After a simple IOU-centric e-invoicing protocol was proposed in a 2011 post to the Unhosted mailinglist, there was some post-capitalism discussion and research on how this system could be used between humans and possibly also organisations.
In the fall of 2016, a "challenge and trigger" loop resolution algorithm was added (see Whispering Merchants) and due to a name clash the project was renamed from OpenTabs to LedgerLoops. The "challenge and trigger" loop resolution algorithm soon turned out to have a lot in common with the Interledger protocol, or at least a circular version thereof.
In 2021 and 2022 we held a weekly brainstorm meeting around Federated Bookkeeping which kept alive the original IOU-centric e-invoicing vision, adding a focus on data portability. A non-profit company, Ponder Source was created with the goal of bringing Connect Your Books to market, but we basically failed to do so.
And then in 2023, something amazing happened: at a gathering in the beautiful hills of Austria, Collaborative Finance (CoFi) was born. We can now refer to some generic theory about Collaborative Finance (PDF) and can rephrase LedgerLoops as "a P2P CoFi system" - and that is where we are now.
LedgerLoops is published free of patents, under the CreativeCommons BY-SA license. Michiel de Jong is working on it full-time.
Since LedgerLoops is patent-free, you can join the network of LedgerLoops-compatible nodes without prior permission, as long as you don't use the name "LedgerLoops" in a misleading way. We might create a test suite to certify software compatibility and bring the algorithms/protocols to a standards body, if there is interest in that.
The ultimate end goal of LedgerLoops is to help to allow goods and services to move to where they are most valuable. In society, this can happen through sharing (abundance based), but it often happens through win-win exchanges of property. These can happen across time thanks to the use of commodity goods and/or the administration of credit. Credit arrangements can form a network, and that's where LedgerLoops mechanisms can add their value.
In a credit networks, various economic arrangements can take place - the most important ones probably being barter, lending, netting, payment, factoring and market making (see Economic Arrangements for my definitions). I created this list of economic arrangements to make it clear that LedgerLoops is neither really an IOU system, nor a payment system nor a netting system. The credit graph exists on its own, independently. Different economic arrangements make the credit balances move, whereby goods and services can move to where they are most valuable, as is the end goal. LedgerLoops offers two mechanisms that can help with this.
In the Strategy Pit repository, I'm currently pitching different decentralised loop detection algorithms against each other. I hope to have something working before the CoFi 2 gathering in Banja Luka.
The "challenge and trigger" loop resolution algorithm I invented in 2016 and described on this website as a solution to the Whispering Merchants problem can be described as "making an Interledger payment to yourself", or as "a DEX on trustlines". There can be multiple variations of it in operation in the same credit network - for instance with / without timeouts, different mechanisms to express units of value, or with SHA-256 vs other hash functions.