Kilowatt Cards: Fixed-value paper

Submitted by rhahl on November 7, 2008 - 22:11.

Robert W. Hahl, J.D., Ph.D.
Chairman
Kilowatt-Hour Card Corp.

The Team

Whose name (s) should be listed as winner(s) if your entry is selected?:

Robert W. Hahl, J.D., Ph.D.

Application Questions

Summarize your proposal in 50 words or less:

Kilowatt Cards are gift cards that can be redeemed to pay for 10 kilowatt-hours anywhere in the world. Electric utilities don't accept them - we do - at www.kilowattcards.com, and then send payments directly to the utilities at the rate they normally charge residential customers for the same amount of electricity, including taxes and fees.

Since they can be used to pay for anyone's electricity, kW Cards are useful to barter for other things - and as a store of value - worth a fixed amount of energy regardless of electricity prices.

They have fixed value because 10 kWh is a physical constant one can evaluate intuitively: 10 kWh = 10,000 Watt-hours, enough energy to run a 100 Watt light bulb for 100 hours (exactly) and roughly enough to drive a Toyota Prius 25 miles. Gasoline has 36.6 kWh/gal. 10 kWh costs about $1 - $2.

The purpose of kW Cards is to save human labor in a form that cannot be taken away through currency inflation. If electricity-backed notes are redeemable at face value then one cannot loose wealth to inflation (but one can, for example, save a stable asset that is less expensive than land). Such notes represent collective ownership of the underlying assets but in a liquid form.

System value is protected by linking issuance of new kilowatt-hours to the purchase of commodities such as firewood and grain - things that represent real labor and energy. That way something more than fiat money is involved in their creation. We limit the price paid for electricity to a multiple of the world average, weighted by population, so places with high prices but small populations like rural Alaska cannot threaten the system.

Joe Stiglitz has predicted that all national currencies will eventually fail due to inflation, and be replaced by private currencies from competing companies, backed by gold and their reputations. But electricity offers a unique alternative. It is a standard, pure product (120V, 60 Hz; U.S.)

While any power producer could issue its own electricity-backed notes, the chances for a local system failure due to war or to fuel shortages are high. But a delocalized system like Kilowatt Cards transforms these physical risks into a financial question. And since redemption of a delocalized scrip does not depend on any given electric utility, it can function as a stateless medium of exchange.

Commerce in kilowatt-hours provides a way to compare values. A lawyer billing $200 per hour is compensated at 20,000 hours of light per hour (at 10 cents/kWh; 100 Watt bulb). The electricity standard could reestablish a link between wages and the value created by disparate forms of work.

Pyramid schemes promise returns to all investors. kW Cards pay no interest, and promise no return unless redeemed, then pay only for the face amount of electricity, and only to someone else, the power utility.

Describe the critical need your solution addresses:

Kilowattcards.com began July 2007 when 15,000 kWh were distributed free at the Rainbow Gathering in AK.

We pay electric utilities by electronic checking though Wachovia Bank (free checking to non-profits). Our payment identifies the power company's customer account number. We also send an email explaination. Since I don't see the customer's utility bills, I ask the redeemers to tell me when the payment appears on their bill.

We have made redemption payments to Entergy in Arkansas (60 kWh $3.05), PG&E in NJ (50 kWh $9.05) Dominion Power in VA($2.36) and Long Island, NY ($5.15). No redemption outside U.S. yet. None have failed.

I have had 1.2 million cards printed on glossy newpaper insert paper, which is water resistant.

The prize money will be used to make Kilowatt Cards into a more reliable store of value and to expand distribution. E.g., buying firewood and wood pellets (plus land to store those assets on) would create a business trading firewood for kilowatt-hours, and selling wood for cash to pay for electricity. These stores could sell Kilowatt Cards, redeem them for electricity, and exchange them for local currency.

We need legal counsel regarding gift card sales and on securites laws.

We need alliances in other countries. A philanthropist in South Africa has offed to help.

The serial numbers are printed with a laser printer using number created remotely, so the blank Kilowatt Cards can be transported easily then actived with a printer.

Explain your initiative in more depth and its stage of development. ** See full questions below box:

One reason the poor are always at a political disadvantage is the inherent imbalance of power that arises between people who can create and deploy new money (endlessly) by fiat, and those who must actually earn money though labor.

The world's money supply grows atleast 15% annually. This new money is used to buy political influence and to acquire assets, at essentially no cost. It also causes inflation, which is very troublsome to people on fixed incomes.

The constant pressure of inflation causes almost everyone to save their wealth in assets which display "growth." This is one of the main causes of rampant consumerism, because businesses must convince people to consume their products if the businesses are to grow.

I think that kilowatt-hours can be a stable, alternative asset class that one can save without need for "growth." We could then have a more rational conversation about the rate of resource use the world can provide.

The ability to save real assests backed by commodities created though labor (e.g., firewood) will help redress the imbalance of power created by fiat money. That might create a more equal society.

How does your strategy and approach respond creatively and comprehensively to key issues? **see full question below box:

I am a patent lawyer (J.D. George Washington Univ., 1993) and Ph.D. chemist (Harvard, 1989), and have worked in patent law for 19 years. I conceived the ideas described above and directed the web developers and graphic designers. I am still the only person responsible for running the system, but plan to bring on a trusted associate of mine who will act as a backup in the near future.

Images

Image 1:

Reference 1 (required)

Please enter the name and contact information for a reference who has a thorough knowledge of your solution and is able to vouch for the integrity and credibility of your submission.

In the event your entry is advanced by the jury, your reference may be contacted.

Full Name:

Daniel Sachs

Title:

Mr.

Business (if applicable):

Neifeld. IP Law

Mailing Address:

4813-B Eisenhower Ave

City:

Alexandria

State:

Postal Code:

22304

Country:

United States of America

Daytime Phone Number:

703-415-0012

Relationship to Project:

Daniel Sach is an informal advisor to the project. He is a lawyer and is employed at Neifeld IP Law, PC, the same law firm that I work for. www.neifeld.com dsachs@neifeld.com

Reference 2 (required)

Full Name:

Shahid Siddiqi

Title:

Mr.

Mailing Address:

264 Wyeth Creek Rd.

City:

Poquson

State:

Postal Code:

23662

Country:

United States of America

Daytime Telephone:

757-570-5808

Relationship to Project:

Shahid Siddiqi is an informal advisor to the project and longtime personal friend. He is an aerospace engineer and consultant who generally works on contracts for NASA.