A group currency (n) is a cryptocurrency that:
The right to mint currency has been historically limited to a small portion of the population because of difficulties in establishing counterfeit-proof tokens of concrete value.
By linking real-world identities to blockchain entries it is possible to extend this right to arbitrary groups in a manner that protects against fraud while preserving fair market valuation for arbitrary tokens.
In a sense, group currency is not a new concept. Traditional companies authenticate the identities of their employees, they provide them with a living wage, give out shares with voting rights, and are required by law to provide financial transparency and accountability.
It is OK to think of group currencies as establishing more efficient, transparent, borderless, on-the-fly companies.
The authors consider the importance of a basic income to be self-evident, ever increasing in necessity, and therefore integral to the functioning of any modern monetary system.
The members of a group currency all mint cryptographic tokens (coins, shares, what-have-you) at an equal rate. This rate may change, but it should approximate a basic income for each group member.
In cryptocurrencies that provide a basic income, the equivalent of traditional counterfeiting is creation of false identities, otherwise known as a Sybil attack.
The value of a group currency on the free market would in part be derived from its effectiveness in handling such attacks. Sybil mitigation is discussed in Appendix A.
Group currencies are encouraged to implement a group fund to which members automatically contribute a percentage of their basic income. Members must be able to opt-out of these contributions, but in doing so they should lose their ability to vote on how the group funds are used.
Group members vote using their tokens. This provides members with a means to signal the importance an issue has to them. Prior calls for “$1 = 1 vote” fail to acknowledge the asymmetry that exists in the creation of fiat currencies and are therefore unfair. Group currencies, however, extend the right to mint currency equally to every member of the group, and therefore make this attractive system of voting possible while preserving fairness.
The purpose of a group fund is to provide the group with a means to invest in the group itself (i.e. value creation of some sort). We believe such a scheme will result in the creation of more value that is properly incentive-aligned with the interests of the group itself, and therefore may have pro-social consequences in addition to increasing the value of the group’s currency.
Group currencies can be used to monetize virtually anything of value; in fact they are perfectly suited for doing so.
The inspiration for this idea came from a desire to make pro-social value creation easier to achieve (without resorting to advertising, outside investment, or donations).
Any value-creation activity can now be easily financed without annoying your own customers with advertisements or betraying their privacy.
What is the purpose of having many currencies?
Have a look at the example use cases above and consider how each would fair if they were to restrict themselves to dollars or bitcoins. Our brilliant researchers would start out with $0 and would have to resort to traditional grant-writing and other means of extracting money out of others before they could begin work. "We're sorry, the NIH grant quota has been filled for the year. Your miracle cure will have to wait."
If instead they formed a group issuing its own currency (say, AcademicCoin), they would be able to immediately:
In the future, the AcademicCoin is very valuable. It represents 1000+ respected researchers who accept it as payment for their time, early access to research results, papers, etc. It provides these academics with something vital: a basic income (early tenure). The freedom to think on matters other than survival is no longer restricted to nobility. The market, in turn, provides them with feedback on their performance through the price of AcademicCoin.
Can an individual receive multiple basic incomes by being part of multiple groups?
Yes. Most newly formed groups will be unable to provide all their members with a basic income, so an individual may be able to accumulate a basic income for themselves by being accepted into multiple groups. In exchange for membership, most groups will likely expect their members to contribute value in some way, and most groups will likely be capable of booting members whom they've decided are abusing the system.
Will it be a hassle to hold many different currencies?
No. At least, there is absolutely no reason for it to be. In this era of cryptocurrencies and decentralized exchanges, software can make conversions between different "tokens" or "coins" as seamless as if no conversion took place.
Say you visit a website selling Pink Widgets for PinkCoins. You only have TurtleCoins. That doesn't matter because your TurtleCoins can be quickly converted into PinkCoins on a decentralized exchange. The software can even show you prices only in terms of your TurtleCoins so you don't have to think about PinkCoins (unless you want to).
Currencies that fit the definition of group currency:
Contact or send pull request to add yours!
Group currency is a project of the okTurtles Foundation.
We would like to thank the following folks who’ve provided invaluable feedback:
Alphabetical by last name.
hi[at]okturtles[dot]com (replacing [at] with @ and [dot] with .)If groups restrict membership, ensure it is publicly auditable, do proper KYC on new members, and keep the group size small, the Sybil attack is of little concern.
It is when groups allow arbitrary membership that combating the Sybil attack becomes of paramount importance for the currency. Below are some resources for this. Please feel free to add to this list!
This work is licensed under a Creative Commons Attribution 4.0 International License.