1. Rapid circulation, or a reduction ticket will typically circulate at high speed until its effective value reaches the scheduled minimum, and
2. Vanishment equilibrium, or the system will be most stable if the values of tickets are to be reduced down to zero.
A reference implementation of iWAT has been developed in the form of a plug-in for an XMPP [4],[5] instant messaging client. We have been putting the currency system into practical use, to which the proposed feature has been added." />


Reduction Over Time to Facilitate Peer-to-Peer Barter Relationships

Kenji SAITO  Eiichi MORINO  Jun MURAI  

Publication
IEICE TRANSACTIONS on Information and Systems   Vol.E89-D   No.1   pp.181-188
Publication Date: 2006/01/01
Online ISSN: 1745-1361
DOI: 10.1093/ietisy/e89-d.1.181
Print ISSN: 0916-8532
Type of Manuscript: Special Section PAPER (Special Section on New Technologies and their Applications of the Internet III)
Category: Peer-to-Peer Network
Keyword: 
P2P,  trust,  currency,  community formation,  

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Summary: 
A peer-to-peer complementary currency can be a powerful tool for promoting exchanges and building relationships on the Internet. iWAT [1] is a proposed such currency based on the WAT System [2], a polycentric complementary currency using WAT tickets as its media of exchange: participants spontaneously issue and circulate the tickets as needed, whose values are backed up by chains of trust. iWAT implements the tickets electronically by exchanging messages signed in OpenPGP [3]. This paper investigates an extension to the design of iWAT to facilitate mutual help among peers in need. In particular, we investigate additional "reduction" tickets whose values are reduced over time. By deferring redemption of such tickets, the participants can contribute to reduce the debts of the issuers, and the issuers help participants by providing exchange media that accelerate spending. This paper describes in detail how incentive-compatibility is achieved by this extended design; we predict that the following properties will hold, which resulted from a game-theoretical analysis.
1. Rapid circulation, or a reduction ticket will typically circulate at high speed until its effective value reaches the scheduled minimum, and
2. Vanishment equilibrium, or the system will be most stable if the values of tickets are to be reduced down to zero.
A reference implementation of iWAT has been developed in the form of a plug-in for an XMPP [4],[5] instant messaging client. We have been putting the currency system into practical use, to which the proposed feature has been added.