For decades I understood money with my primitive societal cortex. I thought dollars were like certificates with a claim to something universally valuable. The concept of money as a representation of a shared accounting system didn’t even occur to me.
While I was aware banks held accounts, my experience of physical money seemed to break the ledger logic, that money only exists as a ledger entry. How could the serial numbers on federal notes mean physical money was a unique reference to a ledger entry? The serial numbers didn’t mean much or make sense to me, they were too abstract to grasp intuitively.
Keep it simple stupid. In principle, in “unicycle money” accounting, if one account balance is increased, another account decreases by the same amount - a transfer of an amount between accounts. If an account is overdrawn, another account must supply the amount as a loan. A shared lending account may be contributed to by all the members with account credits. When several accounting systems use the same compatible methods, their member accounts can transfer between them.
In an analogy to a unicycle, let’s say the seat is a member account, the wheel the transfer of amounts between members and the pedals rise and fall representing account credits and debits.
In this accounting system the members may be required to bring their account back to a neutral balance through ongoing trade account transfers. This is analogous to keeping upright on the unicycle, not tipping over with too much credit or debit.
Members are not required or even permitted to settle their trade accounts with another means of value exchange. However, members can account for a portion of a trade payment in the shared accounting system and another portion of a payment in another method.
Taking the money as a rider cycle analogy farther (pun intended). In the case of a shared accounting system with two complementary units of account, which allows for exchange between them.
Lets’s say a primary larger accounting system and a tertiary smaller accounting system, two seperate unit of accounts, compatible for transfer by exchange with each other.
The larger wheel of accounts and their circulating amounts is similar to the unicycle accounting, in that seated members accounts rise and fall as they transfer amounts between their accounts.
The smaller accounting wheel, the penny wheel, serves the larger accounting wheel, specifically for the larger system of accounts, those accounts in over draft, they can pay off their loan in another accounting method, paying in to the penny wheel accounting system.
A practical example: national currency used for the debt clearance paid to the smaller accounting system and transferred to the larger accounting system which is a mutual credit with the facility for periodic clearance of over drafts.
Those large wheel member accounts with excess credit (an agreed policy amount) can exchange credits with the penny wheel national currency account.
