Comment by rojeee

Thanks for that - very interesting. I think it is possible to create a pure credit/IOU monetary system and I’m working on it at the moment. Though reality is that I spend most of the time reading economics journals... The key is to track reputation and enable the minimum necessary amount of transparency. Eg instead of a single currency like BTC or ETH, everyone becomes an issuer and then the problem then becomes how to efficiently make a market in these currencies by swapping IOUs - essentially what banks do today but in a decentralised way. Furthermore, I think it can be done without a blockchain... Simple tech will do. For one who currently works in the blockchain space - I really like the idea of not using blockchain :)

If you are interested, it’s worth reading the articles “what is money” and “the credit theory of money” by Alfred Mitchell-Innes. He maintained that “credit and credit alone is money” and I mostly agree with him. Another good paper to read is “money is memory”. Oh and Knut Wisksell “interest and prices” is also very good. A lot of literature has been written on pure credit economies but it is difficult to find as it wasn’t ever a popular school of thought. I’m hoping for a revival though!