The Perfect Traders’ Currency

In this post I give my theses for a perfect [traders’] currency.

It’s a work in progress but enjoy, nonetheless.

In my first post in the Barter Series, I spelled out my belief that Barter businesses will need to adjust to accept multiple currencies.

Separating the currency from the marketing and brokering sides of a trade exchange* will futureproof an exchange when the use of multiple currencies becomes the norm, rather than the exception.

This then raises the question, “So what is the perfect currency?”

One can’t answer that question until one understands what the various starting points are . . . here are mine:

The theses

1. Understanding the true nature of money is the second most important issue in life, secondly only to the spiritual.
2. True money is best described as simply, “a record of a half completed transaction”, and can therefore never be a commodity.
3. True money is always created and valued by traders at the point of trade, under the terms agreed by the two traders at their point of trade.
4. All Governments are complicit with and subservient to the agenda of the privately owned [for-profit] International Banking Cartel.
5. The charging of Interest [usury] is ungodly, immoral, compounds, consolidates wealth & power and eventually enslaves.
6. Zero-cost money is a mirage [a fallacy/pipedream] because the costs to achieve zero-cost money ends with a net loss.
7. Mutual Credit systems:
   1. Are the ‘natural’ way of the world,
   2. Are fiscally ‘inherently stable’ by design,
   3. Are infinitely scaleable,
   4. Are fully sustainable, and
   5. Comply with all the primary monotheistic religious guidelines.
8. Human nature is such that rules are made to be broken; pressure to game any system does and will always exist.
9. Credit decisions are best made:
   1. By the people extending the credit,
   2. Who are affected by the decisions,
   3. Who are closest to the critical information, and
   4. In the light of sufficient factual information.
10. Credit-lines issued without repayment commitments encourage:
    1. Greed,
    2. Irresponsibility, and
    3. Indebtedness.
11. Commissions on sale of between 3% – 5% are widely accepted in the business world.
12. Defaults through death and adversity [excluding unusually large events] average 2% of trade volume in real-world trading scenarios.
13. The backing of any currency is ultimately always boiled down to ‘trust’ in people.
14. Anonymity encourages deception.
15. It is human nature for individuals to want to protect their reputation.
16. The ‘thinnest’ systems:
    1. Are the most appreciated,
    2. Generate the greatest benefit,
    3. Have the greatest trust, and
    4. [Outside of any active promotion] will naturally become ubiquitous.
17. Self-interest is the strongest human motivator.
18. Increased ownership in any currency (or system) increases respect for that currency/system.
19. Confidentiality issues surrounding a currency are not binary decisions but are conditional.

Derivations from these theses

Given the above theses, the perfect “traders’ currency” in my eyes will:

1. Be an international floating currency – unpegged from internationally manipulated financial systems – and thus independent from booms/busts/recessions/depressions.
2. Be based on Mutual Credit – free money; interest free credit.
3. Use modern technologies – Internet/Mobile technologies are ubiquitous and efficient.
4. Distribute decision-making to the traders – credit management by the people for the people.
5. Require contiguous lines of trust – thus requiring personal introduction and providing accountability.
6. Be owned by the commons – this is my philosophical ideal.
7. Be an Open Source technological solution – this is my philosophical ideal.
8. Reward the participants who create value – commissions on sale paid to those who introduce/sell the currency.
9. Scale that passive income to the maximum – commissions to multiple levels of introduction.
10. Handle transparency in a conditional manner – some information will be available to all people at all times but certain information will only be available to certain people at certain times.

In future posts I will expand on some of these concepts and address aspects of Club Credits, the practical solution I’ve developed, one that I’ve previously introduced in the concept, Smarter than Barter ~ Better than a Bank and in more conceptual/intellectual detail The Race to Zero.

* Lee Redinger has separated these functions still further in his advice to members of the Think Barter LinkedIn Group. He suggests that the three functions of Advertising, Trade Brokering and Accounting should be separated:

A change that is overdue in the industry is the separation of service. Split out the three core functions of the trade exchange – banking, advertising, and brokering. Make each them stand on their own hind legs and charge separately for services used.

Lee is probably right, however I’m currently focussing on the currency angle as the most important to be separated.