How might we move beyond the confines of traditional notions of money and currency to enable a regenerative transition? How can we use currencies to enable a healthy economy where where resources are allocated efficiently and fairly, contributing to the overall prosperity and well-being of a community?
Ferananda Ibarra is the CEO of the Coventina Foundation, co-founder of the Metacurrency Project, and expert in utilizing the decentralized web to enable economic innovation, collective intelligence, and the commons.
In this conversation we explore the role of currency innovation in economic innovation and regenerative economics. Fernanda has such an incredible range of experience and knowledge that she brings to bear with her work — from her expertise in technology to her love of nature and study of indigenous wisdom to her deep foundational understanding of the commons and collective intelligence.
While the headline for this conversation is currencies, ultimately it’s abroad ranging discussion that explores money, wealth, currencies, why flows are so critical for healthy living systems, what’s wrong with blockchain and the familiar cryptocurrencies out there, and more.
[INTRODUCTION]
"Ferananda Ibarra (FI): My work is about awakening people's creative power, so that they can know they can shape social and economic dynamics. I really know that is the path of understanding flow, because of the integrity that we have to focus on. Now, the new breed of currencies that we should breed, or create, or bring to life have to be non-speculative currencies. They have to be currency that are backed by real assets, or they're backed by the value created by humans and human-centered and not new currencies to bring more millionaires into whatever, but to focus on what really matters."
[0:00:47] Jenny Stefanotti (JS): That's Ferananda Ibarra. She's the CEO of the Coventina Foundation, Co-Founder of the MetaCurrency Project, an expert in utilizing the decentralized web to enable economic innovation. This is the Denizen Podcast. I'm your host, curator Jenny Stefanotti. In this episode, we're talking about currencies, specifically how we can shape healthy human systems through currency innovation. Ferananda has such an incredible range of experience and knowledge that she brings to bear with her work. From her expertise in technology to her love of nature and study of indigenous wisdom, to her deep foundational understanding of the commons and collective intelligence.
I love this conversation for two reasons. First, it takes us to the threshold of the Denizen inquiry, interrogating money and exploring the use of the decentralized web to enable regenerative transition. Second, Ferananda's work weaves so many of our topics into one place; biomimicry, indigenous wisdom, new technologies, consciousness, economics, just to name a few. While the headline for this conversation is currencies, ultimately, it's a broad-ranging discussion that explores money, wealth, currencies, why it flows, or so critical for healthy living systems, what's wrong with blockchain and the familiar cryptocurrencies out there, and much more.
As always, you can find show notes and the transcript for this episode on our website, becomingdenizen.com. There, you can also sign up for our newsletter. I bring our latest content to your inbox, alongside information about online and virtual Denizen events and announcements from our partner organizations. Without further ado, it is my absolute pleasure to introduce you all to Ferananda Ibarra.
[INTERVIEW]
[0:02:22] JS: I joke that I always say I'm so excited for this conversation, but I'm so excited for this conversation. Really, really, really stoked to not just take us beyond our threshold on so many of these point topics that we talk about, but really talk about what does it look like to integrate them, to get to the deep systemic change that we are ultimately after understanding. What an honor it is to have you here. Thank you.
[0:02:48] FI: Thank you. Thank you for having me. I've been wanting to speak with you about all these topics and more, and we had the little opportunity in that panel in New York, which was fabulous and quick, and something that we can deep dive now.
[0:03:01] JS: We have done a lot in this inquiry around new economics, investigating different types of corporate governance to change incentives, regenerative finance. For me, this question of money has been at the threshold of this economic inquiry that we've been on, where I'm like, something's not right. Something's off about money, or something like, what do we need to deconstruct, or blow up, or rethink around money? This is a place where you work very deeply. I actually want to start with this question of what is money and what are the issues of money as we know and think of it today?
[0:03:46] FI: Well, one of the very interesting aspects of money, or including of that question that you're asking is that when I ask people what money is, they describe me what money does, but they don't tell me what money is, right? You need a fixed change, store of value, like energy. Oh, what gives people options? I mean, you got optionality. It's all these ways of describing what money does. I believe that’s part of why people can't really describe what money is is because we really don't understand it fully.
[0:04:25] JS: I think there was a quote from the MMT episode that was something like, if anybody says that they understand money, they haven't thought about it enough.
[0:04:32] FI: Absolutely. I think I want to read to you one of my favorite understandings of what money is, from Brett Scott, from the Altered States of Money Consciousness. He says, “If I had a blind companion that would ask me what is money, I would answer something like this. A vast network structure at the center of which lies three sets of issuers issuing out three changed layers of legal IOUs in physical and digital form, which would later return to the issuers to be destroyed, but which in the interim, and this is an important part, entrenched themselves as an economic network access tokens that circulate around an interdependent web of people who cannot mobilize each other's labor without them.
Tokens are activated in the context of legal systems set, within political systems set, within social systems set, within ecological systems, and this mesh structure underpins modern capitalism etched into the very fabric of our being.
[0:05:42] JS: That bit about labor struck me.
[0:05:44] FI: Yes. Even Charles Eisenstein in the book of Sacred Economics mentions that. The energy, the values really produced by humans, but we seem to stop everything if there's no money, while really, money doesn't do anything by itself. It's not like, we take it like this magic wand that could give us everything, because mostly, there's a lot of options.
[0:06:08] JS: One of the things that I appreciated in doing the research about money and the issues with money was this quote, probably from the FAQ in the MetaCurrency website, which is a really fascinating read that I would point to anyone to. It says, as long as there are monopolies granted for money making powers, we cannot have a free market, or even a true democracy. Can you speak a little bit more about just the default currency/monetary system that is dictated by the state and banks?
[0:06:38] FI: Well, all that entrenched as it mentioned in the code, network of issuers. We tend to think, people really don't understand money, where it comes from. It's the central banks that issue cash and they're the only ones can issue cash and then there's a bank and they’re issued by debt, and just that impossible game, which is the definition of a Ponzi scheme, right? Because they keep issuing money that is issued by debt. Then to pay that debt, you have to pay interest. There's way more, we all had to pay our interest back, there would be no more money out to fill within us.
It's just literally the definition of a Ponzi scheme, because then somebody else’s pyramid is going to end losing. One of the aspects of economies is that there's a human economy and the market economy. What are we focusing on? Are we focusing on the humans, or are we focusing on the commodities? Are we focusing on the interweb of relationships and taking care of each other, taking care of our homes, taking care of nature? We often see people describing the planet as it belongs to the economy. Well, I think it's reverse. It's the economy that is part of the planet and not the other way around. It's so important to be able to say, well, in describing economies, really about everything we do, all our transactions, all the ways we interact with one another. Then we put money on top, like if it was the ruler, like financial capital tends to rule, or encore in all the other forms of capital, like social capital, not-for capital, or knowledge capital, or even psychological and spiritual capital.
It was like, when we speak about the terms, we try to find out ways in which we can embed scarcity in it, which I think is one of the major problems with money, and with designing new currency systems, because people tend to go back, default back to scarcity. Let's put an IP. Let's see what is that we can sell, where we can put the paywall. Let's see. People like you and I like experimenting out of the edges of that. We find ourselves with not a lot of creativity that is possible. Do the sliding scale and people will constantly choose a minimum to give.
[0:09:04] JS: I tried to do creative things. It didn't work out so well. I hear you. Yeah. You're speaking to also, it points to an important concept that I hadn't heard stated as such before, which is enclosure. I know so much of your work, it also looks at the commons. Why don't you tell us about this concept of enclosure and how that fits into the default economy?
[0:09:26] FI: Yes. That is a super important concept in terms of the commons. Actually, in terms of how the technologies that we've developed, in this case, hoochain has that as one of the drivers of design. We can call it that enclosure, like when the commons is in a way taken, either by private means, or by governments, and then they just constrain and manage the commons themselves, and then there's no participation in it. There's no growth in it. There's no, like in Hawaii, the water is private. What you can do in terms of the commons, when it's enclosed is not very broad, as different when the commons has not been enclosed.
I'm going to try to split that a little bit better. The other way which we can talk about is encapturable careers, or encapturable, which is when you cannot by the means of law, or by the means of different social contracts privatize the commons for your own good, but then you have to be able to share.
[0:10:34] JS: Yeah. Enclosure is this fundamental concept of capturing the commons effectively for private gain. I mean, if you really think about it, we own land, whose land was it to – we just claimed it. Then suddenly, we have this passing of private property and ownership. But if you really interrogate that, that's an example of enclosing the commons, right? While I also appreciate it, and this is something that speaking of sacred economics, Eisenstein speaks too there around just the cultural legacy, the idea that our ideas are built on hundreds of years of cultural legacy. Who's to say what fraction of that is our contribution to? When you talk about IP and copyright and things like that, that's another example of enclosure of historical legacy that's part of the commons. It's not just land when you talk about it.
[0:11:27] FI: What happens when we do that is that then the commons doesn't grow the same way. If you think about English language, or language as a commons because it serves us all, but nobody owns the English language. If somebody would own the English language, how would it look like? It wouldn't read. It wouldn't go into all the places that it goes, because when you're thinking about the commons, it's like commons infrastructure that we create either as humans, and then something is built on top, and something is built on top. By enclosuring, you're not allowing for that growth, because you're designing it for privatization, you're designing it for ownership, as opposed to designed for participation, designed for mutual benefit. That includes accountability for it, like being accountable for the commons.
Then, we tend to give out our responsibility for the commons, our responsibility for taking care of nature, because we have this frame that somebody's going to take care of it. What strikes me is in our planetary commons, how can somebody make decisions about the Amazon waters, or the forest, on what to cut, when it's really the global commons is a wasting, which is the lungs of our planet. It impacts you as much as it impacts the neighbors in the Amazon. It's not just the neighbors on the Amazon, where there's a pollution of our river, and then now it's for the people that live in the river. Yeah, the other ones, the first ones that die for sure, but then it's all interconnected. Imagine that Earth just laughs at us when we think we can own it.
[0:13:10] JS: Yeah. I want to talk about flow, because if there's – I remember you making a comment about flow on the panel in New York. If I had to distill the astounding and impressive breath of what you do into one central critical concept, it feels like it's flow. I think you've said, all problems are problems of flow. Tell us why flow is so central to unlocking the regenerative world that we're all talking about here on the podcast.
[0:13:43] FI: Yeah, for sure.
[0:13:45] JS: I love the smile on your face right now. I wish everybody could see it.
[0:13:48] FI: I get so happy with speaking about flow. I laugh and I giggle, because of the phrase of all problems are problems of flow. It's not my attempt to be able to create a new ontological reality for everybody. It's about giving people a tool to think about problems from the perspective of flow. I'm going to start with a quote from Sri Aurobindo, an Indian sage that wrote Life Divine, Savitri, and many other beautiful books. He's the legacy from Auroville, one of the biggest communities that we have in the world. He's in India. He said, all problems of existence are essentially a problem of harmony.
Then when you think about it and you invite our audience to just sink into it, and you think about your body when it's out of harmony, and we go to the doctor and they try to locate one thing that doesn't work, like we were pieces on the car. Many times the diagnosis is not right, or even the way to solve it, because they don't they don't look at the flow. What is it? How is the flow of your brand, or life force impacted? Or your metabolism, or your circulation, or elimination? Or any of our systems gets compromised in terms of those flows. If the hormones don't flow, you don't have serotonin, you don't sleep. There's all of those things that create the harmony within your body.
Then, it's easy to think about when we're harmonious, we're healthy. We have a healthy pattern of flow within our body. That healthy pattern of flow helps us to maintain our well-being. When we think about ecology, or we think about nature, we can also think about it in terms of healthy patterns of flow. Right now, we don't have a healthy pattern of flow. Thus, we don't have harmony. We don't have that ecological harmony, social harmony, political harmony. If we could for this experiment, this thought experiment, agree that then if problem-focused systems are a problem with harmony.
If harmony is created through healthy patterns of flow, then we can say that a way to create harmonious systems from our social systems perspective as designers of that, then we can say, wow, then harmony should be created by enabled shaping, or making flows visible. You see where I'm going with that? Because flow, there's a lot of talks and body of work out in the world about flow, but flow as a state, like a state –
[0:16:30] JS: Yeah. Sure, sure. Sure, sure.
[0:16:32] FI: Where you dance and you're in a state of flow. We're talking about completely different things. We're talking about matter. We're talking about energy. We're talking about communication. We're talking about information. We're talking about process. All these flows together, make a living system healthy. A system is healthy because of its integrity of the patterns of flow.
[0:16:58] JS: You have this comment. I mean, you pointed to it in your commentary just now, but harmonious solutions are crafted through the deliberate design of flows. I think this is a critical as systems change, agent/architects thinking about it through this framework of flows allows us to look at where flow isn't happening, or where we want more flow happening than, I think, you made a really important point. We're going to get to this when we get into currencies around making things visible, being a critical part of this.
[0:17:29] FI: Exactly. Other thing, acupuncturists and holistic doctors, they tell you it's all about how things are flowing. For us in our work, in MetaCurrency work, commons engine work, even Coventina, we say, in flow, we trust. We say, well, flow is an essential component on how we think about design, but also, how we can recognize and start identifying what is the flows that we want to be able to influence? What are the flows that can really change the system altogether, so it gives us a specific perspective on things?
[0:18:08] JS: Yeah. We're going to get to the role of currency soon. I want to take us a couple of places before we get there, because one of the things that your comments just now are pointing to too, I think, is really critical is this question of nature. I would just love to hear you speak to, how are the principles of nature informing your work?
[0:18:08] FI: A hundred thousand percent. A hundred thousand percent. I'm not only informing, but the principle of flow. I didn't remember how John Fullerton calls it, but it's in his principles. What we do have is the practicality on how we transform, we get from the principle into the design. Other principles could be diversity, but also when something is uniqueness, it could be another principle that we use. An essential one for us is what we call get mine, grow ours.
[0:19:06] JS: Yup. Okay. Yeah, I've heard that in your –
[0:19:09] FI: Because we say, it's perfectly fine to get mine, right? We're not like we're here to – if the individual can eat, if the individual can meet their own basic needs, then they can contribute. They can contribute. If you cannot eat, you'll be focusing on what is that you're going to put in your mouth in the very next moment. It's like, if you get your needs met, then you can start thinking about how you grow ours. That way, it's also a way of describing the commons, or a principle of mutual accountability. We can design for accountability, but we also have to design about how we're having that accountability in terms of symbionomy, or relationship with each other.
[0:19:54] JS: Yeah. I appreciate that get mine, grow ours. It's almost like a tagline for regenerative thinking, versus extractive thinking, which is just get mine and then get more for mine, right? Actually, status is based on how much I get for me.
[0:20:11] FI: Can I use my status to be able to get more?
[0:20:14] JS: Yeah, totally. Then what about, and there's another critical vector and this is the whole theme on the podcast that I haven't gotten into nearly as much as I want to, but so important. Let's talk about how indigenous wisdom is informing your work, because that's also another critical piece of the puzzle, I know for you.
[0:20:31] FI: Well, indigenous wisdom informs us when we're designing to create harmony with nature. There's so many things that the indigenous believe in, like the principle of wholeness. We need to be able to build interdependence and interconnectedness. That is part of indigenous knowledge. Or, you don't have to measure everything. Not everything is measurable. There's some things that are only going to be named, that they cannot be put into numbers, or ratings, or stars, which really is important for design, because what we're seeing right now is a lot of willingness to measure everything to be able to then see reality, and there's some things that will always constantly escape us, or that once we put a number or rating to it, it will be something else.
I think the indigenous invites us to more source, more intuition, more relation. I think it's both important, like the, “Hey, salmon. What do you want?” And sit with the salmon and see how it flows and understand it. The other one is putting a thermometer inside of the water and saying, “Do you like this temperature?” And seeing both. For us, I think that the aspects of also not thinking in money in terms of just market economy, but thinking in money in terms of how we build relationships. Like, for example, in the past, and this is named in the book of David Graeber, like anthropologist, social –
[0:22:06] JS: The Dawn of Everything?
[0:22:07] FI: Yes.
[0:22:08] JS: It’s sitting right there.
[0:22:10] FI: Yeah. This is around social currencies. Social currencies were currencies that would be about certain aspects of the life together, to marriage, or to when someone passes, or to be the peace treaty, or things of that sort. He called them social currencies, which could be the shells necklaces, or cowls, or other ways of building relationship focus on the everyday things within our lives, instead of just the things that we do, that then tend to be the ones that become the value.
I think that's essential in our work to be able to see more of wealth, or deep wealth by taking into account that things that cannot be measured, like love, safety. You can measure certain degree on how you want to be safe, or feel not safe. The things that escape, like generosity. We could see it in certain designs, but we still have to not put a number on it. Then the things that are – the visions that we've called in terms of the capacity to evolve within a system.
[0:23:29] JS: You're perfectly bridging to the next question that I was going to ask, was just about wealth. What is wealth to you in your vision of the regenerative future, what is wealth? Then the corresponding, what are the issues with wealth as we define, or think about it today?
[0:23:45] FI: I love the topic of wealth. I love it. I think that is one of those words that we need to recover. Many times, I speak in the work of collective intelligence. I speak about the role of language. I'll explain a little about that. The role of language in changing a system, like in our life, if we would want to change economics right now, let's start by changing the language. Why do we say, I'm broke? You might not have money. Story of my life. I have never been broke. Or, time is money. Or, pay attention. Or, all these things that if there are words like an economic activity within that, that has to do with numbers.
In terms of wealth, it's a powerful word. When I asked in many audiences, what is wealth? People start throwing things, like health and education and family and friendship and time and travel and knowledge and all these things. Sometimes I even mention money. Then money. But it's part of something. When you ask people, tell me the name of somebody wealthy, they will always think about someone rich. I feel that that word has been captured to mean money, or people with money, but we don't tend to think about it in more embroidered terms.
Well, it's very interesting that we say, heal when we think about health. We're healing. Or, so healing is to health, what wealing is to wealth. But we don't use that word, to weal. For me, the people that are working in social change, the ones that are we're designing new systems, we're not healers, we're wealers. We work on the social aspect, in the collective aspects of systems, and we're not healing the system, we're wealing it together. We are trying to accomplish – well-being is another word that comes when I think about wealth. Then that definition for us, wealth is what helps us mobilize resources in a way that it benefits the most people.
[0:26:03] JS: I just love the way you put it, probably from the MetaCurrency FAQ, but somewhere in the long amazing list of links that I'll put in the show notes. You said, trying to express the whole spectrum of wealth with conventional money, as it is done today, everywhere, degrades universal wealth into tradable form. This places humanity into a mercantile paradigm in which everything can be bought, sold and owned. This is a huge epistemological mistake. I thought that was very well put. Okay. Wealth is well-being in this far broader set of things that are in many cases, hard to quantify.
[0:26:38] FI: Yes. We talk in terms of deep wealth. What we have is different frameworks that we use for our design, where if you think about wealth as a whole, and then you think about money, then it's a really small aspect of wealth about products and services. We have to be able to destroy holes in able to pay parts that then we can transact with. Or we have to make it scarce, enable to create an IP, to then be able to transact with it. Whenever there's something that we can divide, we really don't know exactly how to create anything with it, because we tend to then wanting to anchor it back into what part can I sell, what can I monetize? That's because of what this quote says, it's money is entrenched in the very soul of us, is the water which we swim.
I think it was Marshall McLuhan that say, “I don't know who discovered water, but I'm pretty sure it was not fish.” It's like, as fish, we don't really know what is ice water in which we're swimming. But if we were to be to define it, it's like, we always speak about expressive capacity and how we need a new grammar of social value, because we know how to express wealth. We keep quantifying in the terms of money.
[0:28:00] JS: Yeah. Then I appreciated this quote which will bridge us into the next question, which is so central into really thinking about innovation and redesign and the regenerative economy. Non-tradable forms of wealth need to be expressed in a more universal, more encompassing language of flows. I understand what that means now, thanks to the question earlier. Not with conventional money. This is what currencies in our broader sense are made for. They are symbolic tools we use to express and manage currents within the whole spectrum of wealth. Okay, so this is really deep and critical in expanding our thinking about how we actually get to regenerative economic future. Let's talk about the distinction between money and currencies, what you mean by currencies, and why this is really the key leverage point when we talk about flow, to enable the flows that are harmonious, versus out of whack with what we want for the future.
[0:28:55] FI: Yes, thank you for that. I'm going to start by saying how this distinction that we're going to talk about in between flows and currencies and money has given us the capacity to be creative in regards of the flows that occupy our own life. We tend to feel economics is so far away. Money we cannot live without, we can experiment and give to economies, we can experiment in different ways of relating. Some have been successful, but we keep going back into money. We feel that part of that is that the creativity is not that we're not creative, it's that we tend to focus on the wrong framework.
If we would say, okay, yes, living systems are alive, because of the integrity of the flows. We need to be able to create healthy flows. Okay, so what does that mean if then we say, well, let's think about currencies. Let's think about currents. Let's think about how things are flowing. Then we say currency, a way to say a flow, a way to shape a flow, a way to enable a flow, and a symbol that has been formalized to be able to shape them. Once you start seeing that, I mean, it's abstract, but once that you start to see flows, you literally start seeing currencies everywhere.
To give some examples is USDA organics. It's a standard. We take it as a standard. But what it shows is a flow of production of organic food over time. You can also see how credit scores are coupled with money. There are a constellation of currencies, where the credit score is going to determine your access to money. With credit score, people are going to know, “Oh, does she pay? How much credit does she have?” You know how that is very possible to game it and not very accurate, but what if, well, I'm going to go do the what if later.
[0:31:01] JS: That's interesting. You can think about a credit score as an example of a token, or a signal that you accumulate. It's not tradable. It's a currency that is an indication of something. It makes your credit worthiness visible. It tokenizes it. You can think of it as a currency in that sense. Got you. Okay.
[0:31:18] FI: Yes. Because it helps us see that flow and it formalizes it, so that other people can see it. Then we can shape it together. Another way of seeing that is when we're born, we're issued a currency, which is our birth certificate. It's scary to think about that way. The state cannot see you, unless you have that. The state can't see you if you don't exist. You cannot get a credit card. You cannot travel. You cannot do anything, because you don't exist. That's a way of formalizing something. You see, it's that big, big flows.
I would assert that people, by having them understand flows, they can go into their own life, like their school and see what is the flows that they would like to see in their communities, in their companies, and then be able to shape them by thinking about how to create incentives and how be able to produce the behaviors that they want to see.
[0:32:24] JS: This gets me thinking of Donella Meadows, Thinking in Systems. One of my favorite books that I recommend. She talks about information flows as one of the leverage points in systems, right? A lot of this is, you talk about making the invisible visible. It's bringing information into the system that changes the incentive structure enables different flows.
[0:32:46] FI: You said signals before. Think about ants, or we think about other superorganisms. I'm in awe with how they organize, sometimes 20 million ants, and there's no boss. They just understand each other. They just go through a set of signals. Bees have how many, like 17 chemical words and different body markers. It's the sweetness of that intelligence. They do it with pheromones. What are the signals that we have to create ourselves to be able to collaborate better, for example? Or use one single, in The Nature of Economies, which I highly recommend from Jane Jacobs. That book is essential part of the work that we do in MetaCurrency. She says like, when a drop of rain falls in the rain forest, that one drop of rain lands into the leaf, and wets the leaf, and then lands into the soil, and then it goes into the root, and then something else grows, and then the bird comes, and then it takes a seed, and then it takes it – I mean, it's like, with one flow of resource, there's so much life happening.
When you think about local currencies, that one of the values of those local currencies is that they stay, they operate as – some of them the same as money, right? You buy them with money, and then you use it for creating local economy. I think one of the benefits is that the money stays in place. It will eventually circulate back to me, because we're keeping the money within our community. How do we think about flow in those terms, where one single resource can then help a whole local community, and then keep circulating?
[0:34:37] JS: I want to double-click on currencies, because this is such a critical topic. It's such a critical leverage point when we talk about transitioning to regenerative future. What do you mean when you talk about open currencies, or free currencies, when you talk about this being a paradigm shift, that embodies this fundamental and universal claim that any citizen, any community, any organization has the right to create tools for wealth to flow?
[0:35:05] FI: Yeah. Thank you.
[0:35:07] JS: Just help us understand this. It is, like it busts us out of very limited thinking about money and currency into very open, creative, innovative space for changing incentive structures.
[0:35:20] FI: First disclaimer is during the years, we've been trying to call them in many different ways. One of my mentors was Bernard Lietaer, and he used to call them alternative currencies – or no, complementary currencies, not alternative, because he thought that by calling them alternative currencies, that the status quo would get scared and would want to kill them. He called them that way. Michael Linton calls them open money, or free currencies, and some of my colleagues, and I think in the time of that writing, we were calling them open currencies, or open money. It's all free money. This is all ways in how to try to bring to a mass the understanding that we can shape social and economic dynamics, that we were born in some rules that we did not accept. Nobody asked us. But that doesn't mean that that's the only way that it should be the way, especially when you're talking about some local regions that have the right to be able to design any currency they want for being able to trade the way they want. Back to social currencies, it’s like currencies that are meant to signify something for the community, but they not necessarily have values outside of other communities.
[0:36:43] JS: Yeah, I really appreciate that. It's just, it's giving groups the liberty to define currencies, tokens, and ways to surface critical information to change incentives and flow.
[0:36:55] FI: What signals do we need to create? What flow do we want for the nation? Do we want competition, because we find that it’s somewhat healthy? I mean, gamification is full of currencies. Now, gamification is a way to be able to see game mechanics, and within those mechanics, you can think about them in terms of currencies that will help create certain flows of behaviors through rewards. Many times, it's about rewards, like that incentive badges and leaderboards. All those are full of currencies.
[0:37:26] JS: Yeah, fascinating. Yeah. Then I want to talk, I mean, currency design is such a key part of what you do and explaining what it is and helping communities learn about it. You have courses about it. There's this interesting question about communities coming and say, which currency should I choose? That’s the wrong question. For somebody who's like, “How do I make this real?” How do you think about it at a community level, this again, this concept of constellation of currencies that you touched on, or I think you also call it complex currencies? Can we double click on what it actually looks like when we start to think about implementation?
[0:38:01] FI: Yes. This is a nuanced question, because we've tried so many things over the years. Many times, including building cohorts, where we go into certain times to be able to help them to design, help people and communities design their own currencies. We find that the first step that needs to happen is a sense of recovery in terms of moving out of scarcity and moving into the frame of flow. It takes a while. It takes a while, because it's too abstract. It takes a while people need to focus to sink into the examples, and to be able to understand some of the frameworks, so that then we can sit and have richer discussions.
Sometimes it's as simple as we need to be able to see a certain flow within a festival, and we're just going to create a way of making known that none of us have slept, so we're going to use cacao beans in the morning when we go for our coffee. If we don't sleep, we're going to put it in one jar. If we slept, we're going to put in the other jar. In the room, we fill out that nobody slept. Then that signals us that we have to meet and have a conversation. Sometimes currencies can be non-monetary, and it can be quick. You use it, and then the flow happens, and then you throw it away.
Another example with that is time banks. Time banks are low-hanging fruit for understanding currencies, because they build social fabric. They're being out for decades, and people can understand them. Many times, they think that they fail.
[0:39:40] JS: Can you explain what time banks are, for people who don't understand that, that don’t know that concept?
[0:39:44] FI: Yes. Time banks is a type of complementary currency. The beauty of time banks is that it has an ideology where it says that everybody's time is equal. What they'd say is, okay, you don't have money, but you have 24 hours every day. With that abundance, what can you do? Well, let’s trade time. One hour of your time is one hour of my time, and we'll just accounting. It's a system of accounting of minuses, pluses and minuses. You give me, you take from the community, you get into debt, but debt understood in our modern capitalist is something scary that you want to avoid at all costs.
In communities, it's not so. Debt is a way in which you build respect. You build trust with others, because you're taking, but you're also giving back. What's it matter that you're in debt sometimes? In time currency, sometimes you're in debt, you are taking – let's say, they do get sick and community comes to take care of you and they create, like they cook your food and they come and clean. Let's say, that you are like me and I'm being sick. So, I start to give one hour for the food and one hour for the healing and one hour for the water and one hour for whatever is that was given to me by people. Not water. That's a service. But taking me, my shopping, for example.
I start to account it. By the time that I receive all those, maybe I have minus 10 hours, because that's the amount of time that I receive from others. You could perceive that that person is in debt. But it's like, just a minus. It's just part of the flow. It's like, inflow and outflow. It's like, in-breath and out-breath. It's a normal thing for an economic system to have debt, but in those healthy terms, not in the ways that money builds debt. That's what happens.
The thing with time banking though is that one hour of a doctor is not equal to a one hour of a cleaning lady. Even if the time banks people want to say so, the doctors don't want to. They don't want to enter in time banks by doing that. It tends to build social fabric and be for things, like our building, or taking care of children, or cooking food, or things like our very low-hanging fruit, but not big things. Once that behavior, or that social fabric has been ingrained and I know my neighbor, I stop accounting, because I don't need it anymore. People look at time banks as they have failed, but no, they haven't failed. They haven't failed. It's just that they were successfully building the social fabric and then they cease to exist.
[0:42:25] JS: There's no longer – That's fascinating. Are there any other examples of communities using this constellation of currencies, or alternative currencies that you've seen that you're excited about, or want to talk about?
[0:42:38] FI: Oh, there's many around the world. I think that we can go to examples. However, I can tell you what I'm excited about in terms of currency design and where Coventina Foundation is taking it, and with the whole constellation of holochain and holo. We're building mutual credit currencies and mutual credit accounting systems, so that we can create – I'm calling them, we're calling them resource-based currencies. This is because when we talk about regenerative economies, it's a mix. You hear a mix of things. One thing that has been disappointing to me is that from the crypto community, I hear things like, “Oh, because you're creating a currency that is – the currency is managed by Ethereum 2.0, or whatever, that has less energy expenditure than its regenerative. I wouldn't say that's true.
I would say, that if the currency doesn't consider planetary capacity, it's not regenerative. If the currency is running in a currency management system that in itself is causing that much expenditure of energy, it is not regenerative. Examples out in the world, like Kwaxala, this is an example I posted a couple of days ago that they work with holochain as well and they're for protecting trees and for protecting, especially the financial interest is worth more alive than that. Then creating the incentives, so that they buy the rights of cutting forests and they create the mechanism for that to be about caring for the forest and then finding ways on how to help organizations, or corporations buying those carbon credits. Because what they identify is that many companies do want to be more regenerative, but there's no regenerative financial instruments that they can rely on products that are already for them to use.
With other expertise, they don't know how to do it. And so, they don't know how to connect with, for example, biodiversity credits, or how to connect with carbon credits, which is one of the small aspects of currency design that is possible. The resource-based currencies for us is really important, especially as we go and move into a world of AI, where so many jobs are going to be gone, where we will find people not having the possibility to do certain works because AI has taken the work. Then we go into, how are we going to do this? If we don't design a new economic system, how are we going to do this? With UBIs, universal-based income? I don't think so. Why? Because, depends, right? If it's built within the community, sure, but where is the resource going to come from anyways?
We believe that by focusing on resources, by focusing on food and energy, focusing on housing, focusing on education, focusing on waste, you can help communities focus on those flows and help them to create the circular economies that are needed with waste. Probably, economies can be full of currencies that help create those incentive mechanisms from how you move the waste to what do you do with the waste?
[0:46:11] JS: Well, I mean, can be applied in so many different ways. I think this resource-backed currencies is a really important concept to understand also.
[0:46:20] FI: Yeah. Or asset-backed. Asset-backed means for us that you are able to redeem your currency for the asset that backed it.
[0:46:30] JS: It also ties the currency to the real economy. It addresses issues with the speculative economy, no?
[0:46:36] FI: Correct, correct. Because crypto is so speculative in nature that money really turns and laughs in my perspective at crypto, because even the people that hold crypto when they want to be able to liquidate it, they have to liquidate it back to money. Then, they think that they can just design a token and give it to people in the Amazon. You give people a bunch of numbers, and suddenly, they start to trade numbers. It would wouldn't occur to them to do that in the first place. I think that we need to be able to put in the mindset of people that there’s currencies that are based on productive capacity. But that productive capacity is something that you have to be able to redeem for.
An example could be HoloFuel, which is based on computing power, for the Holo Network. the Holo Network is a peer-to-peer hosting network. In that peer-to-peer hosting network, hosts are responsible of giving the service of hosting the Internet, hosting a little piece of the Internet. The problem that Holo wants to solve is to be able to have systems that are owned by people, so data is owned by people. Then we can create more commons, because we have the ownership of our own data. The whole ability is that by creating, that if we do not have the servers, if the soft trade is not ours, it doesn't matter how much you build on top, you will still be able to shut this whole system off if the status is not relevant.
HoloFuel is a currency that was created to be able to give to people as a proof of service. When they present a proof of service, then they get HoloFuel, they pay them HoloFuel. HoloFuel themselves does server capacity to developers. It has a monetary reserve, and then people can exchange HoloFuel for money, because there's a monetary reserve and a market that is created. What is now more interesting is that we're taking that a step further into saying, wow, this is a currency for allowing access to digital, physical infrastructure. What if we create the same pattern for other digital, physical infrastructure? That way, we can be able to trade and in HoloFuel for other, redeem it for, oh, video capacity here. Oh, I want that.
[0:49:21] JS: Yeah. It can be the currency for the entire economics, the economic experiment, or subset of the economy that is operating within the holochain ecosystem for the app developers and for the people who are using it, right?
[0:49:32] FI: Outside of the holochain ecosystem as well, any digital, physical infrastructure.
[0:49:37] JS: Fascinating. We need to do a whole another episode on holochain and why it's different than blockchain and why it's really interesting and compelling for this. I know it's a whole huge area of your work. I want to touch on the technical piece now, because I think this other really central question that I hold with the Denizen inquiry is, how do we use new technologies to enable experimentation and innovation with new economic models? I know that you're really actually trying to build the infrastructure to enable that with the constellation of, and talking about constellation occurrences, you have a constellation of projects that are enabling really, the foundation and infrastructure for this proliferation, experimentation and innovation around new currencies, new flows, new ways of changing incentives and organizing at the community level.
I think, very interestingly, we spoke earlier about indigenous wisdom. A lot of that was able to be stable at smaller scales. In a way, the current information age is allowing us to take those structures and scale them at the global level. I want to first talk about, you make this distinction between industrial and information age economies. Why don't you tell us what that means? Then, just how does Web3 enable these new paradigms, this regenerative economy to happen at a global scale?
[0:51:03] FI: In the history of economy, or the history of money goes very coupled with the change in production. We can see how we moved from hunter-gatherers, tribes to agriculture, and then that became, have more surplus. When you have more surplus, you'll be able to hoard and change the economy completely. Then we all went into, well, the progress was going around factories and big industry. Then, we started to have really, the markets arise out of that evolution of industrial-age economies. Now, we're seeing that there's something else that is emerging that is at the edges.
We see, of course, money moving into more digital forms, but it's also we're seeing that it's not about the money, it's about value. It's about different ways of social value, different ways of making it visible, different ways of tapping into it, like data where it's essential in these times. We can say, it's also a data economy. How do we transform that into knowledge and into wisdom that is then able to help us to be aiding the type of world that we want to see? As we go into this evolution, then we start to see new forms, almost a Cambrian explosion of new forms and how we want to be able to trade value, measure value, or create it within our communities.
It's fascinating how we also go and look back into what has been done in indigenous societies, where they would say like, “What are you talking about? Money?” No, this is about having the, again, back into the flow is being able to see where things are needed to be able to mobilize it there. In some ways, it's more subtle. It's like, how that information serves for us to be able to then see what it's needed when it's needed. We're trying to over measure things in some ways, but it's also important that we go through that to test the limitations and the gaps of what is being able to be known, but also accomplish different ways in how we can visualize data that creates value without pie charts, or little numbers, or little – but that allows us to see almost a living map of how value is moved within an ecosystem, within an organization, within a society. It's more abstract forms of value.
A different way of saying it, I think it was Eric Harris Brown that said that money is but an instance of an expressive capacity that is in the process of evolving. Then we evolve into phonemes and then we evolve into alphabet and then we evolve into whole phrases and then we evolve into being the stud, it allows us to see, feel, and engage with the creation of new monetary systems or new – no, I'm not going to say, with new monetary system. With new ways of trading value. I regretted from saying monetary systems, because I don't think blockchain, or crypto is a new monetary system. They’re currencies.
While, what is really exciting is that then, people would say, wow, it is possible that it's our money. Here we are trying to invent all kinds of name, free money, open money, da, da, da money. People wouldn't get it. Then comes Bitcoin and people start to give interest to it. We give attention to it. It becomes really valuable. Then it only brings a whole new hope, because we can be able to measure and see value differently. Now, it's like the Wright brothers inventing the plane, but just the plane. They did not invent airports, or passports, or boundaries, or faster planes. I think that the same way crypto is not the faster plane, but it's a way for us to spark our imagination to something new.
[0:55:17] JS: It broke open some threshold of innovation and imagination.
[0:55:22] FI: And belief. Also, shaped it into its same scarcity mindset. If you spoke to the token design, it's about – because blockchains can only – blockchains always have tokens. If you're going to create an infrastructure in the blockchain, you will have a token, because blockchain is employed through tokens. The problem with that is that then, people focus on market making and focus on the token, but they don't focus on the infrastructure that needs to be built. In that regard, I feel that we're moving out of Web3, or into a different thing. We don't even describe holochain as Web3. We talk about it as the next web, but what is similar is that part of the distributed layers, a technology, because it allows us to have accounting of all sorts of stuff.
This is critical for new currency systems, because many of the – most of the times, think about all the network and explanation about people giving service for Internet, or server capacity, and then trading it for HoloFuel, it's accounting. You get this amount of money. It's mostly in its sense, it's a holistic way of accounting. Many people are after seeing different forms of value, non-monetary value, and a can for it as well. The role of accounting and the evolution of accounting is integral to the evolution of new economies. Also, the part of that limitation with Web3 and crypto is also regulation, because so little is understood about how the evolution is growing, and so much fear from the people that want to control it, that they want to regulate it so badly that when some innovation comes, they just don't know what to do with it. It stops it and it just slows it down, because they really want to regulate it so badly and accounting, not necessarily.
We think about it in terms of accounting. Accounting is legal everywhere. Accounting we can have a community, for example, with an energy credit. Let's say, that a community, those community solar, and they have a unit of account, which is kilowatt hours. Then, let's say, that there's a surplus of kilowatt hours monthly from the community solar. They can do a lot of things with that. They can divide it among them, but they can also put it into a community pool, where then they can then divide it, or they can choose, or have the governance to be able to say, should we sell it? Should we give the school? Should we put it into the church? Should we keep it for the future? What do we do with it? It's a unit of account. They don't need to create a currency and formalize it as that. They can be using just the normal methods of accounting. These kilowatt hours go here, these kilowatt hours move there.
[0:58:28] JS: That's a great example also, of get mine, grow ours.
[0:58:31] FI: Exactly. Exactly. It's a way in how without a distributor, your technology can't do that. You want the information to not be tampered with. Yeah. You didn't call it the Web3. You called it the evolution of the web. Is that what you said?
[0:58:47] FI: Next web. Next web.
[0:58:49] JS: The next web. Let's call it the next web. It is critically enabling the information integrity to enable this decentralization, Cambrian explosion of economic currency design, incentive design innovation.
[0:59:03] FI: Absolutely. A 100%.
[0:59:05] JS: Amazing. I'm so impressed and inspired by your work and the breadth of it. I know we didn't get into the details of Coventina and holochain and Meta – I mean, I don't know more than one of you. There are so many different things that you're working on. It's really amazing. I'm sorry, we didn't get time to get into the specific projects. I'll link to them in the show notes. But I wanted to get into the concepts, because you've just thought so deeply about so many different parts of our inquiry. I love the way that your work showcases how to bring these together and integrate them to actually propel us towards the regenerative future and away from today's extractive reality. I just want to thank you for coming on to share that knowledge with us. It's really been amazing to get to know you. I'm excited to continue to collaborate with you moving forward.
[0:59:55] FI: Same. Same. Thank you so much. I feel like, the work in itself has the essence of living systems. I really feel that’s the inspiration we should get, all of us. Ending with the phrase of Jane Jacobs, that's when asked the question, what are economies for? She said, to partake in your own fashion in the great universal flow. My work is about awakening people's creative power, so that they can know, that can shape social and economic dynamics. I really know that is the path of understanding flow, because of the integrity that we have to focus on. Now, the new breed of currencies that we should breed, or create, or bring to life have to be non-speculative currencies. They have to be a currency that are backed by real assets, or they're backed by the value created by humans and human-centered and not new currencies to bring more millionaires into whatever, to focus on what really matters.
In some point, I would love to share with you how we want to be able to do this and we’re creating a whole currency systems to be able to support and leverage the regenerative movement.
[1:01:12] JS: Anytime. Sign me up. Thanks again for coming on. I have a feeling this is the first of many conversations that we'll be having for the audience, because we have so much to learn from you.
[1:01:25] FI: I hope so. So much to learn together and thank you so much.
[OUTRO]
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