Bunz cancels itself

ISO: a coup

So Bunz got cancelled yesterday, and in an implosion that was both ironic and poetic, Bunz got cancelled by Bunz. Started as a Facebook group for cashless bartering in 2012, Bunz had grown into a sprawling number of Facebook groups, some for trading different goods and services such as Bunz Wedding Zone or Bunz Plant Zone, and others less well defined, like Bunz Helping Zone. The basic tenet is simple: you trade something you don’t want anymore for something you do want and you don’t use cash. This is a beautiful anti-capitalist concept, except that in reality if I want to get rid of a couch and someone wants it but all they have is half a pizza to trade, this is going to be a problem.

In fact failure of bartering is why complex societies such as ours have currency. Anyway, not gonna get into the economics of it all.

So what happened

In 2016 some original founders made an app for trading, in 2018 they got VC money and decided to take Bunz forward into other realms. They tried to figure out a business model. They introduced BTZ which is digital currency that can be used for trades and redeemed at retailers (it wasn’t crypto even though they claimed it was). With the undisclosed sum of VC money they hired some people, got some retailers on board where people could redeem BTZ and hoped to ride into the sunset by selling user data and getting $10/month membership fees from businesses.

Ok but this obviously wasn’t going to work from the beginning because if I get BTZ from engaging in the app (I don’t put any money IN) and BTZ translates to real money (around 100 BTZ = $10) Bunz has to pay out to a business when I redeem my BTZ. So how does Bunz stay solvent or make a profit when it’s essentially printing money? Well short answer is that they don’t. VC money ran out. They couldn’t make the business model work.

On September 11, Bunz (the app HQ ppl) fired 15 workers and shut down the exchange of BTZ in all retailers except restaurants and cafes.

This angered the Bunz community, though it seems that it had an effect only on a small number of people who were saving up for something big (anyone with small amounts can still go to restaurants). In terms of businesses, only effect seems that now they have to be the front line explaining why they can’t take BTZ to angered bunzies.

Bunz Facebook groups have long been operating on their own, apart from HQ and the BTZ experiment, moderated by about 130 volunteer admins. 15 of those admins got together and staged a coup to change the group name to Palz and have released a statement.

The problem with Bunz

Actually before this all happened I had another draft newsletter titled “the problem with bunz” where I wanted to talk about my thoughts on this bartering community, and now that the coup d’etat happened, I figured why not.

The two major problems with Bunz - and this is actually articulated well in the Q&A with the CEO - is that bartering doesn’t really work. And yes, there are really sweet stories of people trading goods and services, mostly small-scale, and people developing genuine friendships and relationships in the community, but for the most part Bunz had devolved into cash proxy trades. Most trades, especially valuable ones, come with an ISO (in search of) gift cards or booze, which all have a very definite monetary value. So essentially Bunz Trading Zone had become “Cash with Extra Steps Zone”

when it comes to the barter economy, you have three issues. One of them is a value disparity issue, one of them is a medium of exchange issue, and the last one is divisibility of goods... The person maybe doesn’t have the thing that you wanted, and the double coincidence of wants aren’t met. That’s why someone goes out and gets a six-pack of beers.

Full disclosure: other than giving things away for free in the group, I have been paid exclusively in cash for every “trade” I have ever done. Sorry not sorry, I actually felt sort of bad getting someone to go out of their way to buy friggin gift cards.

Happy Bunz Groups are all alike; every unhappy Bunz Group is unhappy in its own way

The other issue with Bunz - and I may get cancelled for this but whatever - is that it became a highly dogmatic space full of tone-policing and in-fighting. Regardless of your political views, the atmosphere often got very tense and even downright nasty. Because I am a loser who spends too much time online, I have spent many hours scrolling through vicious fight threads where Bunz members fought it out over identity politics, trigger and content warnings, and other social and political issues. Bannings in the group are common. In fact, Bunz has a constitution, a set of community standards, that is almost 10 pages long, and admins enforce not only trade rules but also these commandments, some more ardently than others.

And because these groups were set up with certain ideological standards, naturally it makes sense that their revolutionary Palz coup was an ideological one. The Palz announcement reads:

Monetizing our communities completely contradicts the barter system that birthed the Bunz lifestyle, as well as the anti-capitalist practices that have shaped our collective communities.

Today, we would like to reclaim our communities. We would like to bring Bunz back to what it once was. We want our groups to remember why they exist. We do not want to profit. We do not want your app sign-ups. We do not want you to buy into an online currency that will let you down.

Strong words. And sure, that’s fair. Except that when Bunz HQ got its series A funding from the $2.4 trillion ethically murky swamp of Fidelity Investments, the capitalist machine was well underway. Why did these revolutionaries not sever ties then? Could it be because they too were excited by the possibility of growth? I don’t know.

Not all Palz

The response from the Bunz (now Palz) community has been positive. There hasn’t been much discussion or in-depth conversation, but identical Admin announcements in groups about name change and philosophy have been met with almost uniform praise in the form of “bumps” and expressions of gratitude.

The future of Bunz and of Palz is uncertain. Not all of the groups have changed over to the Palz Regime. Some members have pointed out the irony of the new ruling admins criticizing Bunz HQ for sudden changes with no consultation, while at the same time springing on changes on Bunz (now Palz) group members with no consultation of their own.

In addition to this, some admins were not on board. After all this decision was made by 15 out of over 130 admins. I imagine there is some internal drama going on about how to best move forward.

Whatever happens to Bunz HQ or Palz, one thing is for certain: the scale of the group and the complexities of modern economics make true barter really difficult. At the same time, lots of people in these groups find a sense of belonging and real friendship and maybe that’s worth more than all the faux-cryptocurrencies in the world :)

Anyway, ISO good vibes.