No risk is unsafe: Simulated results on dependability of complementary currencies

Kenji Saito, Eiichi Morino, Jun Murai

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Citations (Scopus)

Abstract

Efforts have been put for electronization of complementary currencies (alternative forms of monetary media) in the hope that it would reduce their operational cost. However, this paper argues that the problem is more inherent in the core design of MCS[7] (Mutual Credit System), the most common form of complementary currency today. By simulating a small world of 2,500 traders, we show that growing the number of free-riders in MCS has a paradoxical effect of increasing "welfare" (a "happiness" metric) of the community. Since there is no pressure to stop the growth of the bad users, it is difficult to sustain the soundness of the system without strong interventions from the operators of the system; we need alternatives to the alternatives. We have proposed i-WAT[6] as an electronic descendant of the WAT System[10], a polycentric complementary currency using "WAT tickets" as its media of exchange. A simulation using the same model as above indicates that i-WAT users can sustain barter relationships even in the presence of free-riders by natural evasive actions to avoid risks.

Original languageEnglish
Title of host publicationProceedings - First International Conference on Availability, Reliability and Security, ARES 2006
Pages701-708
Number of pages8
DOIs
Publication statusPublished - 2006 Nov 17
Event1st International Conference on Availability, Reliability and Security, ARES 2006 - Vienna, Austria
Duration: 2006 Apr 202006 Apr 22

Publication series

NameProceedings - First International Conference on Availability, Reliability and Security, ARES 2006
Volume2006

Other

Other1st International Conference on Availability, Reliability and Security, ARES 2006
CountryAustria
CityVienna
Period06/4/2006/4/22

ASJC Scopus subject areas

  • Engineering(all)

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  • Cite this

    Saito, K., Morino, E., & Murai, J. (2006). No risk is unsafe: Simulated results on dependability of complementary currencies. In Proceedings - First International Conference on Availability, Reliability and Security, ARES 2006 (pp. 701-708). [1625376] (Proceedings - First International Conference on Availability, Reliability and Security, ARES 2006; Vol. 2006). https://doi.org/10.1109/ARES.2006.88