Generic and Universal Local Cryptocurrency: LCoin

Frédéric Hayek, Pascal Lafourcade () and Ariane Tichit
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Frédéric Hayek: UCA - Université Clermont Auvergne, LIMOS - Laboratoire d'Informatique, de Modélisation et d'Optimisation des Systèmes - ENSM ST-ETIENNE - Ecole Nationale Supérieure des Mines de St Etienne - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne - INP Clermont Auvergne - Institut national polytechnique Clermont Auvergne - UCA - Université Clermont Auvergne
Pascal Lafourcade: UCA - Université Clermont Auvergne, LIMOS - Laboratoire d'Informatique, de Modélisation et d'Optimisation des Systèmes - ENSM ST-ETIENNE - Ecole Nationale Supérieure des Mines de St Etienne - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne - INP Clermont Auvergne - Institut national polytechnique Clermont Auvergne - UCA - Université Clermont Auvergne
Ariane Tichit: UCA - Université Clermont Auvergne, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne

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Abstract: Blockchains are finding evermore applications. One underused application of blockchains is local currencies. Local currencies are currencies that float in a restricted area in purpose of growing the local economy by forcing local spending. We introduce the concept of geographical demurrage: money loses of its value the farther away it is spent. We construct four generic local cryptocurrencies: a regular one mimicking local paper money; a second that restricts spending to the dedicated geographical area; a third that utilizes geographical demurrage for maintaining the system, and a fourth that lifts the geographical restrictions and maintains geographical demurrage, thus creating a universal local cryptocurrency: a currency that loses value correspondingly to the distance between its point of reception and point of spending. So without the need to restrict spending to a given geographical sphere, the currency will always encourage local spending, no matter where it is spent; yielding a universal local cryptocurrency we name LCoin.

Keywords: Blockchain; Cryptocurrency; Local Currency (search for similar items in EconPapers)
Date: 2023-10-11
New Economics Papers: this item is included in nep-mon and nep-pay
Note: View the original document on HAL open archive server: https://hal.science/hal-04176704v3
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Published in BRAINS - Conference on Blockchain Research & Applications for Innovative Networks and Services, Oct 2023, Paris, France

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