Toronto Facebook group turned app Bunz launches digital currency
Emily Bitze, founder Bunz Trading Zone, talks to Marketing Director David Morton (right) in their Toronto office on Thursday, March 3, 2016. THE CANADIAN PRESS/Chris Young
Michael Oliveira, The Canadian Press
Published Monday, April 9, 2018 2:45PM EDT
Last Updated Monday, April 9, 2018 4:31PM EDT
TORONTO -- Bunz, the Canadian online bartering community known for promoting a cash-free economy, is not abandoning its ethos with plans to launch its own cryptocurrency, company CEO Sascha Mojtahedi said Monday in the wake of some user revolt.
Founded in Toronto in 2013 by Emily Bitze, Bunz began as a Facebook group that encouraged users to trade their unwanted goods rather than seeking cash. Because users' wish lists didn't always align neatly, booze, transit tokens and -- somewhat controversially -- gift cards became commonly requested in trades.
On Monday, Bunz announced it was launching BTZ, a digital currency for the community that can also be used at participating retailers. Mojtahedi said BTZ is not yet an actual cryptocurrency but the plan is to eventually convert it into one. New and existing users of the Bunz app will get 1,000 units of BTZ, which the company says has a current value of about three coffees.
"Because it's a bartering community we've had a number of issues around value disparity ... the divisibility of goods and all these problems can be solved by a cryptocurrency," Mojtahedi said.
"I think this just gives our community more flexibilty."
The initial reaction to the announcement on social media leaned negative, with Facebook user Melissa Neill writing "So much for subverting capitalism" and Ray Wilkes posting "RIP Bunz spirit & integrity."
"Develop something to help poor people get around the financial constraints of capitalism. Capitalize the hell out of it. Develop your own currency for it (but don't call it money lol). Stand back and watch something that was once beautiful die a protracted, awkward death," Wilkes added.
Mojtahedi said the launch of BTZ should not be seen as Bunz heading in a new corporate direction, even though the company has secured funding from institutional investors.
"I actually see it as doubling down rather than diverging from the ethos Bunz represents," he said.
Khatereh Vesal, a self-professed "crypto nerd and Bunz nerd," said she has no issues with the use of cryptocurrencies on Bunz, but objected to the fact that the company's announcement claimed BTZ was an actual cryptocurrency.
"It's like they just kind of decided this was a neat idea -- and it might be, as a loyalty points program kind of thing -- but we have to be very careful what we're calling it because it's not technically on a blockchain yet and it's not really even an initial coin offering yet," Vesal said, adding she wished the company had more information for users lined up before making its announcement.
Mojtahedi said Bunz wanted "to create something that people could interact with" and "learn from the data and the information and the (user) behaviours" before converting BTZ into a cryptocurrency. He added that it's not yet determined whether there would be a mining element to the cryptocurrency as is the case with Bitcoin.
"I think we're looking at a number of different solutions around mining that are pretty different than the way the market approaches it currently," Mojtahedi said.
While the local businesses that are now accepting BTZ have essentially set a baseline value for the currency -- one Toronto cafe is charging 300 BTZ for a latte while a bar is asking 600 BTZ for a pint of beer or order of fries -- Mojtahedi said he doesn't want to interfere in setting its value. He also wants to avoid speculation in the currency.
"We're not offering any inference of the foreign exchange value because we don't know, we're really just starting. We've established a value with our shops and we think it's an opportunity to learn from the community themselves rather than trying to peg some value to this currency," he said.
Jean-Paul Lam, an associate professor of economics at the University of Waterloo, has used Bunz as an example when teaching students about concepts around money as a medium of exchange and bartering.
"Any type of barter system creates problems with finding partners and you have to spend a huge amount of time to find the right partner and find an exchange that would be satisfying to both parties. So I can understand why they are trying to introduce that medium of exchange that is standardized," Lam said.
"But at the same time, it completely defeats the purpose of what it was in the first place, which was a cashless society that would exchange goods for goods."