Grassroots Currencies: Foundations for Grassroots Digital Economies
Ehud Shapiro

TL;DR
This paper introduces grassroots currencies as community-issued digital debt units that leverage mutual trust, providing a foundation for grassroots digital economies with formal protocols and economic measures.
Contribution
It formalizes the principles, economic measures, and protocol for grassroots currencies, distinguishing them from cryptocurrencies and traditional fiat systems.
Findings
Grassroots currencies can measure foreign debt, trade balance, and velocity.
They enable economic scenarios for natural and legal persons.
The Grassroots Currencies Protocol is proven to be grassroots.
Abstract
Grassroots currencies are means for turning mutual trust into liquidity, with the goal of providing foundations for grassroots digital economies. Grassroots coins are units of debt that can be issued by anyone -- people, corporations, cooperatives, banks, municipalities and governments -- and traded by anyone. They are more similar to `inside money' (a medium of exchange backed by private credit) and to fiat currencies (for which the issuer controls scarcity) than to global cryptocurrencies such as Bitcoin or Ethereum, which are unbacked and for which scarcity is controlled by the protocol. In this paper we introduce the principles that underlie grassroots currencies; show that they naturally admit basic fiat currency measures regarding foreign trade such as foreign debt, trade balance, and velocity, and basic accounting measures such as cash ratio, quick ratio, and current ratio;…
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Taxonomy
TopicsBlockchain Technology Applications and Security
