The Book of Taler Bullion

Taler Bullion is a general mechanism for fully backed currencies. It forms a backbone for trading with currencies that are closer to human needs than the common currencies. Currencies are free from inflation and interest, and online trading simply swaps tokens for the entitlement to its underlying value.

This page gives a quick intro into the main ideas behind Taler Bullion. You can safely skip it and read the remainder of this book.

Currencies. Taler Bullion gets its name from the ability to reinstate gold and silver as currencies, suitable for online payment. But it really covers a broad range of options like:

  • Taler Bullion itself is a currency that represents precious metals such as gold and silver, with units like XAU and XAG for both Taler and the precious metal. Trading is used to swap Taler currency for title/ownership of the precious metal.

  • Taler Energy is a mechanism for trading sustainable energy, such as electricity, heat or hydrogen, at a specific period or time, usually according to measured production or use. Trading swaps Taler Energy units such as kWh or MJ for meter readings. This tool adds liquidity to energy markets, by balancing forms of sustainable energy and (inasfar as realistic) delivery times.

  • Taler Focus is a currency representing the most valuable thing in an economy: human attention. The idea is to represent this intrinsic economic value better than in a currency that detaches from this vital mark of quality and then considers it an expense.

  • Taler Dinosaur assigns value to the avoided emissions due to keeping fossil fuels underground, or unexcavated. The idea here is to replace the economic lure of burning fossils with a lure that is sustainable, that is, not an individual benefit at the expense of humanity as a whole. This value could be put to various climate-constructive uses.

Principles. The mechanisms used by Taler Bullion are pretty general, and explained in depth in this Book of Taler Bullion. In general the guarantees connected to the term Taler Bullion are:

  • Fully value-backed makes it impossible to inflate the digital currency. Inflation is a problem because it erodes the purchasing power of a currency. It triggers consumption, rather than saving. Consumption may help to keep industries going, but ideally growth in an economy comes from investments that improve processes. That continues to be beneficial in a non-inflationary currency. There is no force driving towards investment, but it still offers opportunities.

    ...but rate changes. Note that the value of a Taler Bullion currency can fluctuate with respect to paper money. That is usually caused by the dynamics of that paper money. Thinking in terms of Taler Bullion means thinking in terms of the underlying value, not in terms of the dominant paper money. Thinking in terms of an economy of its own, where a Taler Bullion currency is received and spent.

  • No debt or interest means that the most risky elements of the economies of paper money are removed from Taler Bullion. This is boring, stable and makes the system rock solid as a store of value. Interest is widely condemned as a mechanism of exploitation in religious and philosophical texts. It is tied to debt, which cannot exist in a fully backed system.

    ...but participant investors. We can learn from Islamic banking in this respect. Investors can make funds available and become a profit-sharing participant in the undertaking. The system also has its cracks, which are due to the system not being founded in logic but in religious ethics, and the unwillingness of large-scale investors to get truly acquainted with a project into which they invest. It is a mark of the most successful investors that they do take this interest, and get involved in the activities that they support.

  • No banks are needed in a Taler Bullion system, because these are essentially institutions for creating fiat currency. There is also no need for a central bank as lender of last resort to avoid banks from going bankrupt.

    ...but human-centric value. Gold and silver are customary currency choices, made by people, whereas paper money always comes from states. LETS systems that center around human attention pop up as local human initiatives. An interest in trading sustainable energy is commonly felt by those who personally invest in it.

  • No trade exchanges are needed in a Taler Bullion system, because the direct coupling between Taler and its underlying value is constant, so the matching is mostly on compatibilty between supply and demand. Only the fee structures may count as a constraint which is often be pre-settled between traders.

    ...but peer-to-peer trading. The reliance on receiving covered Taler value depends on trust in the party paying with it. This means that trading must use a network of trading peers. Multi-leg trading is possible, but would then involve multiple trading fees, which drives parties to seek out direct trust relations and form a well-connected network that is resilient to fall-out of parties.

  • Transparent expenses are reasonable in any monetary system. If a payment system would be used to circumvent taxation then it would be subjected to regulation, possibly under new laws. When people do unpaid work for the system, then storing or exchanging currencies would be made dependent on vital persons not dropping out in any way. In general, a decent organisation will have to collect some form of costs. Ideally, these would be transparent.

    ...but not from devaluation. The point of Taler Bullion is not to avoid expenses, because they tend to find an honest balance under free market conditions. The point is to get away from the devaluation that is inherent in the dominant systems of paper money.