Bitcoin Forum

 http://www.google.com/hostednews/afp/article/ALeqM5j6wqQyVUcZbJA9hkNMnaA_J0t__Q?docId=CNG.dc9e2090a196d5730ad325eae75724c8.111

I thought they had already launched, but apparently it was just a trial, using their electronic-only system.

Cashing out to pounds costs 3%, and is only guaranteed as an option when done through the credit union holding the GBPs backing the currency.

So this is designed to promote localism? Not a bad idea IMO, and probably the best place in the UK to give it a go. It'll be good for bitcoin to see alternative currencies being used in the UK at least.

Really? Do you know where else?

This is good news because it makes it harder to ban bitcoin if there are other alt currencies around. Especially if local governments are issuing them.

Bristol city council is simply running interference to help out Bitcoin. Good one.

My thoughts exactly. I've heard of small-scale grassroots attempts at local currencies, but this is pushed by the local government. It legitimizes alternative currencies in the eyes of an average Joe. Besides, until now I thought the possibility of some local government trying out Bitcoin was a pipe dream - not so sure anymore. It might happen.

Brixton pound is one of the largest local currencies in the UK
But there are LETS exchanges everywhere, just on a much smaller scale in each case.

Lewes launched their Pound about a year ago - I spoke to a local trader recently who thought it was a pain as a) nobody took them for anything *useful* like car parking, and b) exchanging it back into GBP meant a time-costing trip to one particular building. Good to see it's still going, but there are definitely some real problems around demand and usability that both local currencies AND Bitcoin need to resolve in order to work.

I was going to post something similar, having looked into it I found http://thelewespound.org/ (http://thelewespound.org/), the scheme's website, all the recent entries seem to indicate a failing project, this one is interesting:

I hate to spoil your joy over this, but this Bristol currency isn't really a currency. As far as I know, it's fixed to the british pound in 1:1, thus it is merely GBP in another form. The reason why they started this project is that once you exchange your money to the Bristol thing you usually spend it there. If you just had GBP you would likely spend it somewhere else. So it helps the local economy. From our point of view this turistic attraction is irrelevant.

Feel free to correct me if I'm wrong. I got my information from newspapers and it may be wrong.

Nice idea to make their own currency in Bristol.

Somebody should tell them about Bitcoins.

Agreed - most local currencies are closer to the Gift Card model used by shops in that it limits where you can spend your cash (except you can convert it back to other currencies, at a push). From the spender's perspective, that's a big limitation - "Like Cash! Only less useful!" - you need to offer a *lot* of discounts (like, system-wide) to make it meaningful/attractive to spenders, and local businesses often don't have the margin to do that.

I'd like to see more development around reasons for local currencies - but realistically I think that has to come from, or feed directly into, local taxes/government. Could local taxes be tied into transactions in the local currency for example, e.g. spend Brixton Pounds to give x% to a local development fund? Given that the main draw is to keep money "local" rather than disappear into international companies and pensions, doesn't that open up scope for more local feedback?

I'd like to see more online presences for local areas too - electronic local currencies could feed into this nicely, like a kind of gift card for an aggregated online store for an area. An "eBrixton" site could bring together items from shops in Brixton, which you could then buy online using Brixton pounds, or pre-order online and pick-up in person. There's opportunity for gifts if you know someone's going to be visiting a place, but also means that if people have a Brixton Pound leftover after visiting for the day, it's not just lying around in a drawer being forgotten about.

Oh yeah you're spot on, but I think it's going to add legitimacy to alternative currencies in general.

The problem I've noticed with local currencies is that they usually die out when the good times come back. By the time they are useful again they're nowhere to be found.

The biggest ones I've known of are in Switzerland during WWII and Argentina, Buenos Aires province, Quilmes.

The Argentine one is going to this day but fallen into disuse. 

AFAIK all these local currencies are destined to fail without offering a unique advantage. There has to be something to promote their use for them to go long term. In a crisis that demand is there.

But if there is no unique use other than not being the main currency in the area they just get slowly sidelined. Bristol council would have to make the Bristol pound the only method of payment for some kind of bill to get it to persist. Likewise they could offer some of the advantages that Bitcoin does over conventional financials like making it easier for the homeless to register for an account or lower inflation.

In Scotland they have a different looking banknote. Does this mean they have the ability to break away if they wish?

All of the schemes need to man up and switch to Bitcoin as Bitcoin has the leadership they don't.

I hope not!
If the public somehow connects bitcoins with this bristol gift cards (i refuse to call it a currency. thanks to scribe for a wonderful alternative name), everyone will think of bitcoin as a gift card. Misconception is the last thing we need.

Everyone is overly exicted about a thing that only matters to the Bristol community and has nothing to do with bitcoins.

Just because it matters only to bristol or its tied to the GBP doesnt mean its not a currency. Its still a store of value and a medium of exchange. It's simply designed to promote exchange that does not allow for money to leak out of the local area (think walmart vs your local hardware store).

Local currencies are just glorified gift vouchers, which can only be spent locally. So they stop money leaving the area.

However, theres another reason why people issue them. The issuers are hoping that people will not redeem all the currency notes for goods or fiat, thereby creating a profit for the issuers. Thats one reason why I dont like them. The issuers can enhance this profit mechanism, by putting obstacles in the way of holders from redeeming them. So they put expiry dates on the bills, or they only allow them to be redeemed for fiat in a certain place and time.

The second reason I dont like local or private currencies, is the issuers could issue lots of them, and then go bust, or abscond, making it impossible to redeem them for fiat. That means local merchants will stop accepting them for goods, and they become instantly worthless.

Because of these reasons, local or private currencies are often considered a bit of a scam. Unfortunately, bitcoin is often tarred with the same brush. I am finding it hard to convince people that bitcoin is not like this.

FUD.

Show me how this is a scam http://www.letslinkuk.net/

And be clear about why you think "bitcoin is often tarred with the same brush".

You have presented no counter argument to the points Ive set out.

You didnt make any valid points in the first place, it was just all incoherent FUD. You dont seem to know how the currencies actually work.

As an example, the issuers of a local currency  (in every case in which I am aware) have nothing to do with the merchants that accept them. Therefore, they have no interest in people "not using" the dollars to "profit". In fact quite the opposite. The entire reason for starting the local currency in the first place is to create a network of local resilience and to have them be exchanged as much as possible. If people don't use them, the only person that loses is the person who spent all of the time putting in the effort to build the currency in the first place.

the issuers gives you this "local currency" in exchange for what?

national currency, usually.

how does the issuers set the price per unit of the local currency?

also why wouldn't the people just use the national currency... whats the advantage of buying local currency with a national currency?

its starting to sound like Canadian Tire money
http://4.bp.blogspot.com/_GLGCM6VxXS8/R-FmTbwDSPI/AAAAAAAAAEU/ZExIse66vk8/s400/ctm.jpg

the beauty of the internet.. err one of them.. is that when the credit constriction and asset gobbling part o the cycle hit.. we now have growth of alternative currencies instead of despair...

and i a clever enough barter system would arise...  look out vampires

i imagine it causes some consternation among central bankers

For hypermobile people like me, it used to be a pain in the ass when every small country in the EU had its own currency.

That's why I was really happy when the Euro came along.  It's a shame the Euro was ruined by flawed monetary and fiscal policy.  But in principle, the idea of having one standardized currency for the whole of Europe was not a bad idea.

I like bitcoins for similar reasons. They have the potential to become the standard currency of the internet.
 
These local currencies seem like a step backwards.  If one currency per country is already a pain in the ass, just imagine the bureaucratic nightmare if every city had it own currency.

Stops what is referred to as "capital flight". Which means that money leaves the local area and ends up in the hands of some (multi) national corporation. This saves jobs, increases local prosperity and increases community resilience.

Yes I did. Stop being stupid. Below is two very valid points.

It is an indisputable fact that the currency issuer makes a profit, when he sells printed notes for fiat, and those printed notes are never redeemed for fiat.

There might be a slight "first mover" effect. But if every city has its own currency, it also stops "capital influx" from other areas.

But that's not why most of these currencies succeed or fail. Most of them fail because to the user they are less useful than national currency: "Here, give me one pound that you can spend anywhere in the UK, and I'll give you one pound that you can only spend in Bristol." That's a losing proposition.

Here's a guide to how the Totnes currency was set up. It covers legal and practical issues, and is quite interesting:
http://transitionculture.org/wp-content/uploads/Lewes-Pound-How-To-Guide.pdf (http://transitionculture.org/wp-content/uploads/Lewes-Pound-How-To-Guide.pdf)

Here's an overview of some other UK local currencies:
http://quezi.com/11087 (http://quezi.com/11087)

Yes. Again, my original point was that, simply, the existance of alternative currencies legitimizes Bitcoin in the minds of the masses, or least diminishes the irrational fears to some extent. In fact, the shortcommings of centrally issued alt currencies make Bitcoin look even more attractive.

We are far far away from every city having its own currency. For the last 25 years globalization has been accelerating to an unprecedented scale (with unprecedented consequences). In any case, these local currencies are not just local, they are designed to be complementary, not exclusionary. This means that they function in tandem with a larger (or multiple) currencies which also have their own effect.

It's true that this is why most fail. But in reality it's only a losing proposition if you only care about your personal fungibility and not the strength of the community.

Thanks for that link Ribuck. To quote from that document about the Lewes pound.


This is proof that the issuers sell these currency notes for fiat, with the expectation that a portion of them will never be redeemed. They claim that the profits are used to "fund future initiatives". Which is leftwing speak for "pays for the organisers wages/profits"

From the Lewes pound document
http://transitionculture.org/wp-content/uploads/Lewes-Pound-How-To-Guide.pdf

See, thats proof that the issuers of local currencies discourage people from redeeming the notes, with the intention to generate revenue/profit for themselves.

This is why people are suspicious of alt currencies. And Bitcoin gets tarred with the brush of these local currency scams. Its really difficult to explain to people that bitcoin is not like a typical local currency scheme.

One Briscoin should be pegged to one day's worth of parking in a local driveway.  Two Briscoins for downtown car parks.

The more I think about this idea, the more I like it.

After reading the article, I must say - This seems to be really useless. People will eventually lose on exchange fees without any advantages as compensation. At first I thought it would be more like Greek TEM.