Currency Design Decisions

  Currency TOKEN Life-Cycle
    Token Life Cycle Diagram
      http://LifebloodDesign.com/currencymap/Currency_Life_Cycle.png (http://lifeblooddesign.com/currencymap/Currency_Life_Cycle.png)
    Issuance
      Type
        Mutual Credit (created with a credit and offsetting debit)
        Backed (credited based on another credit or commodity - e.g. dollars deposited to purchase Berkshares)
          Partially Backed
          Reserve Requirements
        Fiat (only credited, no offset)
        Meta-Currency (non-credited, solely derived from other currencies - e.g. Dow Jones Index)
      Means
        Issuer Promise
          Secured
          Unsecured
        Recipient Promise
          Secured
          Unsecured
        Triggered Event / Conditional
        Arbitrary
      Authority
        Centralized (one participant class can issue)
          Authorized User or Class
        Selective (some participant classes can issue, some can't)
          Authorized Class(es)
        Fully-Distributed (all participants can issue)
    Transactions
      Circulation
        Freely Circulating (most monetary currencies)
        Non-Transferable (most reputation currencies)
        Controlled Transfer (certain people or conditions required. Think stock brokers or estates)
          Authorized participant class(es)
          Conditions for transfer
        Approved Transfer (approval required for all transfers - e.g. private stock or LLC membership)
          Approval workflow
      Media
        Tokens / Coins / Bills
          Anti-Counterfeiting Measures
            Precious metal standards, weights, alloys
            Serialization / Bar Codes / QR Codes
            Rare Material (specialized paper, etc.)
            Watermarking
            Entaglio Printing / Microprinting
            Holograms
            Security Stripes
        Vouchers / Checks / Certificates
          (see above anti-counterfeiting measures)
            Magnetic Ink / Character Recognition
          assignable (as in writing a check TO somebody)
          endorsement requirements
          re-assignability options
        Smart Cards
          Anti-Counterfeiting
            encrypted data, PINs, public/private keys
        Voice / DTMF Phone call
          CallerID authentication, passwords, Account#s, PINs
        Portable Device
          Cell Phone
          Handheld
        Paper Ledgers / Passbooks
          Serialized
        Digital Bits
          Proprietary Network (e.g. Visa, Amex, etc.)
          Open Network (web / Internet / email / messaging)
            Authentication Methods
              certs, keys, PINs, passwords, etc.
          Account ID / Swipe Cards
            Anti-Counterfeiting Measures
              Holograms
          Electronic Accounting
            [See Accounting Methods]
      Types
        must complete for each transaction type below
          Commissionable?
          Roles
            Single Party
              Role Name
            Dual Party
              Role 1 Name
              Role 2 Name
            Multi-Party
              Role Names X, Y, Z, P, D, Q (e.g. buyer, seller, buyer's broker, seller's broker)
          Operation
            Credit only - Entity A gets B of Currency C
            Credit & Debit - Transfer Currency C from X to Y
              Balance pre-authorization requirements?
            Multiple Credits / Multiple Debits
              Certain Roles Receiving Fixed Amounts
              ...Receiving Fixed Percentages
            Debit only - Entity A loses B of C
            Rating (numeric but not +/-)
            Multiplicative (Non-Debit/Credit)
          Transaction Permissions
            Pre-Validate Availability of "funds"
              Earmark to "hold" funds
            Conditions Required
              Validation requirements
            Approvals Required
          Authorization Requirements
            None
            Single Party Authentication
            Single Party Password / PIN
            Dual Party Password / PIN
          Immediacy
            Immediate Transfer
            Scheduled Transfer
            Hold in Escrow
            Release from Escrow
            Payment Period (like for loans)
            Recurring Payment Schedule (like for loans)
          Transparency (who can see the transaction data)
            Transaction Amount
              Select, Admins, Participating Parties, Specific Participant Classes, All Classes, Public
            Transaction Date
              Select, Admins, Participating Parties, Specific Participant Classes, All Classes, Public
            Transaction Description
              Select, Admins, Participating Parties, Specific Participant Classes, All Classes, Public
            Transaction Parties & Roles
              Select, Admins, Participating Parties, Specific Participant Classes, All Classes, Public
            Aggregated Data
              Select, Admins, Participating Parties, Specific Participant Classes, All Classes, Public
          Limits
            For each Role / Participant Class
              min. amt., max. amt., frequency limit, # of transactions, # trans per cycle, amt. per cycle, total lifetime #
            Per relationship limit
              e.g. Each user can have one (and only one) rating in reputation currency N for each entity
          Fees
            Time Period Usage Fees
              Paid by which roles
            Per Transaction Fees
              Fixed Amount, Percent or Amount + Percent
                paid by which role(s)
              Formulaic (custom formula)
                paid by which role(s)
          Tax Consequences (required reporting for most trade networks)
            Sales Tax?
            Income Tax?
            VAT?
            Deductable?
        Gift
        Donation
        Loan
        Rating
        Praise
        Reproach
        Rebate
        Discount / Coupon
        Interest / Demmurage
        Fee (membership, transaction, others)
        Purchase (possible sub-types: Retail, Wholesale, Hard Goods, Soft Goods, Service)
        State Change (see Life Cycle - Conversion)
        other transaction types...
      Composition Constraints
        Just this single currency
        Other Allowed Currencies
          Currency Minimums (e.g. min. 50% in dollars)
          Currency Maximums
          Percentages Allowed of each
      Auto Compounding
        Time-Cycle
          # of years/months/weeks/days/hours
        Rate
          for Positive Balances
          for Negative Balances
      Accounting Method
        Single-Entry
        Double-Entry
        Triple-Entry (double plus digitally signed transaction receipt)
          Signed Chains (Intrinsic Data Integrity)
          Signed Block Chains (e.g. bitcoin)
      Audit Requirements
        No audit trail
        Adjustments require reversing or adjusting entries
        Adjustments must be authorized by all parties effected
        Adjustments must be digitally signed by all parties effected
      Thresholds
        Named
          e.g. think white belt, yellow belt, green, orange, brown, black, etc.
          Employee of the Month
          Bachelors, Masters, Phd
        Ranked
          Gold, Silver Bronze Medals
          Top X %
        Numerical
      Triggered Events
        Time Triggers
          Calendar Time
            Annual, Day of Year, Semi-Annual, Quarterly, Monthly, Day of Month, Weekly, Day of Week, Daily, Hour of Day, Minute of Hour
          Elapsed Time
            90 days, 30 days, 24 hours, etc.
        Internal Condition/Trigger
        External Condition/Trigger
    Conversion or Co-Function
      Conversion Limits
        Currency 1
          Cumulative Conversion Cap
          Caps for Participant Class
            Class 1
              Per Transaction
              Per User per Period/Cycle
              Per User Cumulative Limit
              Total Limit for Participant Class
            ... Class n
        ...Currency n
      Conversion Method
        Blended Conversion
      Co-Functionality
        Parallel Reputation Currency
          Example: Credit Ratings are a reputation currency which operate in parallel with dollars. This Co-Functioning rating determines a users cost and availability of dollars. (i.e. credit limits, interest rates, transaction fees, etc.)
        Combined Thresholds
          Example: You get a college degree (reputation currency issued by University) by fulfilling degree requirements through credits (unit of account currency issued by departments) which only count if you received an adequate grade (performance metric currency issued by professors)
    Retirement
      Methods
        Repayment / Zeroed Balance
        Attrition / Degradation
          (It is often smart to include methods for reclaiming value of leakage / lost currency units)
        Redemption
          Requirements
            Min. Amount
            Min. Thresholds (based on another currency...like repuation)
          Limits
            Max. Amount
              Per Participant Class
              Per User
              Per Time Cycle
          Rate
            Discounted Backing
            Blended
        Expiration
          Calendar Date
          Elapsed Period
          Inactivity Period
        Triggered Event
        Persistent / Non-Retiring
      I still have to finish conversion & retirement sections.
  Currency SYSTEM Life-Cycle
    System Life Cycle Diagram
      http://LifebloodDesign.com/currencymap/Currency_System_Life_Cycle.png (http://lifeblooddesign.com/currencymap/Currency_System_Life_Cycle.png)
    Conceive & Design
      Targeted Issue or Problem to be Addressed
      Targeted Community of Users (early adopters w/ shared values)
      Intentions/Purpose
        Desired flows to catalyze
        Indicators of flow
        Currency Complex (A currency COMPLEX contains a set of multiple inter-related currencies -- like dollars + credit ratings)
          Currency System Name
          Currency 1
            Name
            Description
            Formalization Method
              Nominal / Named Threshold - e.g. Bachelors/Masters/Ph.D
              Ordinal / Ranked - e.g. Gold/Silver/Bronze medalists
              Interval / Whole Units - e.g. FF miles, Buy 9 get 10th free card
              Rational / Divisible Parts - e.g. dollars/cents/fractional interest rates
            Currency Symbol
              Display format (e.g. USD $X,XXX.00)
            Intended Role
              Commercial Exchange
              Gift Economy / Non-Commercial Exchange
              Incentive / Reward / Penalty
              Trust / Reputation / Status
              Measure
            Intended Users
              Target Demographics
                Targeted Messaging to those Groups
              Participant Classes
                Definition (must be completed for each valid participant class)
                Name of Class
                Description (Definition, Role & Purpose of class)
                Participant Type
                Any Individual
                Qualified Individual
                Qualification Criteria
                Any Business
                Qualified Business
                Qualification Criteria
                Any Community / Association / Non-Profit
                Qualified Comm / Assoc / NPO
                Qualification Criteria
                Governmental Body
                Activation Triggers
                under what conditions might someone automatically become a member of this class
                Termination Triggers
                under what conditions might someones membership be terminated in this class
                Membership Fees
                Time Period
                Fee Amount
                Valid currencies for payment & percentages
                Referral Bonus
                for signing up a new member of this class
                Balance Calculation
                [See Formalization Method]
                Summation
                Average
                Bounded Average
                Time Boundary
                Upper / Lower Bounds
                Multiplicative
                SumProduct
                Ratio
                Percent of Target
                Current Rank
                Percentile Rank
                Name (by named threshold levels)
                includes True/False, On/Off conditions
                Custom Formula
                Balance Transparency
                Classes who can see current balance of a user
                All
                Selective
                None
                Interest Rate
                Derived from a formula
                Demurrage Rate
                Derived from a formula
                Starting Balance
                Maximum Balance
                Initial Credit Limit
                Maximum Credit Limit
                Formula for Moving Credit Limit (bounded by Initial and Max above)
                Currency Issuer? (can put new currency into circulation)
                Currency Redeemer? (can take currency out of circulation)
                Individuals
                Businesses
                Employee Sub-Accounts / Expense Accounts
                Default Spending Policies
                Default Limits
                Individual Policies
                Individual Limits
                Members
                Non-Profits
                Employee Sub-Accounts / Expense Accounts
                Communities
                Governments
                Employee Sub-Accounts / Expense Accounts
                "Foreign" Currencies (conversion accounts)
                Other Custom Classes
            Supply
              Scarce (supply below demand)
              Sufficient (available on demand)
              Abundant (supply greater than demand)
              Other (uncorrelated to demand)
            Functions
              Unit of Account
              Medium of Exchange
                Liquidity Enhancers
                Convertible to other Currencies
                High Value / Anchor Vendors
                Tax Payment
                Legal Tender
                (Near) Universal Acceptance
              Store of Value
              Token of Status
              Performance Metric
            Value Reference
              Other Currency (dollars, etc.)
              Unit of time (e.g. hours)
              Measurable Quantity (oz. of gold, barrels of oil, kilowatts of electricity, etc.)
              Basket (specific combination of above items)
            Redundancy Requirements
              Centrally hosted / managed
              Mirrored
              Fully Distributed
          Currency 2
            (same sub-sections as above)
          ...Currency n
            (same sub-sections as above for each additional currency)
      Outcomes / Goal / End Game
        Shut Down Conditions
          e.g. A currency used for temporary funding
        Shut Down Process
    Build
      Who is originating/sponsoring the currency project
        Individual
        Community
        Corporation
        NPO / NGO
        Government
      Establish Key Partnerships
        Needed for Credibility
          Examples
            Local Foundation
            Community Leaders
            Anchor Businesses
            Local Banks/Credit Union
            State/Local Agencies
        Needed for Resources
          501c3 fiscal sponsor
          Funding Sources
        Needed for Execution
          Groups w/ access to your targeted users
      Resources & Funding
      Infrastructure
    Launch
      Marketing & Message
      Outreach & Registration
      Adoption Assistance
    Manage & Govern
      Decision Making Methodology
      Stakeholder Involvment
      Financial Viability
        Sustainable Revenue
          for Infrastructure
          for Adequate Staffing
      Refinement of Currency Design
        Committee/Team
          Transparent Meetings/Communications
          Closed Meetings/Communications (if needed)
        Evaluation Process
          Measurement of Metrics & Targets
          Evaluation of Impact
          Refinement of Metrics, Targets & Criteria
        Redesign Cycles
          New Plans / Designs
          Re-Building
          Relaunching / Re-educating
      Holding Vision & Purpose
    Terminate
      Acknowledge Conditions
        Success
          Currency accomplish desired results
            Goals met
            Timeline Complete
            Flow Patterns Established
        Collapse
          Unable to sustain infrastructure
          Unable to sustain staff / support
          Loss of Leadership (schism, split, loss of focus)
          Shut down by outside agency
        Failure
          Currency is not & will not meet desired goals
      Communicate with Stakeholders
      Fulfill Obligations