Bancor’s Plans for Local Cryptocurrencies

One of the biggest questions surrounding the much-hyped cryptocurrency world is why anyone would use digital currencies instead of cash. The founders of Bancor think the answer lies in small communities, like the residents of an apartment building or neighborhood.

That’s based in part on an experience the Bancor team had while working at an earlier startup called AppCoin. The Tel Aviv-based team identified a Facebook group of local mothers and provided them with their own digital currency to use in an online marketplace, which AppCoin had set up for them. The currency, called Hearts, was meant to represent value for goods and services like recycled toys or singing lessons that until then had not been exchanged for money.

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“Usually when you talk sensibly and give good explanations for why you’re doing what, the crowd generally wants to hear that stuff,” she said. “If you don’t trust [a company] to decide how 40% of proceeds go to software development, then either don’t invest in the project, demand it before the project goes live or contribute and trust in the team that you’ve endowed with these resources to do what they said they were going to do.”

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“We see a currency for a building or a neighborhood—communities that can benefit tremendously from having some kind of value transfer tool internally."