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MyCHIPs Digital Money

Content Illustration

A Network of Trust

These examples serve to illustrate what MyCHIPs really is: a cellular network of trust.

It is cellular in the sense that you only have to establish a direct trading relationship with a few other parties you know and trust. But those parties will have their own relationships too, different from your connections. And you can pass value through the network, allowing you to effectively trade with other companies and people you may not know or trust.

So your normal, direct trading partners would correlate to actual connections you have in the real world, like an employer, an employee or a provider of goods or services. In many cases, these relationships are backed up by real-world, written contracts. And any credit allowance granted might be secured by tangible assets, or it could be based solely on mutual respect and reputation.

For example, a club might establish a MyCHIPs identity so its members could pay their dues online, using the network. Such a relationship might exist on nothing more than reputation because the stakes are not very high. If you provide quality credits in satisfaction of your dues, you get to continue enjoying the benefits of membership. If you don’t, the club can kick you out. And if the club lets you down, you can always leave and find some other, more reliable association.

Part of the job of the MyCHIPs software to help you evaluate the risk involved with various potential partners so you can make an educated decision about whether to establish a direct trading relationship with them or not.

For example, your relationship with your employer is pretty solid—at least within a specified credit limit and scope of time. You know each other, you have experience with each other, and you can execute an employment contract to spell out your real-world obligations to each other. In the example above, MyCHIPs would advise you that transactions with Wal-Mart, and within the proper limits are reasonably safe.

But MyCHIPs might give you a security warning about the club you pay your dues to. You may just ignore it because your exposure is low and you don’t mind the risk for such a small amount of money.

However, if you wanted to sell your laptop computer to Bob on the basis of his own personal credit, this could rightly give you pause. You would not want to risk such a valuable asset unless you were pretty sure he could make good on his promise. Assuming Bob is looking for credit on the MyCHIPs network, you could obtain valuable information about his assets and his credit rating to help you decide whether or not to enter into the relationship.

But much more likely, you would never have to make that decision. Rather, the system would discover that Bob works at Home Depot, and they have a deal with Wal-Mart. So by carefully crafting the right chain of trades, the network will allow Bob to send you value through the network, in exactly the form you are comfortable with. You won’t have to accept promises from anyone but Wal-Mart.

So, the whole point of MyCHIPs is to formalize a digital platform for establishing a network of credit relationships, to facilitate commerce between partners who can find a reasonable way of trusting each other, either directly or through the relationships of others.

In a very real way, MyCHIPs is not so much a new currency as it is a way of automatically trading a whole world of privately issued personal and corporate credits. You have your money, Bob has his. Wal-Mart and Home Depot also have their money. But with a properly designed infrastructure, they can all begin to work together as though they were a single form of money.

There are many more technical details we will cover about how this all works. Much of this will be covered in the software description. For now, we will go on to cover some of the higher-level principles of how the network is managed and how peers can interact with one another:
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