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[Help-gnunet] Ideas of debt tracking system to replace currencies
From: |
Mildred Ki'Lya |
Subject: |
[Help-gnunet] Ideas of debt tracking system to replace currencies |
Date: |
Tue, 18 Sep 2018 20:14:02 +0000 |
Hi,
I had some ideas about a payment system that could help us survive the next big
financial crisis, and I wanted to share it here as I believe it might be of
interest to some. I come from the postulate that we don't necessarily want a
currency to exchange goods in a society. All we need is a debt management
system, and a currency is just one way of implementing it. I also come from the
idea that monetary creation is a critical point for all currencies. It drives
the economy. Too much money generated, and it's over-inflation. Not enough
money and you block the exchanges and the economy. We should always be allowed
to perform an exchange if both parties agrees, without consideration for lack
of money.
Inspiration comes from the book "Debt: The First 5000 Years", see
https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years
The question is how to create a completely decentralized system around these
principles, and I had basic ideas around that. To take the gnunet terminology,
the network would be composed of different egos, and each ego would have debts
to creditors and debtors ("créances" and "dettes" in French). There is not
really any notion of wallet balance there.
When a transaction is made, a debt is recorded in the system and both the
creditor and debtor would record that debt. This makes a potentially cyclic
oriented graph. Think of the debt as an arrow coming from the creditor to the
debtor.
When a debt is recorded, the system would look for cycles in that graph, and
when the debt to be recorded would complete a cycle, all debts in this cycle
would be reduced by the minimum debt in that cycle. Let's take for example the
following graph:
A --[10]--> B --[20]--> C
C is owing 20 units to B, and B is owing 10 units to A
In that graph, if a transaction is made between C and A such as it would
complete the graph, with 15 units as amount, it would lead to:
,--> A --[10]--> B --[20]--> C --.
| |
`--------------[15]--------------'
That graph could be simplified to:
,--> A B --[10]--> C --.
| |
`---------------[5]--------------'
The debt from A to B has been purged because A. It's logical. What happened is
that A provided some goods to B in exchange of a debt, B provided some goods to
C, and C provided back goods to A. A received something in return and B isn't
owing anything to B.
What's nice is that before A and C made their transaction, by querying the
graph, C knows who to ask to purge his own debt (A or B) and A knows who is
owing to him (B and C). If the graph contains with each ego their skills and
the goods they can provide, it's a decentralized market where we share with our
own network. Over time, we will know those people and it won't be strangers.
The system could record metrics such as the amount of purged debts and
non-purged debts. If someone has a great amount of purged debts, it means they
are contributing back to the community and we can safely exchange with them. In
contrast, someone with unpurged debts is someone that is not well inserted in
the economy and that is unbalancing it. In either case, that's not a good
thing, and people should be mindful of that and try to avoid such unbalanced
exchanges.
Then comes anonymity. I believe complete anonymity is problematic on
decentralized systems. Only centralized systems when monetary creation is
controlled by a single entity can afford complete anonymity, because everyone
is trusting that single entity. On decentralized systems, you need to know who
you are exchanging with, and you need to know your community.
That being said, you don't need to know anything that happens on the network,
you only need to know your local network. We can imagine a system hierarchy
where you have full disclosure about who is in your local community, their
identity, but when you exchange with people far away, you only need to know
what is your community relationship with other communities. Then on a more
global scale, you only need to know that the relationship between your country
and the other countries in the world is balanced, and don't care about who
exactly does the transactions.
That were my ideas. Hope it can be of inspiration.
Mildred
- [Help-gnunet] Ideas of debt tracking system to replace currencies,
Mildred Ki'Lya <=