Nordic enterprise trust the community is the currency - innovation in complementary currencies

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Nordic enterprise trust the community is the currency - innovation in complementary currencies

  1. 1. The Community is the Currency Money 3.0 Philosophy Conference Chris Cook, Kragerø 07 June 2009Today I am going to be talking about the future of Money......Money 3.0
  2. 2. Money 1.0 - Money of the PastCurrencies consisted of valuable objects
  3. 3. Exchanges for value – money’s worth - required physical market presenceMoney 1.0 - Decentralised and Disconnected
  4. 4. Money 2.0 - Money of the PresentCurrencies are interest-bearing IOU objects or claims over value...
  5. 5. ...issued by Private Banks ...and Central Banks
  6. 6. ...who step between borrower and lender Borrower Lender £ Loan08/07/2011 ...or seller and buyer Seller Buyer £ Credit08/07/2011
  7. 7. ...to provide a framework of trust through an implicit guarantee Banking Lender Borrower System (Depositor) £ £ 08/07/2011...supported by a base of Regulatory Capital Bank Credit Bank Equity 08/07/2011 14
  8. 8. Money 2.0 - market presence is typically through intermediariesMoney 2.0 - Centralised and Connected
  9. 9. Money 3.0 - Money of the FutureMoney 3.0 - involves direct, instantaneous Peer to Peer (P2P) connections....
  10. 10. Money 3.0 - market presence is “network presence”Money 3.0 - Decentralised and Connected
  11. 11. Cool....but what is Money 3.0?Nordic Enterprise Trust works where the Internet and Markets converge
  12. 12. With a little help from Innovation Norway... ....NET has developed a new framework for P2P Finance
  13. 13. P2P Credit and P2P Investment together comprise Money 3.0 Let’s look first at P2P Credit Sellers Buyers08/07/2011 26
  14. 14. Sellers give buyers interest-free credit –or “time to pay” Value Sellers Buyers Credit08/07/2011 27 Credit is guaranteed by a Guarantee Society of seller and buyer members... Sellers Buyers Guarantee Guarantee Pool08/07/2011 28
  15. 15. ...with some kind of “common bond”: geographical, functional, or both Sellers Buyers Guarantee Guarantee Pool 08/07/2011 29Both sellers and buyers pay into a Pool for the use of the Society’s Guarantee Sellers Buyers Fee Fee Guarantee Guarantee Pool 08/07/2011 30
  16. 16. Buyers settle credit in money, or money’s worth of Value acceptable to sellers Value Sellers Buyers Fee Fee Guarantee Guarantee Pool 08/07/2011 31If buyers default, the Pool pays sellers, and collects from buyers Sellers Buyers Pays Collects Pool 08/07/2011 32
  17. 17. A service provider sets guarantee limits,handles defaults & manages the system Sellers Buyers Fee Fee Guarantee Pool Guarantee Services Fee Service Provider08/07/2011 33 Now that Banks’ ability to create and support credit has evaporated.... Credit Bank Equity08/07/2011 34
  18. 18. ...a Guarantee Society provides a complementary trust framework......where Banks may manage credit creation as service providers Sellers Buyers Fee Fee Guarantee Pool Guarantee Services Fee Service Provider 08/07/2011 36
  19. 19. If a barter system incorporates time to pay – Credit - the result is a monetary systemSince 1934 the Swiss WIR business network has cleared credit for SME businesses....
  20. 20. ...for billions of Swiss Franc’s worth of goods and services No Swiss Francs change hands as acurrency or Unit with exchange value
  21. 21. The Swiss Franc is an abstract Unit ofmeasure - a Value Standard, or benchmark The WIR is a monetary system which is complementary to the Swiss Franc
  22. 22. The WIR takes security over members’ property to protect against defaults......so the WIR framework of trust is backed by property
  23. 23. NET’s Guarantee Society is a new framework of trust for P2P credit.... Sellers Buyers Fee Fee Guarantee Pool Guarantee Services Fee Service Provider 08/07/2011 45...enabling value to circulate and the creation of new productive assets
  24. 24. Although Credit is necessary for the circulation of currency.......contrary to conventional wisdom it need not actually be currency....
  25. 25. ...and other Units of Value may be generally acceptable as currencyThis is where P2P Investment through Unitisation comes in
  26. 26. There are conventionally two types of ownership - Public or Private...08/07/2011 51...and there are two types of investment: Debt and Equity08/07/2011 52
  27. 27. Investment through a Limited Company...08/07/2011 53 ....a 19th Century legal dinosaur...08/07/2011 54
  28. 28. ...is what makes the Private Sector Private08/07/2011 55 Credit is typically issued by banks and secured by legal claims08/07/2011 56
  29. 29. ...giving two conflicting claims over the same productive asset08/07/2011 57 But there’s a new furry mammal out there....08/07/2011 58
  30. 30. ...the 21st Century UK Limited Liability Partnership (LLP)08/07/2011 59 A UK LLP is a corporate body with limited liability....08/07/2011 60
  31. 31. ...and...errrr...that’s it!...08/07/2011 61 As far as the UK Tax Man is concerned it is a Partnership08/07/2011 62
  32. 32. It’s an “Open” Corporate where partnership working is possible....08/07/2011 63 ... even without a written agreement08/07/2011 64
  33. 33. It enables direct Peer to Peer (P2P) Credit and Investment08/07/2011 65Over 46,000 UK LLPs are now in pervasive use for purposes never intended...08/07/2011 66
  34. 34. ...even in the Public Sector, where Glasgow has four municipal LLPs 08/07/2011 67Capital Partnership – direct Peer to Peer investment in productive assets 08/07/2011 68
  35. 35. Hilton Capital Partnership ( > £1bn) Gross Revenues Capital Partnership LLP 10 UK Hotels % % Hilton Group Consortium LLP Capital User Capital Provider % % % Property Hotel Bank Developer Specialist Capital Partnership Users Payment Use Assets Custodian % % Investors Managers
  36. 36. Productive assets are held by a Custodian Ownership Assets Custodian...who safeguards the asset on behalf of the Community Ownership Assets Custodian
  37. 37. Investors put in Financial Capital in money, or money’s worth… Ownership Assets Custodian Financial Capital InvestorsManagers provide Human Capital of time, expertise and experience.... Ownership Assets Custodian Financial Human Capital Capital Investors Managers
  38. 38. Users pay for the use of Capital Users Payment Use Assets Custodian % % Investors Managers Result: Capital Partnership Users Payment Use Assets Custodian % % Investors Managers
  39. 39. Capital Partnership reinvents Equity Equity Shares - % age shares in revenues or production...08/07/2011 78
  40. 40. …..which may be transferred, but neverredeemed, since there must always be 100% Units – Redeemable in production e.g. Kilo Watt Hours, natural gas
  41. 41. Units have a value in exchange, but no rights to production or income over time…Equity Shares in property – the Value Proposition 08/07/2011 82
  42. 42. A new form of Co-ownership between Occupiers and Investors 08/07/2011Occupiers may invest simply by paying more rent than is due 08/07/2011
  43. 43. ...and if they wish, they can pay their rent in Equity Shares, rather than £08/07/2011Co-owner Occupiers who maintain property may receive Units as “Sweat Equity”08/07/2011
  44. 44. Energy Units - the Value Proposition08/07/2011 87 Investors - direct investment in energy with no return...08/07/2011 88
  45. 45. ....similar to an investment in gold... 08/07/2011 89...except that while gold may be pretty... 08/07/2011 90
  46. 46. ....it’s not useful in the way that electricity is08/07/2011 91 Consumers – the ability to lock in the price of future consumption08/07/2011 92
  47. 47. But Investors wanting to sell may not find Investors wanting to buy....? 08/07/2011 93No Problem! Consumers will buy if the Unit price falls below the market price... 08/07/2011 94
  48. 48. ...because they gain by buying Units and redeeming them against energy used08/07/2011 95Interest-free financing through monetising renewable energy...08/07/2011 96
  49. 49. ...by issuing - for value now - Units that will cost nothing to redeem 08/07/2011 97Capital Partnerships are not Organisations 08/07/2011 98
  50. 50. They do not own anything, do anything,employ anyone, or contract with anyone...08/07/2011 99 They are simply frameworks for P2Pinvestment with cross border application
  51. 51. ...transcending borders through interactive consensual agreements08/07/2011 101 ...rather than adversarial contractsimposed by national statutes or courts08/07/2011 102
  52. 52. Master Partnerships require no legislation... Users payment Master Custodians Partnership (National) % % Financial Capital Human Capital (Money, IP etc) (Developers, Operators) 08/07/2011 103 ..and there are no national or international institutions and hierarchies
  53. 53. My vision of Money 3.0 is of a networked Clearing UnionUnits redeemable in land/ location rental will be acceptable domestically
  54. 54. Units redeemable in energy will be acceptable globally Transactions will be priced by referenceto an energy standard or Unit of measure
  55. 55. Credit issued by individuals and enterprises will be backed by mutual guarantees... ...so communities with a common bond provide frameworks of trust
  56. 56. Money 3.0 is not an Object: it is a Relationship The Community is the Currency
  57. 57. Thank You08/07/2011 113

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