Is OCS a cryptocurrency?

The OCS is not a currency, but a general framework which supports arbitrarily many different currencies. The OCS also provides functionalities using which currencies and obligations can be exchanged into one another. Cryptocurrencies and OCS currencies/obligations have in common that cryptography is used to verify transactions. However, the OCS technology is more advanced and has features missing in cryptocurrencies:

• OCS is not only used for payments, but provides powerful business financing and value storage functionalities.
• The OCS uses notarizations to verify and confirm formal correctness of transactions and related operations. This means that a transaction is not only signed by the respective participant, but must also be signed by a critical number of notaries who, in the case of a successful notarization, include the properly notarized entry into their databases making it available to other clients.
• The OCS relies on decision threads to ensure sound economic decision making and member appointments.

How is an OCS currency tied to use value?

This connection is established by the way operation proposals are evaluated or, more precisely, by how and in what the economic value of an operation's output is measured. As an example consider a consumer-oriented currency, i.e. a currency that is supposed to be tied to a consumer market basket and the use value such a basket represents. Then in the course of the evaluation of a given proposal the expected volume of its projected economic output must be measured in such market baskets. In other words, the question to investigate is into how many such abstract market baskets the operation's projected output can be exchanged. Now the same operation might be evaluated differently depending on the currency for which the operation proposal is submitted. This is because different currencies have different definitions of "use value" depending on the purpose the goods and services purchased in the respective currency are expected to serve. This might for instance be reflected in the use of different consumer market baskets as measuring units, as well as other details defined in the descriptions of individual OCS currencies.

The above subtlety in the evaluation of operation proposals serves the purpose of making sure that the amount of liquidity created as a consequence of a proposal's approval coincides with the expected volume of the operation's economic output in terms of a currency-specific use value. Since this is applied to all operations and all liquidity created, the overall volume of liquidity is consistent with the overall use value of ongoing operations for the respective currency. Under market conditions this correspondence in terms of volumes induces price stability: For instance, in the above example the price of a currency-specific consumer market basket in that particular currency should remain relatively stable, at least in a longer-term perspective, assuming prices are determined by supply and demand only.

How to profit from an OCS currency as an investor?

In order to understand the basic mechanism by which an investor can benefit from trading in an OCS currency, one first needs to understand how OCS currencies are tied to some underlying use value. Now apart from the current market value, i.e. the price at which a currency of interest can be bought or otherwise acquired in return for another currency/obligation, the currency always has an intrinsic value, which can be defined as the price the currency should have in order to duly reflect its underlying use value. Although one would expect the market value to be somewhere around the currency's intrinsic value, there is a variety of reasons for short-term deviations. For instance, it is possible that at a given moment in time disproportionately many operation proposals are approved, which increases liquidity in circulation and suppresses the market value of the respective currency. Similarly, when disproportionately many operations are finalized and the respective operators seek to acquire as much liquidity as possible in return for the products they sell, the market value of the respective currency increases and might temporarily rise above the currency's fair value.

Now the objective of an investor/speculator is simply to benefit from such fluctuations of a given currency's market price around its intrinsic value: The investor should buy the currency when it appears to be undervalued and sell it when it appears to be overvalued. By buying a currently suppressed currency the investor helps the operators who have "printed" some of the currency and are starting their operations, to obtain the goods and services needed for production. By selling an overvalued currency the investor helps those operators who are concluding operations, to obtain as much liquidity as possible in return for what they have produced and are seeking to sell.

How to buy liquidity in an OCS currency?

You can acquire an OCS currency in return for any good or service you provide. In order to receive or make payments in an OCS currency or obligation you must first open an OCS account. If you want to purchase an OCS currency with a fiat money currency (e.g. Dollar, Euro etc.) you must first obtain liquidity in an OCS obligation which is tied to this particular fiat currency and then exchange it within the OCS. The procedure for obtaining such an OCS obligation in return for Dollar, Euro etc. is defined by the respective obligation issuer and outlined in the description of the respective OCS obligation.

What is a decision thread?

Generally speaking a decision thread is a procedure to help determine the correct answer to a given question. We illustrate this concept based on the following example:

Assume an operator submits an operation proposal in a currency. Then the acting referees for this currency are confronted with the choice of either approving or ignoring it. In the latter case the operation proposal would be automatically rejected after some time. However, any referee has the right to submit an approval of the proposal. In this case the proposal's status shifts from rejected to approved state and will become officially approved if no other action takes place. In order to submit an approval the referee must deposit a so-called referee stake. This means that the referee is effectively betting that the proposal is worthy of approval and will not be rejected. The deposited stake might be lost, but if the referee "wins", i.e. the approval is successful, he or she will receive the stake back. The referee also attaches a supporting note explaining, why he or she believes the proposal satisfies the requirements of the respective currency. Right after the referee's approval any of the remaining referees can submit a rejection to the proposal, thereby conflicting the first referee. If this happens that second referee must deposit a referee stake as well. Now the two referees are betting against each other, while the proposal is in rejected state, such that the last referee has a slight advantage. This can be repeated arbitrarily often such that the proposal alternates between rejected and approved states, producing a thread of conflicting opinions. The thread terminates when no referee is found to conflict the current state, which then becomes the official result. As a consequence the proposal is either rejected or approved, while the participating referees either win or loose, depending on which side they took. The loosing referees hand their stakes over to the winners. Furthermore, in case the proposal was approved, i.e. the first referee in the thread is one of the "winners", he or she receives a fee from the operator.

The above procedure ensures that the referees can benefit from approving proposals that fulfill the requirements of the currency, but also from correcting other referees. At the same time it creates discipline among referees, creating partial liability for incorrect approvals, but also for unjustified rejections.