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Credit

Credits in Zero represent a claim on an atomic unit of hosting capacity, or 'AU', in the Zero Grid. 'Atomic' in this sense refers to the smallest possible unit of transferable (future) hosting capacity. Debits in Zero are the inverse of a Credit, and represent the obligation of a Node to provide or repay an AU. Members are credited or debited based on the Nodes AU contribution or utilization, provided to or received from the Zero Grid. Credits and Debits in Zero can be viewed as a distributed micro-transaction system based on the principles of mutual credit accounting.
Mutual credit is an alternative way of viewing money, currencies, and value. In essence, currency is not centrally issued to represent an extrinsic (objective) amount of value that is derived from a single (shared) ledger (such as a central bank of cryptocurrency), and rather, is tracked as a series credits and debits for each participant in the system. The Meta-Currency Project is an excellent resource for delving deeper into the philosophy and economic concepts behind mutual credit.
Due to the distributed architecture of Zero’s peer-to-peer system, a mutual credit system is the ideal candidate for tracking hosting credits and debits. Unlike purely blockchain-based systems, for Zero’s peer-to-peer network, no central authority exists to accurately keep track of the hosting credits and debits of a particular Member. When a Member runs the Zero software as a Node, a local component called The Creditor (outlined in Section 4.2.6 The Creditor) is responsible for rapidly issuing credits and debits for the Node. These Credits are then redeemable for Infinity, enabling an entirely distributed credit-system to exist between participants, that is also connected to all tokens in the Infinite and traditional economy, enabling a pathway to convert credits to fiat currencies and vice-versa.
When a Member provides AU to the Zero Grid they accumulate Credits, which can then be redeemed for Infinity, at an exchange rate algorithmically determined by The Creditor. The exact calculations as to what determines an AU at a given time are dynamic and are performed entirely in isolation by The Creditor. Credits and debits are issued in a distributed manner, making it near-impossible to know the full amount of credits or debits in total circulation at a given moment in time, given that the number is changing all of the time, and no single Node is aware of the entire system’s state. This system architecture solves the problem of latency and high transaction fees that would exist with managing AU transactions on a blockchain, while still enabling the transferability between the Credits and cryptocurrencies.
Given that the supply of Infinity itself is determined by its own free market economics, there is no easy way of issuing new Infinity from the Creditor without either diluting Infinity or requiring the Creditor to purchase it directly like any other market participant, which would be prohibitively expensive. Alternatively, if the Creditor was given control of the issuance of Infinity, it would undermine Infinity’s tokenomics, dynamic reserve structure and governance, and likely limit the flexibility for incentivization within Zero’s credit system.
For this reason, The Creditor cannot issue new Infinity directly. Instead, a ‘bridge-token’ is utilized called ‘Credit Token’, which holds a percentage of the Infinity Reserve, whose supply can be dynamically expanded or subtracted within the Creditor’s DAO.
Dynamic Token Elasticity and Funding
The details of Infinity, it’s reserve configuration and associated DAO structures are outlined in Governance & Token Issuance.