Experience the Future of Financial Transactions

The estimates vary, but somewhere between four and seven million people participated in the barter networks in the first years after the economic crisis in Argentina. 
For countless people it meant the difference between surviving or not, eating nutritionally or not, having basic necessities, or not. While the networks took off with massive numbers after the 2001 economic collapse, there is a long history of the barter of goods for goods in Argentina, just as there is in most parts of the world. The two things that are unique in form and number after 2001 were the prevalence of the exchange of services, both for goods and other services, and the representation of value placed upon these exchanges. The exchange of services began due to the total economic collapse, with people either without money or unable to access money they once had. 
People could no longer purchase goods or services, thus they began to exchange everything from the repair of their water pipes or roof tops to the increasing need for therapy. 
Exchanges developed with most every service imaginable. In some places one services was traded for another, with the two parties deciding the amount of time or type of service 
that was an equal exchange. In others, services were traded for goods, someone made empanadas and traded them for apartment repairs, while the other took photos in exchange for bus tickets or other things they needed.

 

Before the economic crisis, a few urban ecologists began experimenting with the use of a cupon as a representation of value in exchange so that people who did not have access to money could still access things they needed. Their experiment in Quilmes, a neighborhood outside Buenos Aires, had already taken off before 2001, and after the economic collapse was used as a model for the exchange of goods and services. The way it worked was that a location was used to house the barter itself (called the clubes de trueque or barter club) and people would join the network in that location (called a nodo for no dinero – no money). Each person who joined would first have to go to a few orientation meetings and was encouraged to think about what they could bring to the barter in the form of exchange – one of the rules for participation. The idea was that each person is both a producer and consumer – (called prosumidores – prosumers). 

Each nodo was autonomous and created their own rules, such as how many of the creditos (credits) – representation of value in the exchange – a person would receive when they began participating. All had the same rule that the official currency of the peso was prohibited. The actual trading would take place for anywhere from an hour to many hours one or a few times a week and was located in a range of places, from community centers and parks, to recuperated workplaces. In the beginning of 2002, there were over 5,000 barter clubs with many thousands of people participating in each nodo regularly.

A contemporary describes its functioning, “You would buy raw products and then use them to make other products you could sell. For example, you’d buy flour, sugar, and various things to make raviolis or cakes. You’d sell/exchange some products and with that you could get more than just the products to make the cakes again, to bring more to the next barter, but you could also buy fruit and really everything that you’d eat. And then again, but this time maybe more and you could exchange for a doctor visit. It worked like this and well for a long time.”

Then, with millions of people actively involved, the barter economy collapsed. At approximately the same time that the three initiators of it were arrested by the government and charged with a long list of charges related to the illegal creation and exchange of currency, millions and millions of creditos flooded the barter market, causing a hyperinflation. The creditos economy collapsed. The fear that there would be many more arrests and collapse of the barter economy simultaneously caused people to turn to other ways of surviving and bartering, without the representation of value. There was a subsequent massive decline in barter. There has been a rise again in the barter networks in Argentina since 2009, but still nothing on the scale of the post 2001 crisis.

 

So, what could be done differently today, with an advent of computerization?

 

Lets say that each credito was marked with two codes:

1(One) credito

 

962892  78BBEB

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First code, 962892 is a random number, and the second code is an Argon2 hash value of the first number (last 6 symbols). Hash functions are many and one of the most secure is Argon2. For Inkrypt we will use Argon2 hashing because it is resistant to brute force and GPU attacks.

 

It takes a blink of an eye to convert 962892 -> 78BBEB

 

But to find number 962892 if we are given just 78BBEB would take very long time, thousands of computers and gigawatts of electricity. Such is the number of combinations.

Of course there is a problem - what if someone has simply photocopied the credito. Or someone is flooding the market with forged creditos? When this particular credito was issued code 78BBEB was stored on the disk of nodo central computer. Lets say that someone received this credito bill and excanged it for a loaf of bread. The baker will immediately mark the credito bill with a new set of codes like this:
 

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1(One) credito

 

962892  78BBEB

970990 DB7AF7

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Then he will send message to nodo central computer like this: 

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Transfer 78BBEB to DB7AF7

Nodo computer will delete 78BBEB from disk and write DB7AF7 and reply OK. 
Lets say someone has a forged credito and comes to the baker. 

 

Baker will attempt an ownership transfer:
Transfer 78BBEB to CC78AF

 

But now 78BBEB doesn't exist in the database any more. Nodo central computer will warn the baker about the forgery.
The forger would have to know code DB7AF7 in order to forge a new bill. But that code is now in the baker's pocket.
Notice how just hash codes go over communication lines and never original random numbers. This entire system can be automatized with an app but can also run with just pen and paper.

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