Community-Based Currencies
POA Network served as the base layer for local currency generation & exchange
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POA Network served as the base layer for local currency generation & exchange
Last updated
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Community currencies (CC) are locally generated currencies, similar to vouchers, that local communities can use to trade for goods and services. CCs are created for use in marginalized communities where access to the national currency is limited. They have increased trade amongst small communities and villages in rural areas, created jobs, and improved food security for individuals where these programs have been implemented.
Moving from paper vouchers to blockchain currencies provides the ability for neighboring communities to trade with one another using their own local currency. Blockchains enable CC transactions to maintain security and immutability, and smart contracts provide the ability for users to create on-chain currencies that can interact with one another.
While a CIC could exist on any smart-contract-enabled blockchain, many blockchains charge high fees for executing transactions to the network. In order to trade effectively in marginalized communities, transaction fees must be minimized, which is why we are using the POA.Network blockchain, an Ethereum-based platform that offers an affordable open-source framework for smart contracts. POA leverages an independent group of block validators who maintain the transaction records and who are all licensed public notaries around the United States, which increases security while enabling a method of governance on the blockchain (Barinov et al., 2017). POA Network is a scalable, secure and cost effective solution for enabling CICs for micro, small and medium businesses.
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CICs can be used for targeted aid when markets or supply chains deteriorate in the midst of a crisis. Specific health or food related business may be targeted using blockchain transaction data in order to provide rapid aid to those who need it most.
