What If You Could Decide How The Money You Spend Is Used?
Smart contract cryptocurrencies open up a whole new world of possibility.
Though many of them didn’t realise it, for three days in September, the residents of Leipzig inhabited a parallel universe. Life continued almost as usual — goods were sold, services delivered and funds received. The only difference was, everything was paid for with a cryptocurrency.
As part of SeaNaps Festival, outlets across the city let visitors buy food, clothes and other wares with a cryptocurrency called Lip. One Lip is worth one Euro, and the money is exchanged using a chip which sits on a wearable bracelet. The chip is connected to a Blockchain — an open ledger system that tracks each Lip spent, and creates more Lips by solving complex maths problems.
But why make things so complicated? According to Maxime Faget, one of the seven founders of the festival, by exchanging Euros into Lips, the money “plays with our rules.” Cryptocurrency is far more than just digital money: it allows us to control how the money we spend is used thereafter. So-called smart contracts can be embedded into each token, which means a Lip can be given a set of rules that govern what it can pay for and whom can accept it. This system ensures its value remains inside the predefined confines of the community.
Rather than straying outside the community, Lips can either be donated to a social cause or pay a bonus to those who made the festival happen. What’s more, all the festival’s contributors — including organisers, volunteers, and participating restaurant and shop owners — got to decide how exactly this surplus would be distributed. No easy task. “They all have an idea of how the economy could be better,” says Faget. Eventually, they arrived at a consensus, with, for example, 10 percent going to the festival’s organising association, HABeaTUS, 7 percent to volunteers and 3 percent to a local social project. Independent of the festival’s success, all contributors receive a fixed premium on top.
In recent years, blockchain technologies have created a number of alternative cryptocurrencies, the most famous being Bitcoin and Ethereum. Initially SeaNaps wanted to use the Ethereum Blockchain, since it was technically more suitable to its needs. However, due to current high speculation with Ether (the Ethereum unit of currency), one Lip was worth ten times more than at its initial issuing, making it an unfeasible foundation for a sustainable community project. In the end, HABeaTUS settled for the Ripple — ironically, a blockchain made especially for banks and finance firms. In the end, however, the underlying technology best suited the festival’s needs in the creation of its own cryptocoin.
Instead of being disruptive in the traditional, Silicon Valley sense, cryptocurrencies, like the one employed during the SeNaps festival, can disrupt at a deeper, democratic level — enabling citizens to create more equal ways of living. In a time of highly regulated financial systems, cryptocurrencies allow for radical transparency, so every member of a community can see the spending made within it. “It is a very strong, bottom up, political instrument,” says Faget. The smart contracts can be altered to fit a community’s needs, to respond to sudden changes in members’ income and allow each and every member to have a say in how money is spent within a group.
HABeaTUS’s next plan is to break through geographic boundaries and connect with other events. If other festivals and like-minded people adopt the currency, more value can be created. This value then stays in the network of a global creative community, which supports its own members instead of the international banking system.
Faget’s vision sounds a bit like a Marxist utopia — and he’d likely be unfazed by the association. “We’ve all heard the phrase ‘proletarians of the world unite’ — but 100 years ago it was like ‘okay cool, but how?’,” he says. Today, thanks to cryptocurrencies, people are empowered to change the economy according to their own rules. And when you think about it, that’s actually pretty disruptive.
The members of HABeaTUS are Jonas Petry, Eva Geckeler, Enrico Mina, Alina Zitzmann, Laura Baehr, Les Siestes Electroniques and Maxime Faget.
