Harnessing technology for social innovation: an interview with HullCoin's David Shepherdson

Words: Kate Baker
Visuals: FRankie sutton

Cryptocurrency. Bitcoin. Blockchain Technology. Any of this sound familiar?

If you’re like most people, you might wonder what these words actually mean. Roughly, a cryptocurrency is a digital asset you can exchange, and Bitcoin is an example of one. Blockchain technology is the development that allows digital information to be distributed without being copied, allowing cryptocurrencies like Bitcoin to exist. There are a number of new (and not so new) uses for blockchain technology that researchers and private companies are seeking to develop. As the world grapples with how to best value and apply blockchain technology, a group of innovators in Hull, England have set out to harness its potential to create something a little more human.

I first came across HullCoin in January 2018 through BBC TV commercial. The advert called it a “social experiment that’s rewarding good deeds.” When I saw that this ‘experiment’ was based in blockchain, my interest peaked. I was both surprised and intrigued by the idea of a socially-motivated application of this technology and I wanted to learn more.

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HullCoin is a community currency system that rewards people for doing good in their community by providing them with digital currency to spend at local businesses, donate to partnering charities, or give to other HullCoin users. This idea is result of social policy research that David Shepherdson and Lisa Bovill began in 2014. As local government workers, the two set out to assess the potential of local currencies to address and alleviate issues of poverty. Their findings showed that, by utilizing the blockchain ledger system, it was possible to create a different type of local currency, allowing for exchanging value without bank interference or government support.

Similar efforts to create community currency based on social services, like the now extinct “Equal Dollar” in Philadelphia, PA, seem to always be short lived. The cost of printing and maintaining circulation of the funds is prohibitive and the regulations difficult to navigate. With a digital coin system and no monetary value needed, HullCoin’s model is a promising remedy to the usual complications.

Though this is all great news, I wondered if HullCoin was really “unlocking the hidden value in Hull’s economy” for the good of their community, as they claimed. I connected with David, originator of HullCoin and CEO of Kaini Industries, the parent company of HullCoin, to dig a little deeper into the possibilities and processes he used to implement this model.

Kate: Did Kaini work with city officials or other public representatives to launch HullCoin, or has this been an operation primarily between private entities?

David: In the three years we have been developing HullCoin from its initial design to development, and now rolling it out, it has been integral that we maintain and encourage stakeholder input and engagement at every stage. This includes local/central government, private companies, charities and the public. HullCoin, within its design, is very dependent on partner engagement and participation. So, establishing and maintaining constructive working relationship with all stakeholders is paramount to our success as a company.

K: What was the process of connecting with these partners and securing their participation in the system like? What is the ‘sell’ for private community partners to register?

D: Each different partner/stakeholder has their own interest and value proposition within the design of HullCoin. Kaini Industries has articulated and refined its pitch to different stakeholders:

Public: The benefit of accessing reduced prices on goods and services from participating businesses. Each HullCoin “earned” time-stamps evidence of the positive social outcome via their digital wallet, information embedded within individual’s transaction histories. This forms a ‘social CV’ that can be evidenced as an immutable record of the “good deeds” an individual has undertaken to the benefit of themself and their local community.

Charities/Community Groups/Government: Organizations that are stimulating and providing opportunities for individuals to generate HullCoin have the benefit of accessing a free-to-use crowdsourcing platform to encourage and stimulate participation in activities. Similar to those generating HullCoin, organizations obtain a time stamped copy of every HullCoin they issue so acting as a numerical record of the outcomes they are stimulating within society.

Business: Retailers providing discounts in exchange for HullCoin benefit through prioritizing offers at times in which they are seeking to stimulate trade, additional footfall and revenue. The market that is generated by organizations stimulating positive social outcomes is new within a commercial context. Businesses benefit from the platform as it provides a marketplace similar to other crowd-discounting schemes like “GroupOn” and “Wowcher”. For every HullCoin that a business accepts they also receive a time stamped piece of evidence of the positive social outcome, so acting as a living Corporate Social Responsibility report that enables businesses to discount their excess stock without devaluing their brand.

K: Would you say that the Hull Coin project’s goals are primarily social or commercial?

D: Social. We have structured the company thus far to only accept charitable, grant based funding prioritizing social impact above and beyond profit-making. That said, there is always pressure for us to be sustainable and non-grant dependent so it is always a balancing act. From our experience the ‘Tech 4 Good’ movement is still in an embryonic stage and not really fit for a purpose as a funding vehicle... As a tech company with primarily a social focus, the challenges we have faced with institutions regarding investment has, in periods, stunted our progress in developing HullCoin.

K: How would you describe the impact (observed, potential, or intended) that implementing the Hull Coin system has had on Hull as a community?

D: The initial results have been encouraging, although I have to stress it is in its early days. Through the work we have undertaken, HullCoin has been embraced by communities in Hull with very positive feedback from stakeholders currently engaged in terms of their experiences and the possibilities of using HullCoin for a vehicle for societal change when the resource is released within an autonomous context.

K: What about the impact on individual relationships in Hull?

D: Individuals engaging with HullCoin at a grass roots level, whether that is someone generating HullCoin, a practitioner/volunteer issuing or giving HullCoin, or a local business accepting HullCoin, have all reported almost exclusively positive experiences through engaging with the ecosystem. [There has been an] addition of reciprocity within the relationship between an individual and an organization,  and… a level of satisfaction in supporting local communities by accepting HullCoin.

K: From your experience, what are the main obstacles that stand in the way of HullCoin?

D: A lack of understanding about blockchain technology and the application of it, which we have developed for a social purpose. Even representatives within the tech industry don’t understand the fundamentals. A lack of understanding is often combined with an inflated perception of risk. We have spent much time reducing the perceived level of risk regarding HullCoin and maximizing the potential of what we have developed, rather than focusing on delivery.  

The establishment is only interested in investing in ‘prescribed innovation’ rather than innovation that is both permissionless and grass roots.  

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K: Radicle is interested in championing successes and acknowledging areas for improvement.  What failures or flaws would you be willing to share about the process or the outcome of Hull Coin? What would you change or improve if you could?

D: It’s easy to pre-emp what communities want or ‘need’ when developing an application like HullCoin. It has been important that at its core, HullCoin is a vehicle for radical community development and as such we are not deliverers of services, but facilitators of the needs and aspirations of communities. If a community doesn’t have ownership of HullCoin, it will never realize its potential. To this end, patience and tolerance are underrated virtues.

The tech sector is a different beast. Initially the amount of adulation and positivity that is presented by industry figures can be disarming, after a period of time you quickly realize this is foundationless and quite frankly BS.

K: Where would do you see Hull Coin in the future? Any plans for growth, development or expansion?

D: We have designed the platform and infrastructure so that it can be used, replicated and adapted to be employed within any community across the globe. As a company we are always working on new and (we think) interesting applications of blockchain technology within our sphere of interest in terms of social and civic change.  

K: What advice would you pass along to designers and innovators considering new applications for community-based currency that attack specific wicked problems (like food insecurity or homelessness)?

D: Go for it! Monetary policy is ripe for disruption and innovation. The design of HullCoin and the learning process we have undertaken has opened a number of opportunities that I believe can be a powerful tool for activists and innovators to employ. Be ready for questions and a certain amount of ridicule from those in power. Certainly don’t wait for permission - it will never come.

Kate Baker is a design-minded administrator creating social service innovations by reimagining private and public service models. Kate approaches development and administration with a background in visual art, disability services, advocacy, and data analysis to develop comprehensive and interdisciplinary programs.
David Shepherdson is the originator of HullCoin and CEO of Kaini Industries. Learn more about HullCoin at http://www.hull-coin.org/