Satconomy

I have been working mostly on the implementation side, so I have been unable to spend time posting here. The good news is that I am getting closer to a usable demonstration system, hopefully to be released in December after I revise the protocols to reflect the extensive architectural changes that I have made. For system development and implementation updates, please visit http://tyaga.org/. What follows below are mostly personal thoughts.

Within this year, I have visited the user demos of cyclos, ripplepay and three alpha-sites of open money systems. I have also read the MRS server-client specification, IRTA, some of the unmoney convergence session notes, as well as the more accounting-oriented approach exemplified in ledgerism.net (now defunct). All of these sites are quite inspiring, and I’ll continue to follow the updates on those projects. I have general observations that I’d like to share.

Why do most ledger-based currency systems focus on monetizing community and personal relationships? I still don’t quite get that angle, and besides IRTA, only ledgerism.net had focused on serving business-type needs and/or settlements. When I think of money or currency, I think of organized work and of regularly earning it, not so much the use of it which would just come naturally in a market, community or personal setting.

Why do most systems focus on tracking account net balance, when ‘cash’ flow budgets seems more appropriate for triggering and regulating market activity? Organized work in business, government and nonprofits are driven mostly by serving specific needs, and is typically regulated against revenue targets and controlling costs. It just seems that a particpant or organization that focuses on breaking even (zero net balance) will not have much incentive to innovate and proactively produce value, to take responsible risks.

Why do developers focus on system configurability instead of simplifying the accounting bases of the system? When reading related discussions on the principle of requisite variety, I find it surprising that the focus is mostly on giving the user a myriad of options in configuring an account, such as the use of obscure units, floating exchange rates and leakage settings, which makes the system more intimidating and the accounting more complicated than necessary for a typical user. I realize most users would forgo such options, but it might make the simple users wonder if they are somehow being put at a disadvantage relative to a more configured account. 

To me, requisite variety should come from having a diversity of specialized organizations that issue its own currency and which could either be rejected or accepted by market participants, similar to companies issuing its own shareholder stocks or bonds and people either buying or avoiding those shares.

Instead of being forced to close due to the district’s budgetary woes, the teachers and staff at East Side School (K-12) decided to maintain normal operations by issuing its own currency brand. The shortfall in the school’s salary budget allocation will be made up by issuing credits to teachers, who could then redeem those credits for the products of other market entities. Redeemability is not guaranteed, but the teachers hope to convince market sellers that the school’s currency brand represent valuable and sustainable economic activity. When a seller agrees to accept credits from a member of the East Side School, those credits are then used to cancel the seller’s self-declared ‘debt’ to the market.

For its part, the school district would then accrue equivalent debits everytime it issues credits as wages to its employees. The strategy that the East Side School developed is to start accepting tuition in the form of credits that are issued by other independent currency brands. Just like any specialized entity in this market framework, the school would then use those credits to cancel its self-declared ‘debt’ to the market.

As an independent currency issuer, the East Side School must maintain accurate, timely and transparent accounting records so that any informed market participant could readily evaluate whether or not to support the school’s work by accepting the credits of its members. The school is only one of the growing number of self-declared independent currency brands, propelled by members of the public who wants to be selective on what economic acitvities their products and specialization benefit.

Elsewhere, the elite minority of Westland have started hoarding food and other essential supplies, driven by fear that the public would stop accepting their wealth in the form of generic currency brands.