David Shepherdson hopes this new currency will help encourage local spending, and reward positive social behaviour in the city.
The idea for HullCoin came out of work Shepherdson did with the city’s council around financial inclusion. He was exploring ideas to help people on low incomes make the most of their money; for example, encouraging credit unions over loan sharks.
Encouraged by the council, he began exploring how Blockchain-based technologies could gel with the idea of a local currency. The result is HullCoin.
How HullCoin works
Described as “the world’s first Community Loyalty Point,” HullCoin lets you earn currency by volunteering for community initiatives. It’s all about making a positive contribution to society. And it doesn’t have to only link to volunteering. Shepherdson talks about the possibility of the NHS giving out HullCoins to reward people who give up smoking.
When you’ve collected coins, you can exchange them for discounts on goods and services around Hull. Here’s the official video explainer:
Shepherdson’s six-person startup, Kaini Industries, has been developing HullCoin for two years. National Lottery funding, Comic Relief and the DotForge Impact accelerator have all backed the idea. The plan is to release the currency for public testing by the end of the year.
In the meantime, Shepherdson is busy expanding the HullCoin concept as he explores the idea of an Initial Coin Offering.
ICO, ICO baby
Initial Coin Offerings, or ICOs, have gained a lot of attention in the USA of late. Partly in response to the fact that UK-style equity crowdfunding is illegal there, they’re an increasingly popular way for startups to raise funds. An entrepreneur creates a cryptocurrency and sells it to raise money to fund his or her business. Investors can then redeem the coins for future goods and services front he company, or sell them for a profit if their value goes up. Essentially, people who pay into ICOs are betting their money on a company’s goods and services, rather than getting equity in its future success.
What he’s planning is a cryptocurrency that will exist alongside HullCoin. HullCoin has no cash value, it can only be redeemed for discounts, so is more like a voucher. But this parallel currency would have a fluctuating value against the pound.
Experimenting with a future economy
Shepherson sees this cryptocurrency as a way to facilitate Universal Basic Income. What’s that? Many fear that A.I. will replace human jobs at a rapid clip in coming decades. Universal Basic Income (UBI) is one solution to the risk of people no longer earning a wage.
Under UBI, that the government would pay out a flat sum to every person to do with as they wish, whether they work or not. It’s a radical solution, but one that even some hardened capitalists think might be necessary.
While some governments don’t seem too bothered right now about the threat of automation to the jobs market, there are numerous small-scale tests of UBI taking place around the world.
Shepherdson thinks a Hull cryptocurrency, tied to HullCoin via a smart contract, would be a good way for UBI to work. He’s currently preparing a whitepaper to expand on the concept. Don’t expect to understand it all unless you’re a Blockchain enthusiast though – it will be a technical document aimed at that crowd.
“Having a unit of value that is a net benefit to the community and economy, but isn’t money, fits well into the UBI model,” says Shepherdson.
Hull isn’t a city afraid to do things its own way. Telecoms infrastructure outside the BT network allowed it to take its own path on internet connectivity, for example. HullCoin is a radical idea and we’ll keep an eye on its progress.
Featured image credit: Andi Campbell-Jones / Flickr