Print your own money.

1Everyone mints

Every registered person gets the same right: one CRC per hour, forever. Not one coin from a shared pile. One coin of your currency, which nobody else can issue. Bo’s coins are Bo’s colour. Yours are yours. The village on the right has five people and five currencies.

Two details the contract enforces. Minting is a claim you make, not a drip you receive, and it looks back at most 14 days. And the rate is the same for someone who joined in 2020 and someone who joined this morning. Which raises the obvious question: does the early joiner just end up with a mountain?

2Coins wear out

Every balance loses 7 % a year. Circles calls it demurrage. It is applied to everyone’s coins, quietly, every day. Drag the years and watch two people: one who mints every hour and never spends a coin, and a drawer with a thousand coins in it.

The hoarder never reaches a mountain. New coins come in at a fixed rate and old coins melt at a fixed percentage, so the balance flattens out under about 120,800 CRC no matter how early they started. Being first buys you nothing permanent. Holding buys you nothing at all. What is left to do with a coin is spend it, which needs someone to take it.

3Trust is an arrow

In Circles, “I trust you” means exactly one thing: I accept your coins as if they were mine, one for one. It is an arrow, and it points at whose coins you take. It is one-directional. It is free to set, free to revoke, and can carry an expiry date. It says nothing about liking you.

Try paying with no arrows, then with only your own arrow, then with Bo’s. Only the arrow pointing at you makes your coins spendable to him. So a coin is money exactly to the extent that arrows point at its minter. This is the whole trick: Circles never asks whether you are a real person. It asks whether anyone will take your money.

4Money finds a way

Cy sells bread. Cy trusts Bo, Bo trusts you, and Cy has no idea who you are. You still get the bread. The protocol swaps coins along the arrows: Bo takes your coins and hands Cy some of his. Each hop is a trade that person already agreed to. A service called the pathfinder works out the route.

Push the amount past what Bo holds and the payment fails. The route exists but it is narrow: a path can only carry as many coins as the people along it are able and willing to swap. The largest payment that can get from you to someone is called the max flow, and the protocol’s own whitepaper uses it as the real measure of how connected you are. Not how many arrows you have. How much can actually move.

5Someone has to vouch

Version 2 has no sign-up page. To open an account, an existing member first trusts you, then registers you, and the contract burns 96 of their coins. Your new account opens with 48 coins of your own colour as a welcome. In hours: four days of the inviter’s issuance, two days of yours.

Notice what the invitation is and is not. It is a real cost to the person who vouched, so invitations are not sprayed around. It is not a check of anything: no document, no face, no phone. Which means a determined person with one account and a few days can open two, then four, then eight. Circles knows this. The next chapter is why it does not care as much as you would expect.

6The swarm that goes nowhere

Make a swarm. Twenty accounts run from one keyboard, all minting, all trusting each other so their coins are perfectly good money among themselves. Then decide how many villagers got talked into trusting one of them.

Double the swarm. Double it again. The first number grows and the second does not. A coin only leaves the swarm through a villager who accepts it, and that villager can only pass on as much as they can spend. So the damage a fake army can do is capped by the handful of real people it fooled, never by its size. The whitepaper states this as a theorem and calls it relative sybil resistance.

Be precise about what that protects. The money is safe: a million bots cannot inflate your coins or buy your bread. What Circles does not do is prove that any account is a unique human. If someone treats “has a Circles account” as proof of personhood, the bots are their problem, not the currency’s. That is the honest reading, and it is the one this site takes.

7A coin for a community

Long before blockchains, communities made their own money. Swiss businesses have cleared trades in the WIR since 1934. Towns have run LETS schemes and time banks. Kenyan villages issue Sarafu vouchers against what their members can supply. The primitive is always the same three things: a unit the community issues, a rule for who is in, and a promise by members to accept it. The money is backed by what the members can do for each other, and it works exactly as far as that promise reaches.

In Circles that primitive is a group, and its coin is a group Circles, written GCRC. A group is an account with a rule instead of a face. The rule, called the mint policy, says whose personal coins the group takes as collateral: that is the membership rule. Put your coins in, get the group’s coin out, one for one: that is the issuance. And anyone who trusts the group coin is trusting every member at once: that is the promise, made by one arrow. Zed runs a stall and would rather not judge two hundred neighbours one by one. Try it.

Three things make the Circles version different from a paper voucher. The group coin is backed by its treasury of members’ personal coins, which are themselves hours of members’ lives, so nothing is issued from nothing and it can be redeemed back. The membership rule is a contract chosen when the group is made, not a committee. And the group coin is an ordinary token that a market outside the village can hold a price for, which is where the next part begins. Organisations like Zed’s stall are the third kind of account: they hold and accept coins but never mint. Person, group, organisation. That is the whole cast.

9The euro at the border

No village makes everything it needs. Fuel, phone credit, medicine, the parts for the mechanic: those come from outside, and outside wants euros, or naira, or shillings. So there are two economies here, not one: what the village makes for itself, and what it trades with the world. The village coin can only ever do the first job.

Euros come in two ways. The farmer sells surplus at the town market and the tailor ships a few pieces: that is the village’s exports, a few euros a day. And there is a pool, seeded by someone with 600 € against 6,000 village coins, that will buy coins for euros at a price its reserves set. Every coin sold into it lowers the price. In Circles today this is a real thing: a person who backs their coin with 100 dollars of reserve can swap it for USDC, xDAI or a euro stablecoin, and a group can seed a pool for its coin. It is the border crossing, and it is narrow on purpose.

Run a year at 30 % imports. The village’s exports cover it, the price holds, and the two economies sit side by side: coins for the neighbours, euros for the world. Now push imports past 40 %. The village earns fewer euros than it needs, people sell coins to cover the gap, the price slides, and once the pool’s euros are gone the imports simply stop. A currency can only buy what its holders make. The rest has to be earned in the currency of the people who make it.

Then try the checkbox. This is what happened in the first Berlin pilot: shops accepted Circles, then turned most of what they took into euros. Every coin sold into the pool is a coin that will not buy anything from a neighbour tomorrow, and the price tells the story within weeks. The cure was never a better exchange rate. It was more things to buy with the coin, so that the shops had a reason to keep it.

10Two villages, one treaty

Ashby grows grain and Brook has the mill, and each runs on its own coin. Without an agreement they are two islands: an Ashby farmer cannot pay the miller, because the miller has no use for Ashby coin. A treaty in Circles is nothing more than the two group accounts trusting each other’s coin. One arrow each way, and the pathfinder can route a purchase from a farmer in Ashby to a miller in Brook through both group coins.

With balanced trade the treaty is invisible: what Brook earns in Ashby coin it spends back in Ashby, and nothing accumulates. Tilt the sliders and one village starts piling up the other’s coin with nothing to spend it on. That pile is the trade deficit, made visible. There is no exchange rate to absorb it, because the treaty is one-for-one. The surplus village has three moves: buy more from its neighbour, let the pile melt at 7 % a year, or stop accepting.

The third move is what trust expiry is for. In Circles, trust carries an expiry date and lapses unless renewed. Set the treaty to 90 days and run a year: on each renewal the village holding too much of the other’s coin declines to renew, the deficit village can only pay with what it has already earned, and trade rebalances. A treaty is not a promise to accept forever. It is a promise to accept until the next look at the books.