Shaping the future of financial technologies

Hasler Grand Challenge - Shaping the future of financial technologies (March 2016)

Our motivation

We are considering Switzerland as a fertile soil for a cornucopia of civic, community-driven and entrepreneurial projects seeking to relocalise value production and supply chains; rebuild neighbourhoods and relationships to producers and products; identify rewarding work for the underemployed; and provide learning opportunities for the youth. However, these efforts remain largely isolated and dispersed, with few opportunities for scaling-up their resources. Distributed financial technologies could be offering the methods, metrics and infrastructure for these initiatives to connect together, without interfering with their internal values and missions, aiming at transforming solidarity economy to something larger than the sum of its parts.

Our challenge

Create a financial technology infrastructure, an open and neutral intra-community protocol, that will empower credit and trade possibilities of existing communities and initiate innovative economic models. Such an infrastructure should enable all business, communities and other actors such as financial institutions to experiment on alternative credit and financing resources.

Defining the challenge

The challenge is vast, complex and multi threaded, but existing technologies such as blockchain are designed to respond to similar prerequisites. However, the fact of launching a public blockchain does not, in itself, solve the problem. Our challenge will be defined on:

➔ Enabling multi currency transactions from various actors, proposing an appropriate open and neutral protocol

➔ Integrating transactions deriving from existing software, such as accountability and trading systems

➔ Demonstrating “real intra-community transactions” implicating business, communities and other entities

➔ Empowering community based governance for the sustainability of the infrastructure itself, notably through the use of smart contracts The above challenge requirements set the basis for a transdisciplinary research effort, that is heavily based on ICT competences while incorporating a set of socio economical parameters.

Success metrics

Acknowledging the long term possibilities and results of our challenge, we are proposing the following success metrics for its mid term realisation (3 years’ time):

1. At least one hundred (100) business, communities, associations, cooperatives or other entities such as timebanks, LETS, alternative currency initiatives, connected with their management - accountability software to the intra-community infrastructure.

2. At least one thousand (1000) users having access to the infrastructure, directly through the use of their existing systems.

3. At least one thousand (1000) transactions being concluded through the intra-community infrastructure.

State of the art

There are various existing ICT initiatives that compliment alternative currencies with a plethora of cryptocurrency - blockchain implementations. While an alternative currency (or private currency) can arise as people begin to use a certain commodity as a currency, mutual credit is a form of alternative currency, in which the currency used in a transaction can be created at the time of the transaction. Researchers need to develop a good grasp, and propose interoperable connections of the infrastructure, with:

➔ Cryptocurrencies as a medium of exchange using cryptography to secure the transactions and to control the creation of new units .

➔ Mutual credit, particularly on its self-regulating possibilities, by introducing caps on negative balance that can be raised as balances are paid off, membership agreements and various levels of community participation .

➔ Local exchange trading systems (LETS) such as the Community Exchange System , the Echo business trading network and others.

➔ Commonly used accountability software such as Odoo (former OpenERP), Oracle, Microsoft ERP products and others

Submitter's role

Ynternet.org Foundation, through its scientific committee , is gathering renown experts (ie. Jacques Vallée known for his work at SRI International on the network information center for the ARPANET) in finance and technology with result-oriented successful micro-entrepreneurs, experienced on managing societal transitions. Our raison d’etre is described in one single key word : netizenship, alias citizenship on the net. Ynternet.org will use its pivotal networking role to invite and engage academic institutions, business and entrepreneurs to create a community of practice around an intra-community infrastructure in with the collaboration other organizations in Switzerland notably, HES-SO, cooperatives, business communities and entrepreneurs among others.

Funding the grand challenge work

Ynternet.org will propel this work in Switzerland through a Swiss CTI application-oriented proposal in the area of Enabling Sciences in 2016. It will also activate its European partners in order to build a H2020 consortium and proposal during 2017. However, the infrastructure resulting from this challenge should generate enough transactions and data to further sustain its deployment and serve as a wider platform for understanding new business and financing models.

References

 See for example Tasca, Paolo (7 September 2015). "Digital Currencies: Principles, Trends, Opportunities, and Risks". Social Science Research Network. Retrieved 21 January 2016.
 T.H. Greco. "Money: understanding and creating alternatives to legal tender". White River Junction, Vt: Chelsea Green Publishing, 2001. 
 See description at https://en.wikipedia.org/wiki/Community_Exchange_System 
 See description at https://en.wikipedia.org/wiki/Odoo 
 A full list of our members is availlable at http://www.ynternet.org/membres-ynternet-org /
 Ynternet.org has created a mutual credit pre-prototype to be understood as additional material, available at http://netizen3.org/index.php/Credit_Commons 
 Details avaiable at https://www.kti.admin.ch 
 Details avaiable at http://www.sbfi.admin.ch/h2020/index.html?lang=en