16 DECEMBER 2013
Those three things seem really unrelated, but stick with me for a few minutes and maybe I can make some sense of them. There’s definite holes in my ideas, but it’s a start.
If you haven’t heard of Bitcoin by now I’m amazed. Regardless, it’s actually not as complex of a concept as pundits would make you believe.
Bitcoin is a ledger. It’s distributed and uses algorithms to verify transactions, eliminating the need for a central bank. In that way, it’s rather beautiful.
And Urban Development?
Recently I’ve read a lot about the concept of Basic Income, and I have to say it’s rather intriguing. The United States has fostered a system of corporatism which continuously neglects the disenfranchised. Our cities are rife with crime, homelessness, and drug abuse largely due to a lack of oppotunity.
Yet these opportunities are increasingly automated and wealth inequity continues to grow. Working in tech, I feel we can better leverage the tools at our disposal to help the disenfranchised. With different spending incentives maybe our cities would be thriving communities.
Cryptocurrencies give us the power to design “money”. We’re no longer inhibited by a one size fits all approach to buying and selling. For urban development an ideal currency would reward spending locally and often; it would help small merchants attract customers and reward repeat shopping.
Where does Square come in?
Distribution. I know I said cryptocurrencies don’t need a central bank but we’re directing our efforts geographically; there needs to be a nexus of distribution. It’s got to be effortless for buyers and sellers and if anyone gets how to do that it’s Square.
Let’s be honest, we’re not replacing dollars and cents, we need a better way to introduce money into the local economy. Square Rewards are almost like currency but they’re restricted to singular stores. What’s needed is a “reward” currency that’s accepted across a subset of merchants.
Square doesn’t need a cryptocurrency to do this, they could institute this as a setting very easily. However, Square-centric rewards would be a walled garden at risk for a liquidity trap. The ideal system would be vibrant and dynamic with easy entrance and exit.
Square and other POS providers should want a monetary system with predictable, steady velocity. For profit’s sake they should want a distributed system with low processing costs. Therefore, I think the ideal cryptocurrency for urban development looks something like freicoin.