What is Barter?


Barter is a simple way for people to create and exchange value.

Value creation is similar to money creation in that someone creates a transferable promise of some sort. All similar promises belong to the same "denomination" of value. In normal money the promise is something like "I, the Victorian era Bank of England, will give a pound of sterling silver to the bearer of one of this denomination upon its return to any of my offices." A denomination can also have the same behavior as other financial instruments, such as insurance claims, mortage bonds, coupons, stock certificates, etc.

In any case, there are, presumably, some people somewhere who value the promise and are therefore willing to give up something of their own in order to acquire some quantity of the associated denomination. If what they give up is a quantity of another denomination, "barter" occurs.

Value transfer is similar to money payment in that someone gives value to someone else.

To be precise, what is transferred is a bunch of values, possibly of various denominations, called a portfolio. To be even more precise, what is transferred is a note for a portfolio. A note is created by withdrawing a portfolio from an account. The note is mailed to another account. The note is then deposited by the other account thereby cancelling the note.

For example, Bob withdraws 15 Amazon Dollars, 10 eBay Dollars and 50 Bob Dollars creating a note. Bob signs the note over to Cindy and mails it to her. Cindy then deposits the note in her account.

In summary, the Barter Server:

All steps that might be vulnerable to fraud are protected by public key encryption.