Economic Sustainability of CNs (v2)

Economic sustainability and, in general, sustainability is a very complex issue bearing many interrelated dimensions. To receive funding from an external source, for example, a CN needs to have defined an appropriate governance and administrative structure, and to showcase a healthy community internally and externally. In many cases, the articulation of a clear and inspiring vision is necessary for the engagement of volunteers, but also for addressing legal hurdles through advocacy and policy-making, which are both fundamental requirements for the survival of the CN in its early stages and thereafter. In this project task, the focus has been placed on a so far minimally studied aspect of economic sustainability in the context of CNs. We refer to the community or alternative currencies, which can complement existing successful governance models discussed in WP1 and the pricing schemes and incentive mechanisms analysed in Task 2.2, as parts of a holistic strategy towards the economic sustainability of CNs. There are at least two very good reasons why the study of alternative currencies is worthwhile in the context of CNs. First, the relevance of alternative currencies to the economic sustainability of CNs gets all the more important to understand in depth, in light of the recent hype around combining cryptocurrencies with Internet access sharing, a development which was not anticipated at the time of writing the netCommons proposal. Second, by its very nature, the design of a community currency (CC) involves the decomposition of an economic system, in our case the CN, and its surrounding economy, into different parts. This process helps one identify structural issues and opportunities for collaboration with other sectors of the economy, which could be pursued even if the corresponding community currency is not actually implemented. D2.4 included a tutorial on community currencies for engineers (Martignoni, 2018), and an inspiring analogy between CNs and CCs. In this deliverable, which is essentially a follow-up of D2.4, we first explore novel currency models that could serve the needs of CNs, as these stem from their distinct economic, social, and political dimensions. More specifically, in chapter 3, we refine and analyze the district currency model. This is a “commons-based” currency model, i.e., it promotes “commoning”, as this is evidenced in many of the existing successful CNs. The strong notion of commoning in many CNs is discussed while surveying existing sustainability models of CNs in Chapter 2 and stands as motivation for the broader analysis of community currencies in this deliverable. Second, we improve and further develop a simulation game based on the district currency model. The game has proven most successful in both explaining the district currency model itself and revealing some of the basic principles behind the nature of money and the complexity of currency design. The better understanding of the link between economy and currencies is often the most important obstacle in the deployment of successful alternative currency schemes, especially after the bitcoin hype. In Chapter 4, we present the design of the game as well as the lessons learned through six implementations of it; we also include guidelines for people who wish to run their own variants of the game. Third, we analyze possible integration scenarios of existing alternative currency models with different types of community networks. The analyzed models in Chapter 5 range from the novel and untested district cur- rency model to the most visible success stories in this field like Sardex.net, including possible combinations of those. This analysis and the resulting community currency schemes are then presented as alternatives to current assumptions of how an economy built on top of blockchain-based schemes, like Ammbr1, could look like. More specifically, we stress the need to distinguish between the “accounting” function that cryptocurrencies perform and the management of tokens, which could be in line with the principles of commoning, promoted by netCommons. In Chapter 6, our proposals are placed in the overall discussion about the challenge of economic sustainability of CNs and possible future steps are discussed.