Abstract
Core problems in our present time, inequality in the world, ever-increasing damage to the environment and nature, energy and climate crises (EU Commissioner Frans Timmermans speaks of a ‘jumble of crisis’), are very closely related to the current financial-economic system of the western neoliberal world. A completely different economic, financial and social system is needed. Such a turnaround is within reach due to innovative applications based on blockchain technology. The 2local initiative offers worldwide the opportunity to realize this fundamental change and ensures a sustainable and prosperous world. As a loyalty platform, 2local aims to stimulate the production and consumption of local and sustainable products and services by redistributing the profits of crypto and crypto-related products based on decentralized blockchain technology, via a cashback system. The core of this initiative is a local orientation, in which sustainable transactions take place based on a new crypto currency, the 2-LoCal (2LC, which simultaneously supports the purchasing power of everyone and especially for the benefit of those who have little to spend. Financial transactions no longer take place centrally via the current international banking system, but via a decentralized financial system (DeFi). Economic transactions no longer take place indirectly via the long global chains of today’s multinationals, but directly via sustainable and local transactions between producers and consumers. Through the cashback, people with low income can still buy local and sustainably quality, while at the same time supporting locally producing companies. The 2local initiative is unique in that it combines the values of local cultures with advanced blockchain technology and shares its wealth.
Local orientation
There is currently more reason than ever to build local communities with sustainable, economic and social characteristics. Developments in the western neoliberal world are not going well. There is increasing inequality in the world and an ever-increasing damage to the environment, nature, energy supply and climate (EU Commissioner Frans Timmermans speaks of a ‘jumble of crisis’). This dangerous global trend, perpetuated by multinationals and large internationally operating banks, often in collaboration with governments, can and must be broken by a fundamental shift to a local orientation. 2local wants to stimulate the production and consumption of local and sustainable products and services by working with crypto coins (the 2-LoCal, 2LC), based on blockchain technology, several crypto related products and a cashback system. Paying with 2LC digital coins is easy and the cashback system guarantees accessibility for everyone, even for people who have little to spend. The importance of the local economy is recognized by more and more people, companies, governments and institutions. We can only make a better world, with more prosperity and sustainability, if we start ‘bottom up’. For example, the International Food Policy Research Institute (IFPRI) says, “To transform the global food system and feed the world sustainably, you have to start at the local level.”
We see many initiatives in this area: consumers who prefer to buy locally, citizens, consumers and local businesses that already work well together in many regions and build new local partnerships. Here are just a few examples: local and sustainable food, well-being, care, local energy production, local craft, utensils, repair cafes, 3D printing, initiatives to reduce waste, etc. SMEs, governments and politicians are also focusing on the own region. It is important that they look not only at the short term, but also at the local economic and social effects in the long term. It is important that all regional parties join forces to get local and sustainable initiatives off the ground. Otherwise, local communities will have to deal with a bad economic situation, reduced social cohesion and reduced sustainability, with all the consequences that entails. In addition to cooperation between producers and consumers, 2local also wants to facilitate existing initiatives in the regional field. By using the same coin system, 2LC, in all regions of the world global connections are also created, which benefits the solidarity of humanity.
Counterbalance against multinationals
By producing locally for consumers who put sustainability first, the power of the large internationally operating companies is reduced. These multinationals know how to obtain the cheapest raw materials, anywhere in the world, and they only sell their products where the purchasing power is greatest, anywhere in the world. Moreover, they pay tax in the countries (read: tax havens, to which the Netherlands is also included) where the rates are the most favorable, anywhere in the world.
Multinationals, with their oligopolistic competition, have too strong a dominant position in the global economy. They swallow up promising small businesses or prevent access to the market. This kills fair competition. They operate in long international chains based on lean production methods, global sourcing, minimal stocks, no buffers and only the short term counts. The Covid-19 crisis has incisively demonstrated the enormous vulnerability of these long international chains. The multinationals are strategically locating where they can most benefit from the supply of materials, infrastructure, labor costs, availability of resources, legal aspects and where environmental standards are lowest. Multinationals divide operating income and expenses between countries to ensure they pay little or no taxes, often facilitated by governments. They even put pressure on governments and governments do a lot to keep these companies within national borders. This is known to lead to unnecessary dragging of raw materials around the world, mostly from poor countries and unnecessary transport of the end products, again around the world, and loss of tax revenues by national governments. These globalized production systems are successful in output and profitability, but lead to depletion of natural resources in poor countries, and attack on nature and the environment (including disappearing of tropical rainforests and emission of fossil fuels with the connected CO2 emissions) and global warming with all its harmful consequences. The reward for capital was and still is higher than the reward for labour, which creates inequality, as the French economist Piketty has made clear. Many people still suffer from poverty and hunger.
By selling and buying locally we avoid these negative consequences for people and the planet. Moreover, the local focus will reduce inequality in the world, which arises mainly from the accumulation of capital via shareholders, often with a speculative motive. Buying locally has many benefits: the small businesses that bring dynamism and innovation to the region become more viable. Together with governments and public institutions (such as hospitals, police stations, neighborhood organizations), local companies can ensure healthy, vital and liveable communities in regions. The extra activities in the region will make it easier for local entrepreneurs to compete with the larger web shops, which operate on a global scale. The cities and villages will once again produce busy shopping streets as a result of these local impulses. The large companies, internet companies, webshops and shops that deliver at home have no local roots and are mainly focused on efficiency to reduce costs. The interests of employees and customers come second. Purchasing power is concentrated in these large companies and disappears from the region. This reduces the resilience of the local economy, leading to an increase in inequality in the world, and jeopardizing the social cohesion of local communities.
Counterbalance against large international banks
Working with the 2LC crypto coins reduces the power of the major international banks. These large banks, such as Rabo, ING and AMRO, are private companies focused on making as much profit as possible. Of course, the rules of law also apply to them, but it always turns out that they do not comply with them (think of the big money laundering scandals). It is not just these internationally operating banks that hinder sustainability and prosperity, but the entire international banking system is causing problems. The financial sector is increasingly dominating the economy. Banks are private companies that create money out of thin air thanks to the debts of companies and citizens. The debts are taxed with interest. So in addition to the debt, which must be repaid, interest must also be paid on top of that. This system can only survive in an economy of growth and ensures a continuous depreciation of money. It appears that these practices and mechanisms regularly lead to scandals and greenwashing. Our money system can therefore only function in a growing economy. The question is how long that can go on, because, in any case, we have to put a stop to economic growth. A growing economy is accompanied by environmental pollution and climate change and by depletion of raw materials and auxiliary materials. In a finite world, continuous economic growth cannot exist without crashes.
Money creation and payment transactions are public tasks. Yet money creation is done by international commercial banks. This constantly leads to tensions, which regularly lead to crises. The commercial banks want to make as much profit as possible and in doing so run great risks, for example by allowing the total private debts to rise far too high. These are now even higher than before the credit crisis. The money press should not be in the hands of commercial parties, but should serve public interest. Proposals for a secure payment and savings bank in the Netherlands have been made by, among others, the ‘Our Money Foundation’, but have been pushed aside. The only thing that the government is considering is offering citizens the option of opening a digital account with De Nederlandsche Bank, the Dutch central bank. Recently (on 14 July 2021) the ECB decided to start a ‘test’ for a ‘digital euro’. If this continues, there will be a digital euro that is comparable to a crypto coin. The difference is that this digital euro is issued and managed by a central bank. However, there are serious objections to this, because central banks, as supervisors of the banking system, would then also become supervisors in its own right, which of course is not possible.
Working with 2local
By working with 2LC crypto coins, we avoid the above-mentioned unnecessary and undesirable developments for people and planet. The 2LC coin has been made suitable for settling local transactions, not for hoarding and speculating. 2local’s buying and selling policy aims for a steadily increasing price rate. Anyone can buy 2LC through the website or the app. from 2local, or through various exchanges, such as currently Bitrue and LATOKEN, ExMarkets and P2PB2B. The 2LC stimulates local cooperation and gives substance and meaning to the connections between regions in the world. The money does not disappear to the large companies and banks, or abroad, but continues to circulate in the regions. Purchasing power in the regions will therefor increase sharply. This is the so-called ‘multiplier effect’, which ensures that local spending has an extra effect on the local economy. This makes local transactions effective because the money in the region is earned and spent more often. This stimulates local production and consumption, increasing regional prosperity. This provides additional resources for local companies to develop sustainably. Everyone in the region benefits, including people with less purchasing power, who can fully benefit from the increased prosperity thanks to the cashback system.
2local stands for an integrated approach that increases social cohesion and sustainable production and consumption in the region, so that the energy and climate transition has a better chance of success. The use of 2LC stimulates innovations by local producers, traders and social entrepreneurs by using as much of the region’s own raw materials as possible, and by providing additional services, such as repair, reuse and recycling. Local production implies less transport, more emphasis on services using local labour.
2local works with its own cryptocurrency, based on blockchain technology, with which mutual payments can be made easily, inexpensively, digitally and quickly, also internationally. The new cryptocurrency, 2LC, will in practice act as a local currency. In the past, various systems with local physical currencies, such as LETs, have been developed to suport local systems and counteract the disadvantages of the global economic and financial system outlined above. The cryptocurrencies are going to do much better in this regard. With the new system, local activities are connected to the whole world and benefit from the advantages of proximity, sustainable local transport and better control options in short chains. With the introduction of 2local, we remove the ease with which banks exercise their monopoly position. In fact, they are no longer indispensable in society. Cryptocurrencies can be issued outside the government or other agencies to help the people who need them. No intermediaries are needed, as is the case with other initiatives. Therefore, cryptocurrencies even pose a threat to the banks and the financial sector and that is why banks want to prevent the introduction of cryptocurrencies.
2local uses blockchain technology. To insure the blocks in the blockchain, i.e. to verify the transactions, and to validate new blocks, mining is applied. It is known that mining cryptocurrencies, such as Bitcoin, requires a lot of energy. To avoid this large energy consumption, consensus mechanisms are also used to ensure the blocks in the blockchain, of which Proof of Stake (PoS) is an example. 2local also uses this. This system works by selecting ‘validators’ in proportion to their amount of holdings of the cryptocurrency. For 2LC, this validation is performed by Binance. A fee is paid for this. 2local wants to keep costs as low as possible in order to make as many resources as possible available for the cashback system. To make this happen, 2local charges minimal fees for all people who pay with 2LC coins. Pools are also used, such as Trading pools, Staking Pools and Yield Farming, where payments for a period of 7 or 30 days are placed in the pools. The profit that these crypto related products generate benefits the cashback system, and is monthly distributed according to the rules of this cashback system among producers and consumers
Marketplace
2local facilitates local and sustainable initiatives by setting up a digital Marketplace where producers and consumers can meet. The Marketplace offers the possibility to search for connected companies using various filters. 2local aims to support smaller businesses, consumers and individuals in their economic and financial decisions and transactions, giving them more control over their lives. The connected companies get free advertising and therefore more potential customers. This implies a shift towards smaller, localized production and distribution of goods and services. It means more personal cohesion between people, less polluting transport around the world and easier quality controls (via short chains instead of long global chains that are not transparent).
Connected companies
Connected companies are companies that work sustainably and local-to-local. 2local uses the EU’s Sustainable Development Goals and common sense to decide which company can receive a 2local®CCC (Connected Company Certificate). The procedure is very simple. A company must register on the 2local website and be approved by 2local. An agreement is then concluded between the Connected Company and 2local, which stipulates that the products and also the purchased raw materials are bought or produced locally and sustainably, i.e. come from the immediate vicinity and are not manufactured with chemical fertilizers and pesticides and not with exploitation of (child) labour. When a product/service is sold to a consumer, a purchase/sales agreement containing the above statement is concluded via a Smart Contract. The Smart Contract also includes the wallet number on which the consumer receives the Cashback. Connected Companies are made visible in the Marketplace on the website and in the app. The marketplace will redirect to the Connected Company’s own website, where the products can be purchased with 2LC tokens. The amount in local currency is automatically converted into 2LC at the then prevailing rate. The 2local-Team can revoke a 2local®CCC and will state the reason and help to look for a re-entry opportunity. In order to stimulate the Connected Companies, they are regularly advertised and they receive an affiliate fee credited to their own wallet once a month.
Cashback
It is important that everyone in the world can benefit from the 2local initiative. The introduction of a cashback for local and sustainable products also gives people with less money access to sustainable products. If you spend less, you get proportionally a larger cashback. People who are having a hard time and have little money, but who buy local products, receive compensation in this way. Once a month, consumers automatically receive the cashback in their wallet in 2LC. This stimulates everyone’s involvement in the local economy and will increase sustainability and prosperity in the world.
Representatives in the countries
Initiatives have now been launched in 20 countries to commit companies and connect them with consumers. The connection between users/consumers and affiliated companies/producers is the heart of 2local. This concerns local cooperation and local communities with their own cultures in different countries around the world. Friedrich Nietzsche, a famous philosopher of the 19th century, already pointed out the importance of the link between local communities and their ‘place on earth’. Besides European countries, countries from South Africa, Nigeria, USA, Brazil, Chile, Asia, Vietnam, India, Pakistan, Japan, Middle East, Kuwait and also from Turkmenistan are involved. A Representative has been appointed in each country who is in charge of connecting local and sustainable businesses with consumers. They are the first point of contact. The Representatives guide the Connected Companies, including assisting in registering on the 2local website to obtain the 2local®CCC, and by answering questions.
The solution from the ‘Jumble of crises’ will not come from the government or from the large companies and banks. We have to get to work ourselves. We have to shape the world ourselves. That was also the conclusion of the first episode of ‘The Philosophical Quintet’ of 28 June 2020 on the theme ‘Power, Media and Manipulation’. Take the initiative into your own hands, together with the 2local platform. People and companies that want to invest in digital assets and parties that want to build equity are also welcome.
Visit the 2local website: https://2local.io/, and sign up.
Harry Donkers
4 September 2021
