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CreditExchangeThere is a basic explanation of the credit exchange concept at definitions. For this extended example, consider node A, which can route payments between any three nodes B, C, and D. C  B  A  D A is more friendly with nodes B and C, less friendly with node D. So A charges no transaction fees for payments routed from B to C or C to B. Nor is there a transaction fee for routing payments where D is the payer. However, where D is the payment recipient, A charges a transaction fee of 2%. Node A's exchange rate table is: BA > AC: 1 CA > AB: 1 BA > AD: 0.98 CA > AD: 0.98 Every node stores an exchange rate table like the one above, which it uses when acting as a payment intermediary between any two neighbors. A node could store a very high exchange rate to discourage exchanges it does not want to do. It could store a very low exchange rate (or no fee at all) to encourage exchanges it does want to do. 