The articles Information Rich Money and Water Rewards outline a system of distributed money where the money, Water Rewards, is created and destroyed by loans from a single source. Water Rewards are transferable to entities other than the source. It means Water Rewards needs to have a solution to the double-spend problem.
Three possible methods are centralised, blockchain and a distributed meta-heuristic algorithm. The centralised solution notifies the single source of any transfers. The blockchain solution preserves the provenance of the tokens so that a holder can prove they have a token from the originator. Water Rewards uses a distributed meta-heuristic algorithm available with complex adaptive systems.
The value of Water Rewards coming from any holder cannot be greater than the value of Water Rewards received by the holder. The total value of Water Rewards in the Water Rewards distributed network must be equal to the total created minus the total destroyed by the single source. Each partition of the network must preserve the value of Water Rewards in the partition.
When a Water Reward moves from one holder to another the partitions containing each holder are checked to see that the total value in the partitions is the same as before the move. Checking happens periodically and will detect double spending and pinpoint offenders. This approach is low-cost compared to the centralised or blockchain solutions as it is built into the distributed Water Rewards application.
