Open Fair Credit Standard

Open Fair Credit Standard (OFCS)

Project Status

Currently, the project is being managed using ClockingIT. Join the google group to get involved. We're in the early planning (pre-alpha) stage right now.
Visit this google group

Description

Characteristics

• Nonliquid

OFCS is not a currency system, in that there are no anonymous units of symbolic value that can be exchanged. Debits and credits are applied directly on accounts of individuals or commodities themselves. Credits and debits cannot be transferred from one account to another, and cannot be destroyed.

• Cashless

There cannot be cash in this system because every credit or debit is a record of a unique event and thus cannot be exchanged for substituted for another. Cash as such may be replaced by documentation, or receipts when a physical representation is needed, but are not in themselves to be considered of any value or negotiable.

• Pseudonymous

An OFCS account can be opened under any name. Biometrics and other physical keys will ensure identity security. All records can be audited, though personal information will be kept secret and can actually be omitted. Individuals can create as many accounts as they wish in the system.

• Transparent

All debits and credits created or negated can be audited, even credits and debits that have been negated from being spent or fulfilled, respectively.

• Decentralized

A redundant, encrypted and distributed file system ensures that the OFCS can survive the loss of several nodes and is invulnerable to malicious attack.

• Secure

Each credit or debit has a unique record of evidence such as video built into it as a matter of verification. Additionally, a third party must verify the credit or debit creation. All data is heavily encrypted and keyed to identifiers such as time or geolocation.

• Flexible

The underlying OFCS can be utilized for a variety of purposes, so that multiple independent exchange systems can be created. Any number of social and communication tools can be used to facilitate the function and particular rule-set of each system.

Application

• Formation of a Credit Syndicate
  • Basis of credit – Each syndicate should at its heart have a common idea for what should be the basis for credit: labor-time, energy, power, karma, trust, or widgets, etc. Any basis for credit must be absolute and normative, because the system does not allow for interest, depreciation, or other such trappings of subjective currency.
  • Syndicate membership and self-government. The Syndicate must decide how it will govern itself, whether that be by direct democracy, elected delegates, designated individuals, or even by total automation.
  • Purpose– The purpose and principles of the syndicate must be clear, otherwise there will be no guidelines when it comes to creating the rule-set.

• Customized OFCS Rule-set
  • Each syndicate will have choices to make in implementing a rule-set. Though the underlying system is inflexible, there are certain behaviors and matters of policy that will be hard-wired but revisable. Some of these will be ad-hoc rules, such as crediting certain professions or activities at a different rate than others.
  • Testing – the rule-set must be tested in simulation by either role-playing or using gaming simulations.
  • Revisions– must be made to the rule-set that satisfy both the syndicate's principles and utilitarian concerns. Each revision of the rule-set requires another round of testing.
• Normal Operations
  • Autonomous transactions – The system applies the custom rule-set in all transactions such that all transactions are quick and conveniently executed.
  • Problem management – all disputes or errors will be reported to the appropriate regulating syndicate and dealt with in their particular ways.
  • Syndicate evolution – the syndicate is entrusted to continually be improving its own rule-set and relations with other credit syndicates, as well as providing services to its constituents.
• Dissolution or Merger of Syndicates
  • When a credit syndicate becomes untenable, unstable, or inactive due to neglect, it may be necessary to dissolve the syndicate. Dissolution itself is not complex, but a process for distribution and transference of all indebted goods must be laid out beforehand to prevent disputes.
  • If two syndicates wish to merge their economies, there are several options: they can either keep their separate credit unit systems, create a new system from scratch, or transfer all of one credit system into the other.

Regulation

• Account-Holder Balances
  • Automated checks of individual accounts can occur continuously, adjusting for variable rates in the market. For example, GHG sequestering may vary in labor costs, which will dynamically affect the balance of an individual who has GHG emissions tallied in their debits.
  • Rules can be set for deficit spending. For example, it could be that syndics may only accrue twice as much debt totals as their current credit totals. This can be set per credit category, or tied to a function.
  • Rules can be tailored for category. For example, all food or health care purchases (within a certain time span) will be allowed despite a negative balance.
• Autonomous Federalism
  • Each credit syndicate operates autonomously from one another. No syndicate can interfere with the rule-enforcement of another, but deals may be made where syndicates audit each other to ensure equal trade.
  • Syndicates that form a Federation need to have all meta-rules in compliance, but customized rule-sets do not need to be identical to be compatible.
• Aggregate Metrics
  • The flow of goods and credit/debit will be mapped and made available without breaching the privacy of individuals.
  • Suspect transactions can be escalated via many criteria, such as repeated validation by the same 3^rd party, or a singularity in the flow of goods.
  • Since all exchanges have qualitative data associated with it, it is easy to produce numerical statistics associated with economic activity. Audit trails of individual goods can also be generated.
• Complex Rule-making
  • Rules can be made to apply either universally or by opt-in. For example, controversial goods like recreational drugs may have their circulation and exchange restricted to only individuals who approve of their use.
  • If all rules are opt-in, the syndicates no longer are formal organization but rather heteronymous subsets of the entire fair credit user base.

Meta-Rules

The “meta-rules” are the overall design of the syndicate and determine the syndicate's compatibility with other syndicates. 3 x 3 x 2 x 2 = 36 possible syndicate varieties.

Labor Category Approval

1. Open – all kinds of labor is acceptable in the system
2. Dynamic – the approved labor categories are changeable by the syndicate's administrative body.
3. Static – all the approved labor activities are set at the founding of the syndicate and cannot be changed.

Openness

1. Anonymous – all users' records are hidden from everyone, and all auditing must be done by the system itself without human intervention.
2. Pseudononymous – each user has a long identification number, and records are viewable by any member of the syndicate, but no personally identifiable details are available.
3. Transparent – all users, including all personally identifiable details are available to all other members of the syndicate.

Credit Complexity

1. Simplified – all value is quantified in a single unit system. This precludes dynamic pricing.
2. Multiple – all debits and credits include multiple values, such as carbon emissions, labor time, and energy.

Macroeconomics

1. Balanced – for every debit, a credit must be generated, and vice versa. This precludes any “free” services.
2. Deficit – This allows labor to be credited without attaching a debit to any object or person. Debited objects may also remain uncompensated-for, and people can accumulate debit without a corresponding credit being generated.