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Background: alternative economy concepts

A financial-economic crisis (like this or this or this) makes us think what’s wrong with our economic systems, and search for alternatives. For example, one would search for grassroots ways to organize mutual service and exchange of goods without using legal tender, as the latter can be a scarce resource due to “personal deflation”, esp. in an economic crisis (that is, by being separated from any high-capacity money source of the society, e.g. by being self-employed and having only “poor” customers).

Interestingly, many alternative economic concepts have been developed long ago at concept level, but failed to receive public attention or achieve widespread application. For example, in the area of trade mechanisms and finance, I found several concepts that run for being a basis of an alternative economy:

• LETS, the Local Exchange Trading Systems. Effectively, these are complementary currency systems on a local scale, where members exchange goods and services for LETS credit points. All members start with zero balance, and go below that by paying with credit points; which means, they have the role of a bank that does bank money creation. The value of goods and services is something to be agreed by the members, that is, normal market mechanisms of supply and demand apply. In principle, all LETS systems are confined to one city or small area (see e.g. this LETS list from 2002), as the credits are backed by just group trust (omnidirectional trust from one to all other LETS group members). This is, in my view, their biggest shortcoming. How do you transfer your LETS credits when you move, and even worse, how do you use LETS if you have a nomadic lifestyle? Also, the island-type of LETS, with no standardized infrastructure between them, severely limits its public visibility as one movement or system.
• Time-based currency (see also time banking). Also called “time dollars”. While the bookkeeping is very similar to LETS, the difference is that noarbitrary unit (or a unit aligned to legal tender) is used to measure service contributions, but the man-hour of work time. This can, but needs not, be used to build egalitarian systems, where everybody’s contributions are valued equally. For an interesting early experiment from 1827, read about the Cincinnati Time Store. Currently, timebanks are normally local organizations just like LETS [see an international list of time banks].
• Barter platforms. By these, I mean systems that are based on direct barter between two parties, or circular barter between three or more parties. But always so that a deal happens only when all parties at the same time have something that they can offer that another party in this deal wants. That is, they work without intermediate units of accounting, which would eliminate the need that (1) supply and demand are matched for every party at the same time and (2) somebody can only be part of a deal by both demanding and supplying something, as none of these can be replaced with currency. These severe limitations of direct barter make these platforms look quite unusable, esp. before reaching a critical mass of offers. Examples of such systems include the German portal Bambali.
• Scrip. Alternative currency by simply writing some numbers on some paper.
• Mutualism. An economic theory that seeks to value goods just by the amount of labour / resources needed to produce them, thus eliminating the concept of capitalist “gain” (price above cost) altogether.
• And there is a list with many more articles on alternative monetary systems.

Interestingly, the proposal for a time-based currency even made it into a United Nations document (but note that the document was compiled by members of NGO’s when meeting for the Millenium Forum, so is no official UN resolution or anything):

“The Forum urges [...] [g]overnments [...] [t]o make serious commitments to restructure the global financial architecture based on principles of equity, transparency, accountability and democracy, and to balance, with the participation of civil society organizations, the monetary means to favour human endeavour and ecology, such as an alternative time-based currency.” [We the Peoples Millennium Forum Declaration and Agenda for Action: Strengthening the United Nations for the twenty-first century; United Nations document A/54/959,  adopted by the Millennium Forum on 26 May 2000; section "C. Facing the challenge of globalization: equity, justice and diversity"; this very section quoted here was contributed by John Turmel]

Choosing a time banking service or software

My interest in alternative economy is both at the theoretical and pragmatic level. On the pragmatic side, I desperately need a system to track neighborly help; because when doing that in larger-than-usual amount (say, 50 hours per month and more) and without payment of course, you better track what time you invest and what you get in return or you might eventually end up poor and exhausted.

So what I need is a time banking system. My detailed requirements, in order of importance:

• Non-local. Not restricted to any local area, neither formally nor by informal expectations or average location of members.
• Useful for a personal global network. As I will lead a nomadic lifestyle, the system should be useful within a global network of friends and acquaintances. There is no need that the system allows trade with all members of existing alternative currency systems, but that would be great of course. Trading with personal acquaintances is enough.
• Modern UI. I simply can’t bear with web-sites coming with that pre-2000 look …
• No fees. Transaction or membership fees are simply nonsense in an age of software and automation, where web-based services of similar complexity are all free.
• No-barrier registration. No requirement for an interview, for subscribing and sending in stuff by snail mail. Immediate login after registration must be possible. Pseudonymous registration must be available.
• Open source software. When installing own software, it should be free. When using a webservice, it should ideally be based on free software, too.
• Well-known programming language. I’m happy with Java and PHP and also Ruby, as this allows me to modify the software efficiently when necessary, and to better diagnose problems.
• Low maintenance. So the optimum solution would be using a web service; hosting software on an own server is possible but can be cumbersome to keep up.

Here is a short overview of the projects I found, with my evaluation. Note that I just looked into descriptions and demo versions mostly, so do not consider this my last word on this. By adequacy for the above requirements:

1. Global Groups Exchange at CES. This is the only international and time-based exchange at the Community Exchange System. Seems like the ideal choice among the CES alternatives and the only one.
2. Own time banking system at CommunityForge. Their “default hosted solution” is offered for free.
3. Registering an own CES exchange. The Community Exchange System (see also in German Wikipedia) is a unique global network where local alternative currency systems like LETS and time banks can join. It provides them with a web based accounting environment, and also allows trading between the different groups (which all use their own currency). So the shortcoming of LETS and time banks of being “just local” is remedied that way! Registering an own group involves some administration efforts for that “own” group, but also allows more control and customization.
4. Registering an own time bank at Tauschen ohne Geld. It seems to be possible to create a group there that uses work time as the unit of currency. However, the system is not international (German domain, only member groups from Germany, Austria, Switzerland). Also, it is not clear so far how trade between the individual groups works; it is supposed to use the Ressourcen-Tauschring (RTR) in some way. But like CES, Tauschen ohne Geld provides an e-banking environment to members. There seem to be no fees.
5. CommunityForge on own server. It’s free and open source. Or to integrate the same time-banking and LETS code into an own Drupal site, install the Community Accounting and Offers & Wants Drupal modules.
6. Rivulet on own server. Ripple is a web-of-trust extension of the LETS system, avoiding the group trust necessity that keeps LETSs local. Rivulet is a Ripple server [source] written in Ruby, while the Ripple reference implementation RippleSite is based on Python [source]. RippleSite so far offers a quite simplistic UI, but Rivulet is said to support AJAX (but I did not test the features provided in the UI so far). So in all, I’d like to check Rivulet as my favorite Ripple implementation.
7. OSCurrency on own server. The OSCurrency project is a Ruby-based implementation of the OpenTransact protocol [source], specifically targeted at building a timebank. Example and demo sites etc. can be found on the OSCurrency website.
8. Cyclos on own server. Cyclos is an awesome, free and open source (!) software specially made for alternative currency banking. LETS, timebanks etc. can all be provided with a Cyclos installation, which acts as a website providing a central e-banking environment to all members. The project is very rich in features and seems to be the most mature software product in the area of alternative currencies as of 2011-08. It’s written in Java and runs as a Tomcat container, so installing can give you some trouble esp. if you already have a Tomcat with some web applications running. Be sure to check the Cyclos installation instructions.
9. RipplePay account. Ripple is a web-of-trust extension of the LETS system, avoiding the group trust necessity that keeps LETSs local. RipplePay is the portal supported by the reference Ripple implementation, RippleSite [source]. While this portal has no vibrant community yet, it could still be used together with friends if one targets trading with them only anyway. However, RipplePay’s units of currency are bound to USD parity (while of course not needing real dollars to make payments). This makes orientation simpler, but would require a hack like an internal “15 USD = 1 hour” agreement to using it for time banking. This could of course be fixed easily when installing RipplePay on ones own server; but then again, I would prefer Rivulet, see above.
10. Joining favabank.com.  Favabank is not exactly time banking, but a more general LETS including goods and time-based services, using the “fava” currency. However it is not restricted to some location as most LETSs. Usability looks good, but offers are few as of 2012-04.
11. Registering an own PicoMoney currency.  PicoMoney acts as a service provider that allows this, even for free. However, when issuing a time-based currency, the PicoMoney seems unfit to operate a LETS-type exchange network: there is only one issuer per currency, where issuing means, handing out some of the currency as an IOU (“I owe you”) statement in return for received services. This would mean that, to establish a network, everybody has to hand out an own type of currency that represents the time of just this individual. This would be still tolerable if PicoMoney would allow free conversion between these currencies, but this seems to be impossible in its current state. Note that PicoMoney provides an implementation of the OpenTransact protocol [source].
    
12. Joining zeitbank.net. They seem to accept members without respect to their current location, but their activities seem centered around Munich. Also, the site is only available in German. Also, they require a membership fee of 36 EUR for an individual, per year.
13. Karmagora. A great-looking global time-banking system. The only reason it is last in this list is, it’s still in private beta as of 2011-08.

Other alternative economy projects

That is, those I found to be interesting, but which are not directly usable or related to time banking. In no particular order:

• Kleiderkreisel. A Germany wide barter ring for clothing.
  
• OpenTransact. This is an open source protocol, with a reference implementation, that allows trading with any kind of currency, incl. “time units”.
• The MetaCurrency project. Inventing new forms of money, but seemingly in the early stages?
• A great comparison table of alternative currencies and monetary systems.
• tauschringe.de. A German information site on LETS systems, including an LETS address directory.
• Tauschbillet. A Germany-wide LETS-like system for bartering goods, with a “billet” currency as an intermediary.
• Tauschzone. Another Germany-wide LETS like system for goods, with a private currency as the intermediary.
• German LETS address directory.
• Open Money project. A wealth-acknowledging information system.

On Linux, you can use smartmontools to read the SMART data of a drive; see this good introduction to reading SMART data.

Note that, if your the device is behind a USB controller, you must not use the “-d ata” argument that you normally need to access SATA disks accessed with libata (as per “man smartctl”). If you add “-d ata”, the tool will complain “Smartctl: Device Read Identity Failed (not an ATA/ATAPI device)” and not read any health information or change any setting, even with “-T verypermissive”.

Interpreting SMART attributes in general

Every of the SMART attributes has several columns as shown by “smartctl -a <device>”:

• ID: The ID number of the attribute, good for comparing with other lists like Wikipedia: S.M.A.R.T.: Known ATA S.M.A.R.T. attributes because the attribute names sometimes differ.
• Name: The name of the SMART attribute.
• Value: The current, normalized value of the attribute. Higher values are always better (except for temperature for hard disks of some manufacturers). The range is normally 0-100, for some attributes 0-255 (so that 100 resp. 255 is best, 0 is worst). There is no standard on how manufacturers convert their raw value to this normalized one: when the normalized value approaches threshold, it can do linearily, exponentially, logarithmically or any other way, meaning that a doubled normalized value does not necessarily mean “twice as good”.
• Worst: The worst (normalized) value that this attribute had at any point of time where SMART was enabled. There seems to be no mechanism to reset current SMART attribute values, but this still makes sense as some SMART attributes, for some manufacturers, fluctuate over time so that keeping the worst one ever is meaningful.
• Threshold: The threshold below which the normalized value will be considered “exceeding specifications”. If the attribute type is “Pre-fail”, this means that SMART thinks the hard disk is just before failure. This will “trigger” SMART: setting it from “SMART test passed” to “SMART impending failure” or similar status.
• Type: The type of the attribute. Either “Pre-fail” for attributes that are said to indicate impending failure, or “Old_age” for attributes that just indicate wear and tear. Note that one and the same attribute can be classified as “Pre-fail” by one manufacturer or for one model and as “Old_age” by another or for another model. This is the case for example for attribute Seek_Error_Rate (ID 7), which is a widespread phenomenon on many disks and not considered critical by some manufacturers, but Seagate has it as “Pre-fail”.
• Raw value: The current raw value that was converted to the normalized value above. smartctl shows all as decimal values, but some attribute values of some manufacturers cannot be reasonably interpreted that way (for the details: Wikipedia: S.M.A.R.T.: Known ATA S.M.A.R.T. attributes).

Reacting to SMART values

It is said in this good introduction to interpreting SMART values that a drive that starts getting bad sectors (attribute ID 5) or “pending” bad sectors (attribute ID 197; they most likely are bad, too) will usually be trash in 6 months or less. The only exception would be if this does not happen: that is, bad sector count increases, but then stays stable for a long time, like a year or more. For that reason, one normally needs a diagramming / journaling tool for SMART. Many admins will exchange the hard drive if it gets reallocated sectors (ID 5) or sectors “under investigation” (ID 197) [source].

For the more detailed meaning of the individual attributes, see again Wikipedia: S.M.A.R.T.: Known ATA S.M.A.R.T. attributes. Also, there are many peculiarities of SMART attribute interpretation, depending on manufacturer, series and model, so if you have a strange case search for SMART attribute values from same and similar disks which others posted on forums. People even say that it takes a good deal of “intuition” to interpret them … .

The most important thing to know about SMART values is probably this conclusion from a Google Labs team:

“We find, for example, that after their first scan error [any kind of bad sector error, caused by read instability or media damage], drives are 39 times more likely to fail within 60 days than drives with no such errors. First errors in reallocations, offline reallocations, and probational counts are also strongly correlated to higher failure probabilities. Despite those strong correlations, we find that failure prediction models based on SMART parameters alone are likely to be severely limited in their prediction accuracy, given that a large fraction of our failed drives have shown no SMART error signals whatsoever.” [Failure Trends in a Large Disk Drive Population, p. 13]