Traceable and Evaluated Currencies
Three-Part Problem with Traditional Currency Systems
- Limited Traceability - products are sold to anyone with money, regardless of how it was earned
- Hard to Refuse - even if you could trace money to its source, not accepting a buyer's money has a direct negative impact to a market entity's survival
- Hard to Evaluate - even if you could trace and refuse money, how should money, and what it represents, be evaluated?
Why Is That a Problem?
- Illegitimate activities pay off - market resources could have been diverted towards supporting more productive activities
- Inertia / Feeling of Inevitability - discourages self-determination of what to support
- Market participants have limited resources to arrive at informed economic decisions - blurs cause and effect
- Currency Brands: a market entity could issue and administer its own currency
- Currency-as-Budgets: use a prescribed accounting lifecycle to simplify currency tracking
- Currency Evaluation: use trusted currency brand raters to decide whether to accept or reject buyer's currency
Currency Brands: Trace Currency to Whom or What?
- Make currency traceable to a market entity
- No guarantee that an entity's currency brand would be accepted by others
- An entity should promote its currency brand to be accepted by others
Currency Brands: Traceability to Market Entities
- An entity would self-regulate against its currency brand reputation - focus on entity sustainability instead of mere survival
- Not a Crazy Idea - publicly owned companies already issue revenue goals and self-regulate against the market valuation of its stock price
- Ideally, each entity would manage its currency brand in a highly transparent manner - cultivate market's trust in its brand
Currency Brands: Traceability to Brand Reputation
- A reputable currency brand translates to more diverse product choices for an entity's members
- Unpopular currency brands are more likely to be rejected by sellers, leading to dwindling membership in unpopular entities
- How would it work? How to promote brand independence, self-regulation, market-driven evaluation?
Currency-as-Budgets: Trace How?
- Currency is made traceable through a budget-oriented accounting lifecycle
- Currency is issued, assigned and used through the crediting of one account and the debiting of another
- Currency does not have commodity or physical backing, non-guaranteed redeemability for market products
Currency-as-Budgets: Independent Ledgers
- Budgets are issued and assigned independently by each entity
- In inter-entity trades, equivalent cancellation of buyer's credits and seller's debits
- Currency, as budgets, are not reusable after being used as payment across entities
Currency-as-Budgets: Lifecycle Diagram
Currency Evaluation: How? What metrics and tools?
- Encourage market sellers to not accept disreputable currency brands
- A market participant would use preferred metrics as calculated by personally trusted brand auditors and raters
- Brand raters would audit, index, and rate currency brands, similar to function of search engines such as Google when ranking web pages
Currency Evaluation: Brand Auditors and Raters
- Collect, analyze and summarize trends - bot search and indexing
- Summarize each entity's currency brand reputation and performance
- Aggregate general inter-entity market trends - potentially millions of currency brands
Currency Evaluation: Example Metrics
- Per Entity:
- Percent Recovery = (inflow/outstanding debits)
- Inflow/Outflow Ratio
- Average Currency Units issued Per Member per Week
- Inflow/Outflow by Region
- Most Popular Specializations
- Median Issued Currency per Member per Week
- NPX: OCAUP compliant accounting/ledger systems
- Flora: A multi-agent simulation test bed for comparing currency systems
- Brando: A rudimentary brand rater
- Traditional currency systems: cannot trace, cannot refuse, cannot evaluate
- Traceability to currency brands
- Effective currency evaluation using bot-gathered information, by brand auditors and raters
- Visit the Prototypes!