open money, open metrics, open measures ...
... what's in a name?
The name open money1 was adopted many years ago to refer to the concept of agent-centred money2, created by anyone3 on their own terms. That is, the rules constraining the use of that money are defined by its creators (and those who are subsequently permitted to share in its administration) who are referred to as its stewards.
The stewards (otherwise known as administrators) define how and where a particular open money can be used, who can use it, the expected rules of conduct, the consequences of failure to act within the rules and much else. They also define who can approve new users (conditionally) and the processes for such approval. In typical situations anyone can apply (or self-register) to use such an open money once having become aware of it, but this is frequently likely to involve invitation by an existing user or by one of the stewards.
Any such open money will typically be used within a manageably small community of users, one within which reputation and behaviour are subject to social observation and sanction. The community using that open money provides the essential channels through which sanctions are agreed and imposed in the case of misbehaviour, although technology used to support such a community may well assist in identifying bad actors and the stewards have the power to suspend or even remove such users. Typically, however, the negotiation of appropriate remedial solutions would preferred. This is one of the areas in which open money offers a more human-scale framework than would be possible within a larger-scale, lower-variety pool such as is typical within other mutual credit interpretations.
The open money preference is to apply minimal constraints on how a particular currency is specified and used. Please note that the term "currency" here does not necessarily mean "money"; it can be a record of anything measurable, which is why the same structures support an expanded concept of open measures or open metrics. The effective care, nurture and repair of our communities and the environment in which they exist depends on our ability to measure, record and share enormously more than money, and in ways which do not destroy crucial information or externalize real costs (such as resource depletion, environmental degradation and negative social impacts).
With regard to open money in particular, although minimal constraints are imposed on form and function (these being mostly matters of practicality), there are recommended approaches. In the important case of a locally-controlled liquidity pool, the recommended model is essentially that laid down decades ago in the LETSystem Design Manual - zero-sum, interest-free mutual credit.
However, much has changed since the early days of LETSystems. Whereas technological constraints tended to lead to the implementation of unmanageably large pools of users sharing little in terms of need or purpose, and offered no choice of the currency to use, these days higher-variety solutions are practicable. For example, a user might choose to make use of several such open money pools. Some might use human time (hours) as a unit of account. Others might use kWh - perhaps to record production, consumption and storage in a neighbourhood microgrid, and yet others might record something more abstract such as reputation or confidence. However, the most typical usage might be to record commitments made which could otherwise be settled using legal tender. Any number of such open money instances might be set up within any community, and at any scale. The point of intersection is overlap in the communities using each of these, and the total commitment recorded for any individual (or business, or other organization) will be the sum of the commitments made by that user across all of the open money pools of which he, she or it is a member.
There are good reasons to keep the size of such groups or pools to a sufficiently small size to make self-regulation a human scale set of processes. Larger sized pools would almost certainly require the assistance of more sophisticated technology, but in general the smaller the size the more manageable the set. Size is not the only factor, or even the most important. Some commonality of purpose, geographical proximity or other common bond helps to constrain the complexity. For that reason any approach supporting the management of multiple open money pools needs to minimize the risk of name collisions and other variety challenges generally. Therefore (most particularly within software implementations) the names of entities (such as users, currencies and accounts) are contained within namespaces although that is not essential in isolated instances.
The patterns and flows within and around all such variables (both those with a metric equivalence to legal tender and those used to measure other things affecting our lives) are important in understanding the dynamics of any community, and crucial to the development of remedial and sustaining solutions, especially where required to co-evolve with the community itself.
The term commitment in the previous paragraph tells only part of the story, of course. This is a zero sum accounting system, so the as long as some accounts are in commitment others will be the beneficiaries of such commitments. By convention, we use the term credit to denote this opposite of commitment and represent the values recorded by negative and positive numbers respectively.
Financial obligations to businesses and other agencies outside the communities served by open money systems can only be met legitimately through legal tender. That is not the domain in which open money operates; instead it provides bridges within the local and value-added layer. For this purpose, certain patterns have been designed - perhaps the most important being that of covestment. However, such things are beyond the scope of this introduction so for more information see openmoney.cc.
Footnotes
1. Case
Lower case lettering is used to refer to the concept of open money whereas title case Open Money refers to a software implementation.
2. The word "money"
This is obviously not money in the same sense as legal tender but in its most typical use cases it is metrically equivalent to the unit of legal in use locally. By this is meant that it provides a means to record commitments made that would typically be settled using that legal tender. It is a recording mechanism provided as a convenience. In this sense, it has the same legal status as a bar tab or an IOU note.
3. Users - people, organizations or other agents
The term "anyone" should be interpreted to mean "anyone or anything". Users may be people, businesses, organizations of other types, robots, sensory or effector nodes (connected via the Internet of Things) or any other type of agent.