deror | Currency

MENU

Free Flowing Currency

User-created    •    Interest-free    •    Honour-limited    •    Self-cancelling


 

In our ancient past, we traded between ourselves simply by drawing on our public reputation1.

We did favours for each other (credit), and memorised — later, recording on clay tokens — the I Owe You (debt).

Our "currency" was our public Honour.

 

Today, bankers use the magick2 of double-entry bookkeeping to create IOUs out of nothing3.

These digital 'tokens' represent our IOU to the bank.

 

Then — by a clever accounting trick4 — they let us borrow their IOUs as "money".

 

Why don't we all do the same thing, and just lend to ourselves?

DRAW

 

Begin 0 credits, 100% Honour
Create 5,000 credits
Matching 5,000 debits created
Honour rating 95%

SPEND


Spend 3,000 credits
Credit balance less 3,000
Debits still 5,000
Honour rating still 95%

EARN


Receive payment 2,000 credits
Added to debit balance
Debits now 3,000
Honour rating now 97%

BALANCE


Maximise your Honour rating
Transfer 2,000 credits.
Debit balance now 1,000
Honour rating now 99%

Easy Come, Easy Go

You create credit  [+]    •    It cancels itself  [-]  



Deror automatically cancels5 a small percentage of your IOUs, every seven days.



We call it Polarised Demurrage6.  It reduces your credits, and your debits.



Think of it as a little weekly Jubilee7.  It helps restore your public Honour, all year round.

DAY 1


500 credits | 9,000 debits
Demurrage deducted weekly
Linked to max. prior balances
Honour rating 91%

DAY 28


No transactions since Day 1
Credit balance less 39
Debit balance less 700
Honour rating now 91.7%

DAY 84


No transactions since Day 28
Credit balance less 78
Debit balance less 1,400
Honour rating now 93.1%

DAY 360


No transactions since Day 84
Credit balance less 383
Debit balance less 6,900
Honour rating now 100%

In Other Words

(Wonkish)



Deror is an endogenous, peer-to-peer (P2P) digital credit creation-destruction algorithm.  Its Single-Entry-Double-Entry (SEDE) framework recognises and embraces external forces that tend toward dynamic disequilibrium, such as individual needs/wants and perception-driven behaviours.  It functions as an automated regulatory mechanism by employing internal processes that draw the credit creation-destruction cycles toward a null equilibrium, such as Polarised Demurrage (PD) and inverse public Honour rating.

Overview

Encrypted digital credit creation-destruction algorithm combines Single Entry with Double Entry bookkeeping.


•   User-created new credit generates matching debit

•   Inverse Honour rating;  zero CR and DR balances = 100%

•   1,000 credits (and/or debits) = 1 Honour percent

•   Honour rating determined by largest account balance

•   Credits earned first applied to any non-zero debit balance

•   PD draws both balances toward zero over annual cycle

•   PD destroys credits and debits on weekly cycle

•   Instalment-based crowd financing enables scalable liquidity

Architecture

The deror currency system offers significant advantages over the present monetary system.


•   Links money supply with Time, and population

•   Public Honour rating discourages unnecessary credit creation

•   Public Honour rating encourages spending, and earning credit

•   Personal credit issuance enables an effective "living wage"

•   Personal issuance addresses poverty, welfare, unemployment

•   Positively influences aggregate demand, velocity of money

•   Eliminates usury, compounding debt growth

•   PD = self-liquidating credit, and dynamic debt Jubilee

Research

[1] David Graeber, Debt: The First 5000 Years

[2] Colin McKay, Cheating Females: The Production of Inequality, By Illusions of Equality

[3] Richard Werner, Can banks individually create money out of nothing? — The theories and the empirical evidence

[4] Richard Werner, How do banks create money, and why can other firms not do the same? An explanation for the coexistence of lending and deposit-taking

[5] Guido Giacomo Preparata, Of Money, Heresy, And Surrender, Part II: A Plea For A Regional And Perishable Currency

[6] Silvio Gesell, Natürliche Wirtschaftsordnung (The Natural Economic Order)

[7] Michael Hudson, The Lost Tradition of Biblical Debt Cancellations (pdf)