For most of history, local trade was done on credit. People knew and trusted each other, and when they transacted they generally did it on credit, very little actual money changed hands.
At regular periods, such as at village fairs and markets, debits and credits were tallied and cleared. The sikoba platform is designed to enhance, expand and automate these age-old mechanisms.
Sikoba’s IOU platform performs clearing — the same tallying and offsetting of debts and credits that was historically done at village fairs and trade fairs— but on a more rapid and ongoing basis.
The result is that money is only needed to repay residual balances rather than the full financial value of all trade. Therefore, much less money is needed for the same volume of trade.
Sikoba then expands on this age-old mechanism by allowing credit conversion, a system in which payments between participants who do not know or trust each other become possible. This is done by automatically finding trusted intermediaries.
Sikoba’s basic and most important rule is that a user will only ever have credit exposure to those he has expressly chosen to trust.