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.

A peer-to-peer complementary currency can be a powerful tool for promoting exchanges and building relationships on the Internet. i-WAT [1] is a proposed such currency based on the WAT System [2], a polycentric complementary currency using WAT tickets as its media of exchange: participants spontaneously issue and circulate the tickets as needed, whose values are backed up by chains of trust. i-WAT implements the tickets electronically by exchanging messages signed in OpenPGP [3]. This paper investigates an extension to the design of i-WAT to facilitate mutual help among peers in need. In particular, we investigate additional "reduction" tickets whose values are reduced over time. By deferring redemption of such tickets, the participants can contribute to reduce the debts of the issuers, and the issuers help participants by providing exchange media that accelerate spending. This paper describes in detail how incentive-compatibility is achieved by this extended design; we predict that the following properties will hold, which resulted from a game-theoretical analysis.
1. Rapid circulation, or a reduction ticket will typically circulate at high speed until its effective value reaches the scheduled minimum, and
2. Vanishment equilibrium, or the system will be most stable if the values of tickets are to be reduced down to zero.
A reference implementation of i-WAT has been developed in the form of a plug-in for an XMPP [4], [5] instant messaging client. We have been putting the currency system into practical use, to which the proposed feature has been added.

A P2P currency can be a powerful tool for promoting exchanges in a trusted way that make use of under-utilized resources both incomputer networks and in real life.
There are three classes of resource that can be exchanged in a P2P system: atoms (ex. physical goods by way of auctions), bits, (ex. data files) and presences (ex. time slots for computing resources such as CPU, storage or bandwidth). If these are equally treated as commodities, however the economy of the system is likely to collapse, because data files can be reproduced at a negligibly small cost whereas time slots for computing resources cannot even be stockpiled for future use.
This paper clarifies this point by simulating a small world of traders, and proposes a novel way for applying the "reduction over time" feature[14] of i-WAT[l 1], a P2P currency. In the proposed new economic order (NEO), bits are freely shared among participants, whereas their producers are supported by peers, being given freedom to issue exchange tickets whose values are reduced over time.

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.

A peer-to-peer complementary currency can be a powerful tool for promoting exchanges and building relationships on the Internet. i-WAT [1] is a proposed such currency based on the WAT System [2], a polycentric complementary currency using WAT tickets as its media of exchange: participants spontaneously issue and circulate the tickets as needed, whose values are backed up by chains of trust. i-WAT implements the tickets electronically by exchanging messages signed in OpenPGP [3]. This paper investigates an extension to the design of i-WAT to facilitate mutual help among peers in need. In particular, we investigate additional "reduction" tickets whose values are reduced over time. By deferring redemption of such tickets, the participants can contribute to reduce the debts of the issuers, and the issuers help participants by providing exchange media that accelerate spending. This paper describes in detail how incentive-compatibility is achieved by this extended design; we predict that the following properties will hold, which resulted from a game-theoretical analysis.
1. Rapid circulation, or a reduction ticket will typically circulate at high speed until its effective value reaches the scheduled minimum, and
2. Vanishment equilibrium, or the system will be most stable if the values of tickets are to be reduced down to zero.
A reference implementation of i-WAT has been developed in the form of a plug-in for an XMPP [4], [5] instant messaging client. We have been putting the currency system into practical use, to which the proposed feature has been added.

Peer-to-peer complementary currencies can be powerful tools for promoting collaborations and building relationships on the Internet. i-WAT [1] is a proposed such currency based on WAT System [2], a polycentric complementary currency using WAT tickets as its medium of exchange. Participants spontaneously issue and circulate the tickets as needed, whose values are backed up by chains of trust. i-WAT implements the tickets electronically by exchanges of messages signed in OpenPGP [3]. This paper clarifies the trust model of i-WAT, and investigates how it is related with that of PGP [4]. To implement the model by dynamically building an appropriate web of trust (WOT), we claim that it would suffice if the behaviors of participants satisfy the following three properties: 1. mutual signing by knowing, or any two mutual acquaintances sign the public keys of each other, 2. mutual signing by participation, or the drawer and a user of an i-WAT ticket sign the public keys of each other, and 3. mutual full trust by participation, or the drawer and a user of an i-WAT ticket fully trust each other, and a recipient fully trust the corresponding user of a ticket, in the context of PGP public key signing. Likelihood of satisfaction of these properties is supported by the (dis)incentives imposed by the semantics of i-WAT. A reference implementation of i-WAT has been developed in the form of a Jabber [5] instant messaging client. We are beginning to put the currency system into practical use. Copyright © 2005 The Institute of Electronics, Information and Communication Engineers.

Peer-to-peer complementary currencies can be powerful tools for promoting collaborations and building relationships on the Internet. i-WAT [1] is a proposed such currency based on WAT System [2], a polycentric complementary currency using WAT tickets as its medium of exchange. Participants spontaneously issue and circulate the tickets as needed, whose values are backed up by chains of trust. i-WAT implements the tickets electronically by exchanges of messages signed in OpenPGP [3]. This paper clarifies the trust model of i-WAT, and investigates how it is related with that of PGP [4]. To implement the model by dynamically building an appropriate web of trust (WOT), we claim that it would suffice if the behaviors of participants satisfy the following three properties:
1. mutual signing by knowing, or any two mutual acquaintances sign the public keys of each other,
2. mutual signing by participation, or the drawer and a user of an i-WAT ticket sign the public keys of each other, and
3. mutual full trust by participation, or the drawer and a user of an i-WAT ticket fully trust each other, and a recipient fully trust the corresponding user of a ticket, in the context of PGP public key signing.
Likelihood of satisfaction of these properties is supported by the (dis)incentives imposed by the semantics of i-WAT. A reference implementation of i-WAT has been developed in the form of a Jabber [5] instant messaging client. We are beginning to put the currency system into practical use.

This paper proposes a barter currency system called i-WAT[12] to promote sustainable economy in peer-to-peer internetworking. i-WAT itself is a peer-to-peer system, without necessitating a central point of authority. It uses a digitally signed, electronic form of promissory note as the medium of exchange.
This paper illustrates how it should assist internetworking of peer-to-peer systems, and discusses, in particular how trust can be maintained in such a currency system.
Among other means, the current design of i-WAT allows the notes to be transported over Jabber[8, 9] instant messaging protocol. A prototype of an i-WAT checkbook has been developed as a plug-in for a Jabber client. We are beginning to experiment on the actual usage of the currency system using the checkbook as well as provisional web applications.

This paper proposes a resilient, alternative monetary system on the Internet called i-WAT, based on WAT System[l] which uses a form of promissory note as the medium of exchanging goods and services. i-WAT uses an electronic version of the note, ownership of which is transferred by exchanging messages signed in OpenPGP[2]. i-WAT can be used as the basis of various interpersonal/corporative transactions in the globally distributed computing environment. Specific applications being investigated include distributed consumer reports, an alternative copyright system and spam-free e-mail exchange. A prototype of an i-WAT checkbook has been developed as a plug-in for a Jabber[3] client. Experiments are ongoing.