Will the blockchain really empower the disadvantaged as some of its advocates claim? If Lisa Bovill and Dave Shepherdson have anything to say about it, it will, according to The Guardian, based in London, U.K.
Bovill, a public servant who specializes in welfare rights, and Shepherdson, a colleague, are trying to implement a new type of quantitative easing that will benefit the disadvantaged using a cryptocoin called HullCoin that rewards volunteers for their efforts.
The Guardian featured the HullCoin initiative in the economically depressed city of Hull as part of the newspaper’s “Resilient Cities” coverage. Hull-coin.org goes live on April 29 with phased-in registrations prior to a September public launch.
Local Currencies Not New
Local currencies are not new in the U.K. In the 19th and 20th centuries; they came into practice when welfare systems and national currencies failed. The Bristol Pound and the Brixton are more recent initiatives to link a community’s wealth with environmental goals.
Time Banks and the Local Exchange Trading Systems (LETS), a global mutual credit union, have created value from community resources rather than cash. Exchange members trade skills for time instead of money. They get credits for every hour they volunteer which they trade for services offered by other members.
Bovill and Shepherdson started to digitize these concepts to combine the mutual credit value generation mechanism with community currencies’ spending power.
The goal is to create social credit from good deeds. If it can work in Hull, it will certainly provide an alternative to the depressing existence of benefit sanctions and payday loans for many in the city.
Writer Stephen Walsh noted he has been invited to participate in HullCoin’s first real world trial. The trial will take place at the Freedom Centre, a community hub in Hull. Walsh will perform gardening work for a token he will spend in the center’s café.
Shepherdson, the director of HullCoin, has been working with software developers on the project.
A person can set up a HullCoin account with a phone to log into their virtual currency wallet.
Uses Of HullCoin
HullCoin could persuade more school children to use the center’s library or assist with cleaning up after Christmas snows.
The center could offer money for a sandwich in the café or a reduced price gym membership, according to Geoff Groom, the center’s chief executive. Tony Forrester, the operations manager, ponders how many HullCoins to charge for a plate of chips.
The creation of spending power from good deeds is what sets HullCoin apart from other community currencies. The Bristol and Brixton pounds need to be paid in sterling even if they outlive the local economy. HullCoin has no such limits. One doesn’t need money to earn HullCoin tokens. In placing the issuing power in community hands, the project could reach those who most need it.
Linking value creation to social credit also provides a timely critique of the traditional money system. While fiat currency relies on commercial banks to drive up interest and debts and thereby destabilize the economy, HullCoin generates strictly as a reward for accomplishing a social goal.
A Real Life HullCoin Transfer
When Walsh logs into his HullCoin wallet “30 minutes cleaning the Freedom Centre – 3HC,” his biscuit and tea cost only one coin. The social act triggering the coin’s release remains linked to it. Walsh could also share the good deed on social networks and boost a volunteer profile that could assist him in the job market.
At the same time, vendors and coin issuers will be able to use HullCoin transactions as a social responsibility statement – “the right-on story of a digital penny.”
A charity called Comic Relief provided HullCoin £100,000 in development funds through its Tech For Good program.
The Hull City Council is trying to decide whether to accept HullCoin payment for council tax, rent and business rates.
Walsh’s HullCoin token could get reissued through an incentive scheme the center has proposed.
In the meantime, small businesses have indicated an interest in accepting HullCoin as a way to promote themselves and offer unwanted goods at a discount.
Will HullCoin Fly?
People will want to earn HullCoin if businesses offer it and charities will want to provide them, Shepherdson said.
HullCoin could potentially become part of a collaborative economy that extends from locally-grown food to collective buying and savings networks. If this scenario occurs, HullCoin could provide an economic safety net.
Featured image from Shutterstock.