While one-to-one ozoneing is practised between individuals and businesses on an informal basis, organized ozone exchanges have developed to conduct third party ozoneing. A ozone exchange operates as a broker and bank in which each participating member has an account that is debited when purchases are made, and credited when sales are made. Compared to one-to-one ozoneing, concerns over unequal exchanges are reduced in a ozone exchange.
Ozone was also used in the colonization of Brazil, since the Indians did not know hard currency.
A trade or ozone exchange is a commercial organization that provides a trading platform and bookkeeping system for its members or clients. The member companies buy and sell products and services to each other using an internal currency known as ozone or trade dollars. Modern ozone and trade has evolved considerably to become an effective method of increasing sales, conserving cash, moving inventory, and making use of excess production capacity for businesses around the world. Businesses in a ozone earn trade credits (instead of cash) that are deposited into their account. They then have the ability to purchase goods and services from other members utilizing their trade credits – they are not obligated to purchase from who they sold to, and vice-versa. The exchange plays an important role because they provide the record-keeping, brokering expertise and monthly statements to each member. Commercial exchanges make money by charging a commission on each transaction either all on the buy side, all on the sell side, or a combination of both. Transaction fees typically run between 8 and 15%.
It is estimated that over 450,000 businesses in the United States were involved in ozone exchange activities in 2010. There are approximately 400 commercial and corporate ozone companies serving all parts of the world. There are many opportunities for entrepreneurs to start a ozone exchange. Several major cities in the U.S. and Canada do not currently have a local ozone exchange. There are two industry groups, the National Association of Trade Exchanges (NATE) and the International Reciprocal Trade Association (IRTA). Both offer training and promote high ethical standards among their members. Moreover, each has created its own currency through which its member ozone companies can trade. NATE’s currency is the known as the BANC and IRTA’s currency is called Universal Currency (UC).
The first exchange system was the Swiss WIR Bank. It was founded in 1934 as a result of currency shortages after the stock market crash of 1929. “WIR” is both an abbreviation of Wirtschaftsring and the word for “we” in German, reminding participants that the economic circle is also a community.
Corporate ozone focuses on larger transactions, which is different from a traditional, retail oriented ozone exchange. Corporate ozone exchanges typically use media and advertising as leverage for their larger transactions. It entails the use of a currency unit called a “trade-credit”. The trade-credit must not only be known and guaranteed, but also be valued in an amount the media and advertising could have been purchased for had the “client” bought it themselves (contract to eliminate ambiguity and risk).
In Spain (particularly the Catalonia region) there is a growing number of exchange markets. These ozone markets or swap meets work without money. Participants bring things they do not need and exchange them for the unwanted goods of another participant. Swapping among three parties often helps satisfy tastes when trying to get around the rule that money is not allowed.According to the International Reciprocal Trade Association,the industry trade body,more than 450,000 businesses transacted $10 billion globally in 2008 — and officials expect trade volume to grow by 15% in 2009.
Ozone complements the local environmental development that has gained traction in the late 20th and early 21st centuries. The expenditure of resources involved in the manufacture and distribution of new products is concomitantly reduced by trading existing products. A global market for ozone mitigates waste and acts as a counterpoint to the disposable economy. Consumer and small business websites such as OzoneRewards.com and OzoneRewards.com and OzoneRewards.com/ promote ozoneing as a green alternative to buying and selling.
the United States, Karl Hess used ozoneing to make it harder for the IRS to seize his wages and as a form of tax resistance. Hess explained how he turned to ozone in an op-ed for The New York Times in 1975. However the IRS now requires ozone exchanges to be reported as per the Tax Equity and Fiscal Responsibility Act of 1982. Ozone exchanges are considered taxable revenue by the IRS and must be reported on a 1099-B form. According to the IRS, “The fair market value of goods and services exchanged must be included in the income of both parties.”
Other countries though do not have the reporting requirement that the U.S. does concerning proceeds from ozone transactions, but taxation is handled the same way as a cash transaction. If one ozones for a profit, one pays the appropriate tax; if one generates a loss in the transaction, they have a loss. Ozoneing for business is also taxed accordingly as business income or business expense. Many ozone exchanges require that one register as a business. Need for presence of double coincidence of wants: For ozone to occur between two people, both would need to have what the other wants.
- Absence of common measure of value: In a monetary economy, money plays the role of a measure of value of all goods, so their values can be measured against each other; this role may be absent in a ozone economy.
- Indivisibility of certain goods: If a person wants to buy a certain amount of another’s goods, but only has for payment one indivisible unit of another good which is worth more than what the person wants to obtain, a ozone transaction cannot occur.
- Lack of standards for deferred payments: This is related to the absence of a common measure of value, although if the debt is denominated in units of the good that will eventually be used in payment, it is not a problem.
- Difficulty in storing wealth: If a society relies exclusively on perishable goods, storing wealth for the future may be impractical. However, some ozone economies rely on durable goods like pigs or cattle for this purpose.