Owner reputation is a primary basis of lender-oriented currency design. The benefactor evaluates how likely the recipient is to return or compensate a trade. For example, the recipient might own cash and thus immediately return a favor by giving the seller reusable currency tokens. The currency design is, therefore, aimed at facilitating direct reciprocity.

Member reputation is a primary basis of community-oriented currency design. The benefactor evaluates if a recipient benefits a common cause or resource and how likely that member’s contribution to the community will continue. Even though indirect rather than direct reciprocity is facilitated, there is a strong expectation of a closed-loop circulation of currency within the community. 

Trustee reputation is a primary basis of brand-oriented currency design. The benefactor evaluates if a potential recipient belongs to an entity with a worthwhile specialization and acceptable market performance. The emphasis is on indirect reciprocity without any expectation of closed-loop currency circulation within a predetermined boundary.

To illustrate the concept of trusteeship, imagine a hospital whose mission is to provide healthcare. If the hospital has a reputation for effectively allocating its limited resources to serve patients, then a benefactor would have a good reason to support and accept that hospital’s currency brand. The benefactor should not be concerned whether or not it would eventually benefit directly from using the hospital’s services. Rather, the benefactor should focus on establishing its own reputation as a trustee by effectively fulfilling its specialization.

The preceding comparison does not imply that reputation currencies may emphasize only one conceptual basis. Different reputation bases leads to different approaches to improving market access. On the one hand, it is easy to see that a brand or trusteeship-oriented currency design provides access to the widest market possible since currency use is not limited to direct reciprocity or within community boundaries. On the other hand, it may be argued that a trustee’s reputation offers the least guarantee on redeemability since trusteeship is not as easily qualified or quantified in comparison to ownership or membership.

There are many ways to design a currency index, but the approach advocated in satconomy is to represent and track the diversity of specialized market entities and their activities through the concept of independent currency brands. Each entity issues currency as unused revenue and expense budgets. In a transaction between two entities, the unused expense budget of the payor’s entity decreases by the same amount as the unused revenue budget of the recipient’s entity. Both entities publish and report depersonalized transaction information to promote traceability and auditability.  This approach has the following advantages with regards to the design of a currency index:

Tracking by currency brands leads to diversity in both quantitative and meaningful terms. Each brand represents a specific entity that contributes and takes from the market. In contrast, other approaches emphasize the potential diversity in different currency designs, which would naturally have less diversity than the number of market entities and be of interest only to currency designers and not the general public.

The OCAUP currency life cycle in satconomy aligns closely with a market entity’s typical use of “money”: to budget for organizational goals, to make or receive payments and to evaluate market performance. In contrast, other approaches emphasize other aspects of currency design such as a common means for storing or expressing wealth. Although these design aspects are important, they are not emphasized in satconomy.

A currency index in satconomy represents the existing  diversity of market entities that issue independent currency brands. The accounting systems and interoperability requirements are intended to be as simple as possible. In contrast, other approaches attempt to put a new layer of accounting configurability and/or currency type diversity on top of existing entity diversity.

In all of the currency systems, platforms or frameworks that I have surveyed, I have not observed any that emphasize the utmost importance of currency indexes. In contrast, the research, development and establishment of relevant, sustainable currency indexes is a unifying theme in satconomy. A dynamic, reliable and informative currency index is an essential component and goal in satconomy. A brand index is not simply an option – it is a mandatory feature that promotes public monitoring and self-regulation of market entities that issue currency.

In Ripple, debits represent the obligation of a participant to the neighbor node that it used as a payment intermediary. It doesn’t matter in this analysis whether or not there is an actual manual settlement of ‘debts’. The main point here is that the obligation arises as a result of a market transaction, or what some alternative currency proponents refer to as property transfer.

In LETS, obligation also arise from a market transaction. The difference with Ripple is that the debits are owed towards the whole community, and anyone that belongs to that community may cause a member to accrue debits or cancel it through a market transaction. In contrast, Ripple credit-debit issuance and cancellation are specific to neighboring nodes.

In satconomy, obligations arise even before any market transactions take place and without prior contractual arrangements. Even before an entity’s obligations are quantified as debits, the obligation is already there, qualified as mission statements or organizational goals. Debits are declared as soon as an entity issues equivalent credits for member contributions towards its goals.  Again, no market transaction precipitated the recording of new credits and debits, or at least it would be absurd to call the process of product creation as a case of ‘property transfer’, when technically the credit issuer and recipient within the entity end up becoming co-trustees of the entity’s product inventory and debit account. 

In satconomy, debits represent the quantification of an entity’s obligation to the market as a whole. Not because other market participants have necessarily made any demands on the currency issuing entity, but simply because that entity has made it an obligation to specialize in delivering certain goods or services to the market. There’s nothing new in this concept of ‘self-determined duty’, entrepreneurs are always trying to research and develop new product offerings all the time without explicit prompting from the market.

But someone might argue, how could a currency issuing entity cancel its self-accrued debits when it owes no one in particular? By selling its products to other entities that it perceives as engaging in sustainable market activities. All that happens in a satconomic market transaction is the cancellation of equivalent credits and debits (quantified obligations and contributions). No new ledger entries are recorded out of expectations for future reciprocity in a market transaction.

The implementation strategy in mutual credit currencies might be likened to building boundaries. Members are allowed inside the boundary and could trade with one another, while non-members are invited to join this mutually beneficial community relationship where the currency stays within common boundaries. Satconomy is not concerned with erecting community boundaries where the members trade with one another. Rather, satconomy promotes the creation of entity boundaries where members work with one another to provide products to the market in general. Entity-issued credits and products, rather than being restricted from flowing outside each entity’s ‘boundaries’, are meant to flow between entities in open market transactions.

The implementation strategy in Ripple might be likened to building bridges between nodes or islands of market participants. The unique payment routing feature in Ripple is intentionally restrictive in that only the directly connected participants are allowed to cross the bridge between them. If participant A does not have a direct bridge to the island of participant C, but B has direct but separate bridges to both A and C, then Ripple enables a transaction by requiring an IOU to ‘cross’ from A to B and a separate IOU to ‘cross’ from B to C. In this sense, B acts as an indirect relay person that converts the payment between A and C. Participant A’s payment does not reach C directly. In satconomy, there is always a direct payment between market transactors, causing the immediate cancellation of credits and debits between the involved entities. In contrast to how Ripple offers a manual settlement option for the cancellation of credit-debits pairs after a market transaction, satconomy requires an automatic cancellation-settlement of credit-debit pairs at the completion of the transaction itself.

The implementation strategy in satconomy might be likened to building towers, through which market participants could assess the value that each entity brings to the market. If an entity is deemed to provide benefit to the market, then the currency brand that it issues would be perceived as acceptable in a transaction. If the news or perspective from the ‘tower’ is not favorable towards a certain entity, then its currency brand would also lose favor in the market. In an effective implementation of satconomy, this metaphorical ‘tower’ facilitates access to highly transparent, up-to-date and verifiable information about market activities, entity account reports and analyst opinions.

The member nodes hope to gain access to the market through the entity’s brand nodes. The internal brand node grants credits, which are essentially usable currency, to the individual member nodes, resulting in numerous entity accounts. The brand account limits the ‘flow’ of credits into and out of the entity though the following mechanism:

(1) The internal node assigns a credit limit to the external node, which limits the amount of ‘currency’ that could ‘flow’ out of the entity. This is functionally equivalent to an entity’s self-determined spendable credit limit or a currency outflow limit.

(2) The external node assigns a credit limit to the internal node, which limits the amount of ‘currency’ that could flow into the entity. This is functionally equivalent to an entity’s self-determined debit cancellation limit, i.e., as soon as all the entity’s debits have been cancelled thorugh the receipt of credits from the market, currency inflow is prevented.

The next features are modifications to the standard Ripple protocol. 

(3) In satconomy, each unit increase to the currency outflow limit must result in a corresponding unit increase in the inflow limit. This would be the Ripple equivalent of the intra-entity currency issuance of credit-debit pairs. It is important to emphasize that the preassigned values to outflow and inflow limits dynamically change with currency issuance and use.

 (4) In satconomy, currency outflow results in the dynamic decrease of the pre-assigned outflow limit. This dynamic decrease is NOT equivalent to the calculated relative value of used credits versus a nonchanging pre-assigned credit limit, but rather, the actual preassigned limit changes. Similarly, currency inflow results in the dynamic decrease of the pre-assigned inflow limit. 

 (5) In satconomy, credit-debit cancellation between entities would be functionally equivalent to a Ripple autosettlement feature, if such a feature were to exist. Ripple offers a manual settlement option for the cancellation of the debt between creditor and debtors, which results in the restoration of the usable credit limit to the preassigned value. In contrast, there is no manual settlement option in satconomy:  An autosettlement feature is enforced wherein an entity-declared debt to the market is cancelled by the credits of consenting market participants. An entity’s debt is reduced through the provision of its product to market participants who redeem their credits against the market in general (and not simply against the credit issuer.) A satconomic market transaction does not result in a new record of redeemable credits, but results in its opposite – the destruction of redeemable credits together with an equivalent amount of pre-existing debits.

(6) Since an autosettlement feature does not result in records of indebtedness, the inter-entity payment routing feature in Ripple becomes a nonbinding trust routing feature in satconomy. If a path of trust could be found to link unacquainted market participants, then the seller might choose to directly accept the buyer’s offer of credits (to be used for cancelling the seller’s debits). If no such path is found, the seller might choose to reject the buyer’s credits, or might still choose to accept the buyer’s credits anyway. There is no need for payment intermediaries in satconomy, but there will be a major need for trustworthy intermediaries, such as market analysts and advocacy groups, in verifying an entity’s currency brand qualities. A trust path might be indirect, but payments are always directly made between the market transactors in satconomy.

Suppose that instead of individual trading accounts, members decided to organize into unit entities within a trading community or market. The unit entities would be known within the community by its brand. Each entity does not need to trade with other entities or borrow from others in order to issue currency. Instead, if an entity member has made a perceived contribution to the entity’s goals, then that member is awarded credits and the entity accrues the corresponding amount of debits. The amount of currency or credit-debit pairs that an entity could issue is self-determined within the entity – for example, by a supervisor, manager and other positions of authority that monitors the level of member contribution to its goals.

The member who earns the credits can then spend it on products in the market, or more rarely, redeem it for the products of the entity if those are not already provided as benefits to the members. Currency is intended primarily to be used outside the issuing entity. When the entity is able to benefit someone with its products, goods and services, its debits are cancelled together with an equal amount of the beneficiary’s credits.

In other words, satconomy may be implemented as a mutual-credit community where the members organize into unit entities, each with a declared market specialization. Currency is issued within an entity as credit-debit pairs, which translates to an entity account that has both credit and debit balances as opposed to a single net balance. Only the entity by itself could increase its balance amounts, and those balances have to increase by the same amount at the time of currency issuance. Finally, credits may only be used to cancel debits that are already existing. 

(1) Instead of quantitatively symbolizing the status of an owner as a shareholder or a lender as a bond holder, credits in satconomy are awarded based on the recipient’s perceived contribution to the entity’s goal or mission. 

(2) An entity may issue any amount of its currency according to its self-determined limits, as long as the currency is issued as credit-debit pairs. That is, for each self-determined unit increase in the entity’s credits, its absolute debit quantity must also increase by an equal amount.

(3) The credits are intended, but not guaranteed, to be redeemable into products of the market in general. Redeemability is not specifically limited to the products of the issuer.

(4) When the credits are redeemed for products in the market, the credits are cancelled together with an equal quantity of the product provider’s debits. There is no reusable currency transfer between entities. Each entity does not need to acquire currency from other entities since an enity could independently issue its own brand of currency.

For added emphasis, it is worth repeating that there are no guarantees that credits could be redeemed for products in the market, or that the debits of the entity would be cancelled eventually as a symbol of fulfilling its self-determined obligation to the market.