Local currency backed by Bitcoin?

[Elwar]

I would love to have a coin and bill based currency localized to my town where the idea caught on that using the money locally would spur the local economy and keep the spending local.

Perhaps casacius types of coins and bills with the town name on it to give locals a sense of pride in using it.

It could be introduced at the local chamber of commerce and merchants could be encouraged to use it.

Then maybe have some drawings paid in USD and the winner wins a set amount of local BTC bills to spend at local merchant locations.



There is a radio show I listen to that holds caller raffles and the winner gets "JB bucks" to spend at local merchant locations who also donate a few bucks each week toward the promotion.

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[Phinnaeus Gage]

I would love to have a coin and bill based currency localized to my town where the idea caught on that using the money locally would spur the local economy and keep the spending local.

Perhaps casacius types of coins and bills with the town name on it to give locals a sense of pride in using it.

It could be introduced at the local chamber of commerce and merchants could be encouraged to use it.

Then maybe have some drawings paid in USD and the winner wins a set amount of local BTC bills to spend at local merchant locations.

There is a radio show I listen to that holds caller raffles and the winner gets "JB bucks" to spend at local merchant locations who also donate a few bucks each week toward the promotion.

It'll be interesting to see which, if any, town will be the first to conduct the majority of their commerce with Bitcoin.

[kjj]

I would just use bitcoin.

The local thing is pretty silly.  If people need encouragement to use local merchants, the local merchants are doing something wrong and need to shape up.  Also, if your local currency catches on, you will have huge problems with counterfeiting unless you put some effort into making them hard to copy.  Better to just use bitcoin.

[alatus]

I have to disagree!

Local currency is on a theoretical level disputable, but on a practical, a quite clever idea.
It is for example an excellent way for the locals to act some pressure against the government.
(I saw some positive results in our country.)

The big issue with local money is, thet it is hard to be protected from counterfeiting, etc.
Bitcoin solves this, and is great as a "gold standard" in it.

The problem is only, that local money works mostly because it keeps the capital locally and penalizes the businesses for the unecessary use of resources/services from outside the community. Bitcoinon the other hand is by design a technology for the transfer of funds independently of location. (Many arguments for it come from the realm of international money transfer.) I see some contradiction here.

Anyhow, quite interesting thought! 

[Stephen Gornick]

transfer of funds independently of location.

To encourage participation, generally consumers can purchase the community currency at a discount from a local bank or other venue that offers exchange.  Then, the currency trades at face value within the community.  When a merchant needs to convert the community currency out to fiat the discount is then subtracted from the payout amount.
 
Because all Bitcoin transactions are visible in the blockchain, I suppose it would be possible to know that the funds came from a bitcoin address of the community's exchange and thus the merchant would offer the local discount for those funds knowing that they can then be re-spent locally to in turn get the same local discount when spent again.  It would require a modified client to change the rules on which coins to use when making a payment so that spending the locally-sourced coins that are valid towards getting a discount can be avoided unless actually at a local merchant.  But other than that, bitcoin seems reasonable as the currency to use for a local currency.  The biggest problem likely is that the exchange rate fluctuates so every participant holding the local currency ends up becoming a speculator of a global digital currency.

[ovidiusoft]

A small town in Spain returned to Pesetas a few months ago. But that worked easily because everybody knew what Pesetas was, their approximate value (it's only been a few years since the switch to Euro) and so on. Would love to see this with Bitcoin, but it's going to be difficult.

[PrintCoins]

If anyone would like to have a local currency, let me know and I can help you design and print it (or print it for you).

Here is a cute little work around:

Create a web/cell phone based currency, and just rebrand bitcoins as "New Yorkians" (if you are in New York). You could make a New Yorkian worth the same as 0.1 bitcoins, the client will name it as a New Yorkian, but really bitcoins would be transacted on the backend (whatever the transaction is divided by 10).

Little will they know that their currency isn't as local and restricted as they expected.

[rjk]

If anyone would like to have a local currency, let me know and I can help you design and print it (or print it for you).

Here is a cute little work around:

Create a web/cell phone based currency, and just rebrand bitcoins as "New Yorkians" (if you are in New York). You could make a New Yorkian worth the same as 0.1 bitcoins, the client will name it as a New Yorkian, but really bitcoins would be transacted on the backend (whatever the transaction is divided by 10).

Little will they know that their currency isn't as local and restricted as they expected.

That is a damn good idea, and the same could be done for "Forum Gold" or game systems.

[Phinnaeus Gage]

If anyone would like to have a local currency, let me know and I can help you design and print it (or print it for you).

Here is a cute little work around:

Create a web/cell phone based currency, and just rebrand bitcoins as "New Yorkians" (if you are in New York). You could make a New Yorkian worth the same as 0.1 bitcoins, the client will name it as a New Yorkian, but really bitcoins would be transacted on the backend (whatever the transaction is divided by 10).

Little will they know that their currency isn't as local and restricted as they expected.

That is a damn good idea, and the same could be done for "Forum Gold" or game systems.

Or for Sandwich Bread, name after the town I live in, Sandwich, IL.

[Elwar]

If anyone would like to have a local currency, let me know and I can help you design and print it (or print it for you).

Here is a cute little work around:

Create a web/cell phone based currency, and just rebrand bitcoins as "New Yorkians" (if you are in New York). You could make a New Yorkian worth the same as 0.1 bitcoins, the client will name it as a New Yorkian, but really bitcoins would be transacted on the backend (whatever the transaction is divided by 10).

Little will they know that their currency isn't as local and restricted as they expected.

Good idea, I was thinking a bit along those lines for a local website that allows merchants to exchange the currency. Even though it is actually just another BTC exchange at BTC/dollar rates.

Once the currency catches on the transition to actual Bitcoin would be easy for locals.