FAQ: The Market Community
Everyday dealings with the Grok are similar to the way online banking is performed. A Grok account is however not a bank account, the units are those of the market community. These trade units (Groks) can be transferred online from one Grok account to another, to remunerate goods or services acquired via trade within the market community.
No. The ReeComm runs the infrastructure which supports the marketplace. By opening a trade account you automatically become a member of the market community – but not neccessarily a member of the ReeComm (the latter happens when you acquire at least one joint-ownership certificate).
This mechanism is the same as with cooperative banks: When you open an account at one, they register you as a client – but this does not automatically make you a member of the cooperative.
In principal one could also issue the Grok as vouchers on paper. But the concept does not foresee this as a great amount of work and costs are involved with such vouchers (the various initiatives for regional money can confirm this).
- The vouchers must be difficult enough to make to discourage forgery.
- They must be handed out to the members at authorised distribution points.
- Every <n> months, the circulation safeguard fee must be noted on every voucher in circulation, in the form of a stamp, sticker or hole-punch.
- The computer-based account management would be required in addition anyway, since the distribution points would need to know how many Grok-vouchers a particular person can receive.
The costs for all this would mean that the various marketplace fees would have to be substantially more than without printed vouchers.
We prefer to use the term "creation facility" since it more accurately reflects what is actually happening: No-one is giving you currency credit, rather you are creating the currency yourself. There are various means to provide security and receive a creation facility on your trade account. The main ones are: (a) depositing at least one fully-paid joint-ownership certificate of the CPO; (b) trading national currency in exchange for creation rights; (c) you can found or join an affinity group, whereby members mutually guarantee each other a certain amount of creation facility; and finally (d) active members may also deposit activity points as security for a credit facility.
The question has been raised if account holders substantially in the black will in practice be willing to lend Groks – due to "low interest" (there is none, lending just avoids the circulation safeguard fee), and the neccessity of there being an attractive low-risk project needing funds at the time the person wants to invest.
Firstly: We're suggesting a demurrage of 0.5% per month, i.e. about 6% per year, so avoiding it over a longer period is certainly worth considering.
Secondly: We see here (the sadly prevalent) money-based rather than reality-based thinking. If people think this way, they are putting the having or securing of money in first place. But we can't eat money (or gold), so this priority in thinking does not match the real priorities of ensuring that our basic needs are met (food, water, shelter, heating, clothing). In the ReeComm way of thinking we must all recognise this true priority and take personal responsibilty to do our own individual part. So, if there are currently no attractive offers for projects requiring financing, then get together with some friends and make one yourselves!
Since Groks only come into existence when someone uses her creation facility, won't you have the same problem as national currencies with their mountains of debt?
In conventional terms: There is a very basic difference between credit and debt, as we understand these words in respect of conventional modern currency systems.
The word "credit" comes from the Latin word "credere", which means trust. To receive credit means to enjoy the trust of your community. The community trusts you to deliver goods or services when you take out a credit, i.e. to use it, and use it wisely. Furthermore, with the user-emitted and secured currency described here, a negative balance is more correctly viewed simply as the account owner having exercised their right to create Groks.
The debts of the state currency systems have reached such astronomic proportions because the money borrowed must be payed back with interest, and interest on the interest (compound interest). A sum of 100.000 pounds or dollars, when borrowed for 50 years at 7% compound interest, turns into 3.000.000 (3 million) pounds or dollars. This system of compound interest has the same characteristic of exponential growth as cancer, and therefore, in reality, must collapse at some point.
Since no interest at all is charged, or even allowed to be charged, on the Grok, no mountain of debt can possibly grow.
Complementary currencies which are designed to always have positive account balances must start with balances which are either just given away or must have been earned in some way. Otherwise, if at the start no-one would have a positive balance, then no-one could purchase anything, and so in turn no-one could earn a positive balance.
One could create a central authority which accredits positive starting balances in return for work performed or payment in kind. But then this authority would have the dubious task of regulating the amount of currency in circulation, ensuring there be neither too much nor too little. That is not an easy or enviable task.
The sum of all starting (positive) balances would then be the amount of currency which is available to the market community.
The amount of currency available limits the transactions which can be remunerated at more or less the same time. If there is too much currency in circulation then the prices will probably rise (that's inflation). If there is too little then market trades get restricted and/or the prices will fall (that's deflation).
In the market community as laid out here, the maximum available amount of currency depends only on the securities deposited. Barring affinity groups, all types of securities available to create Groks address the financing of the viably-run enterprises of the CPO. Thus even if all the joint-ownership certificates issued were to be deposited, and all credit limits used to the full, the amount of Groks in use should still be well covered by the assets of the CPO.
The amount of Groks in circulation at any one time is simply the sum of all member accounts with an earnings (positive) balance. This amount changes with each transaction. So each community member contributes through her activity to the amount of Groks in circulation.
The maximum amount of Groks which can be in circulation is in a fixed relationship to the securities deposited, which in turn determine the sum of creation facilites granted. If a person uses their creation facility to pay a bill, then her account gets debited that much, while the recipients account gets credited the same amount.
The maximum possible amount of currency in circulation will be increased if Groks are sold for pounds or dollars. Those thus purchased swell the account balance of the purchaser – but at the time of sale an equal amount is debited from a special system account which exists only for this purpose, so again the balances sum to zero. The national currency thus acquired will of course be used by the ReeComm for investment in local businesses, so purchased Groks will also be fully covered by the assets of the CPO. However, we do not recommend this method, as it may cause the ReeComm to fall under more stringent monitoring by authorities (sale of electronic currency = bank license).
The amount of Groks which currently are in circulation will continually vary depending on how active the members of the market community are. It will wax and wane depending on how much people use their creation facilities – but can never exceed the theoretical maximum mentioned above.
While we're here let's make one thing clear: Demurrage (the circulation safeguard fee) is only applied to positive account balances. Someone may for example have a creation facility of 2400 Groks but an account balance of 0, thus incurring no fee. This is a stark contrast to current national currencies, which by the very fact of their existence require interest (making bankers powerful and the rich richer).
No, the Groks debited as circulation safeguard or transaction fees don't disappear from the system, they are transferred to an account of the market community and used to pay the people running the system – who in turn can only spend them within the system. If a surplus remains then the annual general meeting decides what to do with it – e.g. distribution to members, support of worthy projects, retention as a buffer for future costs, etc.
The Grok only exists as an accounting unit, managed in accounts held in computer databases. It does not exist as vouchers on paper, nor can it be converted to pounds / dollars. Thus there is no alternative than to close a Grok account with a balance of zero. A positive balance must be shed before closure; there are several means to do so: Purchase of goods or services from other community members; donation to another Grok account, e.g. of a friend, or a company or project of the community that will be glad of support. A large positive balance can used to buy another joint-ownership certificate (if another member or the CPO is offering one).
No, you need not own a PC (or Mac). What is required is access to a PC or Mac with internet access. If need be, you can try these tips:
- Ask within your regional market community if there is a publicly accessible internet PC.
- Check if there is a publicly accessible internet PC in your neighbourhood (e.g. in an internet-café or at the library).
- Perhaps a community member who lives near you would be willing to help – ask the organisation to help you put such a request online.
- If the person you want to perform a market transaction with has a PC, then ask this person if you can perform your online-work at their PC.
For tax purposes a marketplace trade must be viewed in the same way as when using national currency. Since the purchasing power of the Grok is independent of the development of national currency, there are several possible ways of coming to a clearing rate with which to calculate the current equivalent value (we intentionally do not call it an exchange rate, as no direct exchange is possible):
- Joint-ownership certificates can be offered for sale outside the market community for pounds or dollars, at a floating price, while internally they remain fixed at 1000 Groks per certificate. Thus an approximate theoretical exchange rate can be quantified by observing the floating prices – but a direct exchange is not possible.
- One can compare the prices of particular goods and services on both markets and thus also quantify a relationship of the two currencies, but this relationship will be specific to the type of goods or service viewed. We expect the relative prices of different types of goods and services within the market community to diverge from those of the external market, reflecting a different mentality, e.g. yes we do grok the value of the work performed by a nurse, and remunerate it in accordance. This way of quantifying a relationship for something particular will be of practical use when ascertaining how much tax in national money is due for professional sale of goods or services rendered within the market community.
- An exciting modern alternative would be to apply collective or swarm intelligence and have the market members all return a subjective personal evaluation of what the clearing rate should currently be – the published suggested value would then be the average of all the individual values submitted.
All of these approaches permit the expression of the value of a trade which was remunerated in Groks in pounds or dollars. On this basis the amount of tax due (in national currency) can be calculated fairly.
In contrast to professional or business transactions, neighbourly help will normally not be liable for tax. For definitive information on this please ask an accountant or the tax authority. If legally required to do so, the market community will provide tax authorities any requested data on market accounts. The community condemns tax evasion and will not tolerate it in any way.
Legally, marketplace trade is viewed as purchase – all regulations pertaining to purchase of goods and services also apply to marketplace trades. This includes the extent of the guarantee, what must be put on bills, VAT and so on.
All trade accounts are clearly flagged as being of private or business nature. Furthermore, each transaction is evaluated, so you can see how well previous trading partners were satisfied.
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