Add Community Currency focal use case

[jandrieu]

Please edit and create a PR for community currency focal use case

Hungry Lisbon Traveler

Contributed by Grace Rachmany

Background

In the context of creating an alternative to the default economy, people want to be able to use and exchange alternative currencies, using their alternative currency wallets as easily as they use a credit card. When people use a credit card, neither the buyer nor the seller needs to worry about the exchange rate--the transaction happens seamlessly. The seller receives their local currency, and the buyer is debited in their local currency.

The vision of the ICF, and the cryptocurrency movement as a whole, is that people will be free to use whatever means of exchange they choose, and that communities will be free to create their own means of exchange.

Scenario

Grace is an advisor to different community currency groups. She has a Circles and a SEEDS wallet and some Sarafu. While in Basque country, she is looking for a restaurant that accepts community currencies. She uses the Open Street Maps to identify a restaurant which accepts community currency, in this case Chiemgauer. Her wallet allows her to convert Circles to Eusko and buy a meal for herself and a colleague at Nina’s Cafe.

Nina and other businesspeople are able to use a debt clearing house to clear debts within the community currency framework, or to use an exchange to trade one currency for the other.

Distinction / Challenge

• Different currencies have different issuance mechanisms (mutual credit, reserve backing, airdrop, UBI, backing based on goods).
• Most community currencies can’t be exchanged directly for a fiat currency as a means of exchange.
• Generally community currencies have closed software systems, without interfaces to other currencies or exchanges.

Artifacts

1. Multi-coin wallet for community currencies.
2. Interchain currency exchange standard
3. IID for local currencies -- IID uniquely identifies local currencies, providing a moniker that can be applied without ambiguity across any exchange. In other words, there’s no confusion about which chain gets to be called “BTC” or similar market problems.
   a. Circles UBI
   b. Sarafu
   c. Eusko
   d. SEEDS

( I believe we agreed to split this into two use cases, keeping the purely crypto-crypto exchange for the focal use case and raising the crypto -> non-crypto use case in the domain map rather than as a focal use case.

Trust/Liability Hierarchy

1. Nina needs to trust that Grace has a legitimate wallet.
2. The Circles and chiemgauer networks need to trust one another to meet their financial obligations in case of trade imbalances.
3. Nina needs to trust the chiemgauer network to honor their financial obligations.
4. Grace needs to trust the Circles network to issue tokens that will have value in other locations.
5. The clearing house has to honor its obligations.

Threat Model

Threat: Potential for currencies in the system to collapse or not have backings.

• Response: Monetary policies for being a part of the network.
• Response: Stop trading currencies if exchange of a particular currency is too volatile.

Threat: Trade imbalances.

• Response: Require some level of reserve in an agreed-upon currency.
• Response: Track history and have a warning system before imbalances get too great.

Threat: Potential to have fake wallets or fake credentials.

• Response: Check ID with payment
• Response: Use biometrics for authentic identification
• Response: Have insurance that covers the expected amount of faking in the system

Threat: Hacking and code bugs.

• Response: Test suites with thorough test coverage
• Response: Open issue tracking for public reporting of bugs and bug fixes
• Response: Open source software so more people can review the codebase and discuss potential problems and fixes.

Threat: Regulatory: local currencies may not be legal within a given jurisdiction.

• Response: ZKP options and invisibility of the network.
• Response: Lobbying for improved laws; invest percentage of reserve towards lobbying.
• Response: Legal council to keep things within the law until it’s too large to regulate away.

Sustainability

Local purchases with local currency helps reduce costs of transportation of goods, keeping purchasing local. Based on the values of these local communities, they can create currencies that reflect sustainable values, carbon-neutrality, circular economies, etc.

(can we tie this more clearly to a specific SDG?)

Diversity & Inclusion

Requirements