This is an exploration of aspects of the phenomenon we loosely call "money". It was created in 2012 and 2013, and went through a number of versions, while I was working with a group of complementary currency advocates and community organizers in the San Francisco Bay Area
1. Transaction Agreement Units
An architectural examination of
money-like forms
Doug McDavid
dougmcdavid@gmail.com
Last substantive edits to the framework were in Spring of 2013. Title page added 15 April
2015. Example edited August 2015.
2. • This framework explores money, and “money-like” instruments.
• Key characteristics of money and money-like units include:
• ability to buy things, including other money-like units *
• now or in the future
• existence via agreements
• to accept for payment
• granting exchange value (separate from any use value)
• operation within some conceptual or physical boundary
• enablement of marketplaces and economies
• usage as rewards for deeds
• measuring success and supporting self-esteem and public image
Architectural Framework for TAU
* Spending one form of money (TAU) for another is generally called “exchange”,
whereas spending for non-money involves the mechanism of “price”
3. • To avoid unnecessary controversy and confusion we avoid the overloaded word
“money” in this presentation
• We draw on two of the money-like features – they are defined by agreements
and facilitate transactions – Transaction Agreement Units (TAU)
• Some things have nicknames, so we won’t necessarily refrain from using terms
like “money-form” in conversation
• We recognize that wealth comes in many forms, much not validly treated as
“units”. This framework covers only wealth (value) that can be “unitizable”
• Such units are complex and multifarious, hence the need for architectures and
this framework
• TAUs represent both:
• store of value (capital) and
• value exchange (flow)
What do we mean by a “Transaction Agreement
Unit” (TAU)?
The “Warmoth Configuration”
Medium of Exchange Store of Value
denominates
Unit of Account
4. • An architecture of something represents the components of the thing, and how
it is composed (buildings, naval vessels, software systems, etc.)
• Every money-like form has its own intrinsic architecture, which we seek to be
able to expose and understand
• Within communities agreements to trade with specific forms leads to design of
local currencies that are based on their own architectures
• An architectural framework provides a set of structures and characteristics that
can be used in designing specific architectures, including how they interrelate
What do we mean by an ”architectural
framework”?
5. • This is best read in screen-show mode to enable internal links to work,
assuming that you are using PowerPoint.
• You don’t need to do anything special if you are reading a .pdf version in order
for the internal links to work properly (though not on Apple, sadly)
• Every underlined term takes you to another page, and the “back” arrows return
you to an appropriate overview page
• This is a concept and relationship model, similar to a class diagram.
LEGEND
How to read this presentation
Clickable concept Unclickable
concept
one half of a
bidirectional
relationships
recursive
relationship
6. • Legal tender
• Postage stamps
• Food stamps
• Coupons
• Green stamps
• Loyalty points
• Royalties
• Talley sticks
• Truck
• Scrip
• Collateral
• Vouchers
• Reciprocal trade (barter)
• Time-banks
• Local Exchange Trading System (LETS)
• WIR
• Corporate securities
• Shares
• Options
• Derivatives
• Market basket
• IOUs
• American Open Currency Standard (AOSC)
• Robert Burk’s Rational System
• Participant reward (Kickstarter, e.g.)
• Discounts
• Mortgages
• Credit cards
• Cash back
• Teaser rate
• Debit cards
• Personal checks
• eBay
• PayPal
• Letters of credit
• Insurance claims
• Insurance premiums
• Tokens
• Turnstile
• Vending
• Casino chips
• Gift certificates
• Trade-ins
• Attention
• Eyeballs
• Click-through
• Reputation points
• Favors
• Donations
• Pawn ticket
• Usufruct
• MintChip
Known examples of TAU
types
• Money orders
• Traveller’s checks
• Guarantees
• Recycling charges
• Premiums
• Lines of credit
• Grants
• Loans
• Micro-loans
• Crowd funding
• Rebates
• Patent
• Copyright
• Library card
• Coffee card
• Condominium “week”
• Commodities
• Products
• Services
• Energy units
• Futures
• event tickets (sports)
• Virtual
• Games, VW
• Gloebit
• Bitcoin
• Qoin TopTop
For more examples, see works by Greco,
Lietaer, CC Research, etc.
10. • Community purposes
• Retain money circulation within the boundaries of a particular community
• Increase velocity of circulation
• Build ownership loyalty via capital-focused wealth-unit
• Internal reward system
• Create liquidity where there is a shortage of liquidity
• Merchant purposes
• Good will
• Marketing
• Loyalty
• Niche (investment) marketing
• Member purposes
• Local discounts
• Access to unique value propositions
• Ethical urgings
• Improve talent capability
• Mentoring
• Problem definition
• Performance of capabilities
BackBack
Purposes (for spending/for accepting)
TopTop
12. Role
•Holder
•Spender
•Acceptor
•Regulator
•Accounting Service
•Issuer
Issuer scope
•National
•Regional
•Local
•Virtual
Issuer powers
•Authorized amount
•Taxing
•Defining functions
•Combining functions
BackBack
Role playerplayed by facet of
Role players
Social entity
•Individual
•Family
•Legal Business Entity
• Corporation
• Bank
• Non-profit
• NGO
•Jurisdiction
• Nation
• State
• Town
• Region
•Network/ community
• Capability
• Organization
• Agent
• Investment
• K-node
TopTop
compatibility
Agreement Details
elaborate
operateswithin
enabled by
13. • Accepted as payment for
• Products
• Services
• TAU
• Partial payment (discount)
• Accepted by
• Network member
• Roleplayer
• Anyone
BackBack
Agreement Details
elaborate elaborate
Spending Agreement conditions
• Personally spendable
• Free spend
• Coerced spend
• Investment
• Locked
• On-demand accessibility
• Single use
• Transferability
• Divisibility
• Defacement
include
Spendability (fungibility)
To accept a unit of a
TAU-form in payment
is to accept a network
of agreements
TopTop
14. Value
Adjustments ReceiverPayer
pays receives
Agreement Details
elaborate
• Value adjustment types
• Accounting system support
• Membership fee
• Transaction fee
• Incentive payment
• Participant exchanges
• Interest
• Collateral
• Jurisdiction impositions
• Demurrage
• Tax
BackBack
Value Adjustment
TopTop
• Cost
• Storage
• Security
• Reporting
consist of
15. Exchange mechanism
• Deliver physical item
• Pay point
• Mobile device
• Shown ID
• File transfer
• Smart phone app
• Computer UI
Storage mechanism
• Vault
• Refrigeration
• Warehouse
• Document
• Database
• Mind
BackBack
TAU mechanisms
TopTop
Physical
Intangible
16. Consumable
BackBack
TAU media
• Coins
• Bills
• Punch card
• Electronic swipe card
TopTop
Durable
Perishable
Grown Made
Named
performers
Service
Recipe
Availability (days,
hours, etc.)
Performance
Generic
performers
Commodity / Product
Utilitarian
Symbolic
Containment
Shelter
Desired
Needed Calories
Fine foods Fashion
m
aybe
m
aybe
17. • User processes
• Create / Destroy units
• Spend units
• Accept units
• Hold units
• Redeem units
• Exchange units
• Accounting
• Administrative processes
• Agreement
• Creation
• Enforcement
• TAU-Form processes
• Create template
• Accept template
• TAU-manifestation
processes
• Clone template
• Modify template
BackBack
Operations
Agreement Details
TopTop
elaborate
18. • Loaned into circulation
• Interest-bearing debt
• Mutual credit
• Spent into circulation
• Gifted into circulation
• Exchanged into circulation
• Mined and assayed into circulation
• Stolen into circulation
• Swindled into circulation
• Performed into circulation
BackBack
Creation / Destruction
• Something put at risk
• Born as TAU
• Something becomes TAU
TopTop
Grown
Manufactured
Branded Generic
Potential
Demonstrable
Time-
based
Results-
based
Creation
Destruction
• Redeemed
• Demurraged
• Spend-once
• Hyperinflation
19. BackBack
Accounting features and actions
•Create entry
•Calculate account balance
•Calculate network capital
•Perform network audit
•Allow negative balance
•Transparency - auditability
− Of use
− Of creation
− Of validity
− Of amount in circulation
Accounting
Account ownership types
•Personal
•Merchant
•Community
•Jurisdiction
TopTop
20. Agreement types for TAU
Agreement types
• Formative
• Match purposes
• of community
• of roles within the community
• with purposes of the TAU instance or system
• Characteristics of form, instance or system
• Membership
• Role expectation
• Agreement to conform
• Cooperative
• Included cooperations
• Excluded cooperations
General stipulations
• Contract enforcement
• Expiration (longevity)
Agreement Detailsare enacted by
BackBackTopTop
21. BackBack
inclusion
AlgorithmSituation
• Member
• Geolocality
• Role-player
• Transaction type
• Calendar time
• etc.
triggers
assembles
Clauses
exclusion
Agreement Details (T’s and C’s)
Variables
Invariants
Logic statements
Labels
TAU-form to TAU-form relationships
Spendability
Value adjustment
Operations
TopTop
Agreement Types
Roleplayers
Parameters
consist of
applies to
enact
22. • Community purposes
• Attract top talent into community of practice
• Retain top talent indefinitely
• Create and refine valuable intellectual property
• Perform innovative engagement work
• Agent purposes
• Build relationships with top talent
• Understand leading edge practices
• Place talent on engagements with leading edge clients
• Member purposes
• Learn from peers
• Teach peers
• Build advanced IP
• Practice on interesting engagements
• Practice with innovative team members
Purposes of – Nervezones
Exam
ple BackBackTopTop
23. redeemed by
backed by
BackBack
TAU-manifestation to TAU-manifestation
relationships
Agreement Details
TopTop
exchanged with
elaborate
Exam
ple
National currencies
Service performance
National currencies
24. Role
•Holder
•Spender
•Acceptor
•Accounting Service
•Issuer
Issuer scope
•Virtual
Issuer powers
•Authorized amount
•Defining functions
•Combining functions
Role playerplayed by facet of
Role players
Social entity
•Individual
•Network/ community
• Capability
• Organization
• Agent
• Investment
• K-node
compatibility
Agreement Details
elaborate
operateswithin
enabled by
Exam
ple BackBackTopTop
25. • Accepted as payment for
• Learning services
• Partial payment (discount)
• Accepted by
• Network member
• Agents
• Merchants
Agreement Details
elaborate elaborate
Spending Agreement conditions
• Personally spendable
• Free spend
• Investment
• On-demand accessibility
• Divisibility
include
Spendability (fungibility)
To accept a unit of a
TAU-form in payment
is to accept a network
of agreements
Exam
ple BackBackTopTop
26. Value
Adjustments ReceiverPayer
pays receives
Agreement Details
elaborate
• Value adjustment types
• Accounting system support
• Membership fee
• Transaction fee
• Incentive payment
• Participant exchanges
• N/A
• Jurisdiction impositions
• Community %
Value Adjustment
consist of
Exam
ple BackBackTopTop
28. media
• Proof of work
• Virtual world coins
Symbolic
Exam
ple BackBackTopTop
29. • User processes
• Create / Destroy units
• Spend units
• Accept units
• Hold units
• Accounting
• Administrative processes
• Agreement
• Creation
• Enforcement
• processes
• Clone template
• Modify template
Operations
Agreement Detailselaborate
Exam
ple BackBackTopTop
30. • Gifted into circulation
• Performed into circulation
Creation / Destruction
• Born as TAU
Grown
Manufactured
Branded Generic
Potential
Demonstrable
Time-
based
Results-
based
Creation
Destruction
• N/A
Exam
ple BackBackTopTop
31. Accounting features and actions
•Create entry
•Calculate account balance
•Calculate network capital
•Perform network audit
•Allow negative balance
•Transparency - auditability
− Of use
− Of creation
− Of validity
− Of amount in circulation
Accounting
Account ownership types
•Practitioner
•Community
•Agent
•Merchant
Exam
ple BackBackTopTop
32. Agreement types for
Agreement types
• Formative
• Match purposes
• of community
• of roles within the community
• Characteristics of form, instance or system
• Membership
• Role expectation
• Agreement to conform
• Agreement to create or improve offerings
General stipulations
• Contract enforcement
• Expiration (longevity)
14 Agreement types in Nervezones
Agreement Detailsare enacted by
Exam
ple BackBackTopTop
33. inclusion
AlgorithmSituation
• Community Member
• Role-player
• Offering type
• Performance level
• Calendar time
• etc.
triggers
assembles
Clauses
exclusion
Agreement Details (T’s and C’s)
Variables
Invariants
Logic statements
Labels
TAU-form to TAU-
form relationships
Spendability
Value
adjustment
Operations
Agreement
Types
Roleplayers
Parameters
consist of
applies to
enact
Exam
ple BackBackTopTop
34. • There is no known example that has these characteristics
Known examples of this TAU types
Exam
ple BackBackTopTop
Hinweis der Redaktion
Spending one form of money (TAU) for another is generally called “exchange”, whereas spending for non-money involves the mechanism of “price”
Top level concepts include form manifestation of some form and system of some number of manifestations. Agreements are pervasive, so the concept of Agreement Details sprinkles pixie dust over the entire universe of concern.
At the form level we are looking at patterns of characteristics and relationships that *could be* applied in the formation of manifestations of the forms within various community situations. The key linkage between forms and community situations flows through Purpose. Forms tend to have definable purpose – what issues and behaviors were concerned for the original designers of a particular form – this is intended to mach up with a pattern of concerns that form the Purpose of the community situation that a form might be consideration of applicability.
The term “TAU-manifestation” is used to indicate a TAU-form applied within a particular community. The TAU-form is used as a kind of template, which then the local money management can adjust an tailor according to their needs. An adjusted and successful manifestation might have value to other communities by importing it into the forms, and used by others as a template
Parameters, variables, invariants, logic and text can be drawn from the rest of the architecture of the TAU-manifestation, as set up according to the structure of this architectural framework. These agreement details can also go beyond the architecture as structured here, thereby providing flexibility and growth for the framework itself over time, as it is used.