Value for Money in Sysmä

On the 28th of November Arvosakomo coop organized a local currency workshop that gathered around 15 people in the idyllic Sysmä Theater House. The workshop was an event adjunct to Sysmä’s plan to launch a local coin in 2018. It was hosted together with the municipality of Sysmä. The local currency experiment will start with a project grant from a joint municipalities council.

Arvotakomo was introduced to Sysmä’s local money project by Kuntavelho consultancy. On behalf of Arvotakomo, the workshop included Jenni Huttunen and Tommi Elo.


The purpose of the workshop was to provide the participants with a rich view on what community and local money can stand for. Arvotakomo aims to support the Sysmä residents with the alternative economy knowledge for developing a communal, parallel currency that would correspond to the municipal goals for revitalizing the locality’s economy.

In general terms, local currency can support, for example, economic diversity and the economic activity of the given community. Parallel currency often improves liquidity, i.e. the ability to make purchases. Value co-operative cooperative is also interested in the value of the proceeds, also with traditional monetary indicators; social, cultural and ecological considerations.

One of the most important boundary conditions for a functioning currency is sufficient cash flow. Achieving adequate flow can be particularly challenging in small localities, such as Sysmä, where the amount of people and businesses is scarce.

Local currency development is approached through experiments because the complexity involved with the monetary system. The situation, the environment and the needs of the community are different in every community, so it is difficult to predict how a particular local currency model behaves when it is placed to another environment. Money serves a wide range of tasks within the communities. The viability of local currency is based on strongly functioning networks. These networks consist of its members: people and businesses, and therefore make the local money somewhat different in every. 


Sysmä is a municipality of about 3900 inhabitants in central Finland. The municipality is known of its beautiful lake-side landscapes and cultural heritage. It belongs to the group of municipalities that, heavily depend on summer residents for economic success: vacationers triple the number of residents during holiday months. The municipality’s strength lays in it’s energetic inhabitants and the small size of the municipality; everyone knows everyone.


Finland has seen relatively few parallel currency solutions. There are already many hundreds of local and community funds in Europe, of which the WIR in Switzerland and the many applications of the British cities are the best known examples. For this reason, examples from Finland are interesting also for research purposes.

Thanks to the active participants, the Arvotakomo found new perspectives on the local money issue. The two most important findings were the involvement of wage and labour unions in the monetary system in society; as this we had not thought of as yet.

The three-hour event started with examples of successful and significant parallel currencies, as well as a general understanding of how coexisting currencies can respond to current challenges. Participants were given the opportunity to get involved in the development work through a role play. The aim was also to orientate the development of local money model towards the real needs and aspirations of the actors in the region.

Most participants reflected on the roles and functions of local money with interest. Several ideas that benefit both summer residents and permanent residents, surfaced amongst participants. Conversations included, among other things, introducing the Sysmä currency to different users as a gift from a municipality or entrepreneurs. However, there are still a lot of questions that require attention from the citizens and the municipality side. Different functions of the local currency may be contradictory and even overturn the good effects of each other in the implementation.


The exchange rates for converting the main currency to Sysmä’s new currency (yet unnamed) and vice versa, were recognised crucial for the success of the experiment. The course has a significant impact on how the various groups adopt money, rely on their currency and commit themselves to it’s day-to-day use in the long run. Entrepreneurs were worried on the exchange rates hindering their business setting. They suggested that there should be a threshold to exchange rates in order to allow entrepreneurs to switch larger sums into euros without exchange rates, which is a good example of the importance of selected exchange rates for the success of the project.


One of the important topics was the role of the Sysmä municipality as a “bank” in the project. The idea was that Sysmä’s money would be managed centrally on behalf of the municipality. The residents also questioned if the municipality had sufficient resources to maintain, for example, money exchange operations, as previously planned.

Some participants noted that Sysmä’s money was given a role of a souvenir for collectors and as a straightforward tool for promoting local tourism marketing. During the evening, many business ideas conserning cottage and equipment renting, food baskets and the activation of the unemployed and use of empty spaces were also discussed.


The next step in developing local money is to look at the features together, adjusting the negligence of the hairs. Balance between various aspects; the versatility and scale of the local money networks, the ease of use of the money in daily activities, and the short-term and long-term goal-oriented work. The money’s viability would be enforced by developing money to meet the genuine needs. The experiment may not, especially in the first year, solve all local challenges in the local community, but the careful preparation of the project will bring the project to provide “value for money”.

In practice, development work should continue, e.g. through the visualization of the service journey. Each phase should be carefully considered together with the municipality and the locals. In the review, special attention should be paid to the various functions, and compatibility, and motives behind money model. Designing a service path can help all actors involved to understand the process as a whole, as well as, to communicate the local money model a wider audience.



Big thanks to the participants for active participation!


Notes from the Seminar

“Blockchain Experiment Starting: Can local currency become new strength of Helsinki?

There is air of plain mysticism around the banking sector and the monetary reasoning around. Come money and finances to the discussion, add complexity and grievance to the max, right? Despite the complexity, encouraged by the late developments around Europe and Asia a September seminar explored the power of local, community and complementary currencies capacity to bring growth and prosperity to Helsinki.

A fine selection of thinkers, doers and influencers gathered in Valtimo, State officials designated group working space in 7.9.2017. There, just behind the Bank of Finland building, in the center of Helsinki, a day-long seminar took place under the headline “Blockchain Experiment Starting: Can local currency become new strength of Helsinki? The event was organized by Valucraft coop in collaboration with Ministry of Finance and Prime Minister’s Office, supported by Helsinki Institute for Information Technology, HIIT.

Continue reading “Notes from the Seminar”

In a new found abundance… everyone can make money.

Teaser of the event from week ago!

Here is clip of the talks held in the seminar morning.

They are both in Finnish and in English and therefore we (soon) will provide a transcript of the Finnish clips in the comments below.

You can also find the whole seminar:

or jump directly to part you are interested in:

Hogwarts paying taxes?

Last week we visited Finnish tax administration headquarters, for the first time. We had been planning such a meeting for a couple of months, but nothing concrete had happened until one day I noticed that one of their analysts, Ville, had peeked at me in LinkedIn, leading to us inviting ourselves there.  I was overwhelmed.  In addition to the handful people physically present, Ville had managed to lure half a dozen people to attend virtually.  Perhaps I was naïve in my expectation, but it really appears that the government officials in Finland are very keen to better understand 0jpeg0cryptocurrencies and community currencies, the tax office being no exception. Or, perhaps working at the tax office can be compared to Azkaban.  In any case, a senior officer there described himself (twice) as a dementor, apparently as he must every now and then remind people that in Finland the taxes are collected according to the pertaining law.

During our two hour meeting, we presented the ValueCraft idea, using the slides we had prepared at the Sitra Democracy hackathon.  We paused for over an hour on the slide where we had outlined our taxation proposal, i.e. that there would be an “experiment” during which the participating people would pay income (and maybe
69964e90017aebbd8fb5f49f6568211ef962b18e52261a953b36de320512da9ealso VAT) in the complementary currency for transactions they make in that.  That is, for example, if I consult Trustlines for eight hours and they pay for me 8 units in Trustline tokens (which of course do not exist yet), and I have to pay 25% of income tax on it, then I would need to pay two units of Trustline tokens to the tax office.  In practise, the experiment would be limited to something more local, such as the Helsinki Timebank tokens, which are called tovi.

Perhaps the most interesting aspect of the meeting was that the forthcoming new tax administration strategy includes “practical experiments” as one item.  A suitable community currency could well form a basis for such an experiment.  Additionally, and somewhat surprisingly at least to me, people at the tax administration felt that our thinking is already sufficiently far that it would be useful to arrange a high profile seminar after the summer holidays, inviting there people from the Ministry of Financing, Prime Minister’s office, and tax administration, as well as from elsewhere within the national and Helsinki municipality governments.

Summa summarum, everything seems to make progress much faster that I was ever able to imagine.

Democracy in Crisis: Where is the power, anyway?

Jeremy H.

Democracy is in crisis, or at least so we are told. Here in Finland, we had the so-called Parliament of the Future yesterday at Porvoo, with speeches from Jeremy Heimans, Pia Mancini, and others.  Even the government of Finland held its first public cabinet meeting ever there.


Now, according to Wikipedia, democracy is a system of government in which the citizens exercise power. But what is this power, and who do exercises it in practise?

Drilling down to the first principles, power is the ability to influence or control our behaviour. If I can freely decide what I want to do right now, including even farting or peeing, I have full power over my behaviour.  So, obviously, at a very basic level our customs and social conventions limit our behaviour, exercising power over us; we prefer to use the restroom. What goes beyond that, may be considered extraordinary or coercive power.


Considering yesterday’s event, who did exercise the extraordinary power there?  The security guards.  They did directly influence our behaviour.  They searched our bags. Knowing that there will be a security check even made me to remove some “unnecessary” stuff from my bag while still at home. The knowledge also stopped my budding thinking about eggs and rotten tomatoes; or maybe it provoked such thinking, but in the end of the day made me to decide not to take them with me.

The next obvious question is what what makes these people to exercise their power over us and us to allow our bags to be searched in the first place?  The somewhat simplified answer seems to be threefold:

  • Social conventions and expectations, backed by
  • threat of violence, and
  • money.

With respect the first two, there is nothing new.  The medieval, Roman, and probably even prehistoric guards behaved the same way and people followed their orders for the very same reasons.

1367980156_1364738014_1What has fundamentally changed during the last 300 years or so is the role of money. Of course, even in ancient Greece silver coins were used to pay for the mercenaries, but the royal body guards were primarily family members or otherwise bound by pledge and honour. Today, at least in the western world and during “normal” times, the large majority of the security folks simply do their job: follow orders since they are paid for following the orders.  Or, in other words, for basically the same reason why most of us get up early in the mornings, endure congested commuting, and spend most of our day inside even though there may be a lovely weather outside, perfect for fishing or a leisurely stroll.

Today, money is probably the biggest single reason that influences our behaviour. Money is even one of the reasons why I write this blog post in the first place: in order to spread ValueCraft, we need money, and in order to get money, we need publicity.


Re-thinking the Concept of Value

ValueCraft is an emerging platform to create ecosystems for multiple measures of value.

In 2008, the financial order almost crashed. If the governments had not saved the financial giants such as Merrill Lynch, AIG, and the Royal Bank of Scotland, the consequences would have been unimaginable. Pension funds and many individuals would have lost a majority of their savings. Companies would have lost access to their capital. A large fraction of the world trade would have stopped.

Economic crises are occurring fairly regularly, all around the world. They are not something that happen elsewhere.  Sometimes they drive societies to full chaos. An ongoing example is Venezuela, with the world’s highest inflation, bloody street protests, and lack of basic necessities.

What have we learnt from these crises? Not much. For example, Donald Trump is trying to do his best to wreck the economy by cancelling the regulation that was explicitly put in place to address the stability problems and to make the financial system more robust. Simultaneously, the world is facing the highest ever level of debt, all of public, private and corporate debt.

Economic assumptions

Our current economic systems have several in-built assumptions. We implicitly assume eternal exponential growth. We assume that there is a direct link between productivity and demand increase.

Consider just a 3% annual growth, or doubling the value of production every 23 years.  At the same time, automatisation is driving the prices down and we are facing a huge pressure to decrease the consumption. Furthermore, production growth is almost always associated with growing energy consumption.  Based on basic physics, continuous 3% annual growth in energy consumption would boil the earth in just 400 years, as our energy consumption would increase to some 130 000 times the current level.

Without growth, debt accumulates, as has been happening continuously since 2008. When we collectively borrow with interest, the economy as a whole has to grow, so that we can pay the interests. Otherwise we have to pay the old debt with new, larger debt, leading to increasing levels of inequality.

Hence, sooner or later our assumptions about growth and debt must be radically reviewed. Assuming that growth, or increase in the production of goods and services, could continue forever while respecting planetary boundaries is insane. Simultaneously, assuming that increase in productivity, e.g. due to automation, would automatically mean widespread growth is unrealistic, at least in the developed countries where the basic needs and more are already fulfilled.


A new way to think about the concept of value

ValueCraft is an emerging platform to create ecosystems for multiple measures of value. ValueCraft is backed by us all, not by a central bank or any other central authority. It is based on “trustlines networks,” a new way of representing how much we are willing to respect our friends’ obligations. 

The main principle of a trustlines network is that it allows secure exchange between strangers, by sending payments along chain of trusting friends. The basic idea is a network of people who have a mutual trust on each other. Anyone can create a trustline with a friend, allowing them to borrow or pay any amount up to a specified credit limit, expressed in anything considered valuable. For example, one can create a trustline for $100, for 10 hours of work, or for 4 beers.

At this basic level there is nothing new.  People have always trusted their friends, lending things and providing services. The new thing is in scaling this up.

With trustlines networks, two strangers can exchange different measures of value by taking advantage of the trustlines they have both created with a mutual friend. Let’s say that Alice and Bob do not know each other, but both of them know Nick. Nick has in turn created a trustline for 4 beers with both Alice and Bob. Now Alice can buy Bob a beer so that Bob owes one to Nick and Nick one to Alice, with the expectation of getting the beer eventually back.  

As the network and different measures of value grow, Bob does not actually need to buy a beer for Nick. For example, it is possible that Bob changes his tyres instead, cancelling the original debt (and perhaps creating a new one.)  Since all the people in the world is connected by just 4 degrees, trustlines scales up quickly in communities and cities.

It is no longer necessary to exchange everything with just money. Computers and digitalisation are particularly good at accounting, having made it technically viable to keep track and exchange values of multiple sorts. Measuring multiple kinds of value make it possible for us to appreciate and endorse actions which are not directly producing monetary value.


The power of networks

The real value of ValueCraft comes through the network effect. As ValueCraft scales through the networks of people and different measures of value, these all become interoperable. An festival coin can be exchanged for a beer with a trusted friend of friend; the surplus production of a grocery store can be bought with time spent for helping a neighbour in cleaning.

Eventually, having multiple measures of value is a critical feature if we humans are willing to get rid of our growth addiction. Having an interface to appreciate multiple measures of value provides us with a tool to bootstrap from the value created in local ecosystems, incentivising different kinds of valuable behaviour.