PayCoupons: moneyless collaboration made in the Edgeryders community

[matthias]

Do you remember Makerfox? The moneyless marketplace that we invented, and that let a group of Edgeryders volunteer worktime in exchange for a 800 USD ticket for LOTE3?

Well, the project was never dead, it just evolved. My brother has been working tirelessly on it, while I have assisted with ideas and concept finding. So there was Makerfox, then it evolved into something called Task Exchange, and now finally into PayCoupons. It’s public, you are welcome to use it. I’ll be available in the comments section for answering all questions about functionality and uses.

But in short, this is what I imagine that PayCoupons can become for the Edgeryders community: a tool that lets us realize many more of the ideas and projects we have in mind. Because it allows a very flexible collaboration: a bit like crowdfunding on steroids. Just like crowdfunding it allows P2P support, it allows everyone of us to pitch in with small amounts of resources and even when they don’t have the time or skills to volunteer directly. But unlike crowdfunding, it does not rely on money but on “coupons” (rights to a specific person’s products and services). While money is scarce, coupons are abundant since everyone can create their own coupons “out of thin air”. Feels like being your own central bank Actually I’m really excited about this tool: I think it’s finally one that can realistically break the power of “always scarce” money, which so far has been our only main tool for economic collaboration. (And sorry that I have to break it to you, but Bitcoin is also of this “always scarce money” type.)

For more details, I have written this blog post today that explains five use cases in more detail: trading DIY products and favours, donations, collecting funding and investments.

For those interested in the technology: yes, it’s still our original network barter invention that is powering this new iteration. Since coupons are “fluid” (able to be split into arbitrarily small parts), network barter performs exceptionally well here, unlike in the Makerforx platform where we also had products and product-like packaged services that could not be partitioned. Now, with 20 people and 4 orders per person, a simulated network barter event will fulfill 70% of all open orders. (“Order” means here somebody entering a higher target balance for a specific type of coupons in their PayCoupons wallet.)

Anyway. For now, you may register, look around and explore the PayCoupons platform, and post your open questions here. I’ll share instructions (and a real-world example) for how to use PayCoupons to make your own project happen in the next few days. Stay tuned

[matthias]

So that’s our current status

@hexayurt , sorry in turn for the very late reply, but this (above) is our current status. Once you made up your mind, I’d be very curious to know what you think about this new system design

[alberto]

Fluid indeed!

Congratulations to both of you for this new step forward! I recall we added “hours of service” in the first iteration of Makerfox exactly because of the easy divisibility of it. The way I understand it, the coupon concept formalizes that early intuition.

I have no problem imagining how this would work in practice. What I don’t get is this: why do you say there is no scarcity? If coupons are backed by the time of the person issuing them, they are scarce, because time is scarce, very much so. And if coupons are not backed by anything (like me issuing coupons for a million hours of data analysis that I cannot give), then they are abundant, but worth nothing. Some scarcity is artificial, but some is very real!

Anyway: account created, looking forward to try it!

[matthias]

Yes yes, naturally scarce

You got that right. Coupons are a generalized “fully fluid” type of network barter, and the performance simulations indicate this is the right way. The Makerfox algorithm always struggled to include fixed-price product even though we had included quite a bunch of tricks (automatic alternative orders, subjective pricing, automatic price flexibility etc.). Network barter is just not the right tool for buying a specific product spontaneously. For that, we now recommend money

About scarcity, I had started to write this out in more detail in the post above, but then thought it’s too much detail for an introduction. You are of course right, coupons are backed by your time (or whatever else you want to trade away), which makes them naturally scarce. Makes sense on a finite planet I guess What I should have said more precisely is this: coupons are not artificially scarce the way money can be. With money, a group of people with mutually beneficial offers cannot trade if they lack liquidity (paradigmatic example: the jobless). With coupons, they can, since everyone creates their own value tokens (“coupons”) that are just as scarce as the resources they want to trade. That does not hurt trading. Only if your liquidity is scarcer than what you want to trade, trading is gradually inhibited.

Now coupons are not a new idea of course. The closest  thing to using coupons as currency are probably trade exchange bills (German “Handelswechsel”), which circulated like cash currency until they matured and could then (hopefully) be exchanged for products of the issuing company. They were however cumbersome to handle, since every intermediary merchant accepting them needed to know which ones are trustable – even of those they wanted to just pass on. What network barter does is taking this system but letting the whole trade chains happen in one instant (from issueing coupons to them arriving at the consumer who wants to spend them for products or services). So, as everyone only ever holds coupons they intend to redeem, the whole trust issue is resolved: coupons are not used as a replacement for cash money any more, and trust in the issuer is implied for coupons the holder intends to redeem. So somehow we got the best of both worlds: the better liquidity of a mutual credit currency, without either the need to trust and handle hundreds of intermediate currencies, or the “solution” to socialize them into a single currency (and getting the collective trust issue that prevents mutual credit currencies to scale beyond ~150 people). (Hmm interesting, I have to expand this line of thought into another blog post …)

[alberto]

Solid (with one vulnerability)

I was always an admirer of network barter. It’s true that it eliminates the risk associated to holding coupons that turn out to be unredeemable.

Again, speaking as an economist, which is probably irrelevant to you in this phase: I think the Achilles’s heel of this system might be, paradoxically, a structural liquidity constraint. Coupons are backed by time, and there is no such thing as “fiat time”. So, whereas a financial system based on money can just expand at will, one based on time cannot. In the real world, we constantly experience inability to buy time, not because the price is not right but because the supply is so limited. You are a case in point yourself: Edgeryders would love to buy more of your time, but you just would not sell it to us. This is no threat to Pay Coupons, but on a theoretical level I wonder if it could ever be an economy-wide system, or if it can only live in niches.

It seems that this a system that works in practice better than it does in theory. A nice change!

[matthias]

Very late reply

And not really a reply at all to @Alberto 's remarks, since I am not sure about the answer. Indeed the total PayCoupons liquidity is limited by the amount of P2P credits that can reasonably exist in a network of people and companies (assume approx. one year of everyone’s worktime, and for shops, 1-2 times the turnover equivalent of their stock levels). Because beyond that, people will fear coupons issued by “over-issuing” parties could become irredeemable, so they will stop ordering. (PayCoupons does not yet show these numbers, but will.)

My hunch is that this amount of liquidity is sufficient for the goods and services economy (“real economy” as Germans like to say), but not sufficient for anything more financialized (options and futures, shares, speculation, rolling debt, sovereign debt). It may not even be enough for large purchases (like buying a family home). When that becomes a practical problem, we’ll have to recommend to people to use PayCoupons to save up in scarce token-style money (legal tender, gold or Bitcoins) before being able to make the purchase.

That is partially “a feature not a bug”, since PayCoupons is designed to be a tool for economic exchange, not also a store of value. Because whenever one tries to mix both functions into the same tool, you end up with a bad compromise (“valuableness” wants to increase scarcity, “usefulness for exchange” wants to increase liquidity). People may however invent a hack (to be able to use PayCoupons for huge purchases) and save up in coupons of multiple large corporations, which are “creditworthy” for larger amounts of coupons, then transfer them as payment to whoever sells them the family home. Unchartered territory

[alberto]

Niche is just fine

Unchartered indeed. Well, life in a niche can be nice and prosperous, as we well know.

[matthias]

Version 6.0 … and do we want to use it in the community?

Yesterday, we released a new version (probably 6.0 if we’d count) on pay.coupons. The major change is that the “primary activity” for new users is building up their own moneyless payment network by inviting new users and connecting with them. A “connection” means these two people can mutually order coupons, that is, they give one another the privilege to pay without money.

There’s also a new blog post that explains its advantages over money (meant for economics geeks).

Question for the team ( @Nadia and @Alberto and @Noemi and @johncoate ): How could we utilize this new tool within the Edgeryders community? Could we integrate it with the (upcoming) Matrix server installation and the community projects it will be used for? (BTW, I prepared the installation today, so I hope May takes over from here.) I’d really like to have PayCoupons up and running as a tool before the next economic crisis hits … it needs 20-30 very active small businesses to work, or 50 medium active ones. How to get there? Are there synergies with the Edgeryders community for a joint effort?

[alberto]

Reading!

Reading your blog post now.

[nadia]

Cool! Very useful for communicating clear social contracts

I signed up and am figuring out how to add coupons for Edgeryders and request certain things getting done. Because something like this would be very useful for e.g. barnraising efforts around the reef and managing the day to day operations. Not to mention p2p support on individual members projects. Two questions

1. Let’s say I’d like to set up an Edgeryders e-shop and enable use of coupons as one mode of payment in addition to credit cards or cryptocurrencies.  How would we do this without requiring people to set up another account somewhere else?

2. How does it work if I only want to buy something from the shop, but don’t want to offer anything yet?

In any case well done, it’s looking a lot cleaner than the previous version

[matthias]

About the questions

@nadia

Let’s say I’d like to set up an Edgeryders e-shop and enable use of coupons as one mode of payment in addition to credit cards or cryptocurrencies. How would we do this without requiring people to set up another account somewhere else?

That’s a nice idea actually. Especially since Reef could sell things like unbooked event space to community members. You can control who is able to pay with coupons by adding them to your “network” on PayCoupons or not, so it does not compete with normal business operations. Buyers will need a PayCoupons account obviously, but the shop can perhaps be integrated with our existing Drupal site if we find a lightweight module for that (so no need for yet another account). After selecting “PayCoupons” as payment option, people would be shown a message like “Please pay … EUR to PayCoupons user … . As soon as we receive your payment, your order will be shipped.” The code of the normal advance bank payment option can be reused to get that done, so it’s not difficult. However for now there is no PayPal-style forwarding to PayCoupons for doing the payment after the purchase. That comfort will have to wait a bit

@nadia

How does it work if I only want to buy something from the shop, but don’t want to offer anything yet?

This is not the normal mode of operation since PayCoupons is not a credit management system (like Ripple of mutual credit currencies). However there are two ways:

• The shop may agree to accept the user’s own coupons as payment, instead of the shop’s own coupons. This is equivalent to recording a credit relationship. Such coupons can be transferred using “Account menu → Send coupon”, and the receiver can re-trade these coupons in exchange for the ones they want using the “Offer this coupon” menu item in the coupon’s menu. Since the re-trading step cannot be guaranteed, the shop cannot be sure to be able to use such a payment, so it’s a matter of special trust to a customers if the shop allows this.

• Or you get the shop’s coupons in other ways before you go there to buy something the regular way. For example, a project account could get lots of coupon donations via the “Account menu → Send coupon” function from other members, and could then re-trade these coupons in exchange for the desired shop coupons, again using the “Offer this coupon” menu item in a coupon’s menu.

[matslats]

cart before the horse

Looking from the outside in, it still seems too led-by-developers rather than by the community.

Also EdgeRyders seems so similar to Enspiral, I would be looking at Enspiral’s software in your place.