The Book of Sensible Taler

Sensible Taler defines and implements 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 Sensible Taler. You can safely skip it and read the remainder of this book.

Currencies. Sensible Taler gets its name from bringing to money the properties that meast people would call sensible. For example, because it builds more sustainable economies. And because it makes money good for saving again.

This builds upon the technology of GNU Taler, almost a digital cash form that works online but has carefully designed security and privacy properties.

A few currencies that can be a sensible alternative to use besides current paper money are:

  • Sensible Taler Bullion is a currency to handle precious metals such as gold and silver, in units like XAU and XAG. The idea is that trading in Taler Bullion is easy, and has underlying exchange mechanisms for the physical metals, or their ownership.

  • Sensible 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 swapping production and consumption times.

Principles. The mechanisms used by Sensible Taler are general, and explained in depth in this Book of Sensible Taler. In general the guarantees that make these Sensible are:

  • Fully value-backed to avoid inflation, so it works to save a Sensible Taler currency. Other currencies may prefer to inflate, which makes them more liquid, and more available to market traders.

    ...but rate changes. This means that Sensible Taler currencies have an unstable exchange rate to (inflationary) paper money. Sensible Taler can have its own economy, not hampered by that level of dynamicity.

  • No debt or interest removes important mechanisms that advance the inequality between rich and poor. Interest is common today, but is actually condemned by most religions as a form of abuse.

    ...but participant investors. It is still possible to attract investors to a business idea, but instead of a fixed interest rate irrespective of profit they would be participating, and help the plan develop and yield a profit from which they get a share. This is the halmark of the most successful investors; they sit in on company boards.

  • No banks are needed in a Sensible Taler system, because no unbacked currency can be created. There also is no need for a central bank as lender of last resort. Economies can organise themselves, and central banks have modest influence, if at all.

    ...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 desirable for those involved in energy production.

  • No trade exchanges are needed in a Sensible Taler 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. Much to our own surprise, Sensible Taler currencies can use peer-to-peer trading directly, between trusted peers. It is possible to build trust for multi-leg transaction paths. Trading peers generally need to be open to outsider audits, includingn by their peers, to assure the full backing of any Sensible Taler currencies that they might issue.

  • Transparent expenses are reasonable in any monetary system where people perform work. This is especially logical if physical transport of underlying backing is neccessary or when a company needs to reserve more resources than mere computation and storage and when these cannot be met with simple membership fees.

    ...but not from devaluation. The point of Sensible Taler 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.