[wolfgang42]

Charli consented by giving Bob a line of credit. (If she hadn’t, and hadn’t owed Bob any money, the transaction wouldn’t have gone through her.) It’s up to each individual participant to set the credit limits on their friend pairings according to their own risk tolerance and trust level. If Bob turns out to be a deadbeat, Charli probably shouldn’t have given him any credit; but that’s not a technical problem.

In practice, I’d expect that if Offset (or another p2p mutual credit system) catches on, you’d see mostly two main ways of using it: friends and maybe local businesses giving small amounts of credit to each other (think splitting the bill for lunch, or a local plumber and a bakery) based on mutual trust, and writing off the occasional bad debt the same way they do now; and larger “commercial” lenders who work like present-day credit card companies, tracking credit scores and the like and with the force of law behind them if you don’t pay your overdue bill.