We need altcoins as long as we interact economically over the net, with people we do not know (or simply with people outside our local communities). If we try to imagine what qualities a “solarpunk coin” should have, what are your thoughts? Do we know any existing coin, checking all boxes? This question is more about political economy of Solarpunk, then its technology.
Cryptocurrency is, with few exceptions, looked at with scorn by most solarpunks. This is due to the technology itself being almost exclusively used by grifters and scammers, as well as some inherent problems to the technology itself, which are wonderfully explored in this Folding Ideas video on Crypto, DAOs, and NFTs.
But to answer your question, I think one of the few viable options would be something based on GNU Taler, which is a sort of anonymous digital cash that is distinctly not based on cryptography at all, and thus avoids the unbelievable waste of energy that most Cryptos are plagued with.
Thank you for mentioning GNU Taler.
I have freshly read an interesting article https://www.leafscore.com/blog/the-9-most-sustainable-cryptocurrencies-for-2021/ (the link is weirdly recycled, it is a 2024 piece), showing that there is a number of altcoins (and I use this term deliberately - no ETH or BTC included) trying to solve both the technical and political faults of the initial concept. I believe that, if one designs a currency properly in political sense, the technology can be adjusted as well.
I’m skeptical if such a thing can be done with crypto specifically.
As an example, the top coin in that list, Solarcoin, uses a Proof-of-Authority model, which while very energy efficient, is also difficult to decentralize, and vulnerable to the ‘authority’ acting maliciously. It’s cool that it’s based of solar power generation, but I can’t help but feel that just means the people who are wealthy enough to own solar panels would become rich compared to the have-nots?
Stellar, on the other hand, uses a Federated Byzantine Protocol, which… Honestly it’s too late for me to try to understand it 😅
I guess I have to ask: what is the goal of the theoretical altcoin? Are we spitballing a currency for a post-capitalism world? Something for us to use in the here and now to avoid PayPal fees or zelle? A method for activists to covertly transfer funds?
The reason why will inform the what.
Partly, I answered here: https://slrpnk.net/post/14539748/11723741
As for the scope of it, I see it as a bridge solution for the stage where we still have to interact with capitalist realm, but can already start building our own (post-capitalist, solarpunk, anarchist - whatever the name) real economy, so we need an inter-community exchange token. There should (nor will) not be a uniform solution for every community involved, so we need something to use as a mediating value carrier.
As such, it may retire at some point in favour of something better suited to the new world needs, or survive - like gold today - in mostly symbolic role.
First of all the reason you seem to get downvoted is the term altcoin, which is very much crypto currency, which has a lot of problems in a solarpunk context.
The fundamental problem currencies try to solve is a lack of trust between parties in a trade. Bascially if you get money, you know you can exchange it for something you want right now or later. So it enables transactions between people who do not know each other and do not trust each other, but trust a the third party issueing the currency. Hence a currency needs to be easy to transfer, so people actually use it, stable in value so people trust it, divisible so people can pay a fair price and recognized, so people can exchange it in as many places as possible for as many different types of goods or services as possible.
The way we usually solve it, is by having a government issue the currency. The reason it has value, is that people living in the country issueing the currency have to pay taxes in that currency. So a lot of people actually do need it. Obviously this require governments and gives those governments a lot of power. However there is another way and that is begging the currency to something, which has value. We do that all the time with coupons and vouchers. The problem with that is that the whatever it is being pegged too, can change in value relative to the entire economy. So if you have your currency fixed to say imaginum and there is only a fixed supply of imaginum in the world, but the economy grows twice in size, you end up with 100% inflation. That was a massive problem with the gold standard btw. It was somewhat fixed, by governments printing more money, then they could actually back with gold. Obviously that is not quite the idea.
So given the options a well run government system seems to me to be better. The good part about that, is that this allows to fund public services as well.
However most currency today is not created by governments today. Instead it is created by banks. When a bank gives you a loan, you get cash and the bank gets a gurantee from you worth the loan. You get cash from the bank and for that the bank gets a gurantee that you pay back the loan. The bank does not use its own money for it, but money other bank cutomers have in their bank accounts. Obviously though those cutomers can still pay with the money they have in their bank account using credit cards for example. So a loan basically doubles the money in the system.
So most money is debt and debt has a big problem in the solarpunk world, as it requires more money to be paid back. Hence you need economic growth and that is a really nasty problem. So making banking illegal would solve a lot of problems.
TLDR: Government issued currency, without banking.
You post starts good, but then gets a few things wrong in the end 😅
For example the leverage banks are allowed to have is more like 1:10, meaning they can increase the money supply tenfold or so. It also doesn’t have to be backed by other customer’s money at all.
Interests on bank loans are also only a small part of why capitalism requires constant growth. In fact the recent years of near or partially even below zero interest rates proove that this basically a neglectable part.
In general, increasing money supply isn’t nearly as big of a problem as some people say, as ultimately money is just a means of exchange with no inherent value of its own, so it it good to be able to adjust the supply easily to account for the real world demand. If you want to read more about that the so called Modern Monetary Theory is a good start.
Personally, I would advocate for the exact opposite: (community) banking without government involvement.
While it is true that taxation gives government issued fiat currencies its primary trust, this is ultimately a coercive methode backed by the threat of violence and imprisionment, which is not something that I can support. It is also only one of many ways to structure a currency and have it being trusted by its users, so I think we will be able to figure out something better 😊
For example the leverage banks are allowed to have is more like 1:10, meaning they can increase the money supply tenfold or so. It also doesn’t have to be backed by other customer’s money at all.
Banks nearly never actually go for the 1:10 limit. The bank usually gives the loan, then the bank tries to find the money for the reserve requirment. However the limit is how risky the loan is and not the reserve requirement. Customer deposits are one of the ways to meet those reserve requirements.
In general, increasing money supply isn’t nearly as big of a problem as some people say, as ultimately money is just a means of exchange with no inherent value of its own, so it it good to be able to adjust the supply easily to account for the real world demand. If you want to read more about that the so called Modern Monetary Theory is a good start.
I never claimed that increasing money supply was a problem, but that having private banks control most of the money supply is. Private banks have a tendency to be less then ethical organizations, which tends to cause massive economic crisis, once their unethical behaviour starts causing problems again. Happens way too often.
While it is true that taxation gives government issued fiat currencies its primary value, this is ultimately a coercive methode backed by the threat of violence and imprisionment, which is not something that I can support. It is also only one of many ways to structure a currency and have it being trusted by its users, so I think we will be able to figure out something better 😊
How do you fund public services, without collecting money from people?
Customer deposits are afaik partially excluded from newer reserve requirements as a result of the 2008 banking crisis. At least my coop bank had to try really hard to convert customer deposits into what are nominally member shares to fulfill these new reserve requirements. And yes, the loan risk is the primary concern, but banks very commonly leverage to the maximum they are allowed.
As for “private” banks… that is a not very precise term and includes coop and farmers’ banks for example, which offer a valuable service to their members. I agree though that many commercial banks are a net negative to society.
The more common way how public works are funded is by the government taking a loan from the central bank, which is essentially printing new money. Taxes play a role in funding ongoing services like payment of state employees and social security, but that highly depends of the specific country. In general taxes are mostly collected to enforce participation in the official governmemt issued fiat currency economy (what is measured in GDP) and are not that relevant to the function of the state itself. Many governments in 3rd world countries hardly collect any taxes from regular citizes at all.
One technical remark:
if you have your currency fixed to say imaginum and there is only a fixed supply of imaginum in the world, but the economy grows twice in size, you end up with 100% inflation.
Should read “deflation”.
Other than that, I agree - within your assumptions of a well run governemnt. However, there is a whole lot of people within solarpunk realm who do not believe thet “a well run government” can exist (detailed definitions aside) and do want government (governance body) beyond the scale of a community that can directly control it. Thus, any such government-backed currency would still be local. Which puts us back to the field one, lacking the intergovernmental exchange carrier.
Getting a bit more theoretical, I am in favor of two currency-backing values that are IMO elementary and not substitute: energy and time. We see many “timebank” systems run locally, but even if we can say that this is the currency created (though commitment) by individuals, they still follow the pattern of central clearing office, sometimes with added reputation systems.
Energy - which essentially all solar, by the way - is mostly used via proof-of-work schemes, and could probably be used through proof-of-useful-work filter, which to me looks like a good way to fund/support public works.
This way or another, whatever is the source of the currency, we always need to address the risk of double spending and forgery. In absence of a commonly trusted authority (bank or government), public trust and control can be exercised through an openly available, tamper-proof and distributed ledger. Now, blockchain is one way to implement it. Can we imagine something else?
tl;dr: No authority, no blockchain - then what?
As you said, money is debt. The only thing we need is for some solarpunk coins would be a platform to control that debt. Not needing to input value into the system, even just having max debt per person would be enough to have balance. The struggle would be onboarding people, as every good project that has no real lucrative side lol
I’m aware not all coins are proof-of-work mined using coal generators. Proof of stake isn’t punk either.
In all honesty there’s nothing to make better, I believe the central issue with crypto is that it doesn’t solve any real problem.
I see two usabilities of altcoin in current (and mid-term) solarpunk context:
- Proof-of-useful-work for primary circulation means that coins can be created in exchange for resources (i. e. storage and processing power) made available to SolarPunk initiatives.
- Secondary circulation makes it possible to transfer funds between distant communities, without any need for a deep trust or even knowledge. The chief matter is to avoid double-spending, of course.
I’m interested in currencies with depreciating value as an incentive to spend or loan money without incentivizing excess wealth hoarding. This was first proposed by Silvio Gesell over 100 years ago but modern digital currencies may make the idea far easier to implement.
Thoughts?
While a good idea in theory, such currencies are never going to be very popular as people loath easily visible and (externally) enforced inflation.
It is also not really all that different from a currency issuing entity regularly making additional money and causing inflation that way. Silvio Gesell developed his theories in contrast to largely gold pegged currencies of his time, and one can argue that fiat currencies of today are already largely implementing his ideas albeit on a larger scale, making the regional benefits less apparent.
The way to make this work is imho to clearly link the inflation to funding of widely agreed on common infrastucture spending through.
I don’t like the idea of a single coin
But one coin generated for hosting a platform, one coin for piracy, one coin for cooperatives etc seems the way to go
Oh right, also one coin for UBI
As per now, I struggle in imagining a layer one chain to support all of these. Probably it would make more sense to stay on eth and eventually move? I’m not sure.
So, do I understand you correctly that we are talking about several “tokens” based on the same chain? I know there are some open chain frameworks (ETH is waaay too capitalist for my liking) that could be utilised - after diligent scrutiny.
Meanwhile, in another subthread, we got to (probably central) question, whether basic risks: double-spending and forgery, could be addressed without blockchain, in a publicly transparent and verifiable way.
Blockchain is just another name for a public (distributed/shared) ledger. Due to scaling and privacy issues of that, this method is inherently unsuited for direct payment use, but it could be useful for an inter-bank exchange market of local currencies.
honestly i’m not sure myself if different tokens on same ledger is better than different tokens on different ledger for what i think…
Because, for example, not every pirate is also solarpunk. Not every archivist is solarpunk. Not every anything common based is solarpunk. They may want to contribute to the pirate sphere with this economic incentive but we still couldn’t completely onboard them on a solarpunk platform (centralized or decentralized ledger whatever)
