Creating a “Shadow Currency” – The LIP

We have decided to create for this event what we named a “Shadow currency”. A few details about that newcomer that doesn’t intend to exist for longer than the experiment time:

– It is called the “Lip” (1 Lip, 2 Lips)
– It looks like this: “l1”. (can you spot the leipziger “Hochhaus” silhouette ?)
– It is indexed on euros (1 Lip = 1 Euro).
– It is implemented using the Ripple Blockchain, as well as the smart contract that runs with it.
– Both at the Festival’s and in partners’ locations around town, all transactions will be recorded on a Blockchain based ledger, allowing each one (partners, festival goers, etc.) to check where the money goes. Thereby, it will also provide a real time accounting for the festival.

I know that many people will start rolling eyes to the ceiling and ask: but why bother? Why not using Bitcoin or Ether? So let’s give it a quick explanation before we discuss for hours about it.

1) Because Ether and Bitcoin might be doing great in many contexts, but are not suitable for a festival. For instance:

– Opening and funding an ETH or BTC wallet with Euros is too complex and intrusive for just attending a festival. One needs 2 days with a platform like Kraken and needs to provide sensible information (id information, selfie with id card, proof of residence). We can’t propose this to persons who just want the piece of pizza they see on the counter to end up in their stomach within 30 seconds.

– Ether or Bitcoin price are too volatile with respect to Euro for our situation. We don’t want to take any risk in the payment of our artists, and it might also scare some non informed festival-goers.

2) Because as any experiment, ours need to have a date of start and a date of end, and creating the currency for it is possible and makes it accurately observable.

3) Because the fact of creating a currency that is both taking a local (usable online but mainly concerning physical and local interactions at first and questioning the way the local economy can be invested by its inhabitants) and a worldwide perspective (using the nationless aspect and world computering possibilities of the blockchain) is making it twice more interesting.

4) Because its neutrality will also allow it to stay out of parish strife such as the one opposing Bitcoin to Ether. For that reason, we are also opening the door to any blockchain community wanting to try implementing their model to this particular problem. Our datas will be public, and can be implemented on the bitcoin blockchain on parallel to the Ethereum one. The research’s outcomes would benefit from this opening of perspectives and methods.

Of course, there are many questions left aside in this short presentation. There are those we already have answers for. And then, there are the questions we didn’t even think about yet…

That is one of the reasons why we want to keep the whole development process as open as possible to contributions, be it only to express skepticism. Because within open critic lays improvements towards efficiency, fairness and ethic.