We have seen above a kind of virtual money which exists on a ledger as the imbalance between accounts. There is no money, zero, in the ledger, but only account balances going up and down, their total always being zero. Ledgers in banks and other corporations are used to store promises of real money, because it is easier to track and transport promises than cash. The intention is always to settle the balance at a later date with a single net payment; sometimes settlement is not even necessary if the net balance is close to zero. Sometimes these systems are said to provide liquidity because they allow payments without cash. A ledger used in this way, is called a credit clearing system. Before computers, all the cheques paid into the banks in one day would go to the clearing house where they would be added up and cancelled out. Banks would pay each other only the difference. Clearing means much the same even today: the hassle of moving actual money can be reduced insofar as transactions can be cleared beforehand, and this is precisely what ledgers do. And payment need never be made as long as accounts stay within a tolerable trustworthy distance of zero. Conventional bank deposits are created on a balance sheet, thus as property, but on a ledger the payments between accounts are more like flows, or even relationships. Ledger money is not minted or printed, it has no physical form and no fixed quantity. Starting from zero, Alice can pay Bob 10 units. Then Alice’s account is -10 and Bob’s +10. The total is zero. Bob can pay Carol, and Carol, Alice. When Alice’s balance is back to zero she can walk away, having paid and been paid without the hassle of shipping units back and forth in armoured vehicles. Another way of looking at it is that spending and earning the internal currency units simultaneously creates and destroys ‘money’ such that, by definition there is always the right amount of it to represent the current credit/debit relationships. Alice’s having ‘owed’ the system for some time is not counted a debt and need not produce interest. In order for Bob to receive widgets before he paid widgets, someone else had to pay before they received. This is a reciprocal relationship and totally different from the commodity money paradigm in which the wealthy own all the money (or at least the right to promise what they don’t have) and rent it out to the poor. And let us not forget that what is really valuable here is not the money, but the goods and services flowing in the opposite direction! Ledger money fulfils two of the three classical functions of money: the medium of exchange and the unit of account; but not the store of value function. Economists such as Silvio Gesell argued strongly that ‘money’ should not be intended as a long term store of value since the primary properties of money are its liquidity and virtuality. The store of value function should be performed by commodities or securitised commodities, and to expect money to perform all three functions is an error of thinking.