All the technological parts for an ideal digital economy are now coming into existence. Pacio is putting them together in a way that creates a common good.
Pacio aims to combine two currently separate technical fields. The company wants to enable accounting, financial reporting and many other business-related data applications in form of a platform (think Apple App Store) in the world of distributed computing with blockchain-like features at its centre. We believe that our business can only thrive in a cooperative community sharing and thus increasing the benefits for all. But we have learned that the technology isn’t there. Yet.
A solution for the technology is on the horizon. A company called Holochain has combined the ideas of blockchain with the technology behind filesharing service BitTorrent.
With some crucial tweaks by Pacio’s developer team, this new software can achieve two things previously impossible in blockchain: unlimited transaction capacity and transactions without fees while keeping the positive attributes of blockchains that allow getting rid of controlling entities. This gets us closer to our ideal of a fair and free economy on a technical level.
2,000 projects later
The motor of (nearly) every blockchain project is a digital currency (sometimes called cryptocurrency). It can be used as money to transfer from Alice to Bob. It can also be used as a token to access a service. Casinos use tokens. Vending machines use tokens in form of regular coins. These coins serve as both token and money and so can cryptocurrencies or cryptotokens or cryptocoins – these terms usually mean the same thing. In February 2019, there are at least 2,119 cryptocoins that can be bought at exchanges. Bitcoin is still the most famous.
In all of those projects and for all of those currencies we find stakeholders who can profit at the expense of people who just want to use them. Most of the time they do this by charging commission. Imagine going to the supermarket to buy a banana. At the cashier, you pay one Euro and you have to hand over an additional 5 cents to a guy who has minted the coins you use. That is surely a great business model for the creator but a bad deal for everybody else.
But that is just the start. Most digital currencies have high volatility. There is no entity managing the price of the currency versus the Dollar or Euro. Those who hold the power want to see the price of a currency rise so that they achieve gains. Speculators are happy with either rising or falling prices, as they gain from volatility. Bitcoin can be worth $4,000 today and $1,000 next week.
There is only a single use for such a currency: stock market speculation. It’s not just Bitcoin, 99% of all coins have this speculative element. As money they are completely useless, no matter what all the crypto fanboys tell us in their fancy tweets.
The other 1% of currencies have a stable price. They are pegged to the US-Dollar and are usually worth between 98 and 102 cents. They work because for every one of those so-called stable-coins, the inventor stores a Dollar in a bank account. The most widely used stable-coin is called Tether. There are roughly two billion in circulation, meaning that there are two billion dollars in a bank account. In theory. In reality the inventor doesn’t disclose his accounts. Users just have his word. The currency runs on pure trust.
What’s Pacio got to do with it?
We need a stable digital currency that we can use for transactions in the software that we build. We are not looking for any speculative gain, but a purely transactional one. We don’t really want to create one, we’d be happy to participate in a great digital economy based on a fair digital currency. But it doesn’t exist. We have to invent it. And while we’re at it, we might as well try to make it the best possible transactional currency there ever was with a thriving community of service providers and consumers. These are the ingredients, in our humble opinion:
- The currency shall be free to use and available to everybody
- While everybody can use the currency, nobody shall own or control it
- The price shall be stable and the currency shall resist speculation
- As every currency needs governance, it shall be governed by those who have the greatest incentive in its wellbeing
- People shall feel as if they were using their national currency
- It shall have the best technical features: security, censorship resistance and scalability
- The currency shall support a community of users that form an economy based on cooperation
- The creator of the currency relinquishes control and ownership beginning from the day it goes live