Primavera de Filippi
"Cryptocurrencies are digital currencies that rely on cryptographic algorithms to provide users with a secure medium of exchange: money creation and transactions are controlled by mathematical algorithms (the so-called mining) implemented within the underlying protocol. As opposed to other digital currencies (such as E-Gold or Linden dollars), which are issued by a central authority, most cryptocurrencies are based on distributed online architectures: they incorporate principles of cryptography directly into their protocol to establish a worldwide, highly secure payment system that does not rely on any government, company, or central bank, but rather on a decentralized network of peers that contribute, through mining, to achieve distributed autonomous consensus (DAC) as to the current state of the network.
Created in 2009 by pseudonymous author Satoshi Nakamoto, Bitcoin was the first cryptocurrency that eventually got traction in the real world. Today, Bitcoin is regarded as the “gold standard” of cryptocurrencies (Grinberg, 2012), but many other cryptocurrencies have been created since then, each with their own characteristics and peculiarities.
Indeed, while Bitcoin is a scarcity-based cryptocurrency that merely mimics gold, it has spurred the deployment of a large number of derivative cryptocurrencies, some of which are specifically meant to promote sharing and cooperation among the members of a specific community. Already a considerable number of such currencies have been deployed so far, yet most of them are still in their early stage of deployment, and it is difficult to say whether or not they will eventually take off. This section will illustrate the objectives and underlying technicalities of some of these cryptocurrencies, which implement a hybrid approach to value creation and distribution by merging the principles of CBPP with more conventional economic thinking. We will refer to these currencies as commons-based cryptocurrencies (CBCC), not because they are themselves commons-based resources (although some of them might be) but because they have been created with a view to support, promote, or incentivize CBPP.
Freicon is one of the first CBCC that was designed not only to create a more stable and sustainable economy but also to support commons-based projects. The cryptocurrency implements an approximately 5% annual demurrage fee, so as to encourage the circulation of money in the economy and discourage hoarding. Moreover, only 20% of the money created is assigned to the miners and the other 80% is assigned to the Freicon Foundation, which redistributes these funds over the most socially or ethically valuable community projects.
A clearer example of CBCC is CommunityCoin proposed by the Guifi community network. CommunityCoin is a cryptocurrency designed for network communities, which features a mechanism of rewards based on the contribution and participation of community members. This currency can, however, only be used for the internal community work-around: users contributing their resources to the network will be able to spend the CommunityCoins they receive in order to, e.g., buy a secondhand hardware from another community member. The goal is, ultimately, to incentivize the members to work for the community (installing new nodes, creating new services, etc.) and make the community network self-sustainable.
Finally, a few CBCC have managed to incorporate their own commons-based agenda directly within the mining protocol itself. This is the case, for instance, of Curecoin (whose mining protocol consists in protein folding computations) and Gridcoin (contributing to solving scientific problems to the Berkeley Open Infrastructure for Network Computing). The opportunities are endless, as cryptocurrencies can be designed to implement any sort of cryptographic protocols and money creation policies whatsoever." (https://hal.archives-ouvertes.fr/hal-01265228/document?)
Translating CBPP values into metrics
Primavera de Filippi:
"After having analyzed the possible dynamics or interactions that subsist between CBPP and CBCC, this section will investigate whether (and how) the latter can be used to translate the functional, social, and ideological values of the former into quantifiable terms.
CBCC could, in fact, be used as a potential proxy to assess the value produced within a particular CBPP community or to compare the values of different CBPP platforms—thereby benefiting from a universal indicator of value without (necessarily) falling within the scope of conventional economic theories.
Before we begin, it is important to note that we are not trying to compare the value generated by CBPP with the market value of these cryptocurrencies. Market mechanisms are only interesting to us to the extent that they implement, at least in theory, some form of DAC. In modern society, the market represents a useful way to interface between competing values. Indeed, in a free and competitive market system—with no barriers to entry and no asymmetries of power—market players act independently and contribute, through their aggregate actions, to setting the overall market price. The mechanism of supply and demand is such that each and every market player is allowed to express their own voice as to what the value of different goods or services is, ultimately (and collaboratively) establishing the market price, without having to rely on any centralized authority or institution. These principles have been transposed from the market into the realm of the firm, with the deployment value economics tools, such as the Sensorica’s open value network (OVN), allowing employees to vote in order to determine which job should have priority over the others and who should be paid more or less.
What we suggest here is to build upon these concepts, to create an alternative mechanism (separate from the market) that would instantiate the same DAC principles (but not the same market principles) within the CBPP ecosystem—so as to eventually come to a consensus as to the overall (systemic) value of commons-based resources." (https://hal.archives-ouvertes.fr/hal-01265228/document?)