Trading the First Tomatoes on the Blockchain
Written by Will Ruddick, Bancor’s Director of Community Currencies.
Thanks to Bancor, blockchain is finally becoming a tool we can use to fight poverty.
Yesterday we had an amazing day in Mombasa field-testing the Bancor Wallet on the POA Network to enable zero-transaction fees and fast payments for local transactions. As tomatoes and chapati changed hands, local shop owners and their customers marked the first-ever community currency transactions on the blockchain. More broadly, we are digitizing and tokenizing the Sarafu-Credit system of paper currencies that began with the Bangla-Pesa in 2013.
Now community members like Mama Evelin (in the photo above) can:
- Trade any amount of Bangla-Pesa (We never had below a 5 paper denomination due to cost of printing.)
- Keep a digital record of transactions which are stored securely on the blockchain.
- Exchange their Bangla-Pesa for Ng’ombeni-Pesa (another neighboring community currency that couldn’t be easily converted to before.)
- Advertise on a community marketplace to get wider awareness of their goods.
- Easily locate and buy goods and services in the community when Kenyan Shillings are not available — with no transaction fees and verification in seconds.
- Easily send local tokens unrelated to commercial transactions to friends and family instantly and without fees.
- And much more to come, such as voting systems, SMS notifications and more.
For Grassroots Economics and similar community currency creators, this means:
- Creating a currency takes a few minutes. All you have to do is specify your token supply and decide which tokens to connect it to in your network.
- We have the security of the blockchain — meaning that the ledger of transactions and the supply of community currency tokens are in a safe, decentralized place — distributed across the Internet and transparent for all to see.
- Designing a customized currency just became much much easier: economic incentives, taxation, demurrage, community funds, voting systems and more can be built directly on the Bancor Liquid Token smart contract.
- The cost to develop a community currency has dropped to training and implementation — rather than the cumbersome and costly process of printing paper vouchers or paying service fees and licences to digital providers.
- Teams can focus on their users, rather than the backend technology. This will go a long way in communities where resources are scarce to begin with.
What makes these tokens special is their ability to connect to one another (i.e., convert back and forth without exchanges) — building a decentralized economy of currencies powered by the Bancor Protocol. These currencies can be designed using their smart contract to share assets, deploy a UBI and facilitate voting and community services.
Fundamentally, community currencies can empower women like Evelin to develop zero-interest credit that is usable among her network. The World Bank claims there is a 2+ trillion dollar deficit in the credit supply — this solution could pull communities out of poverty, increasing trade and local resilience.
There is still a lot to do and we need everyone’s support to really make this a tool that can be used around the world. We look forward to our first usability pilot in rural areas and Nairobi to give us all the use cases and success stories to help us make the case. Onward!
Feedback? Tips? Advice?
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