Could a cryptocurrency backed by land be the world’s first complete currency?
According to classical economics a currency should have certain characteristics. It must be scarce, it must be durable, it must be fungible, or exchangeable into other assets, and it must have some inherent value. Coins made from precious metals fit this profile perfectly. Gold is rare, it is long lasting and it can be used for other purposes, such as jewelry.
However, as Marc Couzic, CEO of the upcoming FieldCoin ICO, says, even though, “gold is the closest we have come to a true currency,” it is no longer an appropriate currency for the internet age. “We have fallen short because it simply does not fit with the needs of a global digital economy,” he says.
The digital economy needs a digital currency, which, as Couzic points out, “adds further requirements” to what users need from a currency, including, “security, trust and transferability.”
Though many cryptocurrencies may meet the requirements of the digital age, they struggle to fit the more classical definition of a currency: specifically, they lack an inherent value.
Couzic believes that the solution is to create a cryptocurrency tied to a real world asset, thus maintaining the benefits of a digital currency while gaining the classic characteristics of a more traditional currency.
Some cryptocurrencies like Tether have pegged themselves to established fiat currencies. However, for Couzic these base currencies also have no inherent value. The US dollar, for instance, “has no inherent value apart from the trust that people place in the US economy.” Though the US economy is currently the world’s most powerful, it would be unwise to expect that to always be the case.
Gold is another candidate. However, as Couzic points out, gold “carries its own disadvantages – not least a limited number of applications to real-world problems.” Though gold may be used for jewelry and some industrial processes, it is possible that real world demand for gold will at some point collapse.
An ideal real world asset would be useful under all economic conditions, regardless of political regime or societal fashion. For Couzic, that asset is land. “We will always need farming,” he says, “and farming will always need land.” Even if farming became radically more efficient and needed less space, land “has innumerable use cases” ensuring continued demand.
FieldCoin will, “create a new instrument based on land property transactions.” Couzic’s first goal is for FieldCoin to be the go-to currency for all land-related transactions, for example land deed sales or swaps. From there, as the “complete currency” meeting both classical and digital requirements, it may move towards mass adoption.