2 Systems for Freedom

This is the eve of Independence Day in the United States. It seems like a perfect time to pause and reflect on the meaning of freedom. Freedom is a word that has a lot of shadesfireworks of meaning. Here are a couple of different perspectives on what it means to me.

 

Civic/Political Freedom

Freedom on a community scale is also called liberty. This is characterized by the 2 Laws:

1. Do everything you have agreed to do. This is the basis for civil Law.

2. Do not encroach on other people or their property. This is the basis for civil and criminal law.

Freedom is the state where everyone – including the government- generally follows the 2 Laws. (Generally means that a system exists where those violating the laws are held accountable)

Tyranny is the state where the government ignores the 2 Laws

Chaos is the state where no one follows the 2 Laws.

History shows that the more liberty a society has (and there is no case of perfect freedom that I know of) peace, prosperity and a generally rising standard of living is the norm for that society.

How free is the United States by this criterea?

Thanks to Richard Maybury for teaching me the 2 Laws.

 

Personal Freedom

The 4 Agreements is a personal code of conduct that liberates the individual on every level. This is a set of agreements that you make with yourself:

1. Be Impeccable with your Word: Speak with integrity. Say only what you mean. Avoid using the Word to speak against yourself or to gossip about others. Use the power of your Word in the direction of truth and love.

This gives you freedom from remembering your own lies.

2. Don’t Take Anything Personally Nothing others do is because of you. What others say and do is a projection of their own reality, their own dream. When you are immune to the opinions and actions of others, you won’t be the victim of needless suffering.

This gives you freedom from the opinions of others and the need to impress others

3. Don’t Make Assumptions Find the courage to ask questions and to express what you really want. Communicate with others as clearly as you can to avoid misunderstandings, sadness and drama. With just this one agreement, you can completely transform your life.

This gives you freedom from misunderstandings and false assumptions.

4. Always Do Your Best Your best is going to change from moment to moment; it will be different when you are healthy as opposed to sick. Under any circumstance, simply do your best and you will avoid self-judgment, self-abuse, and regret.

This gives you freedom from your inner judge.

Thanks to Don Miguel Ruiz for sharing this wisdom with us!

 

May you find peace and independence this as we enter the year’s second half!

 

Next week, we will begin examining Abundance.

 

Case Study – Elizabeth Homes

Editor’s note: Welcome to a new feature – Case Studies! We will be profiling people bringing positive change to the world on the last Thursday of each Homes in postmonth.

Elizabeth Homes is a change agent!

She dropped out of Stanford as a sophomore and used her tuition money to found Tharanos. A decade later, the company has introduced a radically new blood testing service. The plan is to roll out the testing services nation-wide in partnership with Walgreens. Pricing is half that of traditional phlebotomy practices.

Tharanos’ vision: Make actionable health information accessible to people everywhere at the time it matters most.

How Phlebotomy is traditionally done:

  1. Someone with special training sticks a needle in patient’s vein
  2. Draw vials of blood (a big one for every 1 or 2 tests)
  3. Send them off to a lab
  4. Run expensive, labor-intensive and time consuming tests
  5. Wait days (or weeks) for the results

 The Tharanos method:

  1. Pin prick
  2. Collect a drop of blood
  3. Send them off to the lab
  4. Run highly automated tests – many tests can be performed on a single drop of blood
  5. Wait 4 hours for the results

 The big advantages are obvious, less pain to the patient and a radically reduced cost. Reduced anxiety since the patient only has to wait a few hours (not days) for the result.

 Other improvements:

  • Less human handling, less opportunity for error
  • More frequent testing means preventative tests and trend studies – testing today is mostly reacting to a “situation”
  • Less pain/fear means higher likelihood patient will show up for follow-up testing
  • Faster clinical trials – agile trial methods
  • Patient empowerment

This is the kind of world-changing technology that radically cuts health care costs while making huge increases in patient care.  Kudos Ms. Homes!

Progress to the Next Economy

(Editor’s note:  This is the last installment of the Next Economy Series. Next week we will be premiering something new. )

The Theme

There is an underlying theme to the massive change that is happening all around us – Imaginepeople are recognizing their interconnectedness. The Next Economy is mostly about how this is showing up in physical reality.

  • Local and linear thinking is being replaced by a global and exponential focus
  • Expanded responsibility, not  limited liability
  • Taking back responsibility for education, health care and so forth that has been ceded to Large Institutions (I will have a lot to say about these topics later this year)
  • An end to busy-ness: no more polishing cannon balls

 Business

New forms of business with a new style of leadership are rising with the Next Economy.

  • The new business organizations are more agile, forming alliances to gain key capabilities instead of growing them “in house”. Limited liability is giving way to social responsibility.
  • Stakeholders – Everyone and every entity involved in producing value has a stake in the full input and output of production.  This ranges from the true cost of inputs, the well-being of those actually creating the products and finally the end users of those products.  The accounting system that truly measures all this is still in development.
  • Smaller doesn’t mean separate, it means focus on value creation with an eye on what that creation really costs. Businesses must learn to cooperate and collaborate with each other. High Tech companies are engaging in what is called Coopetition.  Competitors agree to work together in specific areas – like the IEEE defining common standards for technology platforms or sharing research efforts that are too expensive for any single entity.
  • The new leaders are not empire builders that dream of some new version of the Roman Empire. They hold a vision of profiting through service to their markets, communities and families. Some of the new leaders are working inside the old economy companies to restructure them into Next Economy businesses.
  • Don’t assume that all large bureaucratic organizations are beyond hope and must simply be destroyed. Some of them produce real value and can be “tweaked” into the Next Economy.
  • Technology allows smaller groups to “scale” as markets grow exponentially. This is different from the Industrial Age when business size had to grow at nearly the same speed as market expansion.

New approaches to energy, living and politics

  • Much of what made the Industrial Age work is/was cheap energy. Non-renewable energy is getting more expensive since we have now consumed all it that is cheap to produce. Renewable energy is being developed but there simply isn’t yet enough capacity.
  • The Industrial Age was characterized by separation and scarcity.  Some of it was real scarcity, some of it is local scarcity and most of it was a perception of scarcity caused by advertising (buy now, before the deal is gone)! I will focus on Abundance and how to overcome scarcity in July.
  • The strong boundaries of the old economy (political and legal) defined separation, primarily for the purpose of controlling resources and creating local scarcity on the other side of the boundary. The bigger the entity, the stronger the boundary.
  • Governance is more effective on a smaller scale. The countries with the highest per capita GDP are mostly city-states and mini-states like Monaco, Macau, Qatar and Luxembourg.
  • Interpersonal relationships – The industrial age family was nuclear (2 parents, 2.8 children) and communities were bound by geography with little in the way of strong bonds.  The definition of what constitutes a family is changing into many variations. Communities based on collaborative creation will need to get stronger in the new climate.

Getting there does not have to be violent.  William Gladstone (1809-1898) led a peaceful revolution in Great Brittan.

This post has a lot of ideas. Which ones resonated with you?

Trust in the Next Economy

The Internet in general and the Next Economy in particular cause trust to take on a wider meaning.

Merriam-Webster defines trust as:

  1. Belief that someone or something is reliable, good, honest and effective
  2. A legal arrangement in which property or money is held or managed by a third party (such as a bank).

This basic definition has now expanded to include the reliability of information, identity management and several other areas, including reputation. It has even sparked a couple of new industries!

Reliability of information sources

Online information sources can range from completely untrustworthy to extremely reliable. You should think before trusting information from unmediated sources (like blogs, Twitter or Facebook). Sometimes, though that is the only source of fast-breaking news – still be wary! Curated forums are a moderately reliable source of information. Examples include Wikipedia and sites that specialized in specific, technical information (e.g. a Microsoft site explaining how to perform a complex function in Excel).

Some bloggers and news sites have built their reputation over time (CNN, Huffington Post, Drudge) but it is impossible to present information without a slant. This is a normal part of human nature called cognative bias.  It is the way we filter all or our sensory input into volume our brains can “digest”. Confirmation bias is one specific version where we tend to only process data that confirms what we already believe. All writers (myself included) are guilty of confirmation bias.

Identity Management

Trust is also expanded into Identity Management: How reliable is your belief that the person on the other end of an online connection is who they claim to be? People who spoof identifies can steal money and damage reputation.

Online “trust” is frequently guarded by cryptographic proof. The simplest form of proof is a user name and password.  There are more complicated forms of verification but in the end, if you pass verification, the system and other users of the system assume you are who you claim to be, an Authenticated User.

Reputation and money can be stolen and/or destroyed if your identity is stolen.  BE CAREFUL!

Building Trust

Limited collaborations build trust that can be expanded into other areas later. Collaboration (a.k.a. co-creation) forms stronger bonds than co-consumption. Trust will probably always take time to build weather in person or earning positive ratings on social media. It is a delicate thing that can be shattered easily by careless actions. 

Sharing Economy

Online trust has sparked the Sharing economy. This model uses online connections to share things in the real world. Owners rent out (share) the excess capacity of the things that you already have (cars, houses, even lawn mowers).  Trust must be created and managed between the provider and consumer by a third party. After all, providers are letting a stranger into your spare bedroom. Consumers are dropping off their dog or jumping into the car of someone they never met.

The providers broker/curate these services. They are constantly seeking ways to increase trust, encourage good behavior and weed out the untrustworthy. They do this with mechanisms like requiring a pictured Facebook profile, ratings/reviews of the participants’ past “shares” and encouraging face-to-face meet ups prior to the transaction.

Here are a few examples of the industry leaders in the Sharing Economy:

HomeAway Rent an entire house or apartment http://www.homeaway.com
AirBnB Rent out a room https://www.airbnb.com
Lyft Ride sharing with vehicle owner driving https://www.lyft.com/
RelayRides Rent out your car https://relayrides.com
DogVacay Pet Sitting http://dogvacay.com/
Zilok Power tools http://us.zilok.com/
Feastly Dining service https://www.eatfeastly.com/

 

This Sharing Economy is literally re-wiring the way we interact with each other!

How have you built trust lately?

6 Surprising Next Economy Technologies

The technological advances that have happened so far are simply the opening act. New wonders are coming. The reason is that human knowledge is growing exponentially.

Progress of Knowledge

 The baseline is the beginning of recorded history to 1895. Each doubling of human knowledge came exponentially faster.

  • 1985 (100 years)
  • 2004 (19 years)
  • 2012 (8 years)
  • 2015 (3 years)
  • After that, the rate is expected to be measured in months.

Here are just a few of today’s technologies that are enabling the Next Economy:

  1. Software is “Eating the world”. This is online companies crowding out the old business models in most industries, just like iTunes obsoleted the record store. It is best described by tech visionary Marc Andreessen.
  2. 3D printing is past the phase of making plastic toys. Industrial printers are fabricating aircraft parts on demand for the Air Force. They are printing living tissues (specifically skin, liver tissue and breast cancer) for research purposes. The list extends to prosthetics, car parts, houses and the latest fashions.
  3. Asteroid mining – Visionary Peter Diamandis is spearheading the drive to exploit “out of this world” resources within a decade. The first spacecraft, a survey vehicle is slated for launch this year.
  4. Nanotechnology promises to allow us to create materials with only the properties we want.
  5. Block Chain-based currencies – The technology that enables cryptocurrencies.
  6. The internet of everything – Devices talking to each other and coordinating work. A simple example is a web site that sends instructions to your house’s thermostat to maintain different temperatures according to you cat’s lifestyle and the weather forecast.

This list shows only a few of the new technologies that currently exist. Technology has a history of creating new more jobs than it kills (obsoletes). In the Next Economy, constant re-training is vital.

Your purpose or a calling is more important than a single job in the Next Economy. Jobs will be assignments that implement elements of your calling. It is an exciting time for for creative Change Agents! Those that do not want to embrace change must make sure that their basic needs are met as criteria for “hunkering down”. Other effects:

  • The institution of community is redesigning itself because of the connectivity provided by the continuing revolution in Information and Communications Technology (ICT). The physical community (one where all members are physically close together) is now one of several types of community. Communities are now defined by common interest more than just proximity.
  • Collaboration is possible with people you have never met face-to-face. Millions of people are coming together to invent tools, models and ideas that will make the world better.
  • Friendship is now possible with people you have not even met face-to-face! This creates all sorts of opportunities and risks. I have ties with several people on the other side of the World that I have never met in person. We work together and have mutual respect and trust. A new definition for achievement is probably next.

My deepest knowledge is in the area of ICT.  There are several other fields experiencing exponential growth.  Some of them are nanotechnology, biotech, Artificial Intelligence and robotics.

The key is balancing the technology with humanity.  Tech for the sake of tech is a hobby at best. Embracing technology for the purpose of building a better world is critical to the sustainable lifstyle that is a central promise of the Next Economy.

 

Getting to the Next Economy – Part 2

The May 8 post, Part 1 of Getting to the Next Economy ended with the question, “How are you moving to the Next Economy?” You should start answering that question by taking actions that take back as much of your life as possible from the large bureaucratic organizations.

Step 1: Take personal responsibility for as much as you can without breaking any laws.

  • Get out of debt (I have written much about being a debt slave )
  • Grow your own food and/or source as much of it as possible from locals. Know your farmer!
  • Take primary responsibility for the security of yourself and those you care about.
  • Manage your own health through reasonable exercise, good diet and other wellness programs.
  • Be happy and abundant. People like to be around cheerful people, it is contagious!  I will have a lot to say about abundance in July.
  • Keep educating yourself. Knowledge is expanding so fast that better ways to do almost everything are constantly being developed.

The large bureaucratic organizations of the Old Economy took over many of those duties in the Industrial Age in quite clever ways. They formed an interlocking web of “allied interests” that are mostly concerned with their well-being and keeping you dependent. Debt is the main tool they use.

They won’t leave quietly. Some of them don’t have the Vision to see change; others have too much invested in the old ways. The bigger the group, the stronger the inertia.

  • Corporations were created to provide limited liability to investors. Now they have succeeded in becoming “persons” in many places.
  • The Industrial Age was a time of “bigger is better” (in economics-speak this is “economy of scale”). That gave rise to large companies and continental-sized countries. The power of being big – economic, political and military worked extremely well until the Internet broke down the need for strong lines of command and control.
  • The myth of unlimited growth worked as long as cheap energy fueled that growth.
  • Large bureaucratic organizations have done a great job of controlling of resources through deception and force.
  • Crony capitalism interlocks the interests of big business and big government. Politicians get money from business and business gets the power of government to squash upstart competition.

Examples

1. Easy payment plans allow you to purchase big ticket items on time.  This creates a debt obligation with finance companies. You have to work to pay it off. It allows the manufacturers to charge higher prices because you only focus on the monthly payment. If you owe more than the item is worth, you are screwed – more so if it wears out before the debt is paid off.

2. Colleges charge such high prices that students now graduate with debt that takes years to pay off. These chains them to the “work force” for a long time before the worker can begin to save for retirement.

3. The fast food industry fills your stomach. Actually, it creates demand for subsidized sugar, high fructose corn syrup (read, agricultural corporations) and delivers low nutrition food to you which in turn causes issues like heart disease and diabetes. (This creates demand for many sectors of the health care industry like big pharma and business lines that cater to weight loss).

4. The industries described in the first three examples are highly regulated. The STATED reason is to protect you as a consumer.  The actual outcome is that only large bureaucratic organizations can afford to pay the costs of those regulations, develop the contacts to smoothly meet the reporting requirements of the regulators and buy the politicians that oversee the regulatory apparatus in the first place.

5. Health Insurance has added some faceless beaurocrat as a key decision maker in your health care. Questions of, “Do I need that?” have been replaced by, “How much does insurance pay for that?”

What steps are you taking to the Next Economy?

Cryptocurrencies, Part 2 – Wallets and Alts

We covered most of the “basics” of cryptocurrencies last week by explaining how bitcoin works. The remaining “basic” topic is wallets.Digital-Wallet-

 

Wallets

They hold your coins, just like a physical wallet.  You can get a wallet for almost any kind of digital device (Windows, Linux, Android, etc.). Wallets provide varying degrees of security, so you should have multiple kinds of wallets and not keep all your coin in one place. You would not keep all your dollars in one wallet and carry it around, would you? There are 3 basic ways to use your wallets:

  • Hot storage is a wallet you carry with you containing the coin you expect to spend soon.
  • Warm storage uses a wallet with extra layers of encryption to further protect your coin.
  • Cold storage is a wallet that is “air gapped” or unplugged from a network for the most security.
  • You are responsible for your own coin. That means you need to make backups of your wallets. If you lose your addresses/private keys, the coin is lost and there is no trusted authority to recover it for you.
  • It is on YOU to learn about computer security

 

The “Other Cryptos” 

Bitcoin is not the only cryptocurrency. All the others are collectively called Alt currencies. Here is how they differ:

  • Block confirmation time -some coins boast a shorter confirmation time for faster transactions. 
  • Hash scheme – bitcoin uses sha256. Many others use a simpler hash scheme called scrypt.
  • Derivative currencies – The block chain is intended to be a platform and indeed, several currencies have been created as offshoots of other currencies.
  • Founders share – A number of coins must be issued when the first block is mined. That number is called the founders share. It can be as few as the number of coins mined in the next block or as many as the currency’s creator decides to issue.
  • Total minable – This is the total number of coins that will ever be mined.
  • Purpose/community – Some coins are intended for specific audiences.

 

There are already hundreds of these cryptos. Here are a few examples:

 

Litecoin Focus on shorter confirmation times for smaller transactions https://litecoin.org/  
Mastercoin A derivative of Bitcoin. Intended to enable complex financial functions such as property and smart wallets http://www.mastercoin.org/  
42 Coin Only 42 will ever exist. The purpose is high price and true rarity.  http://www.42coin.org/  
Lotto Coin A Litecoin derivative. It has many gaming features (e.g. an hourly lottery and superblocks) http://lottocoin.org/  
Maza Coin The official currency of the Lakota Nation. It was the first crypto to be used by a political entity. It is derivative of Zetacoin which is in turn a derivative of Bitcoin. http://www.mazacoin.org/  
Auracoin It was launched on 3/25/14 and is the official currency of Iceland. http://auroracoin.org/  

 

Most of these coins will become worthless but a few will gain traction as functional currencies. Do you want to guess the winners? 

 

Cryptocurrencies, Part 1 – Bitcoin

There is a new kind of electronic currency that that does not rely on a “trustedBitcoin1 authority” such as a bank. Instead it uses cryptographic proof, so it is called cryptocurrency.

Bitcoin is the best known. All of the “cryptos” work in basically the same way and here is an overview.

How Bitcoin Works

  1. Each bitcoin is a string of numbers and letters called a hash.  To verify that every transaction is legitimate, a worldwide peer-to-peer network of computers constantly checks the cryptographic signatures that represent the parties involved in every transaction. This check is a series of very complex mathematical puzzles.
  2. The computers in the network are locked in a contest to solve these puzzles. This is called mining. Groups of computers join into groups called pools for faster solving.
  3. The winner of the contest gets a reward of newly minted coins. The reward shrinks over time. The reward is currently 25 coins for bitcoin. As more computers join the network, the puzzles get harder.
  4. The miners add transactions to a public ledger called a block chain.  This database allows anyone to follow every bitcoin from transaction to transaction.
  5. Once mined, the bitcoins go into circulation and are used for transactions like any other currency. People can buy them through exchanges like Coinbase or directly from each another. A few cities in North America even have bitcoin ATMs.
  6. Once acquired, they must be stored. There are apps called digital wallets (Bitcoin-QT and Multibit are examples) for computers and smart phones. They can be stored in offline storage (air gapped) or in the cloud (another service offered by Coinbase).
  7. The number of individuals and businesses accepting bitcoin is exploding. Everyone from restaurants to Overstock.com accept payment in bitcoin.
  8. Once a transaction has occurred, computers in the network record it on the block chain. The network groups several transactions together and assembles it into the next puzzle.  Each puzzle block is designed to be solved in roughly 10 minutes.

Fun fact: 0.00000001 bitcoin is called a Satoshi after the person that designed the whole bitcoin system in the first place. As I write this, a bitcoin is worth $451.13 and 2000 Satoshi are worth almost one cent.

There are several things that you should consider as you dive into bitcoins or other forms of cryptocurrency:

  • The price is driven by supply and demand. Here is a price chart. 

bitcoinchart

  • There have been dramatic price swings since bitcoin was created at the end of 2008.
  • Bitcoin itself is secure. The systems and platforms built around bitcoin may not be secure.  Personal responsibility is a central idea of the bitcoin ecosystem. You as a participant are responsible for your own security measures. The largest bitcoin exchange, a Japanese company named Mt GoX went out of business and 650,000 bitcoins are still missing from that collapse.
  • There is no central authority like Visa or MasterCard to arbitrate errors and omissions.
  • The relationship between bitcoin and local currencies rely on exchanges which charge fees.
  • A transaction is not considered valid until it has been confirmed by 6 computers in the block chain network. 6 confirmations takes about an hour. Most bitcoin users will accept a single confirmation as proof for smaller transactions.
  • Cryptocurrencies are open but mostly anonymous. Transactions are recorded by address. Address ownership is not visible but it can be discovered with a moderate amount of effort. You cannot assume anonymity.

Bitcoin2 Next time, we will dive deeper into wallets and some of the other cryptocurrencies.

Getting to the Next Economy – Part 1

I recently lost a very wise relative, my Aunt Kay. She was the bridge from my forefathers to me. Aunt Kay taught me many timeless truths but also many things that have outlived theirMayan Pyramid useful lives.

 

Exploring and navigating the Next Economy is in large part trying to figure out what to build on, what to refine, what (if anything) to abandon and what replaces the things we abandon. The choices we make as individuals will determine the direction of the Next Economy.

 

I want to examine this topic from 2 perspectives; this post is looking from a personal level. The second perspective will focus on organizations within the Next Economy.

 

Foundations from the Old Age

Every Age is dependent on the prior one. It has been more than 3 centuries since we left the Agricultural Age but we still have to grow food to eat.

 

Odd things seem to carry forward forever in odd ways. For example, the maximum diameter of the Space Shuttle’s booster engines was determined by the width of a horse’s ass. The framework of the last age becomes the infrastructure for the next.

 

Some things never go out of style. Our basic needs for food, shelter and clothing will certainly remain. The need to be safe in our person, possessions and health will endure into the Next Age. These two lists make up the bottom two layers of Maslow’s hierarchy of needs, forming the foundation of life. Think of abundance as anything beyond these basic needs.  We will examine Abundance in depth later this year.

 

The systems and processes that deliver these basic, foundational needs are undergoing fundamental transformation – primarily to reduce the energy consumption required to deliver them. Production is happening more at the local level. People are growing their own food (permaculture) or sourcing them locally (farmer’s markets, etc.). The new self-reliance and personal responsibility are in many ways a return to principles that were lost in the production and supply chain of the Industrial Age.

 

Principles to refine

Individuals need to start by refining the higher levels of Maslow’s hierarchy. We need to take a “deep dive” into our approach – even the very meaning of friendship, trust, creativity, curiosity and achievement.  The Next Economy is about thriving by serving and elevating those around us, not by crushing, defeating or stepping on them.

 

Things we can/should abandon

There are ideas whose time has passed. Like any rehab project, the first step is demolition. That clears the way to build the new structure. Here are some things that need to go:

  • Processes that rely heavily on non-renewable energy.  Cheap fossil fuel was the backbone of the Industrial Age. We must restructure to reduce our dependence on it with a goal of moving to only consuming renewable energy. The sooner, the better.
  • Duality – The world is extremely diverse. We no longer have the luxury of thinking that two mindsets are enough! The most destructive form of duality is the “Us vs. Them” mentality – It doesn’t matter if this is a cause or a result of war. The mindset needs to end!
  • Debt and financial manipulation – I wrote about the financial 3 Ds  earlier this year.

 

Brand new principles that replace the ones we abandoned

There are a lot of ideas gaining acceptance that may very well become the framework of the Next Economy.

  • Sustainability – The idea that we cannot consume resources faster than the Earth can renew them
  • Unity – The idea that we are all connected and there are no actions that affect only a few.
  • These concepts need to be embedded in our commercial activities through re-engineered business processes and accounting system.

 How are you moving to the Next Economy?

Alternative Currencies

Currency (also known as cash) has been around for thousands of years. Currency is a generally accepted medium of exchange. Money is any currency that also stores value. I wrote about it last year on my old blog.

There are a lot of currencies in use today. The US dollar is the most common.  Others include Euros, Pesos, Yen, Yuan and Lempira. Most of these currencies started out as warehouse receipts for specific assets (generally gold and silver) until a central bank took them over and gradually converted them into debt-backed instruments. The mechanism used to accomplish this is the “fractional reserve system.”

We collectively call these government-backed forms of cash Local, FIAT or Sovereign currencies. Only a small fraction of these total Local currencies are in a form you can touch.  A billion dollar bills would form a stack 63 miles high – that would reach halfway to the International Space Station. The Federal Reserve created $75 billion in January 2014 alone. Most of the cash exists in electronic accounts in banks.

The key point here is that FIAT currencies are ALL issued by central banks and backed only by a government’s promise to pay.  Effectively, these currencies are disasters waiting to happen. The disasters are called monetary crisis and they happen all the time but until now, they were confined to local economies like Greece or Argentina. 

Alternatives

People of foresight (Change Agents like you) are searching for a better way. Several alternative currencies have come into existence and it is up to people to accept or reject them. We do not yet know which ones will prevail but here are a few possibilities:

  • Gifting Economy – this is popularized by the Burning Man festival and Charles Eisenstien’s Sacred Economics. It is the age-old bartering system with the twist of freely sharing your Abundance with those around you.
  • Time Banks – use time as a medium of exchange. The unit of currency is the hour. The banks allow members to earn time by providing a service and then spend it on the services offered by other members of the exchange. If you live in Austin, Texas, Amanda Jones will get you started with the Austin Time Exchange Network! (Note: I am proud to be a member of ATEN.) Some time exchange networks are interconnecting, allowing members to exchange thier hours throughout the United States!
  • Crypto currencies – currency based on cryptographic proof instead of trust. They can be stored and exchanged on almost any digital device. There are many of them, bitcoin being the best known.  Two posts on cryptos are coming in May.
  • Asset-based currencies – are based on the intrinsic value of the object being used as currency. Gold and silver are the best known of these currencies. There is even evidence that some countries are preparing to make their currencies partially gold-backed.
  • Some hybrid – a mashup of other currencies. I have seen a proposal to make shares of blue chip stock a form of currency. There might someday be a way to trade 150 shares of IBM for a car, for example.

Why would an individual want to participate in an Alternative currency?

  • Shelter from the global currency crisis that is likely to happen. Most World FIAT currencies use the US Dollar as a “reserve”. This means they are backed by US dollars. If the dollar gets a mild cold, other currencies could get pneumonia.
  • Lack of trust in the banking system and/or banking regulations
  • No access to regular banking services
  • Desire to focus on the local economy

Do you have any experience with Alternatives?