LIFECOIN
LIFECOIN
A NEW VIRTUAL CURRENCY FOR SHARING LEISURE ACTIVITIES IN THE SMART CITY NOELIA URIBE PÉREZ & A new virtual currency for sharing leisure POL NADAL CROS activities in the smart city 104
· SMART CITIES PROJECTS ·
T
he concept described here represents a novel project of a virtual social currency: LifeCoin. It focuses on the exchange of leisure activities among people. Leisure activities represent an important part of our free time. They not only produce relax but also contribute to our personal development. In fact, the Institute of Leisure Scientific Studies has defined the advantages of doing leisure activities in 5 big groups: social, economic, physiological, environmental and psychological benefits. A lot of these activities can be considered as “services” that one individual can offer. In the same way, these ones can be also seen as services that one might need. Consequently, as a whole it can be seen like an interchange of services. By introducing a virtual currency, non-profit interests are eliminated but the aim of people offering services keeps alive, since users get virtual coins in return, which can be changed for other offered services. This model inspires a social network of leisure services exchange and promotes sharing what people can offer since they will get something in return, in form of LifeCoins, as well as the inherent satisfaction of sharing and socializing. In addition, as a consequence of getting LifeCoins in return, people will be encourage to enroll in another activity so the concept also aims for people doing more leisure activities.
105
· SMART CITIES PROJECTS ·
I. INTRODUCTION The format of money had changed a lot since it appeared. In the middle age there existed just the interchange of things as way of payment. The first official money coins appeared in Turkey, between 680 and 560 a.C. While early money had an intrinsic value (in form of gold, animals, etc.), modern economies are mostly based on money without value itself, since it consists of items representing the good (for instance banknotes). The main advantage is the portability: there is no need of carrying the gold ingots since you can use a piece of paper equal to a fixed quantity of them. Actually, most of the money in use is designated and issued by a central authority. It is considered as “legal tender” and there are 180 currencies in the world. However, this list only includes paper, cotton, or polymer banknotes and metal coins and excludes currencies used by non-state entities. As with many aspects of society, money has also been affected by recent technological developments such as internet.
three different functions: • Medium of exchange: they are used as an intermediary in trade which implies a coincidence of wants between the parties. • Unit of account: they act as a standard numerical value that measure the value and costs of goods. • Store of value: they can be saved and retrieved in the future. The European Central Bank (ECB) had compiled different kinds of money, as can be seen in Table 1. Although it is difficult to classify virtual currencies since its diversity and quantity, ECB has sorted them in three different groups: 1. Closed virtual currency schemes. Users pay a subscription fee and then earn virtual money based on their performance. The money can only be used in the virtual community. It is typical in games, such as World of Warcraft. 2. Virtual currency schemes with unidirectional flow. Users buy virtual currency according to a specific exchange rate but it cannot be exchanged back. The money is typically used for virtual goods although sometime it is also possible to get real ones. An example of this group is Facebook Credits. 3. Virtual currency schemes with bidirectional flow. Users can buy and sell virtual currency according to a specific exchange rate. With the money users can purchase both real and virtual goods. An example of this group is Linden Dollars.
With the dramatically grown of internet users, especially in the last decade, it have been a consequently proliferation of virtual communities. Some of them have created and circulated their own virtual currency for goods and services exchanges. So, at its core, virtual currencies act as a way of exchange and as a unit of account within a particular virtual community. The goal of the currency itself remains; it is the format the one that actually changes. Probably the most widely known virtual currency is Virtual currencies, as any other form of money, meet Bitcoin, a system operated by computing networks that
106
· SMART CITIES PROJECTS ·
collectively encrypt, verify, and process transactions. Its main advantages are that it is open source, non-national, stable in supply and controlled by its users rather than an organization. However, it had an important security fault some time ago that converted regain confidence people its biggest challenge. In order to use it, the user needs to have installed a Bitcoin wallet on the computer or mobile phone, it will generate the first Bitcoin address and more money can be created whenever it is needed. Addresses can be disclosed to whoever the user decides to, so s/he can receive payments. In spite of everything there is a huge tendency of alternative currencies. As Mary Mellor states in her book “The Future of Money: From Financial Crisis to Public Resource” it seems that now more than ever there is a need for more socially, economically and environmentally sustainable systems of finance. II. VIRTUAL CURRENCIES IN THE SMART CITY According to the European Commission, a smart city is a place a place where the traditional networks and services are made more efficient with the use of digital and telecommunication technologies, for the benefit of its inhabitants and businesses. In this way, there is a big investment in Information and Communication Technologies (also known as ICT) research with the aim to fulfil 20-20-20 targets. Since the way of how we see cities is evolving and technology plays an important role in it, alternative currencies appear as a new key factor in communities’ development. There is little literacy regarding virtual currencies
in the Smart City, however the authors considerate that it will be an emerging topic soon. In their opinion, virtual currencies agree completely with the aim of smart cities, not only in the sustainable part but also in the social one. III. LIFECOIN LifeCoin arises as a social connector between individuals which like leisure activities. Either in the way of “offering” or “asking for” – prosumer profile. When someone offers a leisure activity (hereinafter “service”), s/ he will get LifeCoins which can be only exchanged for other services listed in the LifeApp platform. In the same way, any member of the network can request for a service offering an amount of LifeCoins. Anyone interested in the system should enroll in the LifeApp platform through either the web page or the smart phone application. Since the very beginning, s/he will be a LifeUser and will get a personal and non-transferable account – LifeAccount, from which the LifeUser can manage their personal info, services and transactions through the LifeWallet. LifeCoin is a closed virtual currency, so there is no way to exchange LifeCoins into another currency. By this way we avoid people trying to get money through the platform; because the aim is to promote sharing leisure and making possible experiences avoiding official money necessity. Anyone can do this, no matter the earnings but the motivation. The only source of incomes for the business is the users who pay for the LifeApp+.
107
· SMART CITIES PROJECTS ·
A. LifeApp
to use the platform.
The whole operation of the system relays on the LifeApp 1. LifeWallet platform. It is accessible via web page and it also has its Each LifeUser gets its very personal LifeWallet when mobile version through a smart phone application (curegistered. LifeWallet works as rechargeable online rrently available for Android® iOS® and Windows Mobistored-value account and is uniquely associated with le®). A friendly interface welcomes the visitor, where s/ the user’s LifeAccount. he has access to the search engine, the kind of categories The LifeUser can check in any moment the transacoffered and the cities where those services are located. tions s/he have made and the balance of LifeCoins. Since it is expected that most users access the system through the smart phone application, two versions of 2. LifeProfile the mobile app have been considered: free and paid one Associated with the LifeAccount there is a personal (LifeApp+). The free option is the standard version and user profile section, LifeProfile, where the users set contains all the basics to operate successfully in the sysits private and public profile. The private part keeps tem. On the other hand, LifeApp+ has no advertising and some personal info such as email, mobile phone, etc. offers early-bird and promotional deals which are not and also includes an option for personalized services available in the standard versions. LifeApp+ have a cost alerts and preferences. In this area the user can also of 1,95€. configure services and store their favorites. The public section everything that can be viewed B. LifeAccount but any other LifeUser. It includes reviews of services’ users, the list of services offered by the LifeUser Anyone interested in being a member of the network and a brief intro about themself if s/he want to, among can join the system by just creating an account for free others. The application takes privacy seriously and through LifeApp (either web page or smart mobile appliany e-mail or personal info is revealed without the cation) and LifeApp+ (also either web page or smart moLifeUser’s consent. In addition, public LifeUser inforbile application). mation is just revealed only to other members of the When somebody turns into a LifeUser, s/he receives a platform. People/entities out of the community are welcome pack formed by an easy introduction to the planot able to see it. tform operation including basic rules and 1 LifeCoin for In order to ensure the identity of the users, to validate basic users and 3 LifeCoins for premium users which dithe profile all the users must send a photo of themselrectly goes to their personal wallet (LifeWallet) for spend ves holding a paper with their name. By this way all in the platform. In this way, we encourage the new user the profiles can be validated and then give them the
108
· SMART CITIES PROJECTS ·
welcome reward. This procedure also aims users to have a friendlier LifeProfile, since it includes a picture of themselves. C. System Operation Once a person has converted into a LifeUser, s/he can use the platform through either the web page or the smart phones applications in the way of “offering a service” and “asking” for one. The search engine of LifeApp platform is made by 4 easy steps. The first one is the main page where users can look for anything in any location. If the user search a site, such as Barcelona, the search engine will show another page with 3 options to complete. These 3 steps are: transport, accommodation and activities. Of course if the user is not looking for transport nor accommodation, just only for an activity, s/he can go directly to this step and choose which one s/he wants and finish the booking. This 3 steps approach wants to encourage de consumer to buy and make his/her trip easier and complete because in the web s/he will find the 3 necessary steps to make the trip more enjoyable. 1. Service Offer If a LifeUser wants to offer a service, s/he has to create a new one of recover an old one already created by him/her. S/he will have to catalog it in one of the three main groups defined in the platform. Although the user is not obliged to specify more than that, the system also makes more sub-groups into private ini-
tiatives, which are listed below. A single service can belongs to more than one section if the advertiser thinks so. a. Accommodation In this section users can offer/ask for accommodation in any place. Amount of people, days and any other aspects can be set. The operation is inspired in Couchsurfing and Airbnb (see Study Cases I & II section for more details). b. Transport It includes any offer and request for long or shorts trips. It is a mixture of Uber and BlaBlaCar services (see Study Cases III & IV sections for more details). c. Private initiatives All the services that do not correspond to the former categories should be included here. i. Food Any kind of service related to food should be included here, mainly referred to eating. ii. Tourism This includes guides, walking-tours, etc. It can be similar in some aspects to Trip4Real (see Study Case V section for more details). iii. Teaching Lessons and classes of any subject should be included here. iv. Entertainment Any kind of show or performance should be included here, and different kinds of
109
· SMART CITIES PROJECTS ·
them are considered: The system also offers the possibility to any LifeUser 1. Music of making “calls” requesting services that are not ad2. Sports vertised in the system. The user just simply publishes 3. Dancing the service s/he would like to join detailing as much as 4. Others s/he wants to. S/he also can set how many LifeCoins s/ v. Others he would offer for joining the service or let the serviThis section is for those all activities that ce provider to decide the price. cannot be included in the former ones. People is very creative so we cannot ca- 3. Service Joining talog all the possible types of services! Any LifeUser can join any service advertised in the platform. By doing it s/he agrees with the conditions Once the ad is created, the user can add as many inset by the advertiser, such as amount of LifeCoins, formation as wanted, including pictures, videos and date and time and any other requirement that may text. Some aspects of the advertisement are mandaappear (for instance, take your own racket to a tennis tory: minimum and maximum number of participants class, take your own blanket if you want to sleep in my allowed to join for the service, a brief description of it couch, etc.). The user can contact the advertiser via (minimum 10 words), cancellation terms (no LifeCoins public or private messages in order to get more inforreturn in case of cancellation, negotiable or without mation about a service. The transaction of LifeCoins penalization – see Service Cancellation section for is made in the moment that the LifeUser agrees the more information regarding this) and the price in Liconditions of the offered service and decides to join it feCoins (it is strictly forbidden to make any mention and just in case the user have enough LifeCoins in the to other currencies). However, the user (service proLifeWallet to cover the service. The number of Lifevider) can also choose “open-price” option and the Coins that the service costs keep blocked by the sysusers (consumers) will decide the number of Lifetem until the service is done. This mechanism prevent Coins the activity “deserves” after doing it. The minian advertiser from spending the LifeCoins a user pay mum amount of offered/asked LifeCoins is set to 1. of a service before doing it, since the “producer” can In addition, ads are visible for join them for a limited cancel the activity. In case of “open-price” option, the time. The user defines how long an ad lasts although user will have 3 days after doing the activity to “pay” minimum and maximum are set for 1 day and 3 monthe amount the LifeCoins s/he estimates. If s/he does ths, respectively. not do it, the system will set an automatic price of 1 LifeCoin. Then, both the advertiser’s and the user’s 2. ServiceDemand wallets are conveniently updated.
110
¡ SMART CITIES PROJECTS ¡
Also there exists the option that the consumer thinks 5. Rewards that the price for an offered service is too high. In this The system will reward the users occasionally. Somecase, a counter-offer can be sent to the provider. times these rewards will be according to their activity in the network and also there will be occasionally 4. Service Cancellation Policy rewards. In this way, LifeUsers are encouraged to A LifeUser can remove an already published ad in any offer and use services. time without penalty. In case of a service cancellation Any kind of reward, offer or promotion will be in terdone by the advertiser, all LifeUsers who signed up ms of LifeCoins or discount codes. There is no possifor it will receive their LifeCoins back. ble transaction in euros in any moment, excluding the On the other hand, if a LifeUser that joined a servipaid mobile version LifeApp+. It is strictly forbidden to ce wants to cancel their attendance s/he will have to ask for/offer any other currency in any service from refer to the cancellation terms of the service. In any the platform and it might suppose the removal of the case, cancellations one week prior to the date of the LifeAccount. service are allowed without penalties in terms of LifeCoins and in case of no show up there will be no Life- 6. LifeApp+. Coin return. Three options are considered: The users of LifeApp+ will be offered a complete trip o No return in case of cancellation pack when they search for a specific city. In case of no attendance, the user will not receive the The platform analyses all the tags of each activity LifeCoins s/he paid back. It is intended for those serproposed on the website according the search in tervices in which a cancellation may affect a lot the serms of location and number of people. vice. For example, if a LifeApp+ user looks for leisure in o Negotiable Barcelona for a weekend and for just one person, the The advertiser may set specific conditions in terms search engine will show packs of people offering a of time prior to date cancellation, exceptions, etc. The transport for those dates and for one person, produuser will have to contact the advertiser if required. cers offering accommodation for those dates for one o Cancellation without penalization person and finally producers offering activities for The LifeUser can cancel their attendance to the serthe same dates and for one person as well. The full vice without LifeCoins penalty. This can be done at trip in a pack (transport + accommodation + activities). minimum 2 hours prior the time of the service. Less Of course the main advantage of getting this pack is than that will be penalized with 1 LifeCoin that the adthe price. It will be lower than buying separately. The vertiser will receive. producers do not lose money because the system will pay the difference.
111
· SMART CITIES PROJECTS ·
7. Control & Maintenance The system counts with security guarantee and everyday advertisements are review by qualified staff so that all of them obey the rules. In addition, users are free to contact the platform if anything happen or if they suspect that somebody is using the LifeAccount with bad intentions. 8. Services’Promotion LifeUsers can promote their services by a fixed tax of 1 LifeCoin. In return, their services will be publicized both in LifeApp and LifeApp+. D. Overall Objectives The system aims to promote leisure among people with non- profit intentions. In this way, a trustable network can be established since while doing activities together people socialize. Due to the fact that the platform offers a wide range of activities (sportive, cultural, learning, etc.) users improve their skills while socializing. Said that, the systems aims for a more unselfish, healthy, happy and cultivated society... and for free! The actual currency of the system is the motivation of learning new things and having fun.
dingly. If a consumer reports any incident (for example, the activity was a fraud or the producer never appeared) after the date of a service’s acquisition, the platform will carefully analyze the case and solve it. In Open Price case, the consumer will be charged with 1 LifeCoin automatically if s/he do not pay in a period of three days after enjoying the activity. V. BUSINESS MODEL The fermium model is a business model that combines free basic services with payed premium services. This model has a wide number of free users. Only a 10% of total users have a premium account. This small (little) percentage subsidizes free users. The model is viable because the free service has a low margin cost. The CANVAS graphic for freemium model can been seen in Figure 15, where white is general platform and it branches out into free (yellow tags) and premium services (blue ones). In this type of models is important to have into account the average of a free service per user and the price that premium user have to pay for the services.
IV. REAL PROOF OF WORK We ensure the correct operation of the system when nobody communicates any problem and, therefore, the LifeWallets of both provider and consumer update accor-
112
¡ SMART CITIES PROJECTS ¡
IV. SCENARIO A new user in the system that wants to look for a specific activity has to follow the next steps: 1. Make a profile: a. Fill all the information request. b. Validate your profile: Take a photo with a paper of your name. c. Your LifeWallet is updated. 2. Identify your user on the LifeApp 3. Search for a city 4. Search for an activity you would like to do. Select among: a. Transport. b. Accommodation. c. Activities. 5. Review the features of the service a. Read the description b. Check the number of required LifeCoins 6. Take a decision 7. Make a payment (if it is required) 8. Payment is accepted and you are enrolled 9. Make the activity and share your experience in the platform
113