8.1 Telecommunication

An excellent case study to illustrate such a situation is the forced cooperation among various telecommunication providers, necessitated by market demand. A cell phone user roaming through different areas in their home country and abroad will unbeknownst to them make use of the infrastructure of several different providers which route their data back and forth to ensure continuous service. These providers, who are essentially competitors, are driven to constantly buy and sell mobile minutes and data to and from their peers, necessitating countless peer-to-peer contractual relationships, providing pre-negotiated prices that fraction in premiums, discounts and the differences between the pricing regimes of these competing entities.

To facilitate these complex trades, large amounts of liquidity must be reserved and withheld from other productive endeavors, while all participants are constantly exposed to the threat of one of the parties extracting a net benefit from these mutual trades, posing a net cost to the rest of the network.

A mutual credit system, using mobile minutes as its unit of account, could streamline the above-mentioned relationships, remove friction and lower costs for all participants, including the end user, while ensuring that no rent is being extracted by one or more of the participating parties. As an added benefit, no cash reserves must be allocated to the purpose of purchasing mobile minutes and data, just to sell the same amount at a later stage to a third-party competitor.

This same logic can be applied to all industries in which a fungible good is traded back and forth between different prosumers, such as the energy market, data and information markets, or even industrial and agricultural staples such as raw materials and fertilizer. Whatever the mutually traded ReSource may be, Mutual Credit ensures that it is readily available when needed and payable in kind when convenient or necessary.

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