Decentralized Community Resiliency - The Time Consortium

What SZC will launch after “data consortium”

Time Voucher Currencies in Hong Kong

Why We Talk about Resilience… Again

Resilience is the capability to overcome severe impacts from unforeseeable disasters and to rapidly recover by adapting to the new norms. This classic question of creating community resilience is again under the spotlight, because COVID literally killed off the many parts of the global economy, cutting off countless communities from critical supply chains of desperately needed goods and services resulting in a deficiency of support needed to sustain livelihoods.

From a much broader lens, globalism as the modern world’s social norm has failed at an unprecedented magnitude, and local communities, which may be a cluster of like-background individuals in the city connected through physical neighborhood, social media or similar rural productivity works, have been too dependent on this social norm. These communities have not prepared useful tools or ecosystems which help them to sustain themselves during such circumstances. The result is that the world has been re-mapped into different regions shaped by the containment or collapse in the flow of people, goods, services, and capital — a breakdown of trust between people in different kinds of public, private, or professional scenarios. This is especially hard-hitting for exchanges and transactions that originally require face-to-face engagement, from attending a funeral or wedding, completing a massive multi-stakeholder banking transaction, or even just trying to open a new personal bank account.

Community members lining up in front of the bank to apply for government aid. The process is very convenient for the middle-class, as it is simply one click on the internet banking App. But it is very inconvenient for people with limited data and financial literacy, particularly the grassroots.

To bridge this sudden new existential gap, technologically transformative strategies have mushroomed across all industries alike in keeping first-world communities connected, however, very few of those strategies are designed for community development to help grassroots adapt to this new era. Indeed, often these communities do not really need such a singular designer, as their contingent reactions are the best solutions to overcome the challenges.

In fact, our society is transforming from a distributed network of individual cells based on a global trust infrastructure (either backed by the public or private sector), towards a network of decentralized groups of people based on community-based trust systems. Interestingly, the cost of community-based exchanges are much lower than that of global transactions, for example, locally produced masks, and hand sanitizers are significantly cheaper than those exported from abroad. Such local production and consumption of goods and services are especially relevant to grassroots communities who have extremely low capability to compete for the scarce resources at this critical time. For example, grassroots communities are less capable of competing with the global elite class to purchase personal-protection-equipment (PPE) during the time of Covid-19. Overall, the pandemic reinforces the centralization of wealth and power and manifests the importance of an alternative way of organizing our society — decentralization of transactions, exchanges, and trust.

While in a centralized model, societal resilience frays dramatically at the edges, decentralized resilience builds the collective capacity of communities to face challenges, sharing with and learning from each other, and keeping individual heterogeneity intact at the community level. This is not even a novel idea, as internet technologies and social media cultures have already created a huge amount of communities in our societies, allowing each of them to share a very specific digitized anchor point for their community members to gather around, traversing across many communities at the same time. This is very true among the middle class and upward, but what about the grassroots, the 1.6 billion people living in poverty without bank accounts, and digital and data literacy? We believe that grassroots communities have been developing their own disaster response mechanism during the crisis. Therefore, we commit ourselves to learn from their approach “decentralized resilience” and working with them in figuring out how new generation technologies can support their practice.

An Economy without Money

Community-based exchanges do not only happen with fiat money, but also through other forms of transactions such as barter and credit. From our experiences of research and community engagement with grassroots communities in the past decade, we found out that credit — a measure of trust one party has in the counter-party's ability to pay particular goods and services at some point in the future — are not necessarily displayed by fiat money, but can also be represented by community-based currencies. For many communities who are structurally excluded from the global economy such as those in remote and rural areas, refugee camps, urban villages, and slums, they exchange with each other with their valuable assets — time, instead of money. Time, allocated to every human being relatively equally, can be tokenized as community currencies that facilitate and ease local transactions. In fact, the idea of a time bank is not new, but existing initiatives remain micro and small-scale, members having little incentives to earn time tokens that have only a few locations of production and consumption.

In the past two years, we have been working with major NGOs in Hong Kong for a collaborative city-wide time bank project, helping each organization to digitize and tokenize their district-based time vouchers, consolidating and scaling them into a time exchange platform with the support of cloud and blockchain technologies. During the pandemic, there have been a lot more people participating in the program to exchange health-related goods and services, and the project with a theme of community resilience and digital transformation has attracted especially much attention from the government and large-scale charity foundations in face of global health crisis.

Tenant of Subdivided Units in Hong Kong is not only suffering from living quality problems, but also the lack of financial identity. Due to their specific living condition, these tenants cannot provide proof of address to the bank to open a bank account. Recently HSBC has provided them a new product — if they can obtain a guarantee from a local NGO, the bank is able to get them accessing bank services so that at least they are able to receive government financial aid during the COVID time.

Time currency is one type of community currencies, which can be categorized by its bottom-up or top-down nature, as well as decentralized and centralized formats as follows:

Types of community currency

Each model has its own goals and objectives, but they also share the idea of facilitating a “closed economy” among a group of people, which is independent of the logic of the global economy. During the pandemic, such a closed economy serves as social protection for grassroots communities because it does not depend on the dramatically volatile global markets. This idea of a closed economy is similar to that of community-based organizations, for example, an agricultural cooperative can collect money from farmers to collectively purchase fertilizers with higher bargaining power. Or in the urban context, we have ‘Groupon’ as a collaborative effort for individual customers to purchase at a cheaper price from corporates.

Time Voucher Programs in Hong Kong during COVID-19

We have been working with non-profit organizations that operate community-based time voucher systems for more than one year in Hong Kong. These programs are operated by a decentralized network of organizations in the social sector, On one hand, all NGOs have their own mission and vision, target audience, and community engagement methodologies, on the other hand, they connect with each other to share knowledge and experiences. The first time vouchers program was launched by St. James Settlement in 2008 during the financial tsunami when community resilience became a critical topic for our society. It is interesting to note that, these programs were born from a crisis, and now again, the programs are reborn in yet another crisis.

This is what happened to the time vouchers program during the pandemic in the past few months:

Time voucher for farmer’s market.

1. Time Vouchers become Community Currency for essential product allocation. In the North New Territory of Hong Kong, one of the time vouchers program NGOs uses time vouchers as a ‘proof of work’ credit system in their cooperative farms, allowing low-income farmers to purchase ‘real’ PPE products at low price from the NGOs, which they would have no alternative means to acquire. Users of time vouchers mushroomed during the pandemic, as communities produce better, cheaper, and more reliable goods and services (such as food and face masks) than of the global supply chains in face of the health crisis.
2. People donating Time Vouchers to support the more needy. Interestingly, time vouchers participants form informal “time vouchers funds” to donate to individuals outside the program in order to support them receive more help from organizations such as food bank. These micro funds are operated centrally by the NGOs, who help to communicate and build trust between donors and recipients.
3. The grassroots marketplace goes online. Not only does the act of asking and providing goods and services go online, the entire space of communication, community engagement, and trust are also digitalized, and decentralized. Social distancing brings the grassroots community marketplace and public space online. Participate tend to participate more in the time vouchers program during the crisis, having more knowledge sharing, mental health support, COVID-19 health-related information sharing, etc.,, all are beyond the design of the original program.

Building a City-wide Time Bank Network, Starting with Capacity Building

Digitization of time vouchers in Hong Kong by SZC.

Since 2019, Shanzhai City has been partnering with the Hong Kong Council of Social Services (HKCSS) and 4 different NGOs to develop full-stack technology solutions that digitize the time vouchers marketplace as well as cross-districts exchange. The technology allows different groups of community members including lower-income households, single parents, elderly, youths, farmers, as well as local stores to participate in the exchange of goods and services through a user-friendly mobile application. The mobile application includes the following features:

1. Decentralized identification (DID) that allows community members to own and control their personal information throughout the entire process of exchange.
2. Digital wallet that allows the assetizing, saving and spending of time (time vouchers), and
3. A marketplace that allows precise searching and matching of goods and services,

Digital wallet pilot of time voucher

The technology is powered inertly on the backend by high-tech cloud-based data tools such as a decentralized ledger technology (blockchain) for immutable data systems as well as artificial intelligence (machine learning) for the discovery of significant patterns in data. Ultimately, these patterns in data collected through TVP will become important information that supports social needs identification and end-beneficiary targeting for different types of poverty alleviation projects, programs and policies, including but not limited to social welfare and microfinance provision. Overall, bringing together and transforming multiple NGO-based time voucher programs into a city-wide digital time marketplace helps to:

• increase program efficiency: digital transactions automates work of onboarding, matching needs and services, as well as bookkeeping,
• incentivize participation: cross-district exchange increases point of transactions and enable more community members, NGOs and funders to easily access the platform,
• validate the quality of goods and services: crowd certification allows community members to cross-verify the skillsets, talents, and resources of service providers,
• protect privacy: decentralized identities protect the personal information of community members, especially of those who are vulnerable to identity abuse such as new immigrants, refugees, and lower-income households,
• measure impact: tracking of time transactions and analysis of how community members use time informs better social needs identification, service design, evaluation, as well as impact measurement and management,
• Support time vouchers integration with social policies, programs, and projects: a citywide time digital time marketplace allows different actors to purchase time vouchers at ease and integrate with their existing policies, programs, and projects. For example, government welfare providers, philanthropies, and microfinance institutions can provide their subsidies, donations, and loans partially in time vouchers, encouraging recipient community members to not only receive services but also contribute their time and skills to the communities they reside in.

Ultimately, the technology solution aims to support the Time Voucher Program to effectively achieve its goals and objectives in unleashing the potential of local communities especially the aging populations in contributing their knowledge and skills to the community, empowering vulnerable populations to access to alternative employment opportunities, promoting social trust among community members and that between the people and organizations, and last but not least, stabilizing the local economy amidst global economic and health crisis.

Capacity building of time voucher digitization

The following is a list of organizations in Hong Kong operating time voucher programs in general towards different target groups.

List of time voucher partners we are working with.

Our Next Step — the Consortium of Time

Learning from our users who participated in the pilot in the past year, we identify the critical bottlenecks that prevent the time vouchers program to scale in the city: (1) limited point of transaction disincentivizes people to exchange time and services; (2) lack of transparency and trust on people’s needs and services quality; (3) limited channel of tracking transactions and evaluating impact; (4) concerns about data privacy when organizational and personal data are stored on 3rd party database, and (5) limited real-world-resources to back the liquidity of time vouchers.

Will Ruddick from Grassroots Economics presented at Hong Kong Council of Social Service to time voucher NGOs.

In response to the problems identified, we extend our partnership of time vouchers program among 4 NGOs to a broader pool of stakeholders including more social purpose organizations who facilitate community-based mutual support, corporates who are interested in donating their products and services for corporate social responsibility (CSR), and charities who intend to improve the sustainability of their funds. In short, we are building a collaborative program — The Time Consortium, a group of actors who implement different community currency programs built on the same vision and same technology protocols designed for community development contexts.

Dr. Shaun Conway, Will Ruddick and Ilex Lam brainstorming about community currency in Hong Kong.

Our vision about decentralized finance for the community inclusive development platform.

The technology will be continuously built on the IDCC (Impact Data Consortium) public data infrastructure. , and will expand as we work with more like-minded practitioners and community members, global and local. We have been working closely with Grassroots Economics on designing the fractional reserve for community currencies, and with ixo Foundation on the alpha bonding curve for smart philanthropy.

To sum up, we aim to facilitate a decentralized network of community-driven economies for the grassroots and our society as a whole. We believe that resources from within the communities will contribute largely to the SDG funding gap.

Stay tuned!