The idea of timebanking has been around for the better part of 200 years. The basic concept is pretty simple: you do an hour of work, and you receive a credit for it. That credit can then be redeemed for another hour of work carried out by another professional or traded against goods. Instead of the dollar or pound being the unit of currency, an hour of labour or ‘person hour’ is used.
ChronoBank’s model of time-based currencies is rooted in the idea of timebanking — but there’s a critical difference that enables us to launch it on a global scale.
The strengths and weaknesses of this model should be evident pretty quickly. It’s a neat, simple idea: instead of money, you’re trading goods and services for time. Time is a limited commodity, but it’s one we all have to some degree. There’s value baked into the concept of time-based money.
Traditional timebanking works pretty well in certain contexts. It has been successful in small communities where there isn’t a large variation in wages, for example. Often it’s used for work that’s hard to value in monetary terms. An hour of care for an elderly person is priceless — and yet the market values it so poorly that it’s hard to find carers. It’s work often carried out by family members and volunteers, if they’re available.
However, timebanking is clearly not suited to the realities of the 21st century global economy. No one is going to swap an hour of cleaning for an hour of legal work when the pay differential might be 20 times or more. And even if the industry is the same, average wages differ significantly from country to country, so if you’re sourcing labour from around the world it wouldn’t necessarily make sense to trade an hour of software development for an hour of graphic design.
ChronoBank aims to build on the idea of timebanking but to update it so that it is suitable for the needs of the global economy. Until now, timebanking has been confined to limited communities and contexts, largely due to the administrative complexities involved in scaling it up. Using a blockchain-based system, though, we can create a far more flexible version — what could be considered a free market approach to timebanking. We’ll be issuing LH for different countries, and will include a decentralised feedback and reputation system. That means workers will be able to command an hourly rate that reflects not only their cost of living, but also their skill, training and experience.
Whilst ChronoBank represents an evolution of timebanking, then, it’s a fundamental one that positions it well for launching an alternative economy — based not on fiat money but on a completely different kind of currency. In a subsequent article we’ll be exploring the benefits of time-based currencies over fiat currencies.