- In a transaction, the total amount of modified ingress across the set of accounts must equal the sum of modified egress. This ensures that money is not created out of thin air.
- Accounts cannot have a negative balance, meaning that egress cannot exceed ingress for any account.
- A special account called “world” can have a negative balance. This account is used to introduce money into the system, acting as an exception to the negative balance constraint.
Case 1: Invalid Transaction - Creating Money
Adding
$80
to account 1 ingress is invalid as it violates the first rule. Since there is no corresponding egress in another account, this transaction would improperly create money out of thin air.Case 2: Invalid Transaction - Negative Balance
Assuming account 1 has a balance of
$10
. Adding $20
egress to account 1 and adding $20
to account 2 ingress is invalid as it violates the second rule. This would result in account 1 having a negative balance, which is not allowed.Case 3: Valid Transaction - Using World Account
Adding
$20
to the world
account’s egress and adding $20
to account 1 ingress is valid because the “world” account is allowed to have a negative balance as per rule 3. This transaction introduces money into the system, complying with the special constraint that allows the “world” account to balance the system by absorbing the negative balance.