Stephen DeMeulenaere

Alternative, Community, Complementary, Bitcoin, Cryptographic, Digital Currencies & Payment Systems specialist

Stephen DeMeulenaere - Alternative, Community, Complementary, Bitcoin, Cryptographic, Digital Currencies & Payment Systems specialist

Why @Permacredits does not fit the Philosphy of Permaculture, but @Freicoin does

In line with my effort to remind people new to the cryptocurrency movement, that there was a movement for decentralized currencies before Bitcoin, I just wanted to be sure everyone knew that the currency for the Permaculture Movement, Mutual Credit, has been used in the Permaculture movement for decades before Permacredits, the new cryptocurrency which claims to bee supporting Permaculture, arrived on the scene.

There is one big difference between Mutual Credit and Crypto Currency, which makes one match Permaculture, and the other not. Permacredits do not fit the philosphy of Permaculture. Here are the reasons why:

- Permacredits, firstly, are not credits. It is incorrect to call them credits, instead they are assets. These assets must first be purchased with scarce US Dollars. The philosophy of Permaculture is about reciprocation, not about imbalance.

- Like other cryptographic currencies, they are scarce commodities that can circulate as a currency. The philosophy of Permaculture is about abundance, not about scarcity.

- Being purchased by and valued in US Dollars, Permacredits are a store of false value. The philosphy of Permaculture is about entropy in nature, there is a cycle of life and a store of value is not in line with it.

Mutual Credit systems, on the other hand, do fit the philosphy of Permaculture, and here are the reasons why:

- They are issued interest-free into a network of reciprocating individuals and Permaculture practitioners. They do not need to be purchased first.

- The Transaction Stack (Blockchain) of a Mutual Credit system is always balanced at zero, there is only ever enough credit available as is needed.

- Mutual Credit systems, being born from pure interest-free credit, are not a store of value, they are a medium of exchange. They exchange only what is real.

This is possibly why Permacredits are not listed in the Open Permaculture School’s list of Permacredit currencies from this year.

The only cryptographic currency that abides by the laws of nature is Freicoin, which applies the principle of demurrage, which separates the functions of money between a medium of exchange, and a store of value. Permacredits, if they were to be in line with the philosphy of Permaculture, would be based on Freicoin. Therefore Freicoin is the only true Permaculture cryptocurrency

The Bitcoin Blockchain, although revolutionary from a digital perspective, is not revolutionary from a monetary perspective, which I wrote about in a different blog post a few months ago.

Bitcoin is great in many ways, but it can’t do everything. It cannot bring about a sustainable society, so it is not the ultimate revolution in money that we are working toward.

Bitcoin Myth #2: Bitcoin is the first movement for decentralized currencies

I often hear people speak of 2009, the year Bitcoin was born, as being the year that the movement began.

Since I’ve personally been very active in the movement since 1991, and have good friends & colleagues who have been very active in the movement since the 1970s, I thought I’d bring the folks who came to know of the decentralized currency movement though Bitcoin, up to speed about what we’ve been doing the past 40 years.

Well, actually that would take a long time, so I hope you’ll start looking up Community Currencies, Complementary Currencies, Local Currencies and Mutual Credit for a start.

Firstly, EF Schumacher and his friend Ralph Borsodi are two thinkers who helped revive the idea of a government-free money. Borsodi’s Constant, launched as an inflation-free currency in 1974, kept the ball rolling which had been rolling for decades previous, until the Local Exchange Trading System was designed by Michael Linton and others and released to the public.

The movement for non-government currencies has always been decentralized, just not to the extent that was technically capable from 2009. But, the idea that it was possible has been talked about for decades previous.

What’s important to know is that there was a movement before Bitcoin, and if you did not know that already, then welcome!


Bitcoin Myth #1 – There was no Open Public Ledger (Blockchain) before Bitcoin

I hear and read this quite often, that Bitcoin’s Blockchain is the first example of an open public ledger. An open public ledger is a list of all transactions that have taken place in an economic network being made fully available to all members of that system.

It’s not true. Both Local Exchange Trading Systems and Time Banks have had open public ledgers in their systems going back over 35 years. In fact, it’s a central tenet of Mutual Credit Systems that the system’s ledger must be open.

Myth busted.

2 Paths to Mass Adoption: Tipping & Training – @ChangeTip & @CoinAcademy

In behind all the technical discussions, philosophical debates, political lobbying, there’s the popular topic of mass adoption, how to make it easy for anyone who knows how to basically use a mobile phone or computer to secure their device, and acquire, spend and receive Bitcoin.

When I started writing my blog again, I focused on volatility as one of the main obstacles to mass adoption. Now I’d like to flip the coin over for a moment and look at the two main paths to Mass Adoption: Tipping and Training.

I happened to have a chance to ask my question directly to the CEO of ChangeTip, Nick Sullivan, just last week (November 27, 2014) at a pre-Thanksgiving lunch at Hubud, the co-working center in Ubud, Bali, Indonesia, before Pantera Capital announced in their December Newsletter that they had led 3.5 million USD in funding for ChangeTip.

As I happened to be sitting next to him, I ask Nick which he thought was more important for mass adoption: apps that made it easier for people to use Bitcoin, or suitable forms of education that helped people feel comfortable using Bitcoin?

He replied thoughtfully that it was a mix of both, that good apps encourage people to learn, and good learning programs encourage people to use good apps. People will have to learn more by using apps so in effect both are needed.

As co-founder of Coin Academy, one of the main Mass Adoption-focused Bitcoin and Digital Currency education platforms, this raised my hopes that we would also be in someone’s thoughts about how to best educate the masses to start using Bitcoin, and make great use of ChangeTip!

Creating a Cryptocurrency is Not Enough, it Must have a Reason to Exist

These days anyone can create their own cryptocurrency. You can do it the hard way and build it from scratch yourself, or you can do it the easy way and have someone take an existing currency design and put your name on it. There are several different providers you can choose from.

But then what? Do you just give it away, spread it around like Facebook Likes, hoping that it will catch on and people will start exchanging it? Why would they? What’s the incentive?

Bitcoin has an incentive for almost everything, except for hosting a node, something which is really important to the network and circulating bitcoin. But when it comes down to it, there isn’t much reason to circulate bitcoin, at least compared to the perceived benefits of holding onto it.

Most other digital currencies are finding the same problem. Once a group of like-minded tech savvy people have a wallet with some coins in it, they don’t have any reason to circulate it with others. It gets boring to have to load the app and update the blockchain just to have it sit there.

As a designer of previous-generation complementary currencies, I spent around 75% of my time researching and designing the use-cases for the currency, and the remaining 25% on designing notes, setting up exchange platforms, liasing with local officials and educating the users. If it was clear what the use-case scenarios would be, this would save me a lot of that 75% of time spent figuring out how it would circulate.

There are three basic things you need when designing a currency system: a wedge, a sink and a pump.

A wedge is the main reason the system is being implemented. What problem are you trying to solve with this currency? How will it make life not just a little better, but a LOT better for people? A wedge could also be a key partner in the system, a strong backer. A wedge could also be a key beneficiary of the currency system, perhaps a community project of some kind.

A sink is a place, a user in the system who will always receive the currency. The local grocery store, movie theater, family restaurant, etc.

A pump is how the currency gets injected into the economy. How do people get it? What is their reason for wanting to receive it, and what is their reason for wanting to circulate it?

Sinks need to know that there are places they can spend their currency as well, so this is the next step in the cycle. Can they push the currency up the supply chain? Can they buy vegetables with it? If the sink gets clogged, the system will be in trouble.

Pumps need to know that people want the currency and will circulate it, not just hold onto it until the system stalls. They need to know that their participation will help the goal of the Wedge to succeed, from which they will also receive a benefit.

So it’s not just a matter of splurging a currency onto a group of people, but to imbue this currency with a reason to exist and hopefully flourish.

Possibly the first Stable Pegged Cryptocurrency – NuBits

Link to article below:

Link to White Paper

On September 23, Peershares launched NuBits, a digital currency developer Jordan Lee claims will remove the volatility associated with cryptocurrency prices. NuBits hopes to accomplish price stability by separating the coin’s currency and voting mechanisms, which will allow developers to tie the currency’s value to the value of United States Dollars at a 1:1 ratio.

Lee believes NuBits will appeal to potential cryptocurrency users because it will allow them to know the dollar-value of their coins without having to perform mathematical calculations.

NuBits Project Launches

Jordan Lee says that while Bitcoin and Peercoin are important inventions, they possess inherent flaws that render then unsustainable. He says their major flaw is that they simultaneously serve as both currency and shares. The NuBits whitepaper explains why this is a problem.

Currencies must have a stable value to be effective, while Peercoin and Bitcoin have exhibited exceptional volatility. Many argue volatility will end with the high liquidity that will accompany widespread adoption. While volatility will decrease with greater adoption, it is unlikely volatility will ever be less than occurs with large cap stocks such as Google or Microsoft. This is still an unacceptable level of volatility for a currency.

However, Lee says that even if volatility could be eliminated, that would hamper a coin’s ability to function as a “share.”

 Let us suppose I am wrong and that volatility will be eliminated in these networks. In that case they would serve well as currencies but poorly as shares, because they would not appreciate, nor give dividends. This would likely cause a selloff of these “shares”, thereby introducing volatility once again.

NuBits purports to avoid this problem by separating the NuBits network’s currency and voting facets into two separate entities. NuBits serve as the network currency, and NuShares facilitate the voting mechanism, and most importantly the introduction of new currency units.

NuBits as Currency

Perhaps the most frustrating part of engaging in cryptocurrency transactions is having to figure out the fiat-value of the coins involved. If someone wants to buy a $15 movie, he has to divide that by the current bitcoin price to figure out how much he owes. While not incredibly difficult, this can dissuade new people from entering the market.

NuBits hopes to avoid this friction by tying the price of NuBits to USD at a 1:1 ratio. According to the NuBits System, a $15 movie will always cost 15 NuBits, no matter how much the demand for NuBits ebbs and flows. By making it easier to figure out how much the dollar-value of an item is, people less-inclined to adopt cryptocurrency may be more easily persuaded to test it out.

When demand increases, shareholders will vote to create new coins to maintain the 1:1 ratio. When demand decreases, shareholders can vote to allow coinholders to accrue interest on their investment if they agree to “park” their coins for a set period. When demand is low, speculators may see incentive to acquire and then park their coins as a high-risk, high-reward investment should demand rise again.

At present, users can purchase NuBits on Bter.


NuBits will enter circulation through the voting mechanism. Unlike most cryptocurrency voting systems, NuShares operates independently of the NuBits currency (though they can share a wallet).

Instead, NuShares are intended to be a source of network equity for developers, entrepreneurs, and speculators. NuShareholders can receive network revenues in the form of Peercoin dividends paid out by a custodian. NuShareholders can cast votes for actions that positively affect the Nu network. These actions help adjust the supply and demand for NuBits so that they will always remain at a long-term $1.00 US value.

The actions to vote on are Custodian votes, Park Rate votes, and Motion votes. NuShareholders will be able to vote on these three different network actions when a block is minted. By setting their vote in the client it will be recorded into the blockchain each time they mint a block. The purposes of these three categories of votes are to select custodians to maintain the network, choose interest rates for parking, and make decisions on the development of the network.

One interesting facet of NuShares is that it allows NuShareholders to choose who will receive newly-minted coins. People can submit proposals for why they should receive the coins, and NuShareholders can choose which they deem the most worthy cause. Perhaps a developer would like funding to build a project for the NuBits protocol, or a charity wants to raise funds for a cause. They can submit their proposal, and the NuShares community can debate and decide who to distribute the coins to.


NuBits is a unique idea, and it will be interesting to see how Jordan Lee and the NuBits team will work out the inevitable kinks that will arise. If NuBits are truly able to eliminate price volatility through their NuShares voting system, a somewhat uncomfortable question will arise. Is the altcoin community ready for a stable currency?

Cryptocurrency Education – Coin Academy

I’ve taken a break from writing here because I discovered that what’s been really lacking is better education about Cryptocurrencies.

To that end, my colleague Ric Shreves and I launched Coin Academy to contribute to better education about not only Bitcoin, but all of the major cryptocurrencies in use today: Ripple, Litecoin, Dogecoin, Darkcoin, Peercoin, NXT and BitsharesX.

Similar to the complementary currency movement I’ve been active in for over the past 20 years, there’s a lot of mutual misunderstanding, and education is the key to resolving that.

So, visit our site, and let us know what you think!

Philosphers of the Alternative Currency Movement: Murray Bookchin

It occurred to me, in talking with as many people in the crypto”currency” movement as I’ve met, that few have yet to delve into the theory and philosophy behind the broader movement for a new global decentralized monetary system. Aside from a few references to “trustless” exchange and other purely individualistic ideas, most have only dipped their toes in the shallow end of the Libertarian pool, the capitalist end. 

In the next few articles I would like to take you to the deeper end and introduce you to a few philosophers worth reading, whose works are easily available through quick searches of the internet and torrent libraries. 

In early 1990, I was a second-year student studying Political Science with a focus on Soviet Government, with the goal of being involved in managing relations between Canada and our neighbour to the north, Russia. I was walking through Fernwood in Victoria, BC, a quaint 100 year old suburb when I came across a community market. In among the vegetable and handicraft stalls was one of “those” ones, with pamphlets and sign-up sheets placed on it. I was expecting it to be one of the stalls of the environmental organizations protesting the destruction of pristine rainforest along the coast of British Columbia. In fact, it was a brochure for the Local Exchange Trading System, suggesting a shift to a new free economy between individuals.

Murray Bookchin - Libertarian Socialist

Murray Bookchin – Libertarian Socialist

In my backpack was the copy of ‘Post-Scarcity Anarchism’, a book I was reading that was quickly driving a wedge into my analysis of Capitalism via Marxism. Instead of presenting the idea that capitalism would end when some certain stage had been reached, at which time it would fall onto itself, Murray Bookchin posited that capitalism would collapse when the ecological system could no longer support an unlimited-growth economic system. And, that we should therefore stop analysing the present stage to know when the right time to strike would be, but in fact work to start the revolution from within the system, now. The focus should be on the community, and seek to correct the social irrationalities that, coupled with the competitive monetary system of capitalism, are leading us to ecological annihlation.

This matched exactly what I had in mind when I happened into the table presenting materials about the Local Exchange Trading System. To me, it showed that a monetary system that forces competition was part of the problem, and needed to be removed in advance of achieving a post-scarcity society, like Buckminster Fuller said :

“We should do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian Darwinian theory he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.”, which Bookchin would agree with by saying:

“In our own time we have seen domination spread over the social landscape to a point where it is beyond all human control…. Compared to this stupendous mobilization of materials, of wealth, of human intellect, of human labor for the single goal of domination, all other recent human achievements pale to almost trivial significance. Our art, science, medicine, literature, music and “charitable” acts seem like mere droppings from a table on which gory feasts on the spoils of conquest have engaged the attention of a system whose appetite for rule is utterly unrestrained.”


“The notion that man must dominate nature emerges directly from the domination of man by man… But it was not until organic community relation … dissolved into market relationships that the planet itself was reduced to a resource for exploitation. This centuries-long tendency finds its most exacerbating development in modern capitalism. Owing to its inherently competitive nature, bourgeois society not only pits humans against each other, it also pits the mass of humanity against the natural world. Just as men are converted into commodities, so every aspect of nature is converted into a commodity, a resource to be manufactured and merchandised wantonly. … The plundering of the human spirit by the market place is paralleled by the plundering of the earth by capital.” 


A truly free society then is an anarchist society, one that has been liberated from the monopoly both of government and it’s freedom-taking, debt-based monetary system. In this way, ecological sustainability and the full-flowering of human potential may be achieved. 

“An anarchist society, far from being a remote ideal, has become a precondition for the practice of ecological principles.” 
― Murray Bookchin

“If we do not do the impossible, we shall be faced with the unthinkable.” 
― Murray Bookchin



Bitcoin: A Revolution in Payments – Not a Revolution in Money

*work in progress

Bitcoin, the digital cryptocurrency that is getting the banking system’s ‘knickers in a knot’ for everything from its perceived secrecy, security and relative anonymity, to it’s disruptive payments technology, the Blockchain, makes many of us think the monetary revolution has finally arrived.

Sorry to break it to you, it hasn’t arrived — yet. 

Bitcoin resembles it’s arch-rival Fiat Money (national currencies) in several important ways:

  1. Issuance: Fiat Money is created through issuance of debt. Bitcoin is issued through the mining process and valued primarily through conversion of Fiat to Bitcoin. 
  2. Roles: Fiat Money and Bitcoin share the dual roles of money as a Store of Value/Wealth and Medium of Exchange. By design they seek to accommodate all functions of money in one form. This is important, I’ll explain at the end of this list.
  3. Wealth Pyramid: The Ratio of Wealth to Poverty in the current international monetary system is 88:1. In Bitcoin, the top 100 of 35,000,000 addresses hold nearly 1,600,000,000 of a total capitalization os 8,100,000,ooo. This is also a very unequal ratio.

Bitcoin differs from Fiat in one important aspect:

  1. Currency Stability Controls: The fiat system has a few mechanisms for controlling the value of currency, interest rates being the primary mechanism. Bitcoin does not have a stability mechanism. It’s basically the same as circulating shares in a company as money.  The function of Bitcoin as a Unit of Account fluctuates in value wildly, driving future cryptocurrencies toward Fiat Denomination.

The Bitcoin Dilemma

The dilemma stems from Bitcoins similarity with Fiat in being both a store of value and medium of exchange. In the Complementary Currency movement, we sought to separate these two functions into two or more different currencies, which is basically why we call them “complementary”. In the crypto ecosystem, this is best represented by Freicoin, which charges a holding fee on the currency to incentivize circulation over hoarding, which makes it an unattractive investment currency, as noticed on coinmarketcap where it’s sitting at around 65th place. The dilemma with Bitcoin then is whether to save it, expecting the value to rise, or to spend it because it’s so easy and that’s what should be incentivized to flatten the pyramid.

What’s coming up around the corner? Bitcoin and other cryptocurrencies denominated in Fiat values, putting control over currency stability in the hands of the bankers and machinery of banking.

Ridiculous! Why would Bitcoiners just go stab their currency in the back like that?

Now for some headlines to back me up:

July 9, 2014
Dollar Backed Digital Currency Aims to Fix Bitcoins Volatility Dilemma
Founded by Brock Pierce, a former Disney child actor who is now a prolific bitcoin investor, along with ad industry entrepreneur Reeve Collins and software engineer Craig Sellars, Realcoin is the latest in a wave of so-called Bitcoin 2.0 ventures…

5 July, 2014
“Bitcoin-backed Dollars” and How the Blockchain could Enable a Billion Unbanked to Enter the Middle Class

24 June, 2014
“The End of Bitcoin Volatility?” The Soft Launch of Bitreserve
Bitreserve is founded by Halsey Minor, who also founded CNET.

Friends, these are not small-fry startups jumping up and down trying to gain attention and hopefully a slice of market share. These are projects being started by the founder of CNET, and a Bitcoin Foundation board member, among others!


The revolution in Money, the explosion of the emerging monetary ecosystem happens when the functions of money as a Store of Value and Medium of Exchange are separated. This was the case from ancient times, when Precious Metals and items were Stores of Value and only rarely and for large purchases as mediums of exchange while on the other hand Warehouse Receipts representing food and goods in actual storage were circulating as money.
Read “Debt: The First 5,000 Years“.

Then, once this has been achieved and we have a plethora of currencies around us to choose from, to use for specific purposes and according to certain incentives and to strengthen certain personal or community bonds, these currencies will have mildly fluctuating Units of Account that will remain stable over the long term. This being achieved by two main mechanisms, being issued as interest-free credit, and demurrage, a charge on the holding fee of money.

Money or items that are designed to function as a Store of Value, what Bernard Lietaer calls “Yang” currencies probably won’t be eliminated, just as there are still remnants of the Monarchy in some countries. But what will change is money as a currency, and Bitcoin will be merely a jumping board for people to join the emerging multi-currency monetary system.