If some inauspicious event happens to a node, the holders of any equity owed to other nodes will suffer a loss. If you do not allow debt balances between nodes, then any and all inauspicious events will cause losses for every node in the network. These losses will be serially diluted, of course, but since the average node has a low number of outgoing connections, this dilution is relatively slow.

This is only true if you believe in the conservation of money.

Which is to say, it's nonsense.

The concept of 'loss' is inherently misleading, and serves no useful purpose in a mature social economy.

Going back to an earlier conservation, money is a decision-making process, not a thing. It's one - extremely poor and rather stupid - way to decide how to steer policy and values.

With a mature social structure, neither 'loss' nor 'debt' have anything useful to contribute as policy concepts. You can certainly have 'mistakes' and 'things that didn't work for some reason' - but you'll always have those.

Critically the concept of loss does nothing to keep them from happening. You can use other metrics to avoid them, with equal - or more likely much greater - predictive power and effectiveness.

The only way in which loss may matter as a concept is if you're attempting to account for physical resources which can never be replaced.

Any other kind of loss is illusory and psychological - which is a bad foundation for useful policy, as we all know.