Scenarios and Visions based on Experimentations in Alternative Economies: The Case of CommonCoin, FairCoin, and Bank of the Commons.
By Emanuele Braga
1) What is value? Money as a territory of re-signification
Currencies, tokens, shares, derivatives are all units of value. What do we store in these units? Time, goods, trust, risk, affect, health, democracy, racism, gender violence… How does the value of these units change? Who decides if this value is fixed or volatile, and how does it change?
Cryptocurrencies present an important opportunity to create new units of value independently from the traditional banking system. But today, cryptocurrency markets have become hugely volatile sites of financial speculation around hundreds of new coins that serve simply as super volatile units of value for traders, including bank investors.
On the other hand, there is a radically different vision of transformation through democratizing wealth and creating different conceptions of value in a growing alternative movement. A structure based on tokens and contracts can change the logic of the derivatives into patterns of social relationships that are based on cooperation from the bottom up and on shared economic spaces.
Despite this, the financial market remains the most scandalous space and a kind of bogie monster. That is why I strongly believe that these cooperative platforms are the most interesting spaces to root questions the value. I’ll focus on three examples, developed in the past 5 years: Commoncoin, Faircoin and Bank of the Commons. These three projects are interconnected with each other, and could represent a set of socio-political alternatives based on cooperation and mutual aid.
I’ll draw out the development of these three projects from the perspective of somebody situated within the community of Macao, center for art and research
In November 2013 for one month, Macao, center for art and research, hosted the most important hackers and developers of the Bitcoin community of that period (like Amir Taaki, Vitalik Buterin, Cody Wilson… and so on). This gave the Macao community an opportunity to face what Bitcoin was and the ideas behind the cryptocurrency movement. After this full immersion, Macao provoked a discussion in Italy around alternative economies and radically different kinds of monetary systems.
This ended up in a symposium in Macao in September 2014 entitled “Money of the Common”. In that meeting, which was attended by an Italian community of political economists, critical theorists, and some participants in practical projects that Macao strongly supported, we agreed on some key points. We decided that there were two main prerequisites for any currency of the commons to work: First, the money of the common has to be anti-speculative and not scarce, and it has to promote a circular economy. Second, the technological infrastructure has to be sustainable in terms of energy expenditure and consumption. That’s why the Bitcoin architecture was problematic in terms of proof of work and mining, and because it is scarce and fluctuates in value. The high levels of energy that are consumed in processing the Bitcoin blockchain also ruled it out as a currency of the commons.
From that moment on, Macao looked for projects and collaborators in order to build alternative projects that were anti-speculative and sustainable. Faircoin, Commoncoin and Bank of the Commons are some of these. The challenge was to create collective infrastructures for the Commons with new technology, as an alternative to capitalism. And locally and globally to build ecosystems for the future.
Faircoin is a cryptocurrency, based on a cooperative platform, which fixes its value within the community and does arbitrage with the financial markets. The tech infrastructure is also co-designed and maintained, which includes the development of the proof of cooperation protocol based on a hardware alternative to mining, and the proof of work in Bitcoin. The original community was mostly from Spain, but from the very beginning Faircoop was born to be global. A global network of local nodes now exists including cities in Europe, South and North America, Africa… who are each sharing and building an autonomous monetary system to foster a solidarity economy.
Commoncoin is an example of a local social currency that is community based, promoted by the experimental art center of Macao in Milano. The assembly of artists, workers, citizens, and refugees, decided to create different common wallets and to collectively decide upon how much money they should each receive. This is a political laboratory, in which Commoncoin presented an opportunity to re-signify what for them has value. In a post-work society, we need to share value, to be paid, to receive money, and to have access to goods and services; but not on the basis of salary levels, or the comparative prices on different product markets. That’s why this community chose to distribute Commoncoin for tasks and functions such as care, activism, and participation in assemblies; all functions that usually are not waged. Since these are things that produce collective wealth, at least as much as the more recognized achievements around things like producing products or putting on events. With Commoncoin the local community can buy goods and products bought by Macao in Faircoin on the global Fair Market. And finally, based on the Commoncoin system we also redistribute a Basic Income in Euros to all the participants of the network.
Bank of the Commons is a cooperative platform for a multi-currency wallet founded by several groups, including Faircoop and Macao. Through this tool the members are able to have a bank online platform which works in Faircoin, Bitcoin, Ethereum, Euros and Dollars. In Bank of the Commons you can transfer currency using crypto-wallets and sepa/iban, between the members and to the external world. It is based on an assembly of the members and the decision making process is based on consensus. Participants discuss how to regulate liquidity, the mutual aid between members, and the feasibility of the exchanges. The general aim is to support a transition to an alternative economic space based on Faircoin at the global level and social currencies at the local level. Bank of the Commons and the Faircoop ecosystem have a certain porosity with the traditional fiat money system, but at the same time, Bank of the Commons tries to find ways to avoid or prevent speculative trading activities.
These three platforms, Faircoin, Commoncoin and Bank of the Commons are good examples with which to draw a map in which we have a future interconnected ecosystem of common infrastructures. A global solidarity movement based on a cryptocurrency, a local social coin promoting basic income and innovative schemes of value redistribution, and a global banking cooperative platform that is able to integrate these tools and communities.
2) The becoming human of the algorithm and the becoming machine of the society. How could the automatization of social relations generate spaces that become alternatives to alienation and exploitation?
The ecosystems we can create for a more sustainable life, are an alternative to capitalist exploitation, and the production of alienation and violence. But the central crux is the relation between infrastructure, schemes, organization, and human relationships.
Marxist theory underlines how capitalistic forms of exploitation and the extraction of value are an abstract machine that concentrates capital in the hands of the few, while impoverishing workers.
Post-workerism highlights how the question of work and production is today directly connected with the bios, with life and society as a relational fabric. And this is more and more evident in relation to new technologies. Data, migration, finance, gender, mineral resources, and genetics are each territory for the extraction of value and they are all connected with the bios, with the life in itself. Access, risk, mobility, sexuality are the fields of exploitation and alienation.
If on the one hand, the means of capitalistic extraction of value are mainly technological, in terms of both hardware and software; at the same time this is imperceptible, untouchable, and diluted in society, in daily life, in our individual and collective body, in a process of naturalization and prothesis with our behaviors.
The algorithmic control of life and of the social fabric, the automatization of social relations are not perceived here as a design. This raises the central issue: How can we create human organizations that are able to discuss and design their machine, and how can the machine, the infrastructure of the society, become a space for empowering human relations, instead of generating alienation, exploitation, and violence.
There are two movements with different genetics: The becoming machine of the social body, and on the other side the becoming human of the machine. When we speak about forms of organization, new infrastructures, we have to think about the forms that these two moves take, and the forms of possible meetings, fusions, sex, fights, and the mirrors in between them.
That’s why a central aspect is the space of co-design and data production and management.
In the case of Faircoop and Bank of the Commons the decision making process is managed on Telegram, and the tech development, the management and the maintenance are run by technical groups, through both volunteer and waged work. But over the years it became increasingly important to have offline meetings, locally and globally, in order to dig-up issues, design the agenda, and simply get to know each other better.
The cases of digital platforms that invest in the off-line dimension are becoming more and more frequent.
A wonderful example is Decidim in Spain: Probably one of the biggest and most successful platforms for participatory democracy, which was created when the local government of Barcelona decided to empower their organization through offline meetings. This case serves to highlight how important off-line meetings can be as a dimension of the digital platform.
Off-line meetings are clearly somewhat easier in the case of local communities, like Commoncoin. The technical development happens on-demand within the community. But there are many off-line assemblies in which we discuss how the design of the monetary system and the wallets are changing social relations, and how they may modify organizational arrangements, and technical aspects are also discussed. The machine has to follow the desires of the people, and the people understand themselves to be a machine, in the form of an organized collective body. It is important that the machines are useful, that they are not only prototypes, that they are stable, trustable, but also that they are movable, modifiable, depending of course on the political negotiations of the users.
This space is something that is totally absent in major corporation like Amazon, Fb, Uber… The only spaces of genuine negotiation are generated through workers strikes, scandals, and reduced levels of customer satisfaction… They are shaping the social sphere without users having any proper space of negotiation, apart from the possibility of moving or staying off-grid (if it is still possible).
Also on the hardware side, the off-line dimension is very important. I have already mentioned that Faircoin substituted the processing based on mining and proof of work with ‘proof of cooperation’, which is computed by devices physically located in every node of the global network. Thus saving energy while protecting the principle of data protection in the cooperative. In Italy, we are also part of the Cubotto project, which is based around a decentralized system of data storage, through dispersed hardware located within a political network. Another example is the project, Decode, developed by the municipality of Barcelona, which is a decentralized system to facilitate citizens’ ownership of their own data.
3) The central concept of spiral loops.
Algorithms, digital platforms, hardware logistics, and data ownership, are the tools that help to shape “human management”. The point then is, where is the space of decision in which humans express how they wish to be managed?
Within the Macao community, the idea has developed that some machines should embody, and emerge with, spaces of interaction. The continuous entropy that is characteristic of the social fabric and human relations, has to be part of the potentiality of the technical developments.
Macao defined this dynamic as a spiral loop: Apart from the organizational form, the decision in itself, the algorithm, or the coding, the design of a platform, the adoption of one software or an other… What is really important is the continuous feedback between the users and the communities. The design of an infrastructure has to be conceived in a 3D, or even a 5D model in which what is central are aspects like: Human satisfaction, scalability, long term strategies, unexpected errors and scenarios, eroticism, imagination… We don’t think about devices as simple products with certain functionalities and features, but as pretexts to empower the social fabric and as an opportunity to generate further relations. This DIY approach to social organization frames the role of the machines as offering an opportunity to test out different forms of life.
Often this mentality leads to social organization design and coded infrastructures which have a game design. The process of continuous feedback and redefinition of the territory is presented as a game table. These are game tables which often the communities and the stakeholders know, in being characters of this game.
4) The systems of data driven societies and communities. Data visualization and the relation between on/off-line activities.
Public data visualization is a precondition for being driven by data. If we want to create spaces of discussion and negotiation regarding the forms of organization, first of all we need data and feeds on how the ongoing situation is. The accessibility of data is often not a sufficient base for people to discuss things and take decisions. Data not only have to be accessible but also be understandable.
For sure, blockchain explorer, balance sheets on economic management, analytics, google drive with excel files, pad and minutes of the assemblies, any kind of repository, time spent in reporting and maintenance, are useful elements in making the data accessible to everyone (depending on the security policies of the organization). But a well made repository doesn’t mean that the data have actually been read, understood, or that data are the means to rethink the future together.
In Macao, center for art and research the assembly discusses how the data have to be visualized (which feeds data selection, and how this needs to be displayed for the community) and the members use this data in order to discuss how the organization is working. This data driven decision making process has the power to transform communities in policy making based not only on perceptions, beliefs, or opinions and whisperings; but on a shared table of contents, which makes participants more like analyzers and game masters than voters or participants.
In 2015, during the first months of the Commoncoin scheme adoption, the community began to fight a lot regarding the criteria for the redistribution of wealth. Everyone agreed that Commoncoin had to be a closed clearing house, without an exchange value with other monetary systems, and everyone was charmed by the revolutionary idea of a Basic Income distribution. But after a while somebody discovered that working very hard was not so useful, and for this reason reacted by complaining that his role in the organization was more valuable than that of others who he argued were lazy and unproductive. These kind of perspectives led to a feeling amongst some that the Basic Income model was going to fail.
Another battleground was around the mutual aid fund. In Macao every successful project covers the losses of the non sustainable projects. Some participants in more successful projects started to complain that we were giving too much to help feed and sustain parasitic and unproductive projects.
In tackling both of these issues, Macao began to analyze data in order to check what the real dynamic behind these phenomena was, and in many assemblies there was discussion, display, and visualization of this data. During these assemblies the members discovered that what was considered as lazy and unproductive activity was not, and that a lot of functions considered by many to be unproductive were actually very useful. Through this process it became accepted that the general income and the production of wealth according to a basic income distribution was not actually going to fail, but in fact the reverse, it was stabilizing the organization and helping to attract new proposals.
Data analysis and visualization then can be a means to overcome the biases that are usually embedded in a competitive and capitalistic culture. And this culture and paradigm, very often lay in the unconscious. What people agree on in theory, is not always what they are willing to do.
We are worried that our data might be stolen by a big digital platform, because they sell information about our behavior in order to control and shape us as citizens and customers. So the first reaction to that is: Fuck you! Don’t touch my data! The political claim against data mining and markets is the invasion privacy and anonymity. But beyond that, we usually don’t think about what we could do with our data, instead of simply hiding it. Ordinarily we are not able to self-organize around a collective management, or to publicly manage this data in order to use it for the common good.
In the official documentation in which the Chinese Government presents the Social Credit System program, it is impressive how many time they use the words sincerity and honesty and common good. The Chinese state has generated one of the most extensive programs in the world in building a data driven society, in a very top down and potentially oppressive way, transforming the state into a giant digital platform of surveillance. And they state that this is the basis of the social contract with citizens. If you are sincere and honest you have to accept being profiled and controlled and forget any fears of violent repression.
On one side, the platforms of capital and companies are shaping production and distribution through big data, and on the other side, governments and nations are controlling citizens and defining their rights via data mining.
That is why a visual education on data and what they signify is a precondition to use them, to break from the perception of them as raw material for experts. Every time they have been used and well visualized, and become popular, they have become a strong means of propaganda, even performing the perception of the real.
In the face of these top down, dominant uses of data, it is vital to understand how cooperative platforms, local governments, and global political formations, can become democratic spaces to shape the social fabric differently by directly involving people, while retaining their rights and personal freedoms.
5) Autonomy vs Commons, decentralization, and common interests. Blockchain is useful to build decentralized systems, but only in terms of providing an infrastructure for the common good. If it does not serve this purpose, on one side Excel is a better tool, and on the other, it’s only a more feasible technology within the same capitalistic paradigm.
We have three scenarios that for different reasons we need to avoid: The first is the fragmentation and individualization of the social sphere. This can lead to a specific interpretation of decentralization, anonymity, and privacy. One that doesn’t block the rise of competition for easy gain and personal profit, and the emergence of a personalized state of paranoia and cynical distrust that accompanies this.
The second is a bureaucratization of common interests, in which in being together you do not feel free. The third is the selling of your freedom and common goods to the market… The autonomy of groups, projects and individuals apparently doesn’t always match well with the commons.
What else? In many collective and experimental projects of activism this is a central topic: How is self-organization protecting the autonomy of the participants? And how much of what is in common really matches with the needs and the interests of each? Each individual and each specific group or project has to feel both desire and interest in the processes of commoning.
This is the reason way the relation between autonomy and the commons has to be flexible and be based on a bottom up approach to governance. Only in this kind of environment can the architecture of an organization be something significant that adds social and collective value.
In the case of Faircoin, Faircoop has taken the measure of fixing the official community value of the coin, but this value is uncontrollable in the crypto markets. So there’s a life of the coin within the local nodes and on the global level, in which Faircoin is used for the Fairmarket exchange of goods, work, and services… But there are also a small portion of Faircoin that can be purchased in the crypto markets, and usually Faircoop monitors the quantity that flows in these markets in order to eventually take these Faircoin back into the real economy, and within the sphere of the fixed exchange value.
This dynamic was initially quite virtuous, because on one side the community have been using the cryptocurrency in the coop platform at a fixed value, and on the other side, following the Bitcoin crypto-optimism year by year was reasonable, which meant slowly raising the price in accordance with these markets. During these years the assembly of Faircoop raised the value of Faircoin but always trying to stay below the market value of Faircoin, so that there was not so much interest in selling Faircoin on these crypto currency markets.
But all the cryptocurrencies in the markets more or less follow Bitcoin’s value… and when Bitcoin jumped in value at the end of 2017, Faircoin’s value was also raised. That’s why a lot a Faircoin swarmed in these markets. And then Bitcoin fell drastically in price in 2018, and Faircoin as well in terms of market price. In the end, there was large amount of Faircoin in the market with very low value.
Thus it became easy to buy a lot of Faircoin in the market and use it to buy goods in the real economy, products priced at Fair’s official community value. This has been unfair for the producers and the sellers of products, leading to a fall in Euro liquidity for those seeking to exchange from Fair back to Euros at the official value.
This is provoking a debate in a number of Faircoop communities: Is it right to use financial markets in order to have greater buying power which can then be used on Fair markets, but at the same time weakening the circular economy and the sustainability of producers? Again the question arises: Is it better to base things on trust between the members on the basis of individual interests, autonomy and privacy; or on the basis of the common good of the ecosystem?
In my view the use of the blockchain in recent years, along with the big hype surrounding it, is roughly following the lines mentioned above. I think it is ultimately not particularly interesting if the blockchain is used simply to rather differently, and potentially more effectively, produce the same kinds of social organization, governance and services as before. It is also worth emphasizing that in the early stages of designing alternative organizational forms – through things like tokens, and schemes of value distribution – a blockchain infrastructure is not needed. It’s possible and even easier to implement these systems with paper ledgers, data bases, excel sheets, and simply digital or paper coins…
We learn from experience that it is important not to fetishize the blockchain as a magic technology in itself. Sometimes it is better to hack the concept, understand what it is for, recycle it with different tools and use it in order to achieve whatever we set out to do…
6) Cryptocurrencies have been mainly the province of white middle class male traders, and those with profiles very similar to alt-right populism. With an appeal based on easy money for folk using financial markets. From a radically different standpoint, we have to declare that a political use of alt-money can be a tool to help construct a solidarity-care-worldwide ecosystem.
Cryptocurrencies beyond Bitcoin? The swarm of new crypto coins and ICO projects has created a super sparkling landscape leading to a rising arch for a number of years in which Bitcoin was in a way the tractor, the feeder, the anchor. My feeling is that nowadays betting on cryptocurrencies to make an easy gain… The dream of the Lamborghini now, is going to become more and more out of date.
That’s why we now need to eclipse the speculative component of crypto economies to bring a different, more significant issue into view: How is it possible to create an alternative infrastructure and ecosystem for the commons? Circular economy, food production, energy production, health and care, logistics, housing, archiving knowledge, education, basic income schemes, these are the fields that we need to organize differently. We need new infrastructures, new forms of organization, not for individual or local interests but to face common problems on a global scale.
7) Financial markets are the main economic space: It is the space we need to deterritorialize. Socializing finance means both taxation on financial trading and also developing alternative tokens based on social relations. Social relations are always the generator of new forms of organization, and the unit of value can be the basic brick.
We don’t have to leave the battleground with financial markets and capital. Organizing alternative ecosystems, transition plans in more sustainable societies, networks of solidarity, and cooperative platforms are not going to be in themselves the only means of destroying the extractive exploitation of capital.
Financial markets need to be deterritorialized and also must be taxed. The destruction of the public welfare state, public education and public health, has to be blocked, at least partly through resources generated by taxing financial markets and big platforms for capital. We are not able to substitute the lack of a public welfare state through cooperatives and alternative organizations in one move. In this interregnum we have both to use cooperative platforms to build alternatives and also to negotiate and think about what the role of the state is in different ways. For example, it is remarkable what Smart.be is doing in being a cooperative platform for freelancers and gig workers to self-organize, but also in negotiating for the improved public treatment of workers and thereby fulfilling a role that has traditionally been played by the trade unions.
What projects like Commoncoin, FairCoop and Bank of the Commons are doing has to be considered in relation to this more complex picture. They work on the local and micro-political levels and at the same time integrate with the international and global movement. They empower autonomous ecosystems, and at the same time do not give up the struggle for a welfare state and public services. They use participatory democracy and alternative cooperative platforms in order to attack the superpowers of capitalistic financial accumulation.
See E.Braga and A. Fumagalli “La Moneta del Comune, la sfida dell’istituzione finanziaria del comune”, DeriveApprodi 2015. This book is the report of symposium “Money fo the Common”, including interventions by A.Fumagalli, E.Braga, M.Amato, C. Marazzi, Denis Rojo (Jaromil), S.Lucarelli, E. Duran, A. Virtanen and Robin Hood Minor Asset Management Coop
See A.Cossu and A.Arvisson THE COMMUNISM OF CAPITAL? ICO TRADERS AND THE DEMOCRATIZATION OF FINANCE https://files.conferencemanager.dk/medialibrary/51432DDB-BBE3-4327-85F4-BE3493077470/images/21_Cossu_Arvidsson.pdf?fbclid=IwAR3XALT_FUzwtBLSeWABFUBuAkHWxd0gyuUFyVclg7QZpOVfCH6-dGKpXFs