The Cloth & Bag Analogy: Why Joules Beat Credits

“It is not wise to use a joule where you can use a credit, because today they could be the same value, but in two years one is significantly higher.” — Founder, Foundation Document

Keep It Super Simple 3-Tier

Quick Tier (30 seconds)

Credits = cloth (spend now). Joules = bag sewn from that cloth (hold value). Same material, different potential.

Standard Tier (5 minutes)

[Full explanation below]

Deep Tier (Academic)

See Three-Gear Currency Paper

The Core Problem

Someone asked: “If Joules and Credits have the ‘same value,’ why would anyone prefer Joules?”

The Answer: Same substance, different potential.

The Cloth → Bag Analogy

Both have the same base value when created, but:

• The bag (Joule) has structured utility that appreciates as the system matures
• The cloth (Credit) remains fungible and immediately spendable

The Economic Model

The Gap Rate

Joules convert at the current gap rate when used:

This creates optionality — use Joules when Credit value is high relative to external markets.

The Sawtooth Gap Mechanism

Question from Founder: “Where is our Sawtooth Coral to show the gap for our High Tide Waves?”

Answer:

1. External forex markets signal relative currency values
2. The three-tier system (Credits, Marks, Joules) triangulates across economies
3. Joules appreciate because they’re scarce and tied to energy/work potential

The Timber Company Case Study

A timber company’s shares demonstrated the gap:

The lesson: The gap between internal perception and external potential is what Joules capture.

Johnny Appleseed: The Joules Pouch

Since Johnny Appleseed is our sponsorship metaphor, the Joules Pouch fits perfectly:

A Joules Pouch is a container for seeds (Joules) that haven’t been planted (spent) yet. The seeds are valuable, but their full potential emerges when planted in good soil and given time to grow.

Formal Definitions

One-Paragraph Version (Non-Technical)

“Credits and Joules start with the same base value — like cloth and a bag sewn from that cloth. Both are valuable, but the bag has structured utility that becomes more valuable as the system grows. Credits are for immediate transactions; Joules are for capturing long-term appreciation. When you use a Joule, it converts at the current ‘gap rate’ between internal platform value and external market demand — just like the timber company whose shares were worth 7 dollars locally but 4,800 dollars globally. Joules let you hold potential until it matures.”

Two-Paragraph Version (Academic)

“The three-tier currency system (Credits, Marks, Joules) implements a progressive store-of-value mechanism. Credits function as transactional currency with stable purchasing power within the platform. Joules, by contrast, are optionality instruments — they convert to Credits at a floating ‘gap rate’ indexed to the differential between internal platform valuation and external market signals (via forex triangulation across participating economies).

This design solves the ’timber company problem’: when economic activity occurs in a closed loop, participants lack price discovery for the system’s true external value. Joules capture this latent appreciation. As platform adoption scales, the gap between Credits (stable utility) and Joules (appreciating potential) widens, rewarding early contributors without creating speculative bubbles — because Joules only convert when used, not traded.”

Where This Appears

In Letters

• MacKenzie Scott / Buffett: Briefly mention three-tier currency as “anti-extractive economic design” (one sentence max)
• Academic outreach: Link to full Three-Gear Currency paper with this analogy front-loaded

In Papers

• Three-Gear Currency (TLDR): Lead with cloth/bag analogy, then explain gap rate
• Anti-Extractive Derivative: Use timber company as cautionary tale, Joules as solution
• Boaz Principle: Joules as “corner left for gleaners” — appreciation belongs to contributors, not extractors

In Cephas

• FAQ: “Why three currencies?”
• Economics section: Full explanation with diagrams
• How Liana Banyan Works: Flowchart integration

IP Ledger Entry

Related Documents

“Same cloth, different form. Same value today, different potential tomorrow.”