A Community driven coin is a cryptocurrency project that is has no specified owner and of course not a company structure behind it or a CEO deciding for its future. Instead of it , it has Community-driven development that provides the control of the development process, resources and decision making authority, directly to groups in the community.
The importance of Communities through time
Throughout history, communities have played an intrinsic part in how humans come together to share ideas, collaborate and align themselves with each other to incorporate a common identity. Since the dawn of time it has been embedded in our DNA to naturally form tribes, factions or groups in order to work together and produce better results than if we were to operate alone.
Fast forward to the present and communities are more prevalent than ever in our society. Βut with one critical difference : the majority of our social groups have now been digitized and the most communities we form are now online.
The invention of smartphones has provided us with access to endless of unique groups or social networks. Αll of them are accessible from our own hand. As with any big movement in humanity over the last 100 years, technology is at the core of our progression as a species.
Cryptocurrencies and blockchains , the most important inventions after the internet, are no exclusion to this. The so called “digital coins” are supposed to offer an alternative transacting method to the people.
However this cannot be achieved without a wide community acceptance. This is the point where a truly Community Driven coin shines: A cryptocurrency project based on the revolutionary blockchain technology, like the legendary Bitcoin, requires an ever evolving and expanding public network for its function.
This is why the cryptocurrencies have to engage the Community on every level:
a) The level of the network
b) the level of coin distribution
c) the level of the decision making and development.
This is how Decentralization is achieved in every level as well.
The three levels of Comunity’s participation open the way to Decentralization
a) The Community’s participation should be achieved on the level of the network.
However, the projects have to update their mining algorithms in order to be constantly friendly for simple hardware. This way they maximize the participation of the potential miners with a meaningful mining reward. The label ” ASIC & FPGA resistant ” is used in such cases. Unfortunately, many cryptocurrency projects are not supporting ASIC resistant mining algorithms or even worse, many cryptocurrencies are not mineable at all. Thus the Community participation is dramatically minimized.
b) The Community participation should be reflected on the fair coin distribution.
Here, the things are more complex and it is where the masks of the most scam projects can be easily removed. First of all, there are many projects that hold a big percentage of their coin supply (premined coins) in order to reward their founders.
The projects that allow the participation of the Community in the mining procedure, should have a fair and transparent block reward plan. For example, both the Bitcoin and BitcoinZ cryptocurrencies have a certain block reward, distributed to the miners for supporting the network, which is halved every 4 years. This way, they have a fixed number of digital coins that will be supplied to the market at a symmetrically reduced rate.
The aforementioned approach addresses any inflation issues, with completely transparent rules. This comes in contrast with a central bank which is pumping printed FIAT money at her own will. Many times without following solid rules, causing hyper-inflation. History is full with examples like this.
On the other hand, many cryptocurrency projects implement insanely fast halving plans like every a few weeks or months. Obviously this happens for speculation reasons. Such projects cannot be taken seriously as digital coin solutions that could target the World Community.
c) The Community should drive the whole project.
This is the third and most important criteria of the Community participation in a cryptocurrency project. The decisions taking and development.
The big differences between the original cryptocurrency philosophy and the Banks, are the two big “D”. Decentralization and Democracy. Decentralization functions as a prerequisite for Democracy. This happens by guaranteeing that no central authority is holding everything valuable for you or is taking decisions for you, without you.
On the other hand, Democracy requires justice, equality and freedom.
Why justice, equality and financial freedom are important
You can never have financial justice when for example a Central Bank is pumping money in the market, making new rules every few years that herself is breaking.
You can never have equality either, when the golden boys of the Central Bank know from the previous week that some of the rules are going to change. Or when they are hiding the activity of specific banking accounts from the public, while other people cannot enjoy the same “privacy”.
Finally, you can never have freedom when a third party, like a bank, is holding all your assets and requires high fees and many days in order to make a transaction for you to another country. This third party can even go bankrupt or decide to “haircut” the deposits of the clients (with the Banks of Cyprus in 2013 being the most recent example).
Additionally, we should think of those who cannot even open a banking account at all, for many different reasons. For example because they don’t have easy access to a bank or they don’t fulfill the requirements to open one.
For all the aforementioned reasons, there is no freedom, equality and justice with the current financial and transacting system worldwide.
How a fair cryptocurrency brings Democracy and Decentralization
With the idea of a digital coin based on the blockchain technology and the Proof of Work model, the three pillars of the Democracy can finally be there :
You can have equality, because the coin supply is based on immutable inflation rules with a specific plan.
You can have justice , as the rules are the same for everyone. Every transaction for every address can be tracked because all transactions are stored in the blockchain. A copy of which can virtually everyone have.
You can have freedom, since you are truly free to send funds instantly, without borders , with fixed minimal fees. Additionally you have no risk by any third party haircutting your assets, for the reason that there is no third party that holds your funds anymore.
There is only a decentralized network , part of which virtually everyone can be. The consensus of this network is leading to the verification of all transactions and to the recording of each transaction to the blockchain. Everything is now transparent, fast, fair, easy and border-less.
It is more than obvious, that a cryptocurrency project which respects the Bitcoin legacy, has to be a Community driven, fully Democratized and Decentralized. This can be achieved only by fulfilling all the three aforementioned characteristics. It cannot be accomplished by another Central Bank, another financial institute or, even worse, a group of fraudulent people who demonstrate another company-launched premined project. Acting as a cryptocurrency project with blockchain masquerade.
Because it is very easy and free of charge, for every project to be… self-categorized as a “Community driven” one, but how many of these really are ?
The fact that a couple of people are tagged in a social media channel as “Community Managers” or that the founder is interacting with a couple of active members (who usually are just his friends) in , doesn’t make a project really Community Driven.
Most coins have nothing in common with anything that has been described for each of the three levels that a really Community driven Cryptocurrency Project should fulfill. We should imagine how difficult is to comply with all of these three.
Exactly this is what distinguishes a really Community Driven and Pure Cryptocurrency Project from a scam or a centralized one which are just wearing the “Community cloak”.