People, Cooperation, Challenges

Posted by Joe Blankenship on August 20, 2017

My initial research into cryptocurrencies and blockchains primarily focused on Bitcoin and Ethereum, two very successful blockchain systems that have set many standards for subsequent blockchain technologies. However, both of these are experiencing emergent issues of block scale and increasingly consumptive consensus protocols which have yet to find broadly accepted community-wide solutions.

FairCoin is an alt-coin initially based on the Bitcoin protocol which has been adopted by the FairCoop project, a globally open and self-organized, online effort to overcome economic and social inequality outside of nation-state control. FairCoin acts as the tokenized store-of-value for this economic and ideological system which embraces the potential of peer-to-peer (P2P) society, hacker ethics, integral revolution, justice, and solidarity for people, their ideas, and their labor.

FairCoin at a Glance

According to the FairCoin 2.0 white paper, the newest version of the cryptocurrency does not use mining (proof-of-work) or minting (proof-of-stake). Rather, it uses an innovative consensus protocol dubbed proof-of-cooperation (PoC). In this system, blocks in the blockchain are generated by certified validation nodes (CVNs) which are certified and regulated by the FairCoop. There is no reward for this labor aside from the transaction fees. Overall control of the system is a collaboration between the system’s blockchain admins, the CVNs, and FairCoop community members. The admins vote and control CVNs in line with the FairCoop assembly to ensure that the production and security of the blockchain is done as democratically as possible. Community members trade and participate in decisions and direction through the FairCoop assembly.

How Proof-of-Cooperation Works

  1. The PoC consensus algorithm starts with all CVNs examining the blocks to determine which CVN should produce the next block. The chosen CVN has to be an active, certified node which produced a block the longest time ago.
  2. The hash of the last, canonical block is verified, the CVN ID is assigned to create the next FairCoin block, and all other CVNs sign and transmit their decision to have the node from step 1 publish the next block.
  3. Checks are made throughout the network of nodes to ensure it is time to create a new block in accordance with the dynamically established blockchain parameters.
  4. At the appropriate time, the CVN assigned the task to generate the new block gathers the CVNs’ signatures from the most recently published block. This establishes provenance and threshold for that CVN to proceed with the new block, requiring a 50% consensus threshold at a minimum.
  5. The new block is generated and transmitted to the entire network for validation.
  6. If the CVN had enough signatures, it is very likely it will be accepted and published to the canonical blockchain.

Certified Validation Nodes

There are strict guidelines for CVNs in the above processes. Like other blockchain systems, their job is to secure the network and to ensure blocks are published roughly every three minutes. This involves each node maintaining the most recent FairCoin core client software and a unique ID certified digitally by the FairCoop. CVNs must have:

  1. 24/7 connection to the Internet
  2. Usage of public NTP server to ensure synchronized node times
  3. Correctly configured wallet software and FairCoop certificates
  4. Smart card reader or FASITO device, issued by the FairCoin development team, which carries the CVN private keys (secured by a PIN). This device is returned to the development team if it becomes locked.
  5. Vigilance of the decisions from the FairCoop assembly and the changes made to a NCP document regulating the core functionality of a CVN.

Blockchain Management

Within the FairCoop system, publicly appointed blockchain administrators sign off on new instruction data for FairCoin which must be done by 5/8 of administrators within 3 minutes. The number of administrators is dynamic and stored on the blockchain. They are obliged to follow the directions of the FairCoop assembly as not doing so would result in their removal as a signing authority for future assembly dictates (all they may do is vote yes/no).

FairCoin blocks can hold:

  1. Transactions
  2. CVN information
  3. Blockchain parameters
  4. Administrator information
  5. Coin supply instructions

CVNs are added and removed based on signed administrator decisions which are issued to the FairCoin network via the blockchain. The goal is to have greater than 20 certified CVNs operating at all times and any perceivable level of failure from a CVN can result in removal from the network. A minimum number of votes (5/8) can result in:

  1. Add/remove of a CVN
  2. Add/remove of administrator(s)
  3. Update dynamic chain parameters

With version 2.0 of FairCoin, the FairCoin supply is intended to be fixed as the value established at the termination of version 1.0. However, FairCoin can be burned to create return transactions. The number of allowed coins can only be increased during a hard fork, but this feature is not used in the canonical FairCoin. Forks only occur if all administrators vote to do so.

The FairCoop sees FairCoin primarily as a store-of-value for the FairCoop paradigm. This extends to FairCoin’s potential utility in micro-payment systems, facilitating distributed sub-chains, and a common medium for a multi-currency ecosystem. By shifting away from PoW and PoS as consensus algorithms, FairCoin bolsters a low-power, secure, non-competitive, and quick store-of-value that is also ethical, flexible, and committed to global cooperatives, community, and democratic values. Potential use-cases for FairCoin are many:

  1. Merchants accepting FairCoin (useFairCoin)
  2. Self-employed services (FreedomCoop)
  3. Sell goods/services (FairMarket)
  4. Personal Savings (FairSaving)
  5. Donations (FairStarts, CoopFunding, FairFunds)
  6. Local Exchange Trade Schemes

FairCoop Ecosystem

As discussed above, FairCoin has been strategically adopted by FairCoop for a number of goals. One of the first goals you are acquainted with is to exclude governments and central banks. In the context of the website, the perception is that they see these vertical institutions as lethargic and unable to foster equitable knowledge work/access, equitable work-time, and growing of collective/cooperative economies. Other goals include:

  1. Establishing a global north/south economic balance (they wrote restore, but there was never equality politically or economically between the two)
  2. Enhance global cooperation, common good, and economic justice
  3. Use FairCoin in some way for all FairCoop goals

To this end, FairCoin is intended to act as the medium of exchange, store-of-value, and reference value for other economic mechanisms in the FairCoop ecosystem (e.g., FairCredit, FairFunds, FairSaving, FairBag (user backup), FairNetwork, merchant rates, FairMarket, multi-currency exchange). In effect, the overarching strategy is to shift away from existing, hegemonic systems. In order to sustain dialogue within and between communities, committees exist for general matters, economic direction, and social extensions of these system. In addition to committees that can be stood up for any subject at any time, there are three main funds that the FairCoop promotes (which are also related to their primary organizational goals):

  1. Global South Fund
  2. Commons Fund
  3. Technology Infrastructure Fund

These funds exist because FairCoop’s promotion of FairCoin:

  1. Signifies struggle against global financial systems dominated by “1%”
  2. Struggles against economic inequalities
  3. Promotes decentralization of organizational forms
  4. Fostering/production of the commons
  5. Sharing and distribution of open knowledge

These principles/conceptual frameworks are woven into the above agenda:

  1. Integral revolution
  2. “Peer-to-peer”
  3. Cryptocurrencies
  4. Free and open knowledge
  5. Hacker ethics

To these ends, FairCoin is more so seen as a tool/framework than as a monetary model by FairCoop (or committees within FairNetwork). Prior to shifting to PoC, FairCoin was a PoS/PoW hybrid system (based on Bitcoin as an alt-coin framework). Following an initial supply of 50 Million FAIR (the primary denomination of FairCoin) being distributed to the FairCoin network (under the PoS/PoW protocol version 1.0), saving of the coins was incentivized through a system of diminishing award to the minters/miners (6% received to active nodes in the first year followed by 3% the second and 1% for all following years). The aim of this was to boost the store-of-value aspect of FairCoin, ultimately bolstering the FairCoop ecosystem initiatives.

These efforts are largely the result of a small group of people. As of 2014, the Catalan Integral Cooperative (CIC), P2P Foundation for Alternatives, and Dark Wallet have supported FairCoop’s growth with Enric Duran as a key figure head within the FairCoop community (he is/was one of the key donors to the funds mentioned above). These efforts fall largely under the aim to bolster open cooperativism:

  1. Retrieval of property as common wealth under popular possession/control
  2. Building cooperative and self-managed public systems based on mutual support
  3. Free access to information and knowledge

To these ends, social organization is critical. Ergo, local nodes are the grassroots-based foundation of FairCoop facilitating the cyclical flows to and from local and global scales of political economy. These are organizations with no less than 3 members (individuals and/or organizations; prefer at least 6 members with 10-12+ members as optimal for a local node) who are charged with these FairCoop- and FairNetwork-based tasks:

  1. Bring in new FairCoop members through promotion/evangelization
  2. Organize FairCoop-focused workshops, talks, interviews
  3. Connect FairCoop to local events
  4. Get involved in global action, taking charge at local level
  5. Take part in getFairCoin, FairPay, FairMarket exchange economy
  6. Support FreedomCoop members

These, per direction of FairCoop, have to be open and transparent in nature. Funding for local nodes occurs 2 to 3 months after their establishment at which time they are able to redistribute FreedomCoop funds, exchange FairCoin in the local economy, and receive funding from FairCoop's major funds.

Internal Economics of FairCoop

Keep in mind, all economic activity within FairCoop is done in FairCoin. This is closely tied to the internal economics of the proposed FairCoop ecosystem.

“FairCoop has a political framework for management of the commons based on working economic commissions and councils, as well as spaces for participation and digital direct democracy, in terms of policy decision“ - FairCoop Internal Economics page

Therefore, the ecosystem councils:

  1. Decide the cost of the pool funding that is shared with FairNetwork
  2. Decide where the funds go based on issuance of transactions for commission planning/costs

The sources of these funds are largely gathered through FairMarket (FairCoin purchases) and input from FairCredit (which is still an emerging system).

FairCoin Projects

We have already mentioned most of the projects that fall under FairCoop in varying amounts of detail. However, it is necessary to examine each project in their own right as they both bolster and expose the complexity of and issues within the larger FairCoop ecosystem. These are all connected to FairCoop’s economic strategy:

  1. Increase FairCoin price through savings which directly affect increased value of FairFunds
  2. Move products and services from local to global
  3. Establish a fair, consolidated economic system for reciprocation from global to local

To these ends, a cryptocurrency such as FairCoin permits a certain level of immunity from interference and manipulation by central banks while freeing up certain types and forms of economic management.


"FairCredit is the monetary system of mutual credit globally supported by FairCoin. It serves as a vehicle of economic exchange and credit expansion and contraction among FairCoop members, thus reducing the need to spend FairCoins and deepening its store of value function, while also providing better mechanisms to promote credit and economic exchanges." - FairCoop FairCredit page

It must be kept in mind that this system is currently only accepted within the FairCoop economy and in very limited ways. This credit cannot accumulate indefinitely as the store-of-value is intended to be held in FairCoin. However, these credit balances can be used as currency within a mutual credit model.


FairSaving is a:

"savings service FairCoop provides. Your savings will help to enhance the value of FairCoin and therefore of the different FairFunds managed by FairCoop. Thus, FairSaving is born as the first ethical savings system completely free from any central bank or nation-state control." - FairCoop FairSaving page

This is recommended by FairCoop for those who do not have a computer of their own or are not proficient enough with technology to manage their digital assets held in their FairCoop wallet.


FairStarts is a:

"project that aims to create a network of incubators to help develop transnational, open and cooperative projects in the collaborative P2P economy... providing resources such as technological and legal advice, funding, contacts and strategic partners, networking, and physical resources" – FairCoop FairStarts page

CoopFunding is essentially a crowdfunding site that falls under the FairCoop mission goals. When you make a donation, you can choose how much you want to give to which fund. The donations will then be transferred to the FairCoop Economic Management commission which converts the donation into FairCoin and transfers those to the donor’s selected FairFund. If the donor holds FairCoin, they can donate directly to the fund themselves. Surprisingly, CoopFunding accepts a wide variety of monies including FairBill-converted funds, Ecos (CES), and some LETS-based tokens.


"FairCoop virtual market is the website where all products and services produced by members of the cooperative can be bought online." - FairCoop FairMarket page

The intent is the creation of an economy based on demand and not supply. This online market for open cooperativism facilitates self-organization of users in their demand for goods and services while also leveraging FairCredit to fund market operations. Furthermore:

"FairCoop wants to help expand the cryptocurrency FairCoin as a reference in the fields of fair trade and ethical consumption" – FairCoop FairTrade page

This, as all other FairCoop projects, utilizes the project's activity in order to bolster and strengthen FairCoin as a store-of-value for FairCoop.

An examination of the FairMarket website shows that all prices are in FAIR. Products are binned by country with meta-categories of both goods and services (173 total provided by 58 total merchants as of August 11). There are ~65 service partners that are a part of the FairMarket (42 in services, 23 in goods). There are indication that FairCredit will be introduced at some point in the future.


FairCoop created FairFunds to handle FairCoin donations given to and handled by specific goal-oriented funds that are “synergistic” with FairCoop’s goals and objectives (the Global South, Commons, and Technological Infrastructure funds are ones we have already mentioned).

"Each fund has specific objectives that are defined by their council, which manages both the capital distribution and the policies of each fund. All councils are democratically elected and are open to participation... When a person or group has a project and wants to receive funding from a fund, they can access the fund group through the social network and present their project to the council, which will then decide whether the project meets the FairCoop criteria and how many FairCoins should be devoted to it." - FairCoop FairFunds page
FairCoop’s "goal was already to finance projects related to FairCoin or equitable economy... FairCoop we not only extend it and provide it with an improved infrastructure, but also will focus especially in strengthening FairCoin as a value reserve currency." - FairCoop FairFunding page

FairFunding is then the key manner in which FairFunds sustain their income while simultaneously growing those funds’ initial values in FairCoin over time (donation also results in automatic FairCoop membership). This is facilitated in part by the aforementioned CoopFunding (driven by the Cooperativa Integral Catalana).

An individual user or group can get involved through:

  1. Direct contribution
  2. Investing in FairCoin
  3. Promoting the use of FairCoin

In order to submit a project:

  1. Be familiar with dynamics/protocol of fund's council/community
  2. Present your project
  3. If accepted, it will be granted an amount of FAIR that is unused for a latency period

Starting a new fund involves:

  1. Proposal to community and ecosystem council
  2. Minimum of 500000 FAIR
  3. Need open access to fund details, board of experienced people, and tools for FairCoop members to vote


FairNetwork exists to help people get setup and involved with all FairCoop projects and activities. This experience was fairly simple and gave me access to all of the groups, committees, and forums for the FairCoop ecosystem. However, these communities did not immediately appear to be very active.


This project’s purpose is to promote the adoption and use of FairCoin. This is primarily done through:

  1. Being a participant and/or local node
  2. Being a merchant or collective that uses FairCoin
  3. Being a user of FairCoin/FairCoop initiatives

To these ends, useFairCoin provide information on how to accept FairCoin, how to buy and sell FairCoin, and user/merchant resources.


This project exists to bring in external monies and convert them to FairCoin. This is done through three mechanisms:

  1. Fiat currency exchanged without fees at local nodes
  2. Wire transfers without fees
  3. Credit/debit transfers with fees (exchange rates apply) via FairBill


Participation in FairCoop projects and FairCoop writ-large are encouraged through these activities:

  1. Become a part of the FairCoop ecosystem (setup a member profile, familiarization with FairCoop activities)
  2. Get involved in FairNetwork socially
  3. Start and interact with local nodes
  4. Join a commission or council
  5. Run a FairCoin Node as a saver or CVN
  6. Donate to FairFunds
  7. Vote as part of the member assembly
  8. Spread the word about FairCoop
  9. Submit a project

Economic Role of FairCoin

It is overly clear that the primary purpose of FairCoin is to act as a long-term store-of-value for the several projects that fall under FairCoop. FairCoin version 1.0, as a hybrid system, hoped to grow that store-of-value through competitive protocols, such as PoW and PoS, like so many other alt-coins. However, this is counter-intuitive to their primary political and social goals which is what I think pushed them to find/develop a protocol that accommodated those values while also encouraging people to value FairCoin based on a new technological paradigm of cyborg-cooperative principles (terms I will elaborate on in the next section).

In the FairCoin 2.0 white paper, it is clearly stated that no new FairCoins are to be created. This is due to FairCoop’s goal of using that store-of-value for redistribution of wealth for social projects within solidarity and cooperative economies. Moreover, the intent is to use FairCoin as a buffer through which all other currencies and/or monies can be used as social currencies over time. To these ends, purchasing or earning of FairCoin by a critical and/or growing mass of people becomes extremely important for their political economy. The urge to get people involved as such is overly apparent as getFairCoin, FairMarket, and FairCoin links are readily available throughout FairCoop’s many websites.

There is also the issue of existing accumulation. Of the approximately 53.1 million FairCoin that exist from the transition between version 1.0 and version 2.0:

  1. ~9 million FAIR is owned by people outside of the FairCoop
  2. ~32.5 million FAIR is owned by people active in the FairCoop
  3. ~11.5 million FAIR is in FairFunds

A good amount of FAIR can be purchased through the online exchange Bittrex, which is one of the few exchanges to provide purchase/sales of FairCoin. In line with keeping these concentrations of the existing, fixed cryptocurrency growing in value, FairCoop also offers merchants fixed exchange rates of FAIR (currently 1 FAIR for 20 Eurocents) for their adoption and sustained involvement in the FairCoop economy. This merchant relation is dictated by the FairCoop Economic Strategy Group.

The issues of where, how, and for what FairCoin can be used is what largely drives both the political and social dialogues within the FairNetwork. Most of the chat rooms and online conversations found via FairCoop websites, forums, and Reddit consist of how the FairCoop economy distinguishes itself from existing capitalist modes of accumulation and economic activity. These issues are addressed through the FairCoop General Assembly which meets on the 3rd Thursday of every month via Telegram (at the time of this writing, there are 35 English-speaking groups, 12 Spanish-speaking groups, 24 local groups, and 1 international group). The General Assembly then interacts with the FairCoop Boards in order to resolve these FairCoin-related issues (at the time of this writing, there are 5 board assemblies and 11 communication groups).

Foreseeable Challenges

My initial concerns focus on the concept and vision of the FairCoop ecosystem. Ecosystem has several variant definitions depending on profession and context, but among all of them is the sentiment of an inherent and evolving interconnection between all elements to varying degrees depending on the form, function, and structure of their relations. That being said, they have made the same flaw in logic that all cryptocurrencies (that I am aware of) make: They segregate that which is connected to the cryptocurrency from the processes of its production. The processes of political abstraction formed by FairCoop which are then developed by technologists and administrated by boards and committees cannot be separate visually or functionally from the people that constitute and drive the social spaces in which the token value is used if true equity among all participants is to be achieved. That being said, FairCoin has come closer than most in attempting to do this, but have done so by compromising many of the governance structures seen as strengths in many other systems.

By this, I am referring to the administrators of the FairCoin blockchain framework. The core of blockchain 1.0 technology which has largely carried over into blockchain 2.0 is that of trustlessness. This was done initially with Bitcoin’s protocol to ensure that once a miner was running the appropriate software on a node, the human aspect of involvement in governance was then mitigated; the code/space of the miners was the law under which the blockchain was produced and consensus was achieved. If a change was required/desired for the blockchain protocol, a fork was required. However, FairCoin has stated that forks are not used and that protocol changes are essentially implemented directly to the blockchain by 5/8 vote of elected administrators. These empowered administrators, as elaborated on throughout the FairCoop and FairCoin literature, essentially respond to the votes of the general assembly as contrary action would result in their removal. However, in the process of implementing democratic-based actions for shifts in the blockchain protocol, you have reinvented the bureaucracy of centralized governance atop a blockchain protocol of CVN-driven production. This required human/machine relation of the FairCoin space results in the aforementioned cyborg-cooperative condition of socio-political principles driving FairCoops current form of economy.

This is further complicated by the complex, interwoven materials that constitute the FairCoop websites. It is extremely difficult for a laymen to first understand how all of this works and then to become involved as either a developer, investor, and/or user. Developers are limited in their involvement based on their previous understanding of the Bitcoin and FairCoin 1.0 blockchain code-base/protocol potentially leading to a concentration of core-developer power. Investors, depending on their political/social/economic rationale, are limited to 3 primary methods to buy into and then involve themselves in this economy. However, since investors usually have excess investment capital, this is far easier for them to navigate and utilize at a loss than the “everyday” user. Users, as with most blockchain systems, are limited by everything from digital divide to merchant acceptance in their locale of FairCoin which ultimately deters them from involvement writ-large. This is further complicated by strategic actions taken to ensure merchants receive a fixed rate in what is alleged to be a completely equitable economy; an economy where ~21% of the sole-accepted currency is owned by external agents.

Once again, to be fair to FairCoop, the issues of broad cryptocurrency usage against existing fiat and credit monies is one that even Bitcoin faces (as of 2017). However, for a cryptocurrency which was adopted and then adapted for equitable use within a form of global cooperativism, issues of currency accumulation should have been part of the protocol conceptualization once the shift to the PoC consensus algorithm was made. Since there is ~9 million external FAIR, FairCoop is really only dealing with 79% of the total distribution of FairCoin. Within that distribution, ~11.5 million is outside of direct control by the FAIR-holding general assembly. This leaves the FairCoin community with control of ~61% of total FAIR. Since FairCoin is purported to be a “global currency for the 99%”, these numbers and political dynamics have quite a bit more to be desired.

Now that being said, the “61 percenters” have limited avenues of recourse. FairCoop does acknowledge there are both knowledge access- and technological divide-based issues that members can both address and get around (e.g., FairSavings, paper wallets, local nodes, etc.). However, since a large part of the blockchain protocol involves direct democratic action, users without technological access are literally just providing another means through which FairCoin’s store-of-value is increased leaving said users at the mercy of infrequent and difficult barriers to access. These digital divides may also lead to exploitative 3rd-parties who could potentially exploit such limitations to both grow their personal holdings while externalizing more FAIR from the FairCoop ecosystem. Such an example is the usage of cryptocurrency exchanges (e.g., Bittrex). Since the Global South and Technological funds (2 of the big 3 FairFunds) focus on this type of issue, FairCoop should be more cognizant of secondary and tertiary effects on technology-impaired populations based on protocol- and framework-level exploits (even those in North America and Europe).

For now, FairCoin is still struggling to evolve. Even though the cryptocurrency is dominated by the politics and social limitations of the FairCoop paradigm, there is still potential to have a revolutionary token that both symbolizes and functions as an alternative to neoliberal capitalist modes of production; helping disadvantaged people north and south of the equator. Work is certainly needed to update the FairCoin and FairCoop websites in order to emphasize easier access to the social network and a bit less “in your face” options to buy FairCoin up front. If people see the value in socially organizing around the FairCoop politics, the equivalent form of tokenization will potentially take place; naturally growing the economy from the inside-out. The resulting economy could be that which is currently being suggested, for the 99%, instead of an economy that is mired in the legacy of its Bitcoin origins. For developers, producing and maintaining versions of the core software in a languages like Go, Rust, Python, and/or Java Script would drastically increase junior- and mid-level involvement, bolstering the transparency and documentation generated by an increased number of core-developers. Unfortunately, these efforts have to be led by those with knowledge and technology access, but can be and should be done with those lacking, first and foremost, in mind. Investors should be provided options to buy, but with the caveat and mechanisms in place to ensure that redistribution, and not accumulation, are what grow the store-of-value for FairCoin. For all users, efforts should be made to ensure the aforementioned social network assists in increased utility of FairCoin focusing on the “how” populations using FairSavings and paper wallets have options aside from those listed on useFairCoin and getFairCoin. This largely rests on adjustments to the consensus algorithm and the mechanisms through which individuals, groups, and the network achieve democratically-engaged decisions.

Ultimately, FairCoin is one of many alternative cryptocurrencies that are struggling to prove their condition in everyday life. But unless the 61% becomes 100%, FairCoin will struggle to legitimate its claims and value within emergent 21st century political economy.


FairCoin White Paper
FairCoin Presentation
FairCoin Website
FairCoin Stats Website
FairCoop Telegram Groups
FairCoop Boards
FairCoop Website
FairMarket Website
CoopFunding Website
useFairCoin Website
getFairCoin Website
FairCoin Reddit

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