Faircoin

Background

The world of cryptocurrencies started with the enigmatic person or collective Satoshi Nakamoto. His origin or place of residence remains unknown. Everyone talks about him, but nobody really knows him.

In 2008 he published his white paper, introducing a disruptive technology thao

Satoshi not only launched the theory, but also designed it and put it into our hands. The following year he launched a free software application to create the first cryptocurrency, Bitcoin. Then the race began. Hundreds of coins have been developed from this initial one, each with its own peculiarities, but generally respecting basic features such as blockchains, encryption, pre-coined money supply, etc.

We are at a historic moment. Peer society alternatives have been growing fast, and cryptocurrencies provide us with just the tool that was missing to enable us to change the rules of the game. A revolution of economic, technological and social systems is taking off.

General Information on Cryptocurrencies

What is a cryptocurrency?

It is a digital currency, or virtual money based on a peer-to-peer, decentralized exchange network protected by cryptography.

This means that, in the first place, it isn’t a material currency, but rather that everything works virtually from our computers and the Internet. Second, it is protected by encryption, hence the name “cryptocurrency”. This is a way to secure the system and the transactions through mathematical algorithms which convert the information in an encrypted block, only readable with the correct key, with a level of encryption that’s impossible to decipher with today’s known technology.

Coins are not actually units as we may think, but pieces of information, specifically they’re exchanges of keys which are recorded on a public accounts book which everyone can see and check, and which is is almost impossible to fake. To put it simply, what actually happens when you give someone else a coin is that you sign a transaction with your private key, transferring a value (“coins”) to another person’s direction. These signatures make up chains that are verified and confirmed by an entire community of people who use their own computers to verify that the transactions are correct.

As complex as the system may seem, it is actually very simple, and enough technology has been developed to make a cryptocurrency payment as easy as paying with your code-protected credit card.

The innovation and main difference of cryptocurrencies as compared to central money is, in the first place, cryptocurrencies are neither saved nor controlled by any central bank or State. In this system, you own all your money, and the system is secure thanks to peer2peer technology. Secondly, counterfeiting is currently unfeasible.

Thus, cryptocurrencies give us immunity to interference and manipulation by central banks and return us our freedom of economic management

How are notes and balances secured?

Satoshi’s great contribution to humankind is the blockchain. It consists of a p2p program which collects all the transactions done in a period of time in a block and joins them together in “chains”, resulting in something resembling a ledger containing all transactions, which are then distributed and verified to avoid fraud.

In order for a block to be added in the chain, it must be submitted to automatized voting among all the computers connected to the net, so they can determine whether the block contains valid information or not. Once the node accepts a block as valid (which means that all transactions contained are true), other nodes confirm its validity by building the next blocks on the same chain. Therefore, each block maintains a mathematical relationship with the previous block and the future one. This whole process has its foundations laid in the mathematical algorithms specially designed for this purpose.

The blockchain provides the world’s first decentralized, incorruptible system for registering any financial or legal contract, so it’s already being used for multiple purposes, and new ones will gradually appear. Each computer which downloads the program acts as a notary, and all computers working simultaneously decide according to mathematical laws.

How are coins created?

The software released for Bitcoin was designed in such a way that only 21 million coins could be created. For Faircoin, there are 50 million coins plus those which are generated through the minting system explained below.

There are different ways to create these coins. The most common and widespread methods are POW and POS. Both are designed with a feedback system, ie, in order to get coins from the system, you must contribute to making the system work properly. Let’s take a closer look into the way this functions.

POW (Proof Of Work)

This is a validation system based on work, also called mining. It is dependent on computing power. Miners are those who participate in the network, contributing with their computer and the energy expenditure derived from mining.

Mining itself is performed on different nodes working in unison through the POW infrastructure. The more computing power supplied to the system, the more likely it is for a block to be completed.

For each block completed and added to the blockchain, the creator node is awarded a certain amount of coins, in the case of bitcoins, 25BTC.

This system values the work of the mining community in completing the blocks, and compensates it with coins. This is the system used for bitcoins and is known as MINING.

POS (Proof Of Stake)

In this case, the system validation is based on demonstrating that you own the coins by using “money age”. New coins are created once you prove that you have been saving a certain amount for a certain time, and through this savings, you also contribute to the network’s security. This method began with Peercoin and is also currently used in Faircoin. The process is known as MINTING.

Both methods are widely used by different cryptocurrencies, separately or as a hybrid. However, POS arose to overcome some disadvantages of POW: on the one hand, there is the problem of energy consumption. As the system has grown, along with the number of transactions, it is increasingly difficult to mine a block and it requires more and more computing power, therefore becoming an ecological and economic issue.

On the other hand, since transactions are validated by miners, if 51% of the computing power of mining nodes were to unite, they could seize control of transactions and therefore of the registered coins.This is known as a 51% attack.

In opposition to this, POS does not require large energy resources for minting. Anyone, with just a computer and an open purse, can mint (see specifications below), so it’s a much greener way to maintain the system. Also, the only way a monopoly could arise, as in the case of POW, would be if someone were to own more than 50% of minted coins — which would be meaningless in terms of economics, for the owner to prejudice their own capital.

In conclusion, POS encourages savings and thus helps generate sustained growth in currency value which will be gradually fed by all cooperative members.

How are cryptocurrencies used?

To use cryptocurrencies, you first need a virtual wallet. There are many models, each with its own peculiarities, and can be local, as in mobile or computer apps, or online through a server. Each has different features. You can download one for FairCoin here.

Wallets are good for keeping your coins safe and making transactions, both to receive and send money, by just entering a receiver address.

It is important to note that any transaction made is impossible to reverse, as it is recorded in the blockchain; therefore, users need to be careful! Here are some safety tips.

FairCoin

FairCoin is a currency created for the purpose of promoting equality and economic justice. 50,000,000 faircoins were created in March 2014, and between March 6 – 8, were distributed through a massive give-away called an “airdrop” at a rate of 1000FAC/hour to anyone who made a request.

FairCoin became the first currency which needed no initial mining but was distributed equitably in order to promote equality of financial possibilities. Still, obviously an airdrop on an Internet forum has a very limited scope, and therefore the initial distribution isn’t quite sufficient in its equity purpose.

Currently, FairCoin has been adopted by fair.coop's promoters as the cooperative’s currency for use as a means towards global economic justice.

The key purposes of the cooperative regarding FairCoin is using it to generate economic redistribution while it also increases the level of justice, supports the empowerment of grassroots groups, transformation of social and economic relations, and creation of commons (Fairfunds).

Technical features of FairCoin

• 99.99% POS: It is a hybrid POW / POS system but money creation is 99.99% POS. Thus, the majority of faircoins are minted, ie, the system works thanks to everyone’s savings.
• As for security, there is a POW block every 5 minutes, and a POS block every 10 minutes. These two methods are combined to provide the best of each in securing the system.
• The low remuneration for mining, 0.001FAC / block, prevents energy waste since using high consumption mining devices is just not worth it.
• Money Supply of 50,000,000 coins mined out in the first block and initially spread out to all who applied for it, so that not only those with capital or mining resources could have access.
• Savers, ie, people connected to the network and minting, will receive 6% of the coins during the first year, 3% the second and 1% from the 3rd year on.

Some of these features may be changed by consensus on the network in benefit of FairCoin, a topic on which Fair.Coop and its members have a lot to say.

In fact, since Fair.Coop is based on open political participation, we can say that Fair.Coop adds to FairCoin with an approval based on agreements between humans– which, to our knowledge, no other cryptocurrency does. We call it “human-based consensus”.

Buy Faircoins

You can currently buy with bitcoins in some exchanges. First, you must sign up with an email and password and send them your bitcoins. You can buy bitcoins in a number of places on the Internet. Here are some guidelines on for how to do this.

You can download the FairCoin wallet here. Once downloaded, we recommend you follow this tutorial.

Also, a campaign is active on Coopfunding which combining donation and investment linked to the Fairsavings service in a single action done by card or bank transfer.

Mint Faircoins

You can participate as a FairCoin active node anytime by using the software on your computer, waiting for 21 days, and then start minting. Meanwhile, you can participate by mining (POW).

After 21 days, if your coins haven’t been moved from your wallet, you can begin contributing to the network with POS. At that moment your wallet will begin to have a % chance of minting which will be reflected in the official “minting view” tab on the faircoin wallet.

Wallets with the most faircoins are likely to find a block faster. Another factor affecting the chances of finding blocks is the concept of “age”, which makes minting probability grow each day after day 21, up to day 90.

Notice that once you discover a new transaction block, its minting status is set back to 0 and the process starts over. We could go on explaining, but the best way to learn is to download the wallet and start experimenting with your faircoins.

Interview

Enric Duran and Stacco Troncoso, interviewed by Cat Johnson on the cryptocurrency of Fair Coop:

Shareable: What's the importance of having a cryptocurrency focused on alleviating economic injustice and promoting social good?

Duran and Troncoso: Up until now, cryptocurrencies have held great potential, but it hasn't always coincided with a practicality that would alleviate [social] ills. Certain elements such as bypassing the need for central banks are steps along the way, but there was something missing. A holistic social and economic system is urgently needed to address the inequalities inherent in the current system.

How is Faircoin different from other cryptocurrencies?

For one thing, Faircoin is technically different in the currency generation protocol used. Faircoin uses Proof of Stake (POS), instead of Proof of Work (POW). The use of POS prevents any unfair advantage which could be afforded to those who can access and invest in the environmentally destructive means of mining (destructive for its consumption of energy and resources needed for the servers). What really makes Faircoin different is its specific use as a tool for Fair.Coop, as a cryptocurrency designed to act as a store of value for Fair.Coop and its redistribution of capital to socially and environmentally coherent projects.

What's the relationship between Fair.Coop and Faircoin? How will they intersect and/or interact?

Our intention is to be “Fair in name, fair in practice.” Fair.Coop uses Faircoin as its social capital and store of value. Fair.Coop is Faircoin's conscience—it's a cryptocurrency attached to commons-oriented responsibility.

Fair.Coop already holds 20 percent of all Faircoins in existence, which guarantees that the growth of the currency's value will go to the common good. This is guaranteed by Fair.Coop's democratic accountability system.

Do you see Fair.Coop and Faircoin working on a global scale? What could that look like?

In fact, Fair.Coop can't be anything but global; it's been specifically designed to be global; for this reason, we call it the Earth Cooperative. It's not a scaled-up local project. One of Fair.Coop's key objectives is to facilitate a global body of knowledge, capable of generating concrete impact locally.

At any rate, we could make a working distinction between two sets of mechanisms that'd be produced by Fair.Coop: global and local. At the local level we'd be seeing local, specialized mechanisms and knowledge which, in turn, would feed into a global open knowledge economy comprised of, among other things, valuable data and monetary and economic tools. This will be a bidirectional relationship, as both parts will nourish one another for the benefit of the whole."

Who will the funds raised with Faircoin go to? Do you already have organizations or projects in mind? If so, where are the organizations located?

Who the funds will go to isn't something that's decided by the promoting team. Identifying who the potential benefactors are and following through is an ongoing democratic process of the whole coop, as it's coming together right now where each of the different Funds is co-managed by a council that works in conjunction with the other Funds, as well as with the entire community built around Fair.Coop.

The type of organizations we want to work with will be those who could potentially generate peer production in the material plane, as well as benefit from the shared knowledge accrued by the coop. We also want to focus on projects that lack the necessary means to activate this type of peer production.

Other examples would include strategic projects that can add more value to the global commons. Projects which, on their own, maybe wouldn't have the ability to network at this scale to share their knowledge. The projects would also benefit from the moral and material support of a global community if and when attacked by hostile interests. All in all, Fair.Coop will increase the resilience of these projects.

More than naming specific organizations, we are very open to being approached so that everyone can participate in Fair.Coop's co-creation and ongoing development. We are also very interested in empowering the Global South to increase its resiliency. When we say Global South, while there's an undeniable geographical truth to this, we also mean the 99%, independent of where we may reside." (http://www.shareable.net/blog/faircoop-using-cryptocurrency-to-bring-economic-justice-to-the-world)