LETS plus local community currency's and bitcoin?

[matthewh3]

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

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[Murwa]

LETS is about community
Bitcoin is about greed.

Doesnt fit together.

[kangasbros]

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.

[herzmeister]

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.

[Technomage]

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.

[ShireSilver]

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.

[daybyter]

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.

[kangasbros]

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.

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

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.

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

[matthewh3]

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.

[jtimon]

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. 

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.

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.

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.

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.

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 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.

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.

[ShireSilver]

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.

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.

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.

[daybyter]

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...

[jtimon]

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.

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.

[jtimon]

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...

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

[herzmeister]

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  ).

[daybyter]

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.

[ShireSilver]

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.

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.

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.

[daybyter]

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

[herzmeister]

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

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

[daybyter]

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...