Description of money in the system

A general description of how the economics of the “Open money” system will be built at the initial stage.

To begin with, it should be noted that in the system there will be a general economy of the system with a common OM money and local economies in the system with their own currencies, organized on the basis of local trade. These local currencies can also be called credit money, created between people with direct knowledge of each other’s activities. Thus, in the system, each user will have 2 types of money: their own local credit money (CA) and general money – eco-duals (ED).

Local Economy

The local economy and associated local credit money is organized by a user with high verification and has the right to directly create separate CA money with its own name. Having created a CA, the user becomes a CA registrar and the actual head, administrator of this local economy built on this money. Its task will be to organize real trade turnover on the ground, that is, goods and services should be sold for CA. After the organization of a full-fledged exchange of goods, this position becomes elective among the participants of this local economy. At the beginning of the development of the system, the local economy is organized, for example, in a village or a group of villages, between people who may have some degree of trust due to economic utility for each other. That is, initially, CAs will be used to organize local local economies, then, probably, industry-specific CAs that are not tied to a specific place can be created.

The money of the local economy is credit, as it is initially created from commodity loans that participants give to each other. It looks like a participant in the system lends his goods to another participant or renders him services on credit, indicating their value in the system in local money. Thus, a product or service is sold in local money, after which the seller receives a negative credit balance, and the buyer receives a positive one.

For a single initial assessment of the value of a unit of money, 1KD, the CA registrar agrees with all the general commodity standard of the value of money, such a standard in the system, for example, can be 1 kg of wheat flour at retail, which is equal to 10 KD. But it can be different, depending on the place and the most understandable and popular product, where the OM system is developing.

By selling goods and providing services for CA, users increase their credit balance in the system, which they then use to pay for goods and services of other users. A negative credit balance means that the user has accumulated a lot of debt in the form of goods taken and services rendered to him, and in order to continue taking goods, he must pay off this balance.

To ensure that no one gets too large loans, an initial limit is placed on the negative balance, which is regulated by the head of the system. That is, upon reaching a certain negative balance, the user cannot increase it. But also the users themselves can simply stop lending to it, due to its uselessness for the local economy.

The head of the system, as well as economically active residents, should be interested in ensuring that no one simply uses credit money without providing appropriate services in return. The ML system is voluntary, it does not have the function to oblige someone to work or pay the debt by force. To do this, for example, if there is a fictitious crediting of loans without a real transaction, i.e. the actual provision of services, the head of the local economy may cancel certain transfer contracts and block the user’s ability to take further loans.

The elected head is responsible for the overall development of the economy so that it works to create real goods that satisfy all local needs. The same local money can also be used for local social needs, for example, for organizing road repairs, which can be paid for by CA. Thus, CA debtors will always have the opportunity to pay off their debt by doing some socially useful work.

The task of the CD is to build a local circulation of goods that can be produced in a given region, but it is more important here to organize and strengthen trust among those people who entered the local economy. All this largely depends on the CA registrar, if he does not cope, then he will be removed through elections or simply do not use his CA, creating his own.

One user can be a member of only one local economy. To exit and move to another, he must reset his CA balance, that is, pay off all debts in this local economy.

General economy

Local money is not quite money yet, but rather the obligations of some users to others, nevertheless, these obligations are the basis for the appearance of money.

Credit money (CA) is not suitable for the organization of a more significant trade, in which many unfamiliar subjects participate. It is impossible to organize a tax policy in a CA and, in general, somehow ensure the overall operation of the system, since the products of the local economy are mostly valuable only in the given area where this economy exists.

Having provided itself with everything that is only possible to produce and buy for local money, the local economy is not able to organize trade both with the external market and between local economies. For this trade, some common equivalent of value is needed, which is the main money in the Ecoduals (ED) system.

They appear on the basis of the exchange of CD for ED. In addition to the heads of local economies, the system has an administrator of the general economy of the OM system, who has the right to issue ED. He also exchanges these general EDs for local CAs at the rate determined by him and the heads of local economies of the CAs. The exchange rate of ED at the initial stage will be equal to one kilogram of wheat flour of the 1st grade purchased at retail, and the rates of local currencies of the CD will be determined relative to this, since they may actually differ.

In order for a participant in the local economy to receive ED, the head of the local economy buys ED for his local CA from the administrator of the OM system. Thus, a certain amount of ED and a debt to the ML system appear on the account of the head, since he borrows the sold CAs from other participants in the local economy. Other users, in turn, can buy ED from the head of the system using their credit balance. Trade between local economies takes place in ED, which are accepted by all participants in the system as the main means of payment.

In order to fairly estimate the value of the CA, the system administrator analyzes the state of the local economy, judging by the open contracts in the system, which reflect the general nature of the movement of funds. In addition, secret purchases can be made for local CDs, the main purpose of which is to find out the real demand and value of money. Based on this information, sets the rate and amount of ED that can be exchanged for a given local economy.

Any user not participating in a particular local economy, having an ED, will be able to buy goods from any other user of the system. The ED itself can be purchased by selling a real product to a user of the system who has an ED.