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Mutual credit is the basic economic solution of mutualist economic system. It is usually described as a ledger for accounting multilateral barter, where people transfer what they owe to others. This system is also called ledger money.
Let's digress for a moment into the nature of ownership. Using the original mutualist definitions after Proudhon, ownership has two modes: property and possession. Property is the right to have something, while possession is the fact of having it. Originally, 100 years ago, the mutual credit was invented as a method to do away with property (by the above definition). Obviously property is incompatible with any anarchist and permissionless, trustless environment, since it requires law enforcement.
Time banks are the system where people exchange their work hours, they are reciprocal exchange systems that value all time equally, regardless of what is most urgent in the community, dropping the benefits of freed markets. These days they are often run by volunteers, and they are compatible with service exchange. Not really suitable for commodities.
Local exchange trading system is an organization that keeps the ledger with some sets of rules. They often denominate the trades in local fiat currency or its own token. They feature a free market with competition, pricing and all of its perks. The issue is often how the local token enters the economy and what it represents. They are also on a tiny, local scale and different systems are incompatible with each other, although there are attempts to connect separate networks into larger ones over the internet. Moreover, they are locally centralized, with a trusted third party to every transaction between peers. LETS are sometimes criticized for not doing away with property rights, which was one of the goals of mutual credit.
Trade exchange is a barter system between businesses. It isn't comprehensive enough for a mutualist economy.
Ergon is a global, decentralized, public ledger that records the exchange of its native currency. The unit or Ergon, ⵟ, is essentially a reusable proof of work. It is the ledger money for exchanging the work or the fruits of work, with the unique input of free markets into the currency issuance. Additionally, because it's based on cryptography and is fully trustless, it does not require any law to operate. Ownership of Ergon is not a matter or rights. It's a matter of fact - namely, knowing the cryptographic key to your coins. We recognize this mode of ownership as possession.
Ergon comes to existence by the process of mining. Mining secures the chain and confirms the transactions. For this work, each miner is rewarded with the newly created coins according to the number of computations they are making (corrected for the hardware improvement trend over time). Additionally, miners compete with each other to offer the best price for the coins they mined. Read more here.
At this point, the reader may ask, "hold on, the miners aren't really working. They are just running the computers!" and that is true, but the computers consume the electricity generated by other people. If the payment for the electricity was made with Ergons, in the absence of artificial barriers, the miner would be only earning a portion of the reward that is roughly equivalent to the real work he's done by setting up the hardware and supervising the operation. The rest would go to the people who produced the electricity and produced the hardware for him. It happens even when the miner pays for electricity with different currency as well, just with extra steps and frictions.
A miner only mines Ergons when there are people willing to exchange the new coins for whatever he needs. The miner will carefully size his undertaking to have it worth his time and effort. If there are enough coins circulating and people don't need new coins, he will spend his time by serving his community in a different way, limiting the inflation by not producing them. The miners organically adjusts the issuance of coins for the price to match the combined work of all the people contributing to their creation. They do it by following their incentives. As a result, every participant receives the share of the reward corresponding to their input as a reusable and fungible proof they did it - the currency units.
Ok, but are the coins credit or a commodity in the first place? For one, they are purely virtual, they are a record on the ledger. Then, there is also no single particular person or entity that issues or gives them to the miner. The miner serves all the users at once. He does the work of securing the chain for all the previous participants, and the only thing he is given in return is the record on the blockchain. Therefore, it can be viewed as a record of work that hasn't yet been paid for. People may disagree, but I think it is a form of credit.
The system can still be distorted by external factors, like state-given economic privileges, that disproportionately reward some types of work or goods, but the fact it doesn't need any property laws to operate and works globally with no regard to state borders, allows the freed markets to form and work properly wherever the barriers and advantages can be avoided.
The demand for coins is coupled to the demand for chain security. Demand for coins is the desire to use the chain. The chain, being used more, secures more value transfers, therefore it requires more security. A lock has to only be as expensive to bypass as the thing it locks, so it was irrational to attack. A person buying the proofs of work from the past intends to use them in the future; increases the market price of the work being done on the chain security front.
Bitcoin (and other cryptocurrencies, for what it's worth) is also:
However, the unit of Bitcoin does not represent anything meaningful.
Bitcoin mining works very different. The miner is not paid proportionally to the number of operations done by his machines. The payout is flat. Miners are competing over a constant payout, that happens on average every 10 minutes, and that is halved every 4 years. At the early days of Bitcoin, the competition was nonexistent. The creator of Bitcoin has been mining almost alone for a year, receiving a huge amount of coins, and so have other early adopters. Besides, it is hard to make a credit interpretation, because it's not a given in exchange for something particular - the amount of work.
The number of coins to be emitted, and the emission schedule is centrally pre-planned, blind to the people's needs, development or adoption. As with any central planning, the supply is detached and inadequate. It not only represents nothing, it is also severely volatile and therefore inconvenient. It does not fulfill the basic roles of money - means of exchange, unit of account and store of value.
In his book, "Denationalization of money", Friedrich Hayek envisioned many competing issuers of money, separate from the state and having free market to promote the best issuers, that answer the demand in the most beneficial way, keeping the currencies neither inflationary nor deflationary. This is what Ergon does - miners are independent issuers competing with each other, but on top of that, the currency each of them produces is equivalent, therefore fungible. Unlike in conventional cryptocurrencies, the miners indeed make sure the currency answers the needs of the market and make it stable.
Many people struggle to classify cryptocurrencies. They are neither fiat nor commodity money. Indeed, they are so hard to classify because they aren't money in the first place. Ergon, on the other hand, is the new form of mutual credit, ledger money. It is suitable for stateless, mutualist economies. Global and denationalized. Strongly bound to the freed markets, it is designed to fuel.