Hull Council 'printing its own money' by paying digital cash for voluntary work

“We have agreed to take HullCoin in the Hull food bank, so if someone presents themselves for a food parcel, we will be able to print them a wallet number, and we will then issue them with the equivalent of three free hot meals through a network of community cafes. We will be able to turn their food parcel into hot meals through issuing a digital currency – that is where the value is created.”

Digital currency is "mined" into existence by a computer carrying out complex and specific calculations. Cryptographic systems then track who owns which coins and enable them to be transferred from person to person. Coins are kept in a "wallet" which takes the form of a small computer file.

Shepherdson estimated that it would take between ten and 12 weeks for the council to mine enough coins to pay for the hardware it had bought to power the project. After that, the scheme would be in profit. The authority is currently mining with a computer fitted with two powerful Sapphire R9 290X graphics cards.

“We’re printing our own money, I suppose,” he said.

If successful, the project could be expanded in scope and split out into its own company that would act as a “digital bank of Hull” and provide other crypto-currency services to the community.

Shepherdson said that the project was being launched slowly with a "softly, softly" approach but that it would be up and running within weeks.

Rather than being based on the most popular digital currency in use today, Bitcoin, HullCoin is a hybrid of two other coins called FeatherCoin and Ven.

It is not the first time that a digital currency has been created with the aim of social reform. Chiefs of a native American tribe adopted a new coin called MazaCoin as their official national currency earlier this year.

The Lakota people are indigenous to parts of North and South Dakota and are made up of a confederation of seven Sioux tribes, with notable members including Sitting Bull and Crazy Horse, who defeated Custer at the Battle of Little Bighorn.

Developer Payu Harris said that he hoped it would help lift the tribe out of poverty: “I looked at how things were for the tribe now and suddenly had an idea about how we might fix it. We can’t continue to be 20 years behind the times, always trying to catch up. We have to be forward-thinking.

"I think crypto-currencies could be the new buffalo. Once, it was everything for our survival. We used it for food, for clothes, for everything. It was our economy. I think MazaCoin could serve the same purpose."

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