Questions around implementing a non-profit barter credit network

[AirBreather]

Hello, all

I have been tasked with heading and starting up a local exchange and trade system (LETS) for a community I am part of.

(FYI: Local Exchange Trading Systems - Wikipedia, the free encyclopedia )

So far the process has been smooth (note that it has not reached 'pilot' state yet), but a few prominent questions have cropped up:

- What happens if a member is stuck with a large number of credits and has no desire for expending them in the ways available? (e.g. prefers cash - but people did this because they don't necessarily *have* cash!)

- How to avoid negative balances if everyone starts out at '0' and goes into negative when 'buying' from another? (irrelevant? People should be see-sawing between negative and positive?)

- (Ties into above) How to inject new credits into the system without someone unfairly gaining or losing?

Questions and comments appreciated.

[Ebinesos]

Why do you insist on having credit be a part of this system?
Who will be the primary provider of funds (the treasury of your system)


In my local community, there is a strong "hour trader" system in place. work an hour, earn an hour.

[floslib]

Perhaps everyone could start with some form of positive balance, depending on the needs of your community. This is assuming you don't want anyone to have a negative balance.

[AirBreather]

Originally Posted by Ebinesos

Why do you insist on having credit be a part of this system?
Who will be the primary provider of funds (the treasury of your system)

In my local community, there is a strong "hour trader" system in place. work an hour, earn an hour.

Credit is to make it transferrable. It is to be real-currency and fair-market equilivant. There are links to real-world expenses, income taxes, etc, that require this process to be very above-board.

The question of 'primary provider of funds' is up in the air - that is why the 0/zero balance is started off with. Otherwise, people are essentially getting 'free money.'

Originally Posted by floslib

Perhaps everyone could start with some form of positive balance, depending on the needs of your community. This is assuming you don't want anyone to have a negative balance.

See above. Though there could perhaps be an initial cash-in - but the question then is *who* gets the money? If it were to be even a impartial bank account, this gets a whole lot more complicated.

[Interpreneur]

I've been part of a couple of barter systems in the past and as I recall everyone who signs up starts off with a positive balance (just for signing up). Otherwise you will have a lot of people signing up and never doing anything else, hence a lot of dead accounts.

You also need to be selective as to whom you allow in your system, as many people have no real value to provide and will suck the life out of your system.

[AirBreather]

Originally Posted by Interpreneur

I've been part of a couple of barter systems in the past and as I recall everyone who signs up starts off with a positive balance (just for signing up). Otherwise you will have a lot of people signing up and never doing anything else, hence a lot of dead accounts.

You also need to be selective as to whom you allow in your system, as many people have no real value to provide and will suck the life out of your system.

The first point is understood, especially for a 'for profit' system.

Intended to be a very selective, small-scale community trading network.

Thanks for your points.