Every currency must have legitimacy and sovereignty to be useful. For example, the US dollar ($) has become the worldwide clearing currency, the ultimate legitimate currency in the eyes of many governments. But it is not sovereign, except in the US. In most of Europe, the sovereign currency is the Euro (€) is the sovereign currency, in Japan, the Yen (¥), etc.

If we are to enter into a more decentralized age, with nation-states and corporations seeing an end to their coinage monopolies, any new currency must achieve legitimacy and sovereignty. For local and global transactions.

As a counter-example, Bitcoin and other crypto-currencies are not considered legitimate^∇ nor sovereign.^∇ Maybe they will become legitimate for some transactions, but they can never be sovereign. The blockchain is not sustainable and the alternative, less-energy-consuming versions of it are not secure and are manipulable.

Legitimacy and Sovereignty

Legitimacy means you do not have to convince people to accept the particular currency you wish to exchange. Sovereignty means the currency is protected by a national power. The more legitimate and sovereign the currency, the easier to use. The seller and buyer of the currency exchange the currency as matter of routine.

rCoins

rCoins have a herculean task ahead because they are a step away from tradition: It must derive both its legitimacy and sovereignty from people. There is no nation-state to create sovereignty or legitimacy, only a transparent history.

I mean, the legitimacy and sovereignty of my personal coinage comes from the many I trade with (what would they be called, my community? my “convivium?”) and the rCoin’s history. That sounds rather weak compared with powerful nations with lots of weapons. But it works and it is actually stronger. And it does so more effectively that the powerful nation, the stuff that has been holding us back for so long.

Relationships

The US makes money centrally, at will (by fiat), with banks as distributors. The legitimacy comes from the trust that other powerful countries place on the US; its sovereignty flows from the weaponry we have. Legitimacy is one to many, sovereignty is exclusive.

rCoins, on the other hand, has a many-to-many legitimacy and its sovereignty comes from its transparent history. Legitimacy comes from the people who accept my rCoins and sovereignty comes from its recorded history.

As you probably figured by now, unlike dollars, euros, or yens, rCoins are not anonymous. They bring along a transparent history and that makes them sovereign anywhere in the world. They are not backed up by a powerful nation, with more weapons that they know what to do with, but they are sovereign by the fact that their history contains everything, including all transactions and valuations that it has gone through since its origin.

Legitimacy

Say that I am hungry and I want to purchase a cheeseburger. At first, people who know me and know what I am doing, trade their cheeseburger for rCoins. Then, based on that, other people may trade their cheeseburgers for my rCoins. By that act, they are co-investing in our company.

My social circle, and maybe others, accept my rCoins at a discount. As our company gets close to delivering value, these rCoins go up, too, towards 100% of their value. The early believers, and subsequent supporters, get the gain! Instead of diluting the investors’ basket of rCoins, it will increase its value.

Big Spender

But, wait, that’s the ideal case. This could turn into a blank check for runaway personal consumption! Or, what if I spend it all on useless items at a cost to my social circle and everybody who trusts me? That may be so. Once. But in the future no one is going to trade with me. Perhaps, a few people will, but they will be more guarded. And if I keep doing it…

BTW, this happens today. We used to put a lot of legal guardrails to make sure that people who are non qualified investors would not be allowed to become investors, but those guardrails are no longer. They were paternalistic and now we are supposed to act as adults.

The problem is that, in spite of rumors to the contrary, today’s investments are not transparent. This means that we are supposed to,

• Make investments
• Like blind adults
• With our fingers crossed.

Why Would I?

But, what would be the reason to take rCoins from somebody with low-legitimacy?

Well, the person is likely part of your social circle and you trust them. You accept their rCoins at a discount. They do it because,

1. The trade will increase the rCoins legitimacy.
2. As the cheeseburger-eating people deliver value to the world, the value of their rCoins will go up. And, who knows, but these rCoins may go up in value in the future.

Note that the first is a given, whereas the second is speculative.

This is pretty much the way seed rounds are raised today, even though the deals are opaque. rCoins bring along a transparent history. You would most likely not bother looking at it and calculating its legitimacy and sovereignty, your mobile device will.

Your mobile can tirelessly look through all of the rCoin’s history and give you a go/no-go signal plus a recommended discount. As a side-note, we used to tell people this and they found it unbelievable, That’s… utopian! Well, chatGPT and the explosion of the so-called AI that has managed to slap that attitude right out.

A Herculean Task Ahead

As we said at the top of this post, rCoins will have a herculean task ahead when it comes to stepping away from tradition. Any change is perceived as a threat and this will be perceived as the biggest of threats.

We are counting on the fact that rCoins are on the right side of history and national governments and their banks are on the wrong side, holding us back. Something is going to have to change. Perhaps the change will not result in rCoins, but it will not depend on national interests.

Did We Say Blockchain?

Finally, please note (pretty please) that we never said anything about rCoins being on a blockchain.^∇ They would have to be on a platform that guarantees their integrity, part of its legitimacy, but we don’t specify what that platform is. The technology to do it sustainably is either here or within reach.

Even if we end up with less-than-bullet proof technology, the worst that could happen is that each person involved will invest a relatively small amount on the unfamiliar rCoins. People can always check their history.^∇

ENDNOTES

• David Rosenthal. EE380 Talk. Wednesday, February 9, 2022 <https://blog.dshr.org/2022/02/ee380-talk.html>

• David Gura. 2022 was the year crypto came crashing down to Earth. Dec 2022. <https://radicals.world/vYAuHt>

• The blockchain is not impervious to manipulation. See DSHR’s Blog: EE380 Talk <https://radicals.world/aaJg8k>. Also, see, DAOs Are Not Decentralized, Not Autonomous, <https://radicalcompanies.com/2022/05/09/daos-not-decentralized-not-autonomous.html>

• Google Dictionary. <https://radicals.world/FuTPvf>