Bitcoin Forum

I recently found out there is a small LETS group in my area and I have emailed the parent group for more info.  I don't know much about LETS yet but is there a way of integrating bitcoins into a LETS group to form some kind of new local currency?  Any info or help greatly appreciated so I can approach the group about it once I have their contact details and am a member.

Edit:  Maybe someone is lazy and wants something from a LETS supplier then maybe they could buy some LETS hours with bitcoins.  Or maybe someone has earned up too many LETS hours and wants/need to balance out then maybe they could sell some of their LETS hours for bitcoins.  Also with new local currency popping out backing and pegging them to bitcoins could provide security and kudos to the new currency with people knowing they could also cash out there local currency for hard cash via bitcoins.  Many people are moving away fiat and want as little contact as possible with it so step in bitcoin the peer2peer decentralised internet currency

LETS is about community
Bitcoin is about greed.

Doesnt fit together.

LOL.

However, because I like destroying communities with greed, it would be interesting to create bitcoin-LETS exchanges, or exchanges to any local currencies.

I tend to agree with Bernard Lietaer's work who proposes dual currency systems.

http://www.scribd.com/doc/84816011/Bernard-Lietaer-The-Monetary-Blind-Spot-Yin-and-Yang-Money
http://www.scribd.com/doc/26248658/Is-Our-Monetary-Structure-a-Systemic-Cause-for-Financial-Instability-Bernard-Lietaer

Bitcoin may be a too efficient money for a regional system. But there can be exchanges of course. I'd say Bitcoin is a "patriarchical" currency (controlled by an authority, but it's computer code) and the best one we've ever had at that, because it's open and transparent.

Indeed local currencies and Bitcoin might work hand in hand quite nicely in the future. This connection has not been explored yet but I think that there is massive potential.

IMHO, LETS is only really useful as a tool for local lending. Its not a currency. But it does allow for the temporary expansion of currency, giving the system the flexibility it needs without creating a permanent excess.

What I envision is bitcoins and commodity money being the primary currencies, and LETS coming in to handle the small business temporary loan situations.

For example, say a small clothing manufacturer gets an order for a sizable amount of pants. They don't have enough cash on hand to order the cloth, so they use the LETS system to get a loan to buy the cloth. They know they will get paid for the eventual product, so taking out a loan makes sense. Once they get paid for the finished product, they can pay off the loan.

Perhaps the clothmaker and the buyer are part of the LETS system as well. The loan can be transferred/cleared automatically when appropriate, and only the profits for each part of the transaction need to be transferred.

I learned recently, that there are more than 30 local currencies in my country. If there was a working bitcoin mobile payment system, some of those LETS might be interested to make their currencies convertible to coins.

What is the benefit over traditional loan in fractional reserve banking? That you can get the loan without bank?


Many local currencies operate with obscure rules, therefore it could be a bit tricky to create an exchange.

Maybe someone is lazy and wants something from a LETS supplier then maybe they could buy some LETS hours with bitcoins.  Or maybe someone has earned up too many LETS hours and wants/need to balance out then maybe they could sell some of their LETS hours for bitcoins.  Also with new local currency popping out backing and pegging them to bitcoins could provide security and kudos to the new currency with people knowing they could also cash out there local currency for hard cash via bitcoins.  Many people are moving away fiat and want as little contact as possible with it so step in bitcoin the peer2peer decentralised internet currency.

I think a LETS/bitcoin market could be useful. For some of the LETS members to buy stuff sold for bitcoin and viceversa.  It could be also a nice proxy to trade between different  LETS currencies. The problem I see is that being LETS communities small, there won't be much volume.


If you want a backed currency, it won't have anything to do with LETS. It is mutual credit non scarce money: it is not cash.

But there's gold/silver backed local currencies so you could have a bitcoin backed local currency too (again, it wouldn't have anything to do with LETS apart from the fact that the currencies are local to an area). For example, chiemgauers are an euro backed local currency with demurrage. It's inspired in Gesell's freigeld but the fundamentals are totally different than those of LETS.


No. LETS is used for payments. It is based on mutual credit but it is definitely a currency. You spend the money into existence and destroy it by accepting it back. The main purpose of LETS is trade and not financial lending/borrowing.
If it were for lending, not many lenders would be attracted since the interest is zero. Even negative in other mutual creedit systems such as ROCS.


I would say that the yang part of bitcoin comes from the fact there's nothing in it to prevent interest and short-term thinking.
Regardless of defining bitcoin as a currency without authority or one with a decentralized authority (the block chain), I agree that Lietaer would consider it a "Yang currency". Maybe the fact that is meant to be global makes it yang too. I guess this is all too relative anyway.
Thank you for the links.

That doesn't make sense. If it can be created and destroyed at will, there's no good way for the market to derive a value for it. Its ability to be created and destroyed makes it much more useful as a credit tool.

LETS just won't work as a primary currency - only as a secondary adjunct to something else as a primary currency. Adding it as an option to a system based on bitcoins or precious metals could work.

There are at least 3 web programming companies listed at the chiemgauer website. If bitcoin would be convertible to chiemgauer, the could work on the new forum software... :)

Because of what you say, you cannot make cash out of mutual credit.
You need an unit, but it doesn't have to be necessarily a "primary currency". You can use USD, ounces of silver, hours of unskilled labor (yes, wages aren't fixed, the doctor can charge you more than an hour per hour), loafs of bread, or liters of beer or milk.
My point is that you don't need another currency to use it as a medium of exchange. You can trade directly with it. We could say fix the unit to a kg of butter and then negotaite prices from it. For example...
-1 beer, please.
-Ok, give me 0.5 butter units of our LETS as payment.

Being that you can use any unit, 1970 USDs (inflation adjusted) or terras (or any other basket of commodities that the community defines) seems more appropriate than bitcoins or gold as the price would fluctuate less.
My point is that is not a technology for lending, it's meant for trade. And it doesn't need any other currency as backing, just a unit.
I think usd and hours of unskilled labor are the most popular choices. But there is at least a Ripple based (also mutual credit) local currency denominated in silver: https://www.shirehours.com/
Well, with Ripple, multiple units can be used at the same time. I think they use both hours and silver ounces.
Ripplepay allows btc, gold ounces, usd, eur, slv ounces, cad, hours, JPY...
villages.cc only hours
I know these aren't LETS, but they're mutual credit too.

You just need a chiemgauer/btc market.
Another solution could be BTC -> EUR -> Chiemgauer
You can buy Chiemgauers for 1 eur each.

I live close to the Chiemgauer region, afaik they don't allow changing Chiemgauers back to EUR, at least not officially (black market maybe, but we Germans are nice and follow the rules  ;)).

Well...the comment with the forum software was more meant like a joke...but the smileys are hard to identify here...

I just thought, that mobile payment is the future. And it has already started in some countries, like:

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:22551641~pagePK:146736~piPK:146830~theSitePK:258644,00.html

I just wondered, how those LETS currencies could be brought up to this standard, and some coin + instawallet solution might work.

So, the euro <-> LETS currency market is not enough.

Well, fixing the unit is a problem. Any sort of fixing will lead to an abuse of power by those with the ability to do the fixing. It also leads to problems with arbitrage. That's why it needs to float.

I haven't logged in to ShireHours for quite a while. I know I've been registered on that system since 15 Dec 2008, but I'm only connected with two other users. It mostly seemed to me to be a way for people that don't have any money to pay off debts without doing the work required to earn the money.

Seems like the chiemgauer stats are not available in english. I think, they are pretty impressive. They even have some cashcard?

i know, but on second thought... one hand washes the other  ;)

Well, it would be a 6 or 7k chiemgauer job?

https://bitcointalk.org/index.php?topic=50617

so it would be in their interest, too... :)

LETS is a socialist price fixing scheme. It cannot work in the long term. If LETS credits were actually traded against currency, the price advantage of LETS would disappear, and it would have all the disadvantages of every other arbitrary fiat.

Economies can't run on charity, that's just not how reality works.

I thought you could convert them back at 0.95€ per Chimgauer or something like that. If you can't convert them back they're not backed by anything.
From wikipedia...
Businesses: accept 100 Chiemgauer at face value and spend them for their own purchases or exchange 100 Chiemgauer into €95, losing 5% for commission but earning more by attracting Chiemgauer members to their products and/or services. Of this, €2 is devoted to administrative costs, and €3 replaces the original discount to the non-profit.

Again, it is not cash, it is credit. For every positive balance there's another participant with a negative one. There's no need for arbitrage because it is not a commodity nor cash. It's like saying that loan debts need to float. I don't want debts to me to float. I want to negotiate a unit and get paid back. The unit is just an agreement. Instead between each debtor/creditor pair, between the LETS community as a whole. As a prerequisite, all participants know and trust each other. Also every participant needs to understand and accept the rules.
The only way to abuse the system is by leaving with a negative balance. In that case you're betraying the trust that you were given.


I haven't participated in ShireHours but it is just a fork of Ripplepay and that's not how it works. If you're stupid or generous enough to forgive debts without receiving anything in exchange that's your problem.
It's like saying that barter is for people who want things but don't want to pay with money and pay with useless stuff. If that's how you've bartered the problem is not with barter, you just let people screw you. That's part of the free market, if you're stupid you make awful deals. Is that a problem with the free market or with stupid people?


With all due respect you don't have a fucking clue what you're talking about.
What in the world makes you think that?
Is that you think that fixed wages is a requirement? It is not. Even if you chose hours as the unit all the prices are negotiable. An hour is supposed to mean (as said before) an "hour of unskilled labor". That is (in case you read it the first time but didn't get it) "an hour of certain work that anybody can do". That includes, for example, moving boxes from a store to a truck. That doesn't include, for example, an hour of programming.

What price advantage? What charity?
Have you even read the wikipedia page about LETS? Where are you taking all that nonsense from?

yup, businesses can, consumers can't. that's just to artificially boost the network effect a little i guess.

I see.

Its not the debt itself that gets arbitraged, but the units. If the units are fixed, then an arbitrage situation will arise - whether it is "needed" or not is irrelevant.

And credit money isn't needed for everyday trade - commodity money works just fine for that, better than credit money actually. The only time you need credit money is when you need to expand the money supply beyond what the commodity money can provide. And then you need it to be able to collapse back into nothing (AKA clearing). Trying to base an economic system on credit based currency is suicide, as so many countries are finally starting to find out.

Please, explain me with an example how this arbitrage could occur. For example, fixing the unit to 1 USD.


Yes mutual credit money isn't needed, it's just an alternative to cash (my definition of cash includes many many things such as bitcoin, gold, usd...).
What we have today (USD, EUR) is not mutual credit. It is credit from the state (and banks, by fractional reserve banking) to the rest of us which is transmuted into cash by law. If they didn't print like crazy, it would be basically equivalent to gold. So even if it's also credit, what we have today is definitely cash. It's in a blurry frontier.

This video may help you understand my vision of money (and also mutual credit in general, which I really doubt you understand):

http://www.youtube.com/watch?v=ySzqM5dpF7s

This could be the "first part": http://www.youtube.com/watch?v=UQX3tNuC_TY

And this is the film from the LETS crew to promote their system: http://www.youtube.com/watch?v=TwmM5Nb6hiE
A little bit too much "anti-capitalism" for me, but not bad. They are really criticizing the current system.
We all monetary reformists don't like the current system. So your argument "LETS won't work, look at the current system" doesn't serve. Just like I can't criticize gold by criticizing the fed, you can't say "Gesell's free-money sucks because Keynes was wrong" or neither of us can't criticize debt-free money proponents (the conclusion of the money masters documentary, basically) by saying "greenbacks are doomed because Bernanke is crazy".

Also LETS systems have been working pretty well (for its limited local purpose) in many different places for long so your conclusion "it won't work" is already invalid. IT DOES CURRENTLY WORK in hundreds of communities (http://www.complementarycurrency.org/ccDatabase/).

Anyway, I'm sure we two can agree that what we want is a free monetary market in which people can chose the system they prefer (or use several of them simultaneously).

yup, for all you gold bugs and other commodity-bugs out there, what is money, in short?

Money is information.

That's all it is really.

Its purpose is to serve our bartering and trading with as least friction as possible.

All those different means and tools we have used as money in history and today have different characteristics which serve its original purpose in different ways, some better than others.

Hmmmh...from that perspective, *coin is the perfect money, because it reduces money to pure information. No need for additional means, like paper bills, metal coins or funny plastic cards. Just a sequence of 0's and 1's...

So anyone with a LETS should love bitcoins, because it leaves out the need to print any money, or so...

There is no such thing as a "generic unskilled labor hour", and I don't have to prove that Keynes was wrong in order to say that Gessel's depreciating money is crap when Gessel himself was full of crap.

The stated purpose of LETS and every other ponzi scheme like it is "to provide an alternative (or adjunct) to state money, and to create jobs in the community". In every case, people get some sort of discount; either in the form of a markdown on goods or else (extremely) cheap labor. I remember an article about it once, noting some old lady getting her house painted for less than half of what it would cost her in dollars.

The system overall is basically the same stuff the NGOs shove down poor developing countries' throats: shame based credit money. They claim by offering either zero interest or artificially low interest you can stimulate business, but all real business runs on capital, the holders of which demand interest and for good reason. The incentive of interest ensures that money is spent on the most efficient businesses rather than socialist bridges to nowhere. By taking away interest and economic responsibility through their arbitrary credit materialization, they invert economic control from consumers to producers and eliminate any chance of getting capital influx or developing any real business.

If you want to be a "good person" and paint some old lady's house for free, then volunteer and do it for free. Don't use some retarded socialist ponzi brainwashing scam. LETS, Berkshares, and all their crony companions are pure blooded communists, and the results of communism are always the same no matter what shade of red you paint it.

https://i.imgur.com/l6Brh.jpg

http://www.scribd.com/doc/26248658/Is-Our-Monetary-Structure-a-Systemic-Cause-for-Financial-Instability-Bernard-Lietaer

Are you saying bitcoin doesn't create diversity and interconnectedness? Do community currencies even create diversity or interconnectedness? I would think a currency that is only accepted in a small region would create more separation than anything.

We're all using a very local currency every day. That is our own precious time, our own work hours. Whether we buy groceries, do some boring paper work, or some mundane task in our job that is well below our qualifications but must get done so it's out of the way, all these things are *inefficient* because there'd surely be businesses we could find to outsource those tasks, who are specialized and thus more efficient at it.

So why don't we outsource everything? Because it makes us dependent. It makes us slow to react to changes. It makes us inflexible. And changes will occur. So this approach is unsustainable in the long-term. This is the *resilience* factor.

An actual local currency is an extension of this concept to a community. So often in history there were factories standing still while there were still skilled workers and there was still demand, but there was recession, there was "no money". So they could and should have established a local economic cycle with their own money before everyone starves of poverty.

With a money that is scarce, no matter if naturally or artificially, such things will always happen. I don't see how Bitcoin will mitigate that. Even the American colonies resorted to scribs at some point when gold became too scarce. But the scarcity of a currency is necessary in order to be ubiquitous and universally accepted, while in local context it has to be abundant in order to encourage activity. These are diametrical requirements that a dual currency system (i.e. gold with scribs, or bitcoin with ripple) can solve.

+1 for both jtimon and herzmeister for a great understanding of currencies. Scarcity is a two way street, it's a good thing in some ways and a very bad thing in some ways. Currencies based on mutual credit basically have no scarcity because the currency itself forms from the work that is done in those communities. It can never be scarce. Commodity money however can become scarce in a community, making it impossible for someone to use it as payment. Of course that person could take an expensive loan and become a debt slave but it's not necessarily the best way to go.

In a mutual credit system taking and giving credit is all about the community and there is no sense of debt in the same way. One of the reasons for this is that all of the credit is interest free. There is also no forced payment. That credit is loaned from the entire community, not from any single person. Of course one could abuse this by only taking and not giving but at some point people would stop giving if a person has a balance of minus 100 hours (in a timebank).

The problems with these type of currencies come when we go to large scale human interaction and large production chains. Their acceptance is entirely based on community trust which is why mutual credit systems don't really scale well. This is where Bitcoin comes in. Bitcoin could be the widely accepted currency that is accepted everywhere but at the same time people could use mutual credit within communities because it does not have scarcity which can sometimes limit the possibilities of what people can do.

Yes, is a work that you don't need preparation nor any special abilities to complete. It's a very simple definition. Usually it's said "it is more or less equivalent to 10$" as an orientation. The intention of using hours is avoiding USD inflation.
Anyway, if you don't like that unit, you can use USD, silver oz, liters of milk or whatever you prefer. Whatever the group agrees will work better for them.


Glad that you get they're different. Out of curiosity...What would you say is the worst crap from Gesell?
Not talking about solutions, what misconception?


LETS aren't designed as ponzi schemes. You don't need more and more users to make it work. In fact, it's trust requirements make growing the user base very difficult or even impossible from certain point.
What makes you think they're ponzi schemes?
I haven't heard of any discount not in stuff prices nor in wages. Where have you heard that?
I read some articles about bitcoin being a ponzi scheme too. Could your article be biased too?
Could the old lady be saving the hidden costs of conventional money?


This is not to borrow money for investing. This is just realizing the internal trades within a community and replacing conventional money with their own accounting in the degree that is possible. Nothing to do with micro-credits which, by the way aren't at zero interest.
But you can also borrow to invest at low or no interest with others systems like Wir or JAK.
Still they aren't ponzi schemes nor destroy the economy. Read about them, also interesting.


Amazing how fast dogmatic people bring up words like brainwashing. I'm far far away from communism. You haven't read Gesell (specially critic with Marx) nor Riegel (who inspired LETS). Both libertarians.
Start with their wikipedia pages because it seems that you haven't gone that far in your research:

http://en.wikipedia.org/wiki/E.C._Riegel
http://en.wikipedia.org/wiki/Silvio_Gesell

Then reading directly what they said from them won't hurt you:

http://www.newapproachtofreedom.info/
http://www.community-exchange.org/docs/Gesell/en/neo/

Yes, that's exactly what I meant when I said "LETS is not cash". You cannot build a skyscraper or buy a car using LETS, because coordinate that much credit would be very difficult, but for selling your backyard fruits and buy some bread it is perfectly functional and far superior than say, barter. Bitcoin has more potential growth than LETS. A LETS community must be limited so LETS can only grow in usage by starting more independent groups. Ripple doesn't have that inherent limitation. I'm very optimistic about Ripple's scalability but it could be that it were also only suitable for small deals.

Different advantages, different uses. We should embrace polimonetarism and forget monomonetarism.
A more complex monetary environment is also a more resilient one. And I disagree that diversity needs to necessarily mean a sacrifice in efficiency. You could not dream with the efficiency of very diverse systems like the rain forest if you had just a few types of organisms.

yay for polimonetarism.

Ripple really really has to become totally ubiquitous in order to benefit from the 6th degree of separation effect so that it can "scale up" properly. And even then, as a developer I'd say Ripple is O(log n) for trusted transactions, while Bitcoin is O(1).

Yes it surely depends on a lot of factors in how far efficiency would be sacrificed for diversity, especially in today's world where we're all connected and can exchange information fast, but there definitely is a statistical tendency. The more production facilities you have for a car, the more likely there'll be reinvented wheels, but the more diverse cars can be produced.

This is true, but only when there is some government either limiting the supply or fixing the price. If the price is allowed to float, then any amount of commodity money will suffice.

This is a real problem.

For one thing, it seems to be saying that people will be forced to not charge interest. That is just plain wrong. Why should anyone get to tell me how to use my hard earned money? Who made you the economic dictator?

Second, it denies the reality that lending has a cost. When I lend someone something, whether its a lawnmower, a hammer, or some money, I am unable to use it until it is returned. And the longer it is loaned out, the more it costs me - whether the cost is in opportunities lost or just inconvenience doesn't matter. Interest on debts is a way to compensate the lender for their cost. It isn't necessarily the only way, but to deny that option is immoral.

I know a lot of people don't like the idea of charging interest, but that's due mostly to the problems associated with it. But most of those problems are due to the underlying currency being based on debt. You don't get anywhere near as many problems with lending for interest when you use a wealth based currency.

yes, but does the price of the one universal commodity currency currently float in a way that is beneficial to the requirements of a local community at a given time and place?



No dictatorship required. Theoretically there can be interest of course (and it's implemented in some Ripple systems afaik), but in practice it shows that local-/trust-based exchange system encourage people to not use interest very much, don't forget also because these units of exchange are abundant.

Why would there be one universal currency? That just sounds like a really bad idea. Eggs and baskets and all that.

We can see in Europe what happens when you try to have just one currency.

As amazing as bitcoin seems to be, I don't believe it can be all things to everyone. There are reasons to have other currencies. A free market in currencies is IMHO the way to go. Let each currency float against all the others, and the market will figure out the right price - and change the prices as needed.

then why are we discussing  ???  

this thread is about local currencies and bitcoin after all :D

but ok, lots of parameters to fine-tune there. *How* local? Which rules? I'd like to see an empirical approach one day, i.e. many communities trying out different things, all sharing their findings through the internet.

(oh ok, and you said local commodity money, but a commodity for me is inherently universal)

Money is subject to the network effect. On a free market, I would expect a small number of dominant currencies (maybe even only one), however there could be small local currencies. Think browsers or operating systems.

The Euro is a political project, not a market one. The reason why it failed (or will soon) is a variant of the tragedy of commons (see Philip Bagus: The Tragedy of The Euro).

But in the past, there were times where gold and silver were dominant due to market forces. The various names for money, e.g. dollar, pound, mark, were merely different weight units (of gold/silver).

to be nitpicky, Dollar comes from Thaler (http://en.wikipedia.org/wiki/Thaler) comes from the name of a location, Joachimsthal (http://en.wikipedia.org/wiki/J%C3%A1chymov) in Bohemia.

A dollar is the same weight as a British Crown (coin) isn't it (a quarter of a sovereign with a sovereign or a £ used to be equal to a Troy pound of sterling silver) ?  Also the British colony's in India also used a dollar too I think.

As under the pre 1918 gold standard about $4=£1

It wasn't actually equal too $4=£1 as the $ was .900 silver and the Crown .925 Stirling.

I was referring to lonelyminer's statement about "The various names for money", i.e. merely the etymology.

I repeat, there is no such thing as a generic "unskilled labor hour". Herding geese, painting houses, moving boxes, and digging holes are all "unskilled labor", but they certainly are not all worth the same amount of money. Nor is the quality of work the same between laborers or companies for all of those jobs. Also, your "they're trying to avoid inflation" argument is 100% invalid as virtually every community currency operating in the US is backed by USD. A few "have plans" to back their currency with stupid things like firewood, but I haven't seen it happen yet and I can already tell you how that will work out. How many tons of firewood does it take to exchange the same value as one ounce of gold? Which is more expensive to store? Which will rot and become more or less useless if it gets wet?


There are two major fallacies in Gessel's work. The first is the idea that interest is an unfair charge against workers (and business owners, who Gessel would rather see eliminated) for capital. The second is the idea that workers should receive "all of the fruits of their labor". He specifically mentions salespeople as being more or less superfluous middlemen that steal potential "fruits" from the "laborers".


Unless those community currencies are saving the hidden costs of minimum wage, which would be illegal AFAIK, then no. Bitcoin started at zero value, whereas LETS and similar schemes start bankrupt. The berkshares site even specifically says "merchants give a ~2% discount as an incentive to use berkshares". Also, the article I read was pushing LETS as a great socialist panacea, it was my own conclusion that they are ponzi schemes, based on the fact that they begin bankrupt and run on debt.


I have read Gessel's work, in his (translated) words for myself. I always do so in regards to any subject that interests me even slightly, and that I might argue about. I'm quite familiar with Gessel, and when I first read his work I even thought it was a good idea.

However, I have also read "Human Action" cover to cover, and after comparing Gessel's arguments to von Mises', I can only conclude that Gessel's arguments, and not Mises', are invalid. Do I also need to rub it in your face that Gessel served as the economic Tzar under a communist state (albeit for a short time)? Gessel says that he is an anarchist and supports freedom, but the sort of freedom he wants is the freedom to do whatever you want on anyone else's property. His "freeland" idea was nothing short of pan-communism, and his obsession with worker ownership was obviously pinko. Gessel's "Robinson Crusoe" argument was especially convincing, but when you take away the moral assertions and examine it from a pure economic standpoint, it completely fails to make sense anymore. An economy where you grow everything yourself and the only trade is barter in perishable goods, then it's true no interest is possible, however no economic specialization is possible either so it's a moot point- you can't have economics without a real economy.

Also, Switzerland is currently a bankrupt hole working on becoming a third world country. Wir hasn't worked any economic miracles for them, although it has produced a lot of superfluous low quality housing. It's merely a less extreme version of the colossal ghost towns built by the communist Chinese government.

Good examples. Negotiating labor prices wasn't going to be that easy. I guess they end up using 1 h = 10 USD.
Then you don't like hours denominated LETS, ok. Then chose other unit. The unit is not the fundamental concept of mutual credit.


Then those community currencies are not mutual credit. LETS aren't backed by anything. Well, you could say that "LETS are backed by the wares offered by the participants" or "LETS are backed with trust". But in the sense you mean, in the traditional one, LETS aren't backed.
You should know that given that you claim to know "virtually every community currency operating in the US".


LETS don't start bankrupt. The positive balances always equal the negative ones. That's why they talk about "the power of zero".
That's the only reason why you think they're ponzi schemes?


Berkshares aren't mutual credit.



What?
He was not against profits or free floating interest rates, just against a hidden rent (http://en.wikipedia.org/wiki/Economic_rent) in the gold standard.


Well, he was a merchant. It's kind of strange that he call himself a parasite, don't you think?
Remember what he said about Marx? Remember what he said about free trade?


It seems that you have forgotten the book you claim you've read then or mixed it up with something else in dreams. Where did he proposed such an economy?

You are correct that Dollar comes from Thalers, but that does not invalidate my argument. See wikipedia: (http://en.wikipedia.org/wiki/Thaler)

True, LETS isn't backed by anything. It's not really an advantage in that case, either.


Mutual credit = mutual inflation. There is no practical limit to the positive and negative balances that can be accrued under such a system. As a result, the fact that all balances "zero out" on paper is of no consequence.


So I have to dig through that garbage and point out all the glaringly obvious quotes I'm referring to, eh? Fine, but that will take time.

I think Bitcoin and local currencies can complement each other very nicely.

You would use Bitcoin for purchases over Internet, interregional trade and large purchases (like a house or a car) when you want to deal with a really safe, highly valued currency.

On the other hand though use a local currency for regular purchases at a local store, because handing out some slips of paper at the cash register is just simply faster and less complicated.

This way, we wouldn't need any government-backed money anymore at all.

But what could bitcoin offer those lets? I think easy (cheap, fast) electronic payment is one the features.

BTW: if the EU actually takes the 1 and 2 cent coins out of the market, bitcoin payers could actually save some money? But mobile payment would be a requirement then. And instant payment, or course..

They already have electronic implementations of LETS. Cyclos, a Drupal module, etc. I think Mageant's description of what bitcoin can offer is better.

This is something I've always thought bitcoin could do.  I've always imagined a world where local, or even national, currencies are backed by bitcoins.  e.g. Your government can prove it has 100,000 bitcoins, and so issues $1 trillion (or whatever) at a fixed exchange rate which citizens use on a daily basis.  When you need to buy a house, you save up your $s, exchange for BTCs and buy the house.  International trade imbalances would be paid off with BTCs.  (aside: I realise that I've made an exchange rate of $1 million per btc, but bear in mind I'm just using the "$" as a symbol to indicate unit-of-currency, not as an indication of the existing US$. We could use, e.g. B$)

This could even work with LETS.  A wealthy bitcoin entrepreneur could set up a bank and issue a BTC-backed LETS currency which the local community would use.  Neighboring localities would have their own currency backed by whoever owns bitcoins there, and the exchange rate would fluctuate according to how hard the people worked, and how much produce they manage to export to the surrounding localities in order to bring more BTCs into their own locality.

Less-than-honest BTC owners might try to surreptitiously issue more currency, but inflation would always catch up with them.

In a way, this would also partly solve the scaling problems with bitcoin (or have they all been resolved?).  If everyone all over the world were to pay for their small transactions with bitcoins, the blockchain would grow by... how much?... 1 TB per day?  And if everyone had, say, 10 non-empty addresses, then you'd need a balance-block of... maybe 5 or 10TB. (these are just guesstimates).  So, like Mageant says, paper currency for day-to-day transactions.

Again, if it is backed by bitcoin then it is not LETS. He could issue a local currency backed by bitcoin, but not a BTC-backed LETS currency.
LETS is mutual credit, it's a different thing from backed currencies.
Although LETS are local currencies, not all local currencies are LETS.

Yes, indeed.  What is the acronym for a Local Exchange Trading System which is *not* based on credit/debt but rather on value-by-scarcity of some commodity?  How about BitcoinBackedLocalEconomicTradingSystem,PaymentNetworkandCurrency.  BBLETS,PNaC.  ;D

How about just what is is? A Bitcoin backed local currency. Including LETS in the acronym would be misleading.
All I'm trying to do is to avoid that people get a wrong idea about what LETS is. Because there's a lot of confusion about the qualities of different alternative monetary systems. People tend to see all of them as if they were the same thing and they're not. Also many times different names mean almost the same thing.