Origin of energy currency
The origin for SolarCoin was an energy Currency Paper entitled: DeKo: An Electricity-Backed Currency Proposal. Deko paper on SSRN The paper was drafted in 2011 and presented in July 2012 in Split, Croatia.
The paper contained various assumptions about electricity forward markets and central banks that would likely prove difficult at scale. The assumption of a "hard" economically useful commodity backed currency; even a forward linked one were assumed to be offset by the counter-cyclical nature of electricity demand and economic activity. SolarCoin is a derivative of a hard backed currency. SolarCoin is a representative currency focused exclusively on renewable energy.
The primary thesis being that the value represented by the public money supply would act as a dampening agent to wild economic swings thereby improving long-term economic growth. To date no formal critique of the paper has appeared to invalidate or validate the hypothesis. Thoughtful critiques are welcomed.
According to the book The Nature of Value Money functions as a shared social belief system. Anything can serve as money as long as people hold the following beliefs in a thing.
- Belief as a representation (not store) of value
- Belief in the unit as stable unit of information or account
- Belief in the unit as a means of exchange
Gold, paper, IOUs can functioned as money. Money is an agreed social protocol which has multiple aspects and degrees of accpetance and function. Money exists up to and until the boundaries of belief in it stop. The Icelandic Krone is a known currency but won't likely buy one a drink in a foreign bar as the bartender won't believe in or be familiar with the Krone's transactional value. The boundaries of belief are the boundaries of a currencies transactional value representation. These beliefs and expectations determine what is or is not able to socially function as money.
Those interested in the history of money may be interested in the US "Free banking era" when thousands of forms of the US dollar were in circulation. According to some sources the average life of a sovereign issued currency is estimated at 27 years.
Those interested in understanding the relationship betweeen currency and debt may find value in educational information provided by Bridgewater Associates at Economicprinciples.org. Bridgewater is not affiliated with SolarCoin or the SolarCoin Foundation.
The SolarCoin Foundation is non-political and has a single mandate of incentivizing solar energy generation. As such it does not advocate for or endorse any particular currency system, political belief or viewpoint.