Programmable Money
From Open Risk Manual
Definition
Programmable Money is any digital form of money that offers mechanisms to specify automated behavior of that money through a computer program. Programmable money may be seen as a new product category sitting alongside existing money products such as central bank deposits, demand deposits, nonbank money, and cash.
Characteristics
- Traditional digital money is defined (at low level) by database entries, thus pure data. The set of possible operations on these entries is external to the storage mechanism.
- Programmable money in general stores along side numerical information computer code that can be applied conditional on other events. Such code must be tightly integrated into the monetary unit representation (e.g. deterministic knowledge of the rules that are applicable), otherwise it might more appropriate to talk about a general digital monetary system.
Approaches
- Transaction scripting approach: a (small) program is attached to every discrete amount of value tracked by the system, indicating how that amount may be spent
- Virtual machine approach: embeds programming capability in the system itself in the form of virtual machine instructions that can recognize and manipulate the value stored in the system
