Faircoin, an Equitable Currency Servicing Cooperatives

Faircoin, an Equitable Currency Servicing CooperativesThe dream of a “global cooperative” that has been haunting the libertarian activists for decades, resurfaced in early 2014 in Catalonia, in the Cooperativa Integral Catalana (ICC), a network of production cooperatives, squats, environmentalists and anti-globalization groups. The ambitious objective is to “create a revolutionary tool for building another world economy” drawing on principles of “peer-to-peer communities, open cooperativism and hacker ethic”.

To achieve such a result operating globally, the founder of the movement, Enric Duran, 38, encourages alternative associations in other parts of Europe to come together on the model of the ICC and to federate within a network of exchange and mutual support called Fair Coop.

Duran borrows 492,000 euros and refuses to pay

Until recently, cooperatives vocation was “revolutionary”, which, however, was undermined by a fundamental weakness: they used the official currencies controlled by states and banks. The first time, Enric Duran tried to overcome this paradox in his own way. In 2008, he borrowed 492,000 euros from various banks to give to advocacy groups and fund a newspaper. Then he announced that he did not intend to repay the loans. A coup that earned him the nickname Robin Banks (Robin Bank, Robin Hood of Banks), but also an indictment, an arrest warrant and a trial in absentia.

Since 2013, to escape justice, Enric Duran has been in hiding, “I don’t participate in any public event, I work only on the Internet.” He simply indicates what flows through Europe. Whatever the outcome of his court case, he understood that now he must find less adventurous financing.

The quest for ethical currency

However, since the advent of bitcoin, the situation has changed. Today, a somewhat talented geek can create its own Internet cryptocurrency, drawing algorithms invented for bitcoin. For Enric Duran and his friends, a thing is obvious: Fair Coop must have its own currency.

Yet there is no question of adopting the bitcoin, which according to them has several unacceptable defects. On the one hand, to solve the equations to “undermine” (create) bitcoins, you have to have a lot of very powerful and expensive computers. On the other hand, the “mining” consumes a lot of electricity. Finally, the first to arrive in the bitcoin system have now the advantage of the rise of the course to get rich without doing anything, as annuitants.

Enric therefore goes in search of a more “ethical” instrument. In spring 2014, his sights fell on a cryptocurrency with an attractive name: the faircoin, a variation of peercoin, another currency circulating on the Internet.

Like bitcoin, the faircoin works through “blockchain” – a centralized register where all transactions are recorded and stored. The blockchain is freely available, but faircoins owners are anonymous. However, unlike bitcoins, mining of faircoins by solving equations is marginal. The original creator of faircoin, who remained anonymous, has set up a cheaper and more egalitarian system. It issued 50 million at a time, in March 2014, and distributed them free for three days, to users who had opened a portfolio on his website.

Therefore, it was enough for them to keep their faircoins for twenty-one days to automatically receive new, in proportion to their initial capital. Accrued interest is 6% the first year, 3% in the second and 1.5% thereafter. The number of faircoins is not capped, which opens endless possibilities.

Collect a collapsed currency

Unfortunately, the founding father of faircoin was less “ethical” than expected. In six weeks through various maneuvers, he succeeded in artificially raising the price of its currency. Then, one day, he exchanged his faircoins against the bitcoins and disappeared. Immediately, the price collapsed to near zero, and small speculators found that they had been duped.

Enric Duran then arrived with a new project, offering the orphaned community to take joint control of this disaster currency and put it at the Fair Coop service.

Soon, some holders were persuaded. Among them, Thomas König, a computer consultant aged 45, living in Dornbirn, a small Austrian town. Thomas volunteered to take over the management of the blockchain. “I have fully analyzed the source code of the software. I discovered design flaws and security vulnerabilities, I fixed them. I’ve added new features to the portfolio, and I created a tool for exploring the blockchain.” He also deals with the website and discussion forums.

To begin the conversion, Thomas König and other faircoins owners have decided to donate their portfolios to Fair Coop. Meanwhile, Enric Duran launched a crowdfunding operation: supporters send him euros and bitcoins, which he used to redeem the faircoins holders who refused to give their faircoins away for free. In late November, while a faircoin was worth 0.26 cents, Fair Coop controlled about half of faircoins in circulation.

With this treasure, Enric Duran will now proceed to the second step: the establishment of a system of “Fair Credit”. He will distribute free batches of faircoins to companies and associations destined to join Fair Coop. Recipients will keep this social capital that will grow in value as they develop their production of goods and services. The faircoin can then be used as collateral for a loan system.

“Create a symbiotic economy”

The cooperative is not yet operational, but it has already attracted hundreds of activists from different countries. The “interim guidance” to coordinate its activities is led by renowned personalities of the alternative movement. It includes Michel Bauwens, 55, a Belgian installed in Thailand, director of the P2P Foundation, an Amsterdam-based research center whose mission is to promote peer-to-peer exchanges and free licenses in all economic sectors.

Fair Coop can also count on the participation of the lawyer Primavera de Filippi, a researcher at Harvard University in Boston, who studies the legal and social impact of cryptocurrencies and governance systems driven by algorithms. He plans to create a Fair Coop network in Boston.

In France, Fair Coop recruited Etienne Hayem, 30, creator of symba, new alternative for local currency backed by the Ile-de-France region. The symba currency is used to assist SMEs involved in equitable economy that banks refuse to credit. According to Etienne Hayem, new local currencies and cryptocurrency with global reach are the two branches of the same movement, “the creation of a symbiotic economy that couples the economic wealth of ecological and social asset.”

Until this day, the survival of faircoin is largely based on the Austrian Thomas König: “It’s exciting, I can finally put my skills at the service of a noble cause. But on the other hand, it’s exhausting. The faircoin takes up all my free time, I cannot see my family. I do not know for how long I’ll hold on.” This is not a call for help, but we guess that assistance would be welcome.

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