The co-op issued scrip, each piece was worth half an hour of babysitting time.
The Capitol Hill Babysitting Co-op was a co-op that started in the 1950s in the Capitol Hill Area of Washington D.C., where each parent was issued 40 scrip, redeemable each for half an hour of babysitting, and was expected to repay those 40 scrip upon leaving the co-op.
Being able to trade babysitting hours without exchanging money was very attractive to parents in the neighborhood and so the co-op grew from 20 families in the early 1960s to more than 200 in the early 1970s. Eventually the co-op faced a problem known as the Paradox of Thrift, where parents did not want to spend their scrip, but they wanted to earn it, resulting in under-spending, and over-saving, and people not being willing to purchase baby-sitting services with their scrip:
At first, new members of the co-op felt, on average, that they should save more scrip before they began spending. So they babysat whenever the opportunity arose, but did not spend the “scrip” they acquired. Since babysitting opportunities only arise when other couples want to go out, there was a shortage of demand for babysitting. As a result, the co-op fell into a “recession”. This illustrates the phenomenon known as the paradox of thrift.
You can read more about it on this link: https://en.wikipedia.org/wiki/Capitol_Hill_Babysitting_Co-op
So to summarize, there were two problems with the Capitol Hill Babysitting Co-op:
The value of the Co-op currency that people held didn’t decrease overtime. Whether that’s through inflation, meaning the price of the service increasing, or demurrage, with the quantity of currency that people hold decreasing, overtime. Without that value decrease, there was not enough incentive to spend the currency, and too much incentive to hold on to it. The shortage of people wanting to spend the currency resulted in the Co-op falling into a recession.
There was a single currency for all babysitters, with each scrip equal to half an hour of every members’ babysitting, meaning that everyone’s babysitting services was considered equal in value. It also meant that there was only one monetary policy, instead of multiple currencies, each with their own monetary policy.
These problems would have been solvable by MyCurrency’s customizable multi-currency platform, because:
first of all, we are not talking about one currency for every individual. With the MyCurrency platform and app, every individual can have their own currency, so the consumers can choose the currency that they actually want, and shun the ones they don’t. Therefore there is far less likelihood of one bad decision on how to manage the currency ruining the whole market, as happened with the Capitol Hill Babysitting Co-op currency, and
we’re giving every currency issuer the option to add a burn rate, which is a form of demurrage, to their own currency, which solves the problem of the currency falling into recession because people are hoarding it, aka the Paradox of Thrift that the Babysitting Co-op suffered from in the 1970s.
This is how Babysitting clubs could work in the new world of MyCurrency:
Every babysitter has their own currency. Every babysitter sets their own burn rate.
Every consumer chooses the babysitter who offers the most competitive price with the most reasonable burn rate.
Babysitters are incentivized to do well in their job because if they don’t, the demand for their service and their currency decreases. From the babysitter’s perspective, if other people don’t demand their currency they won’t be able to do trades and acquire other people’s babysitting dollars, therefore they can’t go out and have other people babysit their kids.
Babysitters are also incentivized to set a burn rate for their own currency that is high enough to discourage their holders from hoarding it, because they don’t want the amount of babysitting hours they owe others to accumulate over time, and become an ever increasing ‘debt’ that others could call upon at any time.
If only MyCurrency was available for this co-op in the 1960s, their currency would have not receded and it might still be gaining more members and very much active.