access to smartphones and buy prepaid cards to get connected to the Internet.
I've thought about this as well. I think the key will be having systems that can still run in small neighborhoods even if the Internet goes down. This is why I've researched a lot about mesh-networks over the years. We have to create self-sufficient pockets that won't collapse even if the overall system collapses.
If the internet/electricity goes down, simplicity is the way forward, not complexity.
(bartering/physical token, has been proven to work out quite ok, so far - without any hi tech).
Where has barter worked?
Barter works everywhere , all the time.
(I exchanged 2 lbs of tomatoes yesterday, for a dozen eggs...)
......ohhhhhhhh....from 14,000 b.c until around 3,500 b.c, approx...)
Yeah, for sure. I remember seeing a presentation at PorcFest where someone built a mesh network and demonstrated how it works. Definitely important if things get bad.
When current fiat currency system based on the USD collapses it will be very rapid.
Suppliers in the B2B space with long timescales of investment vs return will start demanding payment in a stable global currency -Bitcoin. It is easy for businesses to do this. They just need the motivation, which will come from the existing system collapsing.
Then these demands for payment in Bitcoin will flow down the supply chain to consumers where a range of cryptocurrencies, including Hive will fill the space for smaller, faster payments.
Its really not so hard to get set up with a Hive wallet, not if your next meal depends upon it.
Onboarding could be better, and maybe a cryptocurrency that really nails the fast, free transactions with an easy onboarding app will become the next Zoom.
But Hive is well positioned.
If everyone tried settling in bitcoin, the network would back up with sky high fees... or maybe people would actually start using the lightning network.
A very interesting post, @lukestokes. This is something I've been thinking about for a while (just like most commenters here). Let me quickly share my thoughts.
The financial collapse you are describing will have many, many unforeseen effects. One thing that will certainly be affected are the large-scale systems we are dependent on, most notably electricity and internet connectivity. And these two things are key to running cryptocurrencies.
The other area that is most likely going to be affected is the individual and collective human psyche. While we can sorta guess how the electric grid will be affected (blackouts), it's incredibly hard guessing how humans' behavior will react. Desperation? Bursts of pointless violence? Hedonistic abandon? Depression? Suicidal tendencies? Maybe a mix of all this? In any case, under those conditions I think it would be even harder than with today's apathy and complacency to get people to adopt a new way of exchanging goods and services.
For those who keep their calm and reason, it may not even be necessary to formalize the transactions online, especially on the local level. As experience shows us, in times of crises people can come up with alternative means of exchange in mere minutes, such as using cigarettes for exchange. Coupled with that you add barter, or even gift economy, so you can at least get off the ground and maybe put some food on the table for that day. Later on, once people have gotten over the innitial shock, THAT is the time to introduce alternatives to what we used to know as banking, finance, and coining currency. Provided, the necessary infrastructure is in place.
My greatest concern, however, is the second point. After all, before people started bartering with cigarettes, usually they had been through months (years?) of food rationing, bomb raids, the daily loss of life, and a gradual loss of material and social structures around them. I don't know if it will be the same if suddenly our only means of measuring wealth and exchanging goods becomes null and void. Though one thing that may be able to prepare us for it, is at least discussing this possibility before it happens. Which is why I am happy to read this article of yours and comment on it.
Thank you for your comments.
I can think of a friend whose wife lived through multiple currency collapses (local money literally going to zero) and they always seen to adapt and survive. Old money is replaced with new money. I think that can happen again but instead of the loop, they could decide to use self-soverign money uncontrolled by the violence of the state.
Yes, it's possible internet and electricity grids may shut down, but the people running those installations want to feed their kids also, so I could imagine a scenario where they get onboard with getting paid in cryptocurrency also. That said, I do hope we move towards a more decentralized approach to electricity and connectivity.
If people are scared and freaked out, maybe cryptocurrency would be too much for them, that's a good point. I still think it would be easier than, for example, cigarettes though, as long as at least a portion of their network (15%?) were actively using it, accepting it, promoting it as a valid option, etc.
I have been thinking about these things a lot, and there is still some parts missing for what could really solve the issues. A community cryptocurrency is already out there and slowly spreading, absolutely worth studying. It's called Ğ1 and it's the first form of what the inventors call "free money" (as in freedom), analogous to the Free Software freedoms. This currency is based on the mathematics found in the Relative Theory of Money paper (Théorie Relative de la Monnaie, original in french). This moves the money creation from debt to the participant in a Universal Dividend, and seeing how Hive already functions it shouldn't be hard to recreate that fully.
I have two problems with the Ğ1 though for worldwide adoption:
Point 2 can be seen as an advantage to keep it to one specific community, but the problem is that Ğ1 is not easy to bootstrap for other currencies yet either.
Could a Universal Dividend coin and a good enough trust system against abuse of it (i.e. one entry per participant) be made on top of Hive or using the Hive code?
I was thinking myself that probably the Web of Trust could be replaced with a kind of reputation system, but as you talk about communities and we have SMT hopefully coming up, a SMT/steem-engine/hive-engine like system with a full WoT for a community could work just as well... We will just have to change among the communities.
I think we are very close...
Neighborhood mesh internet could be set up on cheap baofeng ham radios. Most neighborhoods arent big enough for that to be impossible. It'd take work of course, but what part of something like that wouldn't? You're rebuilding and decentralizing all the things. Bet it could be easily done on raspberry pis too, but I'm even less familiar with that.
I'm running this idea by my buddies. We're a community of dudes set on bringing back the manly skills that our world tries to suppress. Whittling, knife sharpening, natural spirituality, gardening, homeschooling, things that help build a resilient culture. I'd love nothing more than to have a decentralized economic system built into that community. We're all withing about an hour driving distance, so the mesh network isn't ideal for us rn, but the grid also hasn't collapsed so that's not a grand concern. Just getting something running would be a huge step forward.
Setting up internet on cheap ham radios? I'm not even sure I understand the concept (baofeng - no idea, and aren't ham radios the old two-way radios, the kind that truck drivers like to chat on?) but it sounds exciting! Thanks for even putting this thought out. So that means you only need the electricity to power your device and your ham radio (not a huge deal, that much I know), and that way you can access nodes, make transaction on the blockchain, etc. Does that mean we don't even need an internet provider?
That's exactly what it means. WiFi and other wireless internet (3G, cell phones, etc) is just broadcast on radio signal. A local mesh network would just be an autonomous internet in your local area. Lots of folks are experimenting with it.
Baofeng is the brand. They're a Chinese producer of crazy affordable ($20-50) radios. Walkie talkies, but not the ones truckers use. They're on what's called the citizen's band. Similar, but different frequencies. But yeah, you could do it with CB radios too, just have everyone on the right frequencies.
The radios have batteries, but they also have battery bypass to run on 12vdc, so I imagine it'd be super easy to run it on a small solar rig. Could even build it into an ammo can for a weatherproof box and hang it in a tree for better reception.
Or you could just barter at a market....
K.I.S.S, and all that...
Bartering isn't really practical.
I think most would just revert to cash if their is enough liquidity around to support it and have pretty high turn over! In some cases it may just be an IOU that is traded and can be redeemed! In many parts of Africa we use airtime and data as currency and trade that too
But yes any accounting system can work in a crisis in theory as long as everyone agrees! It’s just that people will default to the easiest form of currency
Have you seen the pictures of cash currency in the gutter and in trash bags after hyper inflation?
Yes I have, Zimbabwe is next door and we’ve seen it play our first hand
Right, this brings to mind how after the introduction of the Euro the old Deutsche Mark bills continued circulating on the Balkans for several months, where people had been using them previously instead of their highly unstable national currencies. It doesn't matter though. They may just as well have used coat buttons, since it is their agreement among each other that gives value to a currency.
I only like HiveNeighbours other two doesn’t sounds like thriving community
Any other options?
HiveNeighbours is cool.
HiveLocal...
We have to have workers, we don't have to have dollars.
Keep working, stop paying.
I've thought about this as well. I think the key will be having systems that can still run in small neighborhoods even if the Internet goes down. This is why I've researched a lot about mesh-networks over the years. We have to create self-sufficient pockets that won't collapse even if the overall system collapses.