Currency or Witchcraft?: Crypto Goes Farm-to-Table

In 2006, it relaunched Berkshares and formed a purpose-built not-for-profit organization to issue them. This time, Berkshares were worth a dollar each and could be bought at a discount from local savings banks as a way to boost the businesses that accepted them. The notes themselves were made with the help of a member of the Massachusetts Crane family, who supplied Paul Revere with the paper for notes that financed the American Revolution, and have provided paper for American currency ever since.

This generation of Berkshare notes was more like a national currency. But instead of dead presidents, the notes bore the likenesses of homegrown notables such as civil rights activist WEB Du Bois, who was born in Great Barrington, and author Herman Melville, who wrote “Moby Dick” on his farm in nearby Pittsfield.

The relaunch came amid a wave of local currency experiments that sprouted up around the US starting in the ’90s, such as Burlington Bread in neighboring Vermont, most of which have since fizzled out.

The new Berkshares didn’t exactly revolutionize their local economy either. But it has survived. Along the way, it achieved the more modest goals of promoting local businesses and contributing to Berkshire’s distinctive charm. Witt estimated that in the more populous southern part of the county, 10 percent of residents — that’s several thousand people — have used the currency, and everyone has heard of it.

Adam Bornstein, who leads financial innovation for the Danish Red Cross, studied America’s local currency experiments while working on blockchain-based community currency projects in Cameroon and Kenya.

He said that most of the US currencies amounted to glorified marketing campaigns where the money is used once, never to be used again. What set Berkshares apart, he said, was the idealistic vision behind it and an emphasis on keeping the money in circulation by encouraging owners to use the notes they take in.

“If it’s just a marketing campaign, it doesn’t have financial value,” he said. “Susan’s group was able to make it part of the community’s fiber.”

A fiery manifesto

Wit has continued refining the monetary vision she created with Swann, drawing on lessons from the sustainable food movement.

“Decentralization and diversity have the advantage of preventing large-scale failure,” she wrote in a 2017 paper updating an earlier collaboration with her late partner. “This is as true in banking as it is in the natural world. Think of seeds. If many different strains of corn are planted by different farmers and a disease strikes the crop, some strains will resist and the corn will be harvested.”

The article is in some places a fiery manifesto. It fondly recalls the Free Banking period of the 1800s, when state-chartered banks issued their own silver- and gold-backed notes, and described the decentralized system conducive to the Jeffersonian ideal of yeoman farming. (The intellectual descendants of Alexander Hamilton, who, unlike Thomas Jefferson, advocated the creation of a strong central bank, prefer the term “Wildcat banking” to characterize the freewheeling era). Blaming the Federal Reserve Act of 1913 for facilitating a process of industrialization that soaked rural communities dry, the article quotes Nobel Prize-winning economist Friedrich Hayek, a member of the heterodox Austrian school.

In his criticism of the Fed and his embrace of Austrian school thinking, Witt had much in common with early adopters of Bitcoin. As buzz around cryptocurrency grew, Witt became curious about it.

She began attending crypto gatherings, beginning with the Miami Bitcoin Conference in January 2016. Witt, now 75, recalled being the oldest person in the room, dressed in pink among a sea of ​​hundreds of young men in black. “I loved it,” she said. “I learned so much.”

Because of Berkshare’s status as an alternative money pioneer, she enjoyed a minor celebrity among crypto enthusiasts, and Witt said she feels a kinship with some of the anarchist impulses — favoring local control — that fueled Bitcoin’s development.

But she also frowns on the financial speculation and globalization trends surrounding the technology, saying she rejected several offers to convert Berkshares into a cryptocurrency.

Eventually, the limits of paper notes, and a series of conversations with Bornstein and Fennie Wang, a refugee from decentralized finance—the nascent industry built around blockchain technology—with a manifesto of his own, convinced Witt to take the plunge.

“We needed to go digital,” Witt said. She explained that a digital system will enable more and larger transactions while generating detailed data on how Berkshares are being used.

While none of these functions require blockchains themselves, the technology has spawned countless systems designed to issue customized digital money.

“It’s a little plug-and-play in that sense,” said Wang, who designed the system under the auspices of Humanity Cash, a startup she founded to build universal basic income and community currency systems on the blockchain. Citing the instant settlement and peer-to-peer capabilities of blockchain systems, Wang said they offered the closest digital equivalent to cash.

Witt cited the low transaction fees on Celo, the blockchain network they ultimately chose to host the cryptocurrency.

A digital revolution?

Digital Berkshares went live in April with the launch of a smartphone wallet app.

Ryan Salame, a 28-year-old Berkshire native and head of FTX, Sam Bankman-Fried’s crypto exchange, donated $50,000 to provide $10 worth of free Berkshares to early downloaders.

Additional Berkshares can be purchased in the app for dollars at a one-to-one rate. Berkshares covers Celo’s transaction fees on the back end, allowing businesses and customers to trade in the currency for free. However, converting Berkshares back into dollars incurs a 1.5 percent fee, a barrier that backers hope will keep the currency in circulation.

Because it runs on a blockchain, all transactions are publicly visible online, though Wang said she hopes to introduce more privacy features eventually.

So far, Wang said, about 400 people have downloaded the app and set up accounts. “There’s definitely room to grow,” said Wang, who added that she’s refraining from promoting Digital Berkshares extensively while the initial rollout is studied.

Currently, the list of providers that accept it is heavy on the capricious. In addition to a host of organic farms and independent bookstores, there’s peripatetic performance artist Roger the Jester and the Magic Fluke Company, which makes banjos, ukuleles and mandolins to order.

The most important business to sign is the co-op, a pillar of society and hotbed of localist sentiment. Marketing manager Devorah Sawyer said the currency project and the partnership were kindred spirits. “It almost doesn’t matter if it catches,” she said. “It helps us maintain the camaraderie of the local stores.”

In addition to taking digital Berkshares for purchases, the co-op has begun making larger payments — in the thousands of Berkshares — to some vendors with them, which was inconvenient with the paper-based system.

As for the retail experience, it varied over the course of a two-day gastronomic tour of the region. At the co-op, a purchase of hard kombucha required the cashier to call for help on a walkie-talkie, then wait a few seconds while another employee brought a dedicated device for Berkshares transactions. At the self-serve farm stand at North Plain Farm, purchasing a jar of local honey was as easy as scanning a QR code attached to a bulletin board and entering the purchase amount into the Berkshares app. At GB Eats, an eatery on Great Barrington’s main street, paying for lunch with Berkshares was easy, but tips remained cash only. At the SoCo Creamery around the corner, several attempts to scan a QR code presented on an iPad failed and I was forced to buy my ice cream with an American Express.

Face frustrations

Ia world flooded payment options, even small hiccups can limit the appeal of money that already requires extra effort to acquire and becomes worthless past the county line.

“I think it’s a thing for rich people,” said Charlotte Ivy, 20, who recalled receiving paper Berkshares one Christmas as a child, “instead of actual money.”

Ivy, a retail worker, spoke on the condition that she was not affiliated with her employer. She said she saw the digital upgrade as little more than an inconvenience.

“What it really does is it creates more work for small businesses,” she said, “and I don’t know that the money we’re making is worth it.”

While the guardians of the almighty dollar may not be trembling at the prospect of digital Berkshares putting them out of business, at least one of them has taken note.

Wang said she has discussed the project in private conversations about technology and money with a senior official at the US Office of the Comptroller of the Currency, which is charged with overseeing US banks, and that she hopes to have the official visit region to see it. in action. The comptroller’s office declined to comment, and Wang declined to answer follow-up questions about the conversations.