Cobalt - Mutual Credit System

Overview

Cobalt is a mutual credit system for use as an experimental local currency, with a built-in reputation metric that measures economic participation in a way that is resistant to gaming, rewards diverse trading, and provides a positive-sum signal of each account's embeddedness in the community economy.

Core Principles

1. Integer-exact accounting. The underlying ledger uses integer credits and double-entry bookkeeping. Debits and credits always balance to the unit. The sum of all account balances is always zero (the fundamental invariant of mutual credit).
2. Deterministic, reconstructible state. Every piece of system state can be recomputed from the transaction log alone. There is no lossy, order-dependent, or floating-point state in the authoritative layers.
3. Separation of concerns. The ledger is the source of truth. The scoring system is a derived view computed on top of it, and can be rebuilt or modified without touching the ledger.
4. Absolute, positive-sum metrics. Scores are not normalized against other users. Anyone who meaningfully grows their economic participation sees their scores grow, regardless of what anyone else does.