A local exchange trading system — or ‘LETS’ for short — facilitates exchange between members by providing a local currency and a directory of offers and needs. LETS allows people to create value within their community, and barter collectively - exchanging their skills and services in return for skills and services they would have otherwise paid for.
LETS can be thought of as a mechanism to facilitate the velocity of trade, goods, and services out-with the existing monetary system, allowing us to create sustainable local economies. To give a tangible example; one member may offer a couple of hours of tech support and use those tokens gained to buy a piece of art listed by another member.
LETS have historically become popular during times of crisis. One of the first LETS' was founded by Michael Linton in a Canadian town stuck in depression back in 1981. LETS were also popular during the 1998-2002 Argentine Great Depression. Most LETS groups are small and consist of maybe 50 to 250 members, usually with paper-based credit notes and ledgers maintained by a committee. Similar systems have arisen in recent months amidst the pandemic — Tenino, Washington, started printing wooden money to facilitate trade between its residents. However, these analogue systems are inherently prone to counterfeit notes, dishonest activity by administrators, and, perhaps most importantly - human error.
As lockdowns across the world effectively shut down whole sectors and a large part of the economy, we are entering a new era at a breakneck pace. Technology like Ergo can efficiently address this problem, building bridges between local economies without commercial or central banks. These separated communities could still be connected via gateways, allowing liquidity to move between them and avoiding exposure to toxic debt, creating a system that is immune from both inflation and depressions. Many variations of LETS could exist for individuals and small businesses, with varying participation criteria, credit limits, collateralisation requirements.
Additionally, thanks to Ergo’s sigma protocols, creating a ‘Trustless LETS’ on top of Ergo is also possible. A Trustless LETS has no membership record, therefore, no management committee is needed for enrolment allowing it to operate with full autonomy. This will be discussed in more detail in an upcoming article.
If the ideas discussed here interest you, LETS start the discussion! Join us on the #lets channel on Discord – or on Ergo’s Agora, a Telegram group chat used to facilitate open discussions around privacy, anonymity, trust, economics and related topics.
The need to reform the global financial system has been evident since the last crisis in 2008. Now, COVID-19 has forced our hands. We cannot delay, and the best way to start is from the grassroots.
Cryptocurrency should provide tools to enrich ordinary people. Their small businesses providing no much above making ends meet, not depersonalized big financial capital. This is what inspired me. This is my dream.
