The current monetary system is clearly in trouble, so alternatives such as gold or bitcoin are gaining attention. Although these commodity monies are good stores-of-value and units-of-exchange, they lag the fiat infrastructure a a medium-of-exchange (gold because of the expense of shipping, and bitcoin because of limited scalability)
Problems to solve
- Interest – there is an opinion that compounding interesting on money creation is sapping the vitality of the economy, while concentrating ownership of assets through bankruptcy
- Centralisation – centralisation provides the power to sanction, and cut targets off from banking
Interest
This site proposes a bookkeeping system (medium-of-exchange) to supplement bitcoin
A currency, whether fiat or bitcoin, needs to be acquired first before it can be used for economic activities. One has to loan fiat, or purchase bitcoin before being able to make a payment. This is essentially bartering one’s product or service for a more popular (widely accepted) commodity in order to make a purchase, in order to overcome the coincidence of wants problem
The proposed bookkeeping is based on mutual credit that makes bookkeeping transparent to economic activity. If two people agree on a transaction, it takes place frictionlessly without concern over having money first
An analogy is the use of a credit card where the money is created at the moment the payment takes place. However, with a credit card the money created is debt at compounding interest, while with mutual credit it is interest-free credit (simply a bookkeeping entry).
The difference is that banks charge a transaction fee plus compounding interest on a negative balance, where mutual credit simply charges a fee for the service, with no interest on credit