Hullcoin: Can Local Currency Help Stimulate Hull’s Economy?
Volunteers and community workers may soon be able to get rewarded for doing “socially-useful tasks” thanks to a blockchain technology that rewards individuals effort with Hullcoins, of which can be exchanged for discounts at local retailers.
The idea, which had its inception in 2014, is being spearheaded in Hull, England and was first envisioned by David Shepherdson. Specifically, Shepherdson researched how the blockchain technology underpinning bitcoin could be utilized as a local currency to assist communities in Hull struggling with high unemployment and poverty. Kaini Industries is the company behind Hullcoin, and they have mined over ten million Hullcoins to be distributed to local community groups.
The firm then runs due diligence on any local community group interested in distributing the native cryptocurrency to ensure that they adhere to the project’s principles; to “create a better community.” Subsequently “bundles of coins” in batches of 700 are allocated to respective locales in the city. Volunteers can then participate in activities with these community organizations to earn Hullcoin.
Hullcoins have no specific value; hence the amount of coin issued is at the discretion of each community organization. Additionally, they cannot be purchased with money; it must be earned by doing something socially useful.
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Volunteers who have earned the virtual currency receive them via a mobile wallet and can exchange them at participating retailers for discounts ranging between ten to 50 percent. Likewise, discounts offered is at the discretion of the retailer. There are guidelines on what retailers can offer discounts.
For instance, Hullcoins cannot be used in purchasing cigarettes or alcohol. The retailers can then decide what to do with the coins, such as re-issue them to employees as a form of a reward or donate them back into the community to help stimulate the local community even more.
Kaini industries monitors the amount of Hullcoins in circulation and as such can control its demand and supply by taking some offline if needed. Although the project is still in the beta testing stage of development, there are currently over 40 participating local retailers, 70 local community organizations and 700 volunteer users.
Potential Economic Impact
Often volunteering is based on altruism, therefore, when individuals volunteer they usually do so because they want to contribute to society without expecting to earn a reward. So, does the advent of Hullcoins cheapen the experience of volunteering?
According to Shepherdson, earning a reward for volunteering is not necessarily a bad thing because it can lead to increased participation by volunteers.This incentive can be particularly important in down times when there is an increased demand for volunteers to help in food banks and other local community groups in providing support to those affected by the recession.
Volunteers could give up more of their leisure time as a way to earn more Hullcoins and then exchange them for discounts at their local retailers. This, in turn, boosts trade for local retailers because they might not have otherwise gained that additional demand. Therefore, stimulating the local economy.
Hullcoin says in the future they could become the “blood supply of a growing collaborative economy which extends from locally grown food projects to collective purchasing and savings networks, providing an economic safety net for hard times and new opportunities for good.”
It must be noted that for Hullcoins to work, it needs to be useful and there must be a large number of users who perceive it to be valuable and are willing to adopt it.