[p2p-research] How Open Money Ought to Work

[marc fawzi]

How does this money differ in its basic nature from the existing money?

What are its propositions? (or deductively provable benefits)

How does it work with respect to supply-demand economics? Does it enforce
scarcity by moving the price higher with demand? or does it move money into
increased supply?

There are more questions but I'm not sure I'm asking the right ones until I
fully understand the context.

It does sound like you've put a lot of thought into it. I'm just coming at
it from my own context (the P2P Energy Economy) which addresses the above in
a radical way (which may not be practical as what you're suggesting but it
is radical and new so I guess I'm trying to bridge evolutionary to radical
thinking by trying to understand thel aspects (if any) of what you're
proposing that are a radical departure from the kind of economy and currency
we have now.

Marc


2009/3/25 Ryan Lanham <rlanham1963 at gmail.com>

> I've been thinking a long time about LETSIs and Open Money lately.  I have
> a few thoughts on the execution of a larger scale scheme than those
> typically handled in current LETSI frameworks.  I'll throw them out here and
> welcome any feedback.
>
>
>
> 1.      Those who honor one or more types of local currency are members of
> a LETSI network.  Think of the old credit card honored symbols on retailer
> doors.
>
> 2.      A LETSI network, or more generally, the [exchange network] (in my
> example below, the hypothetical Bay Area Bucks Network) is a membership
> organization.
>
> 3.      Any person or organization making offers (or bids) in the
> [exchange currency] requires [membership] in the exchange network (like
> having an Ebay account).
>
> 4.      Scrip can be used by anyone whether or not they are a member so
> long as it is used at a member organization.  Scrip is essentially local
> legal tender as accepted by a member (e.g. for 50% of any bill or for all
> purchases under $20 US etc.)
>
> 5.      To get currency without being a retail member, members create an
> [ask bid]—like selling something on Ebay--for a good or service (or loan) to
> attain exchange currency.
>
> 6.      When an ask bid is accepted or a [counter offer] is made and
> agreed—like from an Ebay buyer member—a [contract] is recorded at the
> network administrators at a given [exchange price] set in the network
> currency.  The issuing person is the [asker], the one who accepts the ask
> bid or sets a counter-office that is agreed is the [offerer].
>
> 7.      There is also meta-market of local currencies with inter-currency
> pricing linked to other standards of value such as $US and to each other.
> This central exchange point is called the [grand market].
>
> 8.      The [network administrator] is an entity responsible issuing
> currencies following a contract.  It could be a community foundation,
> chamber of commerce, group of market makers, etc.  It manages electronic
> account credit and debits and also trades scrip for electronic account
> debits.
>
> 9.      All contracts require that the offerer complete
> transaction comments within an agreed period based on the goods or services
> specified in the ask bid.
>
> 10.  The network administrator can freeze accounts of those who do not
> issue comments and/or investigate negative comments and resolve them as
> appropriate in the membership provisions.
>
> 11.  The grand market set of exchange prices is set once per 24 hour
> period to simplify administration of the participating networks.  For
> example, the Grand Market would publish that LETSI currency A is worth 0.2
> US dollars or 1 garden fresh tomato, 20 aluminum cans, 1.4 units of LETSI Z
> (etc.)
>
> 12.  Any participant in LETSI A could fulfill a contract be delivery in
> kind quantities of specified items to the network administrator (usually
> US$), but could be pounds of canned goods for a local food pantry, etc.
>
> 13.  As an example, Say someone wanted to issue 1000 Bay Area Bucks (a
> hypothetical network currency) to themselves in exchange for a large good or
> service (an ask bid).
>
> 14.   There would be known ways to use those BAB units publicized and
> supported by the network administrator (the catalogue) and the local network
> would encourage advertising schemes.
>
> 15.  I would put my ask bid (1000 BAB) up for offer to participants in the
> pool (the retailers, etc. would honor the bucks)...for, say 500 lbs of
> concrete ready mix.  I might just as well ask to borrow 1000 BAB in exchange
> for paying 20 US dollars every week for one year based on a standard
> contract noted in the ask, or offer a coupon for 100 hamburgers of a given
> type at my hamburger stand.  The list of asks would look very similar to a
> micro credit site (e.g. Kiva or MyC4) or Ebay sales items, etc.
>
> 16.  The BABs would only be unlocked if (and only if) another member
> accepted by confirmation online that the BABs I wanted for the good or
> service were contractually agreed.
>
> 17.  The member offerer might offer fewer BABs (e.g. 640) for the services
> or goods to the asker--in other words, there can be auctions.
>
> 18.  The asker then either choose to accept or decline an offer.
>
> 19.  Upon agreement, a contract is set (matched).
>
> 20.  The network administrator automatically issues network currency to
> the account of the asking member.
>
> 21.  The asking member who now has a credit to an account can go to a
> central facility to trade e-currency for scrip (essentially an ATM).
>
> 22.  The grand market allows movement of liquid commodities and currencies
> between local exchanges at daily set rates.  E.g. BABs to US$, ounces of
> silver, BABs to other LETSI currencies, etc.  The simplest model would
> be US$ but a range of grand market trades would likely quickly arise.  A
> central foundation would manage the grand market.
>
> 23.  It would be straightforward to add charity or microcredit systems to
> this framework where a special rate of scrip could be moved to a charitable
> account, for example, in exchange for a credit card debit.
>
> 24.  The key supporting systems would include the catalogue of asks, the
> bank accounting system of e-accounts, the scrip tracking system, the grand
> market system, and ancillary tools like charity systems, microfinance
> systems, etc.  However, most things could be handled as a variation on the
> central catalogue system.
>
>
> Ryan Lanham
>
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