Building a New Economy

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One of the priority objectives of FairCoop is to build a new global economic system based on cooperation, ethics, solidarity and justice in our economic relations.

For this great goal to be possible, it is very important to have a clear strategic path which is well understood and shared by FairCoop’s members. This article explains the strategy we have considered.

Faircoin is the cryptocurrency we have chosen to monetarily support our economic system. In addition to the advantages discussed in other sections, it’s a cryptocurrency with features that make it suitable for saving money at a very low ecological cost, because the energy expenditure needed for mining is not necessary. Faircoin was previously created; 50 million were distributed at first and since then, a small percentage have grown through savings. Faircoin is traded in currency markets just as any other cryptocurrency or State currency. Foreign exchange markets exchanging cryptocurrencies (alone or with State currencies) have been expanding rapidly in the past two years. The evolution of the foreign exchange markets has always had an impact on the purchasing power of citizens of the world, with serious consequences such as impoverishment, cheap labour and the exploitation of natural resources. The reason for this was not only the imbalance of trade but also speculative movements that tend to benefit the rich. Knowing this, our plan here is to restore the greatest level of global economic justice that we can, by using something that has usually played against the global south: market forces (supply – demand). In short, as we say at FairCoop, the point is to hack the foreign exchange market by inserting the cooperation virus as a tool for global economic justice. To this end, in this first phase, we will promote the market’s demand for Faircoin through cooperative actions, and at the same time, we will encourage the reduction of the amount that is for sale. There will be no “buying for the sake of it”, which would not be sustainable or coherent. Instead, we want to promote Faircoin as an option for ethical savings, facilitated by multiple services making it a useful tool for initiatives working toward the economic empowerment of active subjects of social change. In order to understand our plan, an essential concept to learn about is the properties of currency. Currency has different functions, among the best known are:

  • Medium of exchange of goods and services.
  • Value storage
  • Reference value (price system)

Through these functions, currency contributes to meeting important needs in the economy; for instance, the “value storing” function is a key for the use of money as capital. Economists have usually designed economic systems which attempt to get one single currency to fulfil all functions at the same time. In the case of fiat money, the formal banking system is offered as the only mechanism to act as a store of value, through interest, since the value of these currencies is itself devalued over time, due to inflation. And banks are increasingly forcing people to use their networks in order to access the “exchange of goods and services” role of money. In the case of social and complementary currencies, until now existing projects have generally met with varying degrees of success in the function of “medium of exchange”, but with their value being referenced to a fiat currency, they have also been victims of same inflation as the currencies to which they refer (except, at least directly, in cases such as time banks). The case of Bitcoin, because it is a cryptocurrency, must be followed closely as it evolves. So far it has shown great success as a store of value over the long term, despite fluctuations in the short and medium term, and it is growing rapidly as a means of exchange. Still, certain contradictions between both functions have been spotted as its growing acceptance by businesses that turn it directly into fiat currency has put a significant selling pressure on the money market. With FairCoop we plan to build an autonomous economic system over the current system, and for that we picture a set of free economic tools to use in order to generate new social dynamics. We’re building a series of coins and resources that play complementary roles, instead of trying to get a single currency to fit all needs at once. To do this, we are focusing on the following currencies:

  • Faircoin for the value storage role, starting now and with the long term objective of using it as a price reference.
  • Faircredit, a worldwide mutual credit system as a means of exchange of goods and services, supported by Faircoin.

And the following resources:

  • Fairfunds: Faircoin funds for donations to various types of projects. The Global South Fund will be used for local collective empowerment projects at various levels, while the Commons Fund and the Technology Infrastructure Fund will fund global projects, which may also include globally coordinated networks of local projects.
  • Fairsavings as a source of Faircoin savings for those members who aren’t security experts.
  • Fairmarket, FairCoop’s virtual market that will allow members to use Faircredit, and anyone to use Faircoin.
  • Fairbag as a resource to support backup encrypted savings and wallet management for advanced users who want to keep their savings in case of an emergency.
  • Coopfunding as a permanent platform to raise donations in any Faircoin-convertible currency, which feed the Fairfunds.

These, together with other projects presently in discussion which will be announced and launched in the near future, will serve to build the fundamentals of the FairCoop economic system. This system is meant to be fractal, i.e., from the experience in the root platform it can be moved and replicated to different regional and local scales around the globe, with interoperability at different levels for the entire FairCoop ecosystem. Next, we will explain the plan’s three phases as we envision them.

1st phase: Increase Faircoin price and prioritize savings, in order to increase capital of FairFunds

The key concept for understanding the project’s potential to generate economic resources is the market cap, or market capitalization, which equals the amount of existing coins times the value of one unit. Some of the activists promoting this project bought large quantities of Faircoin at a very reduced price with the intention of redistributing to FairFunds projects and revalue by generating real value in a cooperative way through FairCoop. As explained on the Funds page, a primary goal of this phase is for Global South collectives and important pro-commons projects to receive Faircoin capital which could be useful to their development, together with the free knowledge resources and other types of support they will find in the social network (link). That is, to generate exactly the opposite dynamic as with that of the global financial power, which devalues people’s goods in order to keep their resources. Initiatives to prioritize at this stage will be: – FairSaving. FairCoop’s multi-signature digital wallet, which forces a minimum saving period of 6 months. – FairCoop wallet. Linked p2p multi-sig wallet. – FairBag. FairCoop wallet service that will allow a trustworthy encrypted backup which can be recovered in an emergency situation. – FairFunds. At the starting phase, it is important to spread the word and get projects to begin joining and feeding the various funds. In this sense we already have Coopfunding (link) for crowdfunding campaigns for FairFunds, exchangeable for Faircoins. Coopfunding will soon have a mixed option: 50% grant + 50% Fairsavings.

2ns phase: Economic activity: moving products and services all around (December 2014 – December 2015)

In this second phase, when the market cap reaches an amount that makes Faircoin generate commercial interest, and while the growth curve of this market cap becomes more moderate, it will grow in importance, creating economic activity both among FairCoop members and worldwide. Its important to understand that the community’s ability to purchase products and services depends on the total market cap of the currency it holds, and therefore trade expansion depends largely on the success of the cryptocurrency vehicle used as a store of value. The projects to be prioritized in this phase will be: – FairFunds: This will be the time to start distributing funds in the form of already-available Faircoin capital, to support participation of projects in the coop’s economic activity during the first year, and to be used freely from the second year on. – FairCredit: Global mutual loan system, supported by Faircoin, the currency to promote its use for production and consumption in the FairCoop ecosystem. – FairMarket: Virtual market that will accept Faircoin and FairCredit, allowing FairCoop members to open their shops with the technological support of the entire platform. – Other projects underway related to generating an autonomous banking system, and facilitating exchange processing tools and the ability to exchange other currencies to Faircoin and FairCredit.

3rd phase: A fair economic system consolidated worldwide (January 2016 – ……..)

This third phase, of course still further ahead, will be characterized by the consolidation of the ecosystem and its expansion to as many levels as possible. It is important to note that for this to happen, the value of Faircoin should consolidate so it can serve as a reference value, allowing us to stop depending on the prices drawn by fiat currencies. This may be the most difficult priority to achieve. In order to generate the reference value, it will be necessary to create very broad collaboration dynamics among many different people who can build large cooperative networks to defend the value of Faircoin as a benchmark of our ecosystem. Regarding other FairCoop objectives, we will try to increasingly multiply the cooperation and solidarity dynamics in every sense, leveraging the shared knowledge and the projects implemented at FairCoop, as well as the collectives that were part of it.

It will be, at the end of the day, about spreading the seeds for cooperation, common good and fair economy so they can expand to as many corners of planet Earth as possible.

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