How can we design a cryptocurrency for the better of humanity and ecology? In this last chapter of the crypto deep dive series, we will dissect two kinds of blockchain cryptocurrencies that are currently making waves on the internet and beyond. Furthermore, we explore the waves of the ECO Coin framework that intends to bring humans a democratic system - with living trees - into this sustainable, communal cryptocurrency.
Blockchain technology has only been around for ten years. It was only in 2008 when Satoshi Nakamoto released the Bitcoin white paper. To put it in perspective: this means that cryptocurrency technology is about as old as the first iPhone.
However, in these ten years Bitcoin, Ethereum and other cryptocurrency technologies have fundamentally changed the way in which we look at money.
Traditional money is always bound to either national or supranational organs that have a rigidly structured political and legal framework. However, in the blockchain world, these legal and political frameworks are way less elaborate (or sometimes even non-existent).
The sheer possibility of having money that is uncontrollable, ungovernable and often not taxable is a seismic shift in terms of monetary development. All of that has happened in the course of ten years. A promising start, leaving us wondering: what may be coming in the future?
Next Nature Network is developing a new crypto currency, the ECO Coin. In our view, what’s needed for blockchain technology to be used to its full potential, is a system that stimulates sustainable and earth-friendly behaviour. That blockchain system is simply not built yet, but ECO coin is making steps towards building it.
Luckily for ECO coin, we are not the only ones to pursue sustainable blockchain technology. We have peers (and potential partners) that we can learn from. People that are developing their own platform(s) in the same, bottom-up way that ECO coin is trying to do.
In this final story in the crypto-deep dive series, we will explore two examples of currencies that the ECO-coin is drawing inspiration from, and we explore the framework of the soon to be used ECO coin. So let’s leave the crypto-anarchism for what it is and look at bottom-up, society-focused blockchain solutions.
Tokens: a digital representation of human data
Besides cryptocurrency money there are also (cryptographic) tokens. In this world, a world that is not focused on big-money and system-wide revolution, there are many interesting things happening that ECO coin can learn from.
Cryptographic tokens are a form of digital payment currency that can resemble any real-world asset and anything that generates more data or money on behalf of the token holder. Interest or dividends earned can be tokenized and subsequently shared as well. The person holding the tokens will automatically receive all interests and dividends connected to it.
So how do these tokens work on the practical level?
Let’s take the idea of a token out of the abstract by analysing a project like the Dutch NestEgg.
The word nest egg has the connotation of a sum of money that is saved for the future. In essence, NestEgg is a platform that aims to build sustainable energy infrastructure without direct investments from governments or real estate investors.
Users put money into the platform, which NestEgg uses to build infrastructure (like for example a windmill) and in return, users get a cryptographic token which is their proof of having invested into the infrastructure. The token automatically generates dividends, meaning that the token earns the user money as long as it’s held. Users can claim through the NestEgg platform after the infrastructure project is built.
NestEgg, in essence, is a way to democratise pension investment. When young people invest into it now, they have a way of saving up for their own retirement, fully outside of traditional pension funds.
We should be looking to integrate these tokens for things that are not articulated within our current, dominant economic framework of fiat money. The most applicable articulation of this research, is of course, ecological value.
ECO coin was majorly inspired by this approach of using digital currencies for investing into your own pension (read: the far future). It’s a subject that is so contradictory to the lightning speed developments within the current blockchain space.
In a way, you can compare an investment into the ECO coin platform as an investment into the future. And even though it doesn’t return actual direct dividends or money, the soft result of an investment into ECO coin is that you make sure that the (near) future stays within reach humanities effect on climate change is brought back lots. People will also begin believing in the future again, where we can live together with both our ecosphere and technosphere in a great symbiosis.
Money: better when spent
Another inspiring example, this time in the category of money, is the FreiCoin project. This coin decays in value over time, making it more inflationary than our euro’s. The effect is that over time users can buy less for any FreiCoin that they’re holding.
So why is that a good and inspiring thing?
The project incorporates the concept of a demurrage fee, which in the days of physical money was a kind of service fee that you would pay to the banker stores and safeguards your gold. A service fee, if you will.
In the FreiCoin project, however, demurrage fees are actively implemented to make it less attractive to hold an amount of FreiCoin for a longer period of time, and more attractive to spend your money. If you have €100,- worth in FreiCoins, those will be worth approximately $61.39 in the course of a mere 10 years.
One can imagine what the FreiCoin demurrage fee would do to the capital of the world’s wealthiest people. It wouldn’t make sense anymore for them to hold on to it when the same fees would apply. As such, currencies that decay in value (currencies with a very high deflation rate) have the possibility of leveling out the economic field when they are adopted on a big scale. The world’s wealthy people would be forced to re-circulate their money into the economy and broader society in the form of investments. Those investments would benefit everyone in that sector, instead of just the capital holders.
These are the kinds of solutions that are worthwhile to look at in the span of a 100 years.
Therefore the ECO coin has chosen to incorporate this structural incentive of a demurrage fee to incentivize users to spend the coins at partners as quickly as possible instead of doing the #hodl that many crypto investors do.
Making this technology it even more rooted in nature: the value of ECOs represent the decaying value of trees, since trees mature and die over time, too. We’ve calculated that it takes about a 100 years for a tree to die, so it should also take 100 years for an ECO coin to die, meaning that 1% will be cut off its value every year.
The framework of the ecocoin
So how are we going to use cryptocurrency technology for the better of humanity?
The eco coin will be an investment in humanities future, generating ecological dividends over time. And, it’s value will decay quickly over time, incentivizing the user community to spend the coins and keep the currency vivid.
Within the framework of the ECO coin, which will be alive within the blockchain world of the 100 years to come, we also aim to fundamentally change the root of blockchain technology to include humans into the equation, as well as ethics.
Adding humans into the equation: the eco-inspector
Any (blockchain) system that wants to sincerely be good has to ‘force’ its users to work towards the same collective goals. As of yet, this ‘working towards the same collective goals’ is simply non-existent in the many blockchain networks that are around.
In other words: there’s no ethical guidance yet in whatever a blockchain can and can’t do. That’s why we are introducing the ECO Inspector: a real-life job with which you do important work for the ECO Coin network and are remunerated for your work in ECO coins.
The ECO coin network can never go without its ECO inspectors. They literally keep the blockchain afloat by verifying that sustainable actions took place, introducing and training new ECO inspectors and managing the escrowed trees by confirming that these trees are still standing at the given location. In addition, giving this task to humans, instead of to computer power, may prove to make this currency less energy intensive.
Democratizing to aid sustainability
What’s important for the coming years of blockchain development is that ethics become a part of the conversation in the blockchain world. Whether you are using your Bitcoin to fund sustainable ideas or to fund an arms race within Africa, to the Bitcoin network: it doesn’t matter.
Moreover, agency and self-regulation are a big problem in current blockchain networks as well as a big question for regulating bodies. How can you regulate/steer something that is not tied to any one location nor can be shut down?
The ECO coin is making people work towards the same collective goal of doing more sustainable actions and treating the planet well. The regulating body, the ECO coin team, can only point in the direction of a solution, but it is building systems that outsource decisionmaking on the environmental questions and uncertainties towards its community of users.
We will do that by creating a decentralised monetary fund where users can vote on wherever the fund’s money should go. A Decentralised Autonomous Charity, a digital agora. This means that the authority about what is and what isn’t sustainable will not be held within ECO coin as a company, but rather be collectively agreed upon by the community of users. We are working on the voting system as we speak and users will be able to vote from the app very easily.
All together, eco coin team, the eco inspectors, and the voting community will work towards a system where ECO coins can only be spent on sustainable products, thereby changing our consumption habits. Therefore, a thorough dive into into the supply chain and production methods of the companies that want to partner in order to verify that they are, indeed, selling good, sustainable produce that should be exchangeable for ECO coins.
Because the blockchain will be public and vendors are identified, funding bad ideas using ECO coins will be nearly impossible to do. And this is also strongly de-incentivised by the network as a whole, since ECO coins can only be spent at certified vendors.
Nature is to be hard-wired into our technology
On top of that, any ECO coin is not just a superficial number on a blockchain, but it stands for an actual, living tree somewhere in the world.
As such, the network is literally pegged to real-world trees, who back this new cryptocurrency with something that has tangible value. The ECO coin trees are the physical representations of the digital network.
With the ECO coin, a part of our ecology (trees) will be hard-wired into the technological world of the future. That is forward to Nature, pur sang.
Let’s use this framework to save the future, and our earth, together.
This was the last story of the crypto deep dive series, in which we immersed ourselves into the crypto world to explore the possibilities for the ECO coin. Want to learn more? Visit the ECO Coin website, where we will soon publish the technical paper.