The Credit Commons Protocol defines a shared ledger through which participants can account for exchange using a mutually-agreed unit of account (which could be a national fiat currency, hours, kWh of electricity, or anything else). It can be applied recursively, meaning that ledger groups can voluntarily federate into a nested structure that can be visualised as a fractal-like ‘tree’.
This fractal structure mirrors that of sociocracy, suggesting a natural fit between the resulting economic and participative governance structures. Trade and decision-making is supported across and between networks, enabling scale and diversity of economic activity without the requirement for centralisation. Groups can therefore remain small, trust-based, and self-governing within a larger, decentralised, yet complex economy of similarly autonomous actors that is referred to as the ‘Credit Commons’.
At the macroscopic level, the resultant scaling properties may also have profound implications for the trajectory of economic growth, with substantial empirical and theoretical work suggesting that both natural and human systems with such network geometries eventually reach a steady state (rather than following open-ended growth).
The requirement for exchange rates between groups also means that ledgers can support different but interchangeable monetary instruments within the same community, such as mutual credit and use-credit obligations. The Protocol therefore provides part of the technical and collaborative finance infrastructure necessary to rebuild the commons economy.
The video below introduces the Protocol in more detail, explains the underlying monetary theory, describes a theory of change, and explores some of the possible economic implications of widespread adoption.