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Table of contents
A and B are two physical or moral persons. A is issuer and user. B is user. WE is the name of the currency.
Let's now take a look on how this currency is issued and redeemed.
CASE 1: wealth has already been created and acknowledged in the past
Both A and B agree that wealth has been created, and B is willing to acknowledge A in the form of (tradable) WE currency.
- B is invoiced X WEs by A
- Now B, as user, needs to earn this X amount of WEs (unless he/she already has them on the account).
- A as issuer creates X WEs on his account.
- A as user injects these WEs in the community by spending them for whatever stuff or services he/she needs
- Players (users) will transfer this amount of currency from account to account by selling/buying stuff and services they need
- In the end of the loop the X WEs come back to A account. Cycle is complete.
CASE 2 : wealth is to be created in the future
- A has a specific need that requires spending Y WEs.
- As issuer, A issues Y WEs and put them in its/his/her account
- A spends Y WEs in the community
- This amount of currency flows from player accounts to accounts when they sell/buy stuff and services they need
- A makes tradable wealth offers (goods or services) that are potentially acknowledgeable to the level of Y WEs.
- If A offers are honored by community players then the Y WEs can be redeemed. Cycle is complete.
Case 1 seems to be the easiest and safest one because it doesn't put risk assessment onto A in regards to its wealth production capacities in the future. There is a risk assessment though: the capacity of OTHERS to produce wealth within the community ecosystem. It's an assessment on others' individual capacity, and the community as a system (hence the systemic quality of currency set flowing in it).
Case 2 seems more like a bet on the future because currency is issued BEFORE wealth has been produced by A. Wealth production is on the shoulders of A, a compact and trained player (as individual or organization). This wealth production capacity is the raison d'être of the currency itself.
The currency will build trust if A proves to be a skilled, reliable player from which currency issuance is acknowledged as wealth by the community.
In both cases 1 and 2, let's remember that both the currency issuer and the community are totally intertwined. A will show good wealth production capacity if the community functions well. Each exchange of currency between members inside the community builds more nutriment for A and the whole community.
Growth
An additional assessment for the future, in case 1, could also be considered: the issuance an additional percentage of WEs each time X WEs are invoiced. It could be for instance +15%, which would somehow represent a projection of 15% capacity growth for A to generate tradable wealth. It adds into in the equation the fact that new players are likely to join the community and its currency, so the monetary mass needs to grow. It also expresses what Art Brock saw as what is not yet acknowledgeable wealth, but etherial wealth that hasn't yet manifested physically and not been perceived by human consciousness. It ias in a latent state in the ether.
Further down the road we might also explore a possible relationship between this growth assessment and the number of new comers in the currency. It is community and context related, extremely multifactorial, linked to quantity AND quality. Still, proportions or even some rules between extra percentage of currency issuance and community growth might emerge.
Last but not least, we can consider that the growth assessment (15% in our initial scenario) could come from a community process, a set of currency rules, or an agreement between players A & B at each transaction.
Another possible path: a market prediction currency.
Questions
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Why not a mutual credit rather than an issued currency? A, as a power wealth issuer, is likely to quickly have a much wider credit line than most other players in the community. It will become a core issuer and redeemer in the community.
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If we go for mutual credit all along the line, how does the risks assessment about the future work?
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In case 2, what would the limit of currency issuance be, so that it is considered as reasonable investment/assessment directed towards the future?
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Although the issuance of this type of currency can be regulated by community / distributed mechanisms, it remains as a scarce currency. At this point we don't know how the supply will really reflect and serve the whole community.
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We don't know how this issued currency can play with mutual credit. Why would people prefer to transact with WE when they have mutual credit at their disposal? The only reason why they would accept WEs is when enough people are willing to spend them with the source A (redeeming them). So the gravity forces for WEs can come from these people. But is it enough? Will WE circuits build and be sustainable inside an ecosystem of mutual credit?
New notions
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Currency set: a set of currencies working systemically together. Examples:
- a reputation currency influencing a mutual credit line;
- an acknowledgment currency (for instance TGB --True, Good, Beautiful) influencing a production capacity of a company
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Ethereal wealth: wealth that relies in the ether (or the kosmos) that hasn't taken any embodied form, or a form that human consciousness is aware of.
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Integral wealth: all spectrum of wealth – tradable, measurable, acknowledgeable, ethereal
Thoughts on the fly, to process
Currency is issued from a unique centralized source. But the currency issuance process is not centralized: it is determined by community itself, because other players are asking A to produce wealth, or because A needs wealth from other players. Although this later case may still look centralized, A can only ask for wealth that is distributed somewhere in the community. So it seems that the eternal opposition between centralized versus distributed models is not relevant here.
Reverting the banking system. In the current banking system the bank issues credit money for A to be able to build wealth production capacity. Then A paies back with interest. In our present case wealth producer and currency issuer are one same player, like in mutual credit.
The main different with conventional mutual credit is that only one player is issuing/redeeming currency.
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