Blockchain-based local currencies the next step in urbanisation
Local currencies built on the blockchain may be the next logical step for millennials as urbanisation drives economic growth and the desire for personal connections becomes more important. By 2030, around 5bn people will live in urban areas, and the impulse to connect socially will likely lead to the rise in local currencies. Examples include the Brixton Pound and the Tel Aviv Pishpesh. Blockchain transactions provide the security to back local currencies, whilst also offering accessibility and instant economic data that can be used to help local communities.
But there's another reason to expect a rise in local currencies, one that's more in line with the social and cultural norms which characterise the coming of age of the millennial generation: ironically, the denser living that comes with urbanisation does not usually engender community. As cities grow and we live in closer proximity, we feel less connected to each another. That's one reason that city living is linked to increased rates of depression.

But millennials famously need to feel connected, to feel a sense of community and belonging. Just look at the booming phenomenon of shared living - not just spaces such as WeLive and Common, but also the tendency of millennials to choose to live with room-mates rather than on their own. Yes, part of this is economic, but it also has to do with millennials' well-documented desire to reclaim a sense of the "social" that social media alone has failed to provide.

That is exactly what local currencies are doing - building urban communities from the wallet up. Local currencies create this sense of community that millennials crave by giving city residents the chance to support local merchants and vice versa. Rather than seeing hard-earned cash go into invisible pockets, it stays within the locality of the spender. When money is kept within the confines of the community, it expands opportunities within, adding value to every dollar spent. Consider the American Independent Business Alliance study that found that for every dollar spent at a locally-owned business, 48 per cent stayed in the community as opposed to 14 per cent of every dollar spent at a chain. In other words, we can use money itself in the form of local currencies to help create community in an otherwise alienating and lonely urban landscape, turning the city itself into a driver of economic growth and change while revitalising the way people feel about spending their money.

Take two successful examples: the Brixton Pound, a currency in south London "designed to support Brixton businesses and encourage local trade… for use by independent local shops and traders", and Tel Aviv's Pishpesh, used by 300 local merchants in the city. Again, cash in the service of community.

But such currencies wouldn't have been the least bit valuable unless there existed the technological underpinnings to make them viable. And that brings us to the third timely phenomena enabling this shift in the way we view our money: the blockchain enables local currencies in a way similar to how high-speed internet enables Spotify and YouTube. Transactions occurring via blockchain are highly secure, corruption-resistant, accessible to anyone with a smartphone and offer real-time economic data that can be used to help meet the needs of local economies. Blockchain technology affords citizens a way to support local businesses, drive economic growth and increase job opportunities by developing and using a local currency.

In short, the confluence of growing urbanisation, the rise of the millennial generation and emerging blockchain technology is what makes the timing for local currencies so ripe. This can lead to a new way of thinking about money - one based not on scarcity and competition, but rather on co-operation.

Imagine you were offered a million pounds, but it came in a box that can never be opened. Would you want it? The answer is no, because money itself isn't valuable, it's what you can do with it that gives it worth. That's exactly what millennials are beginning to do with localised currencies - make money more meaningful.