The purpose of the SPADES Token is to provide a cause-based, stable, and generally increasing store-house of value for the backing of community currencies.
SPADES Tokens were created for the backing of two types of community currencies:
- Global online communities such as this one, with others to come, and
- Local community exchange currencies (or credit/barter systems) that allow wealth to be imported from global online activities. See our S.C.A.L.E model.
Global Online Communities
Global communities that bring people of various cultures together so that they can earn, learn, and share with one another do need a common, neutral, medium of exchange for transactions between their Members.
Blockchain cryptocurrencies are perfect for backing the value of a community currency, but not the optimal choice for transactions in the community itself due to the inherent energy and monetary cost of adding a block to a chain. The environmental impact, time it takes for consensus, and financial costs of mining make adding a block to a chain only viable in certain circumstances.
Etsy, eBay, Venmo, etc… don’t use a blockchain for their transactions. However, using blockchain-based crypto as the “backing” for a community credit makes perfect sense so that users have a decentralized exit strategy, with options for conversion to a growing number of other cryptos (BTC, ETH, etc…).
As any global community currency is earned by its Members, those Members need a way to convert their excess community credits into a currency that can be exchanged for just about any other useful medium of exchange, i.e. national fiat currencies, and other cryptocurrencies. SPADES Tokens meet this need.
SPADES Community is the first online community that will use the SPADES Token as backing, but not the last. Already other communities are in planning and implementation to utilize the SPADES Token as the exit. The credit system of this community, called “Cloud Credits” will also integrate with those communities so users can move between platforms, using their earned Cloud Credits either here or there, with accounts sharing a synchronized login.
Local Community Currencies
Local communities, especially in developing nations rural villages, have a great need to import wealth from the opportunities that information technologies now offer. But what can they do with wealth that is crypto based? They can use it to back their own local barter system, acting as a ledger to ledger village trade credit. Our SPADES Community Directors are working with charitable partners to help create ACCESS POINT and SCALE (Social Cooperative & Local Exchange) locations where the charities are already on the ground providing support.
There are a number of good reasons to use a local credit system backed by a viable global cryptocurrency.
- Local credits help to keep wealth within a community.
- Local credits empower a community to maximize its use of productive resources.
- Local currency “backed” by a global crypto allows more wealth to be imported to the community, along with a means (the crypto) to purchase things they need from outside their community.
- Local credits kept on a ledger can’t be physically stolen as they are on a computer, they are only moved when a person comes in to an exchange location and gets something from the local coop (food, dress, etc…) and the clerk moves credits between community Members local internal accounts. See how the S.C.A.L.E. system mentioned above works.
- Local credits circulate more rapidly than national currencies. As such, the same amount of currency produces a larger economic gain in the community. This can help with localized food security, and village sustainability.
SPADES Token Stability
When something is purchased on this site by a visitor or Member with regular fiat cash (U.S. Dollars, Euros, etc…), or with other cryptocurrencies (BTC, ETH, etc…), that value is immediately utilized to purchase SPADES Tokens from the exchanges upon which SPADES Tokens are available. This continual buying, to back the Cloud Credits paid to the Members/Seller of the item, should slowly yet stably increase the value of the SPADES Tokens and hedge against volatility. The more utilized this community is, the more SPADES Tokens will be purchased for backing.
The process is such:
- Fiat funds or cryptos enter the community for purchases by the public, or Members;
- That value is used to buy SPADES Tokens on exchanges;
- Those purchased Tokens are delivered to the SPADES Community Bank Wallet;
- Members making the sale that initiated the public purchase are paid in Cloud Credits within the community; and
- When Members redeem (cash out) those Cloud Credits, they receive those same SPADES Tokens from the Community Bank Wallet that were previously purchased from the exchange.
Cloud Credits come into existence when funds enter the community, and are deleted when that value exits the community. All Cloud Credits are backed by the purchase of Tokens. What is important here is that SPADES Tokens are being bough on exchanges from the funds entry, but upon the exit they are not “sold”, they are simply transferred from the Community Bank Wallet to another SPADES wallet address. This means, overall, more “purchase” of Tokens should take place on exchanges than “sales” of Tokens. This equation should result in a stable, increasing value for the SPADES Token.
In the case of local communities using SPADES Tokens as backing for their local credit system, the SPADES Tokens are not being offered for sale on the public exchange – they sit in a community account to “Back” the local credit until such time as a person in the local system wants to cash out their local credits for SPADES. This means they are not generally in circulation, they are “staked” for the community. This should additionally support the overall value of the Token. For further information on this topic, please see the SPADES Tokenomics plan here.