How Money Systems Work Publications Payment Methods Glossary of Terms The Money Conference


 

Currency Systems
Backed Currencies Transaction NetIthaca HOURS
LETSNational Currencies
ROCSTime Dollars
Complementary Currencies

How Money Systems Work

What is Money? Design Characteristics of Currency Systems Social Implications of Currency System FeaturesInteract

What is Money?

Money is an agreement

The agreement may be voluntary or coerced, conscious or unconscious, and may fluctuate with time or remain fixed.

within a community

All kinds of communities--large and small; local, national, international, or virtual; cooperative or competitive--may create such an agreement.

to use something as a
medium of exchange.

The money itself can be issued en masse by a central authority or created ad hoc by two consenting parties in a mutual credit system; it may store value or merely mark transactions; it may be backed or valued with something tangible or merely by the issuing authority; and it may take any shape--coins and bills, some chalk marks on a blackboard, or bits of data inside a computer.

 

What is Money? Design Characteristics of Currency Systems Social Implications of Currency System FeaturesInteract

Design Characteristics of Representative Currency Systems

A growing number of currency and payment systems, each oriented toward different social and material incentives, are available for use today. The most appropriate one for any given transaction will depend on the needs and objectives of those taking part in the exchange.

We present here an overview of the design characteristics of some representative currency systems, all of which are explained in further detail in our glossary of important terms and concepts and under discussion in The Money Conference.

National Currencies Ithaca HOURS Time Dollars LETSystems WIR ROCS
Unit $US, DM, Fr, etc., mediated through $US 1 HOUR = $10 U.S.
(bills)
hour of service

Green $ = $ $ (SF) Hour
How
Issued
Central Bank and constituent banks Center Mutual Credit Mutual Credit Center + Mutual Credit Mutual Credit
Details Debt-based fiat money, bearing interest; thus promoting competition. Backed fiat currency whose supply must be managed. Usually fixed exchange rate:
your hour = my hour
Most prevalent local system Uses national currency (SF) for unit of account; WIR for settlements.
  • Negotiated exchange rate
  • Demurrage charge on both + and - balances
  • Main Benefit Legal Tender Ease of Use:
    Bills
    Simplest System Ease of Use: Single pricing for national and green currency Oldest and largest local system: 80,000 members; $2 billion/year) Synthesis of most robust features of all other local systems

     

    What is Money? Design Characteristics of Currency Systems Social Implications of Currency System FeaturesInteract

    Social Implications of Currency System Features


    graph: columns=  scarce vs. sufficient x  rows= backed vs. fiat currencies

     

    What is Money? Design Characteristics of Currency Systems Social Implications of Currency System FeaturesInteract

    Join us in The Money Conference, where we hope to compare insights on all kinds of money systems--old, new, high- and low-tech, real or theoretical--and to synthesize from our shared experience wiser and more efficient models of exchange media.
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    How Money Systems Work Publications Payment Methods Glossary of Terms The Money Conference


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