By Lucia El Asri 04/05/2015 Hojaderouter.com
Enric Duran is working with a new electronic currency that seeks to contribute to the creation of a cooperative global ecosystem able to compete with capitalism. The currency is based on values of cooperation, solidarity and equality, and puts aside the individualism that, according to the activist, defines Bitcoin.
Faircoin was created in early March 2014 by an anonymous developer who then left without a trace. 50 million coins were created and then distributed between the 6th and 8th of that month, at a rate of 1,000 units per hour; given as gifts to whoever signed up to receive them. It became the first virtual currency that did not initially have to be mined, and that was shared equitably in order to promote equality between participants.
The currency was orphaned until last summer. Between April and May, Enric Duran, the famous Catalan Robin Hood, rescued it with the help of Thomas König, a software developer with over twenty years of experience.
Faircoin is a cryptocurrency whose name refers to economic justice and fair trade, and that corresponds to the values that Duran has always advocated. An activist who went public after defrauding the banks between 2006 and 2008 for around 492,000 euros in loans. He claimed that he wanted to refurbish his apartment or buy a car, had payroll and other false documents and even created shell companies to support his scam.
His intention was always to allocate that money to fund social movements in order to teach a lesson to the financial system and demonstrate its weakness. So he became known as ‘Robin Hood of the Banks‘, who swindled the rich to give to the ‘poor’. His activities have led him via prison to spending a long time in hiding. He retains the hope of being completely free, although he admits that the there is still a long way to go for that to happen. Despite the obstacles and being a wanted man, he continues his long struggle: to build alternatives to the financial system, this time using Faircoin.
König became responsible for controlling the technical aspects of the cryptocurrency, working to ensure its security and adapting it to better suit Duran’s vision. “When nobody paid attention to it and it had no value, I and others dedicated ourselves to buying the faircoins,” says the Catalan to HojaDeRouter.com. When they had acquired a significant quantity of Faircoin, they launched the project publicly.
And so Faircoin became the official currency of FairCoop, an open cooperative, global, born in mid-September 2014 “as a cooperative of cooperatives and other social and collaborative initiatives.” Now the number of coins exceeds 50 million, each valued around 0.0184 euros ($ 0.0201), with about 10,000 users and a market capitalization exceeding 950,000 euros (just over one million dollars). Since the beginning of 2015 you can buy faircoins by card or purchase by bank transfer and exchange them for cash at 10,000 ATMs in Spain thanks to Getfaircoin services and Fairtoearth.
Together, Faircoin and FairCoop promote a new global system of “post-capitalist economy” based on collaboration and free software. The cryptocurrency has become one of its main pillars, functioning as an exchange currency and a store of value.” Thomas König explains that it promotes solidarity by allowing anyone to transfer value to other people quickly, securely and cheaply, without relying on centralised governmental or financial powers. In addition, “a cryptocoin can be a useful tool to generate a social movement and mutual support networks around it, and to bring the “virus of cooperation” to the money markets, says Enric Duran.
HOW DOES FAIRCOIN WORK?
With Bitcoin, users give up part of their computer resources so that certain tasks can be performed (as control transactions in a decentralized manner). It is part of what is known as “mining” – a process by which the coins get assigned by the algorithm: if you’re a user and you mine, you might get some coin. The more computing resources you devote to mining, the greater the probability of reward.
With Faircoin, users also utilise their own resources, but in this case the mining is minimal (0.01% of the process). When it does happen, it functions as a task on behalf of the community for which they receive a small direct reward. The goal, in this case, is not users competing for more and more coins, but cooperating. It is a very different philosophy.
In the beginning, the faircoins were shared fairly in order to avoid the situation that only people with capital or resources (large servers) could access the coins. Here what matters is that the coins that already exist and those that will be generated serve the community, so that all users can benefit from them.
Faircoin operation is based on the savings of all members of the community. The “savers” get more coins when they keep a certain amount of them for a certain time, thus causing the value of those faircoins to increase. It is a voluntary process that promotes solidarity within the network. So in the case of Faircoin it doesn’t make much sense to dedicate large servers to mining, which, according to Duran, greatly reduces the ecological cost which, “in the case of Bitcoin is very high”.
The activist explains that Faircoin, although inspired by Bitcoin and retaining its essence as a means of payment, differs in its philosophy, or “what’s behind it.” In the case of Faircoin it is a community of people who collaborate and believe in the human being, trust between people and projects, and want to use Faircoin for the common good, to generate a collective vision and to improve society. “But in Bitcoin individualism, personal wellbeing, and individual profit predominate”.
“As the value of the cryptocurrency grows the greater is our capacity for action to allocate Faircoins to projects related to our values,” said Duran. That will make it possible to bring the “virus of cooperation” to the money market and to reorient the dynamic of personal profit and speculation by collaborative processes that benefit as many people as possible and contribute “to the whole system we are developing.”
He gives us an example: in the early days of Faircoop, the cooperative received 20% of the money supply of Faircoin (around 10 million FAIR) to help out various projects around the world. These Faircoins were divided into three funds: the fund for the Global South, to help local projects (5 million FAIR) ; a fund for the Commons, designed to create and disseminate tools for the common good (2.5 million); and the fund for Infrastructure and Technology, funded with 1.5 million. Another million was invested in the development of Faircoop itself.
THIS IS NOT THE FINAL VERSION
König explains that he is currently working on a second version of Faircoin that introduces several significant changes. On the one hand cooperation will be more complete and no more reward will be generated; on the other, the privileges that so far the cryptocurrency grants to those most faircoins have by saving will be deleted. “So Faircoin be even more aligned with our values and become a more human cryptocurrency” says Duran.
Both Duran and König argue that Faircoin, while important in Faircoop, is “nothing more than a tool within a global framework.” Progressively other tools will appear to “complete the monetary and economic ecosystem of Faircoop”, according to Duran. He explains that a just monetary system also needs access to credit that is democratic, that is accessible “to all persons having the capacity to produce”, and that at any given moment can cover people’s basic needs.
This will be possible in the future with the other decentralized currency called Faircredit, which will be tasked with providing mutual credit. The loans will be interest-free debts that will become a revenue for others, and the sum total of all balances in the system will be zero, so that credit will no longer depend on centralised banks but the common good. The appearance of Faircredit will not lead to the disappearance of Faircoin, but they will be used together as complementary currencies.
A NEW ECONOMIC, SOCIAL AND FINANCIAL SYSTEM?
Duran explained that the initiative to create a global ecosystem cooperative does not intend to make capitalism disappear directly, or even imply that capitalism can disappear. “It means that we have a space in which, voluntarily, cooperatives, individuals or groups who wish to participate in it can generate an environment that can be sufficiently autonomous and independent of the current capitalist system.” That is, to live together in order that citizens can choose which of the two want to participate. He is convinced that, ultimately, it will demonstrate that it works much better than the capitalist system.
And what about those people who do not understand cryptocurrencies? How do you win their trust? Duran knows that making this model accessible to people is a challenge, but the first priority is to “build a strong and robust system” that can then be introduced to those for whom the technology is more distant . For now the work is to encourage social groups to accept donatons in Faircoin, and in May work will begin to encourage businesses, freelancers and cooperatives to use it.
Duran says that one of the major mistakes of many cryptocurrencies is that they have focused too heavily on “a purely technological level rather than on its social function in the real economy”, something that Faircoin and those who make it possible are trying to change. The results may not be apparent in the short term, but the activist believes that the next six months will be crucial for the consolidation of the project.