Time Credits on Trustlines
Why use Trustlines for time credits¶
This article dives into the philosophy of time credits. It shows that emphasis on a circular economy makes the idea of time credits compatible with mutual credit. However, many time credit systems are limited by scalability problems due to their centralized nature. In contrast, Trustlines allows for a large-scale, interoperable network of time credits that prioritizes the self-governing nature of autonomous community work.
Why is this possible? Economic networks on Trustlines are based on existing trusted relationships, so natural economic borders emerge between communities where there are fewer trusted relationships. However, these communities remain connected at the edges---wherever they are naturally interconnected by individual friends and families.
To help visualize unique ways to implement time credits in your community, you can check out Time Credits - User Stories.
Top 7 reasons to use Trustlines for time credits
- Trustlines enables a "decentralized timebank," the easiest way to start using time credits.
- Community groups can facilitate direct transfers of value between members by providing a trusted intermediary. This is useful when the two individuals are strangers and are not willing to create a trustline.
- Businesses get a direct, granular way to support trusted community groups and individuals, by agreeing to accept their time credits as payment.
- Community groups can partner with other trusted organizations, to facilitate direct transfers of value between members of their different communities. This is useful when people do not share direct trustlines.
- Community partnerships also expand both networks of partner businesses, thus growing the "spend" network of all volunteers.
- Volunteer groups will have a better ability to estimate the total number of hours their members plan to contribute over a set time period. This information is based on the capacity of the received credit limits.
- Using Trustlines would result in a transparent, public source of data to track the scope and impact of community work. Such transparency will be important in shaping future policy decisions)
Time credits and the circular economy¶
In the non-profit sector, there is an often-overlooked but important distinction between charity work and solidarity work. Using the term "solidarity" usually indicates a belief that community work is a reciprocal or circular activity. Proponents emphasize that we each have something to both contribute and to gain from our neighbors, that no person is an island.
This philosophy is apparent in most time credit systems. Time credits (also referred to as time dollars or timebanking) are a form of alternative currency in which the unit of account is "time." In other words, they receive a number of credits corresponding to the number of hours worked. See Top 3 reasons to use time credits for community work for some benefits of time credits.
Within most time credit systems, it is generally accepted that everybody's time should be valued equally. This may be due to an egalitarian philosophy, but also related to the specific type of work being done. "Care work" is an example of a specific type of work that is not typically valued by the market economy, but it can be a good fit for time credits.
Under a system of time credits, beneficiaries of community services should not feel as if they are receiving charity. This is because the beneficiaries, too, have value to contribute. They typically expect to "pay it forward" in the future. Likewise, those contributing their time and services expect to be beneficiaries of the system, at some point.
Top 3 reasons to use time credits for community work
- Reward volunteers for community work. This may help reduce burnout and sustain existing levels of community work, in addition to attracting broader participation.
- Empower recipients of services to view themselves as assets, with something to contribute to the community. Access untapped potential.
- Empower recipients of volunteer services to show tangible appreciation by giving credits to volunteers. This is particularly important for those who do not have the financial means to do so otherwise.
Compatibilities: mutual credit and time credits¶
Under a system of mutual credit, all value exchanges are simply debits and credits between entities that trust each other. One reason this works is due to value circulating evenly: Every member of the credit clearing system should be comfortable "lending" into the system because they know the value will eventually be repaid in another form.
It is straightforward to implement a time credit system using mutual credit because both assume a circular economy. All debits and credits are simply denominated in "time" as the unit of account. Instead of a central authority issuing an arbitrary number of time dollars, mutual credit would allow units of value to be organically issued by trusted community members whenever they are needed.
Scalability problems in centralized time credit systems¶
Because of the trust involved in creating an alternative economy, it is difficult for centralized systems to grow beyond the natural borders of a trusted community (in which the members really know each other). There are a few reasons for this:
- A small community creates a more intimate environment, which motivates people to look after their neighbors.
- If it gets too big, people may start to feel alienated from the community. This can make people feel less motivated to contribute.
- People are more trusting when the community consists of friends or friends-of-friends, so members can hold each other accountable.
- In a large community, people may lose faith that others will honor the value of their credits.
These problems of scalability are easily avoided when using Trustlines. But Trustlines still preserves all the advantages of centralized systems. Similar centralized configurations can be created using Trustlines. For further details about the advantages of using Trustlines, please see "Top 7 reasons to use Trustlines for time credits". Otherwise, please continue to Time Credits - User Stories to help visualize different ways to use Trustlines for time credits.