Introduction
In this paper, I will consider the launch, promotion, and extension of local currencies (tokens) as one of the use cases that can be enabled by using the blockchain development platform Symbol.
Issues in Realizing the Token Economy
Tokens are an affinity for blockchain technology, and they were the earliest realization of the technology.
Specifically, I think Bitcoin was the first service and the first token to be born at the same time as the birth of the blockchain.
And counterparty tokens are born as a service using Bitcoin. It is a bitcoin-based token issuance service.
In Japan, entrepreneur Takafumi Horie, known as Holiemon, issued a “HORIEMONCARD” token in the form of a “counterparty token”, which has become a hot topic in the Japanese blockchain community.
However, it is hard to say whether we are creating an economic sphere (i.e., a token economy) with the tokens created, or whether we are achieving this.
It has become a popular theory that it is difficult to create a token economy by simply circulating value to replace legal currency.
The complexity of using alternative payment methods is a barrier to continued use.
In other words, the issue is that the token economy will not be able to move forward without creating a scene for its use, rather than an alternative to legal currency.
Issues facing the local currency use case
Local currencies are booming in the token economy usage scene.
It is designed to create tokens that are used in a certain region (within a certain conceptual range of an area or organization) and contribute to economic activity in that region so that the distribution of the tokens itself has value.
Even in local currencies, when defined as an alternative value to legal currency, specifically when it is used like a $300 discount coupon, it doesn’t have to be a blockchain token.
As discussed in the famous Japanese book “WHY BLOCKCHAIN”, which talks about the reasons for using blockchain, there is no point in going to the trouble of building a payment system with blockchain because “legal currency + paper discount coupons” is the easiest alternative for discount coupons in legal currency units.
It is concluded that it is doubtful that the advantages of the system, such as less susceptibility to falsification and easier aggregation, are worth the cost of building and operating the system.
Does it make sense to adopt blockchain technology for local currencies?
In conclusion,Adopting blockchain for local currencies can be useful.
Rather, it is not an exaggeration to say that usage that cannot be steered in that direction is an unsustainable service.
What is the role of local currencies in the first place?
What does it take for a local currency to become a fixture rather than a temporary boost?
As mentioned in the previous section, the key to expanding and sustaining the use of local currency services is to design the circulation of values that are not expressed in terms of money, so that they contribute to local economic activities.
In other words, designing a local currency by tying it to an “entitlement” that is not quantified in money can take it from being a mere alternative means of payment to becoming the only “value” that can provide an “experience” that cannot be obtained with money.
This is before the use of blockchain or not, and it’s very fundamental that local currencies cannot succeed without focusing on the “value” that exists or can be created in the area.
In summary,Local currencies are not a substitute for money, but rather a way to boost the local economy by making visible and circulating the “experiences” and “rights” that are available only in the region.
As mentioned above, there is a need to design a local currency.
Why you should adopt blockchain for local currencies?
Only when local currencies are designed not as a mere substitute for money, but as a circulation of value in the local economy, such as “experiences” and “rights,” will there be a reason to adopt blockchain for local currencies.
Because local currencies are tied to “value” in the local economy, they have a public nature that requires transparency in their issuance and distribution.
It also requires assurances that the local currency can be collected reliably and without fraud when receiving services in the local economy, and that the transaction process will not be recorded or tampered with.
in short,There is a ‘need for smart contracts’ in local currencies.
This is the reason for the adoption of blockchain.
Why you should adopt the Symbol as your local currency?
We’ve talked about the need for blockchain “smart contracts” in local currencies, but is there any reason why we should adopt Symbol among the many blockchain platforms?
In conclusion,The advantages of building a local currency with Symbol are numerous.
Issuance and management of the local currency is “easy”
In Symbol, it is possible to issue tokens easily by using “Mosaic” build-in function. This is one of the advantages.
In terms of development and operational costs for blockchain adoption, the platform’s token-issuing management capabilities are more than a little advantageous over other blockchains.
Furthermore, Symbol’s token issuance capabilities are very powerful and allow for the inclusion of simple messages in the sending and receiving of tokens and the ability to bind metadata to the tokens themselves.
By using mosaic and metadata, it is possible to design tokens that represent “value” and “experience” in the local economy as “assets” rather than “quantity of money”.
Use Case 1: Community Contribution Activities and Use of Community Facilities
Why not design a token issued by a community contribution activity that is tied to the right to use a facility that the community has and the date and time of use?
Specifically, residents who participate in and are recognized for their contributions to community cleanup activities are given priority rights to use tennis courts and other sports facilities managed by the area.
This is an example of a tokenized “right” that provides incentives for some users.
The introduction of local currency incentives is “easy”
Symbol also provides us with a built in feature that provides distribution limits based on token and account properties. This is called mosaic restriction/account restriction.
The restriction feature allows you to design incentives for users.
Use Case 1: Community Contribution Activities and Use of Community Facilities (continued)
Let’s design a more concrete way to give the aforementioned local contributors priority access to the local facilities.
In order to give local contributors priority to use local facilities, a mosaic-restricted advanced reservation system could be implemented, where only users with tokens issued at the time of their contribution can access them.
Since it is possible to design a mosaic with an expiration date, it may be possible to design a “right” that can be used for one year after the community contribution activity.
Circulation between users of the local currency is “easy”
Symbol provides several built-in features for transaction implementation, which are essential for smart contracts.
Most importantly, the build-in feature provides peer-to-peer transfer with messages between accounts for tokens issued by the Mosaic feature.
It allows you to implement a mechanism for transferring, collecting, and updating tokens in exchange for enjoying the “rights” and “experience” of local currency.
Use Case 2: Regional contribution activities and local production for local consumption
What about economic activities where local businesses give back to local contributors in a heartfelt way, for example?
We design economic activities for (1) farmers, (2) A place for local production for local consumption such as local restaurants, sales outlets and processing plants, and (3) consumers.
(1) farmers, (2) local production for local consumption:Crops
In exchange for farmers providing local produce that is in poor shape but cannot be distributed in good taste, farmers receive local currency from the point of sale in exchange for providing local produce to local sales outlets and processing plants.
Or, in exchange for providing local produce to local restaurants, they receive local currency.
(1) farmers, (3) consumers:working force
Local currency is transferred from the farmer to contributors (citizens, other farmers, or participants in the farming experience) who help with the farm work in support of the farmer.
(2) local production for local consumption,(3) consumers:products
Contributors with local currency can taste local specialties at local restaurants, receive inexpensive or free local produce and processed goods at retail outlets, and receive other benefits.
In each of the above situations, the transfer of peer-to-peer tokens can be accomplished in Symbol by means of a transfer transaction at the time of providing a “right” or “experience”.
In other words, we will be able to paint a picture of a new economy, such as the following.
Expanding the use of local currencies and inter-regional exchange is “easy”
In addition, Symbol provides the ability to build in multiple transactions atomically and across different chains.
This can be a very powerful weapon in the growing use of local currencies.
Use case 3: Inter-regional exchange
If a local currency economy is successful, it is possible with Symbol to expand the same system to neighboring regions and then to a larger regional economic area that binds them together.
Each local economy will have its own private chain of systems, and once built, the local currency solution will be able to be rolled out to other regions like a stamp.
If a similar system is deployed in neighboring and adjacent areas, the value of one area can be exchanged for the value of another area.
(Technically speaking, this means using a Symbol cross-chain swap or aggregate transaction.)
In other words, it allows for inter-regional exchanges, where the value gained from one region’s contribution is exchanged for the same quality and quantity of value in another region to receive goods and services provided in another region.
Integration of values may occur between regions where there is an active value exchange.
And the circle of mutual aid surrounding the local currency group will be expanding in layers.
Why you should adopt the Symbol as your local currency?
As you can see from what I’ve said so far, the reasons why you should adopt Symbol as your local currency are －
The platform provides in advance sufficient functionality for “smart contracts” that are essential for the sustainable use of local currencies.
— — — That’s all.
To put it more bluntly, from implementation to promotion of use, in its expansion,
Regional currencies can be realized “easily” with Symbol’s build-in function.
You can paraphrase the above.
Conclusion
Local currencies have been introduced in various communities.
There are some, such as shopping mall points that can be used like vouchers as an alternative to legal tender, which we dealt with negatively in this paper.
However, most of the local currencies that have lasted are still providing services combined with local values.
For example, Palm Point, which can only be given and used at the “Musashi Koyama Palm shopping mall” in Japan, has been a favorite of local citizens for many years.
Palm points can be converted into discount coupons, but they also serve as a right to attend events that take place several times a year.
It is designed to be redeemable for raffle tickets, participation in money-grabbing opportunities, and to be accompanied by event participation rights as a value-added, not a substitute for legal currency.
Perhaps the limitation of the existing centralized system is that only the operator is designing a place for the use of points.
If we adopt blockchain as a de-centralized system, we can design peer-to-peer user-driven events, etc.
By setting up “rights” and “experiences” for the local currency by the participants themselves, the circle of fun mediated by the local currency will expand.
The liquidity of local currency will increase as participants set up places and even means of “contributing to the community” to earn local currency.
When we can design a place for the consumption and acquisition of local currency that is linked to the community, it will begin to function as a sustainable economic zone with local currency.
And by building a decentralized system, which can be achieved with Symbol,
By leaving even the design of consumption and acquisition to the users, local currencies dissolve and diffuse into the economic sphere due to the spread of localized users’ mutual aid
This is the future of local currency that will be realized with Symbol.
