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P2P Barter – My entry to the MintChip Challenge

Posted by bcmoney on August 31, 2012 in E-Business, E-Commerce, Mobile, Philanthropy, Web Services with No Comments


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Here’s an explanation of what we have today, followed by a Use-Case for my idea

A newspaper illustration depicting a man engag...

A newspaper illustration depicting a man engaging in barter, paying his yearly newspaper subscription to the "Podunk Weekly Bugle" with various farm produce. (Photo credit: Wikipedia)

TODAY:

1. Person A is a farmer who has worked hard all season and is ready for harvest of their crops. For simplicity’s sake, let’s call him the “Seller“, since the next step will be to sell their produce. For that they may need any of the following:
a location (i.e. storefront or directly from their farm)
an advertising budget to attract patrons to their own farm directly (or to their storefront)
transportation or a carrier service to do deliveries, or,
distributor agreements which arrange to have the produce picked up exactly when it is ready and bring it to 3rd party wholesalers or retailers for stocking in their storefront

2. Person B has a particular skill, for example software development. They go to work for a company to earn a salary, take a contract position at a set rate, or consult independently for an agreed fee. The money they earn from their labour is typically used for food, shelter, transportation to/from work and other necessities. Anything left over probably goes towards entertainment, investment or paying down loans. They are both a seller of their service and consumer of goods, but for simplicity’s sake, lets call them the “Buyer“. To buy the Seller’s goods, they will need:
knowledge of a particular retail location (store name, directions, hours, etc)
to be aware that the Seller now has delicious produce available (and where it will be offered)
transportation to get to wherever the produce is being sold (i.e. store, market, direct from farm)
something to trade with the Seller (today: typically physical cash or digital bank savings, tomorrow: MintChips)

This food industry example works great, because almost everyone in the current “food” economy has a primary role of Buyer; not Seller, producer, grower or anything related to creation of value. According to the United States Department of Agriculture (USDA), only 2% of Americans are employed in the Agriculture sector, whereas in the last century over 30% were.
REF: http://www.csrees.usda.gov/qlinks/extension.html

The same goes for Canada, with some supporting statistics from Statistics Canada.

http://www.statcan.gc.ca/ca-ra2006/articles/snapshot-portrait-t2-eng.htm

http://www.statcan.gc.ca/ca-ra2011/index-eng.htm

And even in Japan, in fact, this is the trend in all “developed nations”.

http://www.tokyofoundation.org/en/articles/2008/the-perilous-decline-of-japanese-agriculture-1

JUST A FEW PROBLEMS WITH CURRENT SYSTEM:
1. Fragile local food industry which suffers from “globalization” of produce
2. Dependency on oil prices being low enough to ship goods internationally
3. Disregard for individual sellers, as the availability of a large number of providers decreases the need to maintain relationships
4. A lot of redundancy and waste built into the supply chain
(i.e. Chile ships us Blueberries so we can ship our Canadian Blueberries to Europe)

FUTURE SITUATION (thanks to MintChip):
1. Person A is a farmer who has a need an Interactive Advertisement to send out via the web (i.e. social network, email newsletter, etc) which will advertise their latest harvest being made available at the local Farmer’s Market this weekend. For simplicity’s sake, let’s call them the “Seller” again.

2. Person B is a Software Developer (or artist, graphical designer, etc…) with experience doing Interactive Advertisements. They also need to feed their family, thus coincidentally they have a particular interest in this Seller’s product. For simplicity’s sake, lets call them the “Buyer” again.

EXCHANGE OF VALUE:
1. Person A requests a provider with the experience and reputation to build their Interactive Advertisement and Person B is suggested.
2. Person B agrees to build an interactive promotional web application (which they typically charge a rate of $50/hr for) on the promise of payment, which will be held via MintChips.

APPLICATION:
The application I’m proposing would calculate the amount of Person A’s goods that are required to meet the pay rate of Person B. Person A can then choose whether they wish to initiate a Barter transaction, or, perform a mico-payment to Person B directly via MintChips.

Likewise, Person B can choose whether they prefer to accept payment in the full Bartered-value offering, or, the equivalent digital payment via MintChips. The two parties can also meet somewhere in the middle by adjusting a combination of physical goods exchange and digital MintChip exchange.

BENEFIT:
Person A and Person B never need to meet face to face, just as they currently do not need to meet with cash, credit or debit transactions performed at 3rd party retailers.

Person A has discovered Person B’s talent and establish a professional relationship with them, which they may fall back on again when they need similar work done. Usually, Person A would have had to
have gone through an agency, recruiter or freelancing service.

Meanwhile, Person A is now aware of the quality of produce available locally, through Person B. They will thus aim to maintain a positive relationship with Person B as they can save overall on costs as compared to relying on international Sellers. They may wish to offer their services again, or, obtain other sources of value with which to barter with Person B, the next time they need that type of produce.
Why MintChips instead of dollars from a bank account?

Cutting out the middlemen who do not add value to the supply-chain is probably the main benefit of the example above.

The banking sector is another prime example of an institution which adds little to no value to the transactions that occur daily between Buyers and Sellers. They merely guarantee the safe delivery of money from one party to another.

MintChip can serve this function for daily expenditures, and would not require massive or unfair per-transaction, monthly or annual fees.

MintChips can be communicated with remotely, so two parties conducting a transaction do not have to be in the same physical location.

MintChips provide added security that many banks don’t offer (or offer only to premium clients), such as the ability to rollback transactions, make anonymous payments and high-level encryption of all information contained in the transaction.

 

Last, but certainly not least, I managed to sneak in a nice “tongue-in-cheek” question during the webinar (yet something seriously worth considering when you take a look at CFR, Club of Rome, World Bank, IMF and UN documentation released lately):

 

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BC$ = Behavior, Content, Money

The goal of the BC$ project is to raise awareness and make changes with respect to the three pillars of information freedom - Behavior (pursuit of interests and passions), Content (sharing/exchanging ideas in various formats), Money (fairness and accessibility) - bringing to light the fact that:

1. We regularly hand over our browser histories, search histories and daily online activities to companies that want our money, or, to benefit from our use of their services with lucrative ad deals or sales of personal information.

2. We create and/or consume interesting content on their services, but we aren't adequately rewarded for our creative efforts or loyalty.

3. We pay money to be connected online (and possibly also over mobile), yet we lose both time and money by allowing companies to market to us with unsolicited advertisements, irrelevant product offers and unfairly structured service pricing plans.

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