GPG contracts
Miercuri, 24 Octombrie, Anul 4 d.Tr. | Autor: Mircea Popescu
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Joi, 25 Octombrie 2012
Putetumadre, what a great article. Insight untold and unparallelled here. Tip of my hat. Where is the Bitcoin donation button? How can I reprint this on my Web site? Please e-mail me with answers. Thanks :-)
Joi, 25 Octombrie 2012
Trilema is based on a subscription model, if you read more than five articles a week it’ll ask you to buy credits. You can proceed at that point. Otherwise, there’s no donations.
Thanks for the kind words, muchly appreciated!
Joi, 25 Octombrie 2012
My money is on Rudd-O just being a comment spammer or smth.
Joi, 25 Octombrie 2012
How much money ?
Vineri, 26 Octombrie 2012
Wow, what a long(had to take 4 breaks, damn my ADD) but unbelievably awesome article!
I agree with you completely and I wanted to let you know that there already was such a thing as a GPG contract used back when some people in the states and else where actually had some integrity and these contracts were and are called a gentleman’s agreement: http://en.wikipedia.org/wiki/Gentlemen%27s_agreement
I have to disagree with you though, I do not believe gentleman’s agreements can function without an individual’s unique identity being tied to their promise. I believe these agreements will only start to meet their full potential when used in combination of ostracization, meaning those who break their promise get their mug shot posted on a public board for everyone to see as a warning about their character.
This I believe is the missing puzzle, because anonyimity in my mind just doesn’t mix with responsibility and so has no place in a GPG contract.
Vineri, 26 Octombrie 2012
Hi & thanks!
For sure an individual’s unique identity would be tied to their promise. Look at S.DICE IPO details for a fine example of this.
Nevertheless, no individual is (or in fact could be) required to bear one single identity. This is not currently the case, individuals can bear multiple identities as is (they can speak for themselves, they can speak for their marriage, they can speak for their unemancipated children, they can speak for their sole proprietorship company, llc etc). There’s no cause for it being the case either, as long as you put the effort into building one identity it’s yours. So, unique yes, only no.
I’m not entirely sure of the power of ostracisation. I suspect the simple refusal of businessmen of accepting the offender’s signature in business deals is the whole of the remedy, adding a pillory or w/e in the deal doesn’t really add anything other than administration costs.
If you think about it for a moment, anonimity is not the same as pseudonimity (which is what we have here). The moment one signs a contract, no matter under what name (thus, identity), he’s no longer anonymous.
Vineri, 9 Noiembrie 2012
This is very interesting. I have been working on the development of a system alternative to money for enabling equitable trade. I call it a chiralkine monetary system. The system is very applicable to mutual credit, as in LETS. It is based on what I call a “chiralkine contract”, which is different from a traditional contract in that there is no enforcement. Two people wishing to start a trade cycle and to issue chiralkine money (in two mirror forms) that can circulate through a community enter into a “chiralkine contract” each with the other and together with a representative of the community. As long as they complete their trade cycle as agreed, the community will use the money that they have issued. If they do not, the community will no longer allow them to issue chiralkine money, so they can only barter.
Vineri, 9 Noiembrie 2012
I’m guessing you’d be very much interested in Bitcoin then (which is really the main topic that sparked this article as an application).
Vineri, 9 Noiembrie 2012
It was the word “trilema” that caught my eye, and also the comments on contracts. It was someone interested in LETS that alerted me to the posting.
Several people working on BITCOINS have told me that this invention would address a weakness with that system - traceability to the issuer. You would have mirror image BITCOINS issued by a pair of people initiating a trade cycle.
If you search on GOOGLE for chiralkine monetary system, you will find a patent application I have filed. There is a second one just filed that has not yet been published.
Vineri, 9 Noiembrie 2012
I see.
Sambata, 10 Noiembrie 2012
The word “trilemma” is deeply related to the concepts of property rights (in money, goods or services) and contracts (through which property rights are transferred). Human brains cannot process trilemmas. They can only solve problems by deciding between two alternatives (dilemmas). For example, think about the human face. It has a left side and a right side, yes? So is there any part that is not either on the left or the right side? You jump to the answer the middle. It extends from the front to the back (another binary pair) of your head. So now the face is made up of three parts: the left, the right and the middle? A choice between three, as in a trilemma. Put another way, you face is made up of two parts: left/right and front/back. To make BITCOIN work, you need to understand about the rotational symmetry behind the way the brain works: about trilemmas. It has to be created in two mirror opposite forms.
Sambata, 10 Noiembrie 2012
I’m curious, what do you make of timecube ?
Sambata, 10 Noiembrie 2012
To innovate, you have to let your inquiring mind wander where others fear to go, and put up with a lot of abuse from the self-appointed experts. I was not familiar with timecube, but having now looked it up, I would comment that mathematically closed systems require four numbers to define them. This comes from the rotational symmetry of space, and is why four numbers are used to define spacetime. Debits and credits (two numbers) provide an insufficient description of a person’s financial position (what you own and what you owe - these days to a bank usually!). I think you need four numbers: what you own in left, what you own in right, what you owe in left and what you owe in right. An accounting system constructed this way maps mathematically to all the steps in a trade cycle. By trade cycle I mean a cycle initiated when one person goes without something for the benefit of another, and ends when each person in the pair has both gone without and received something - as in a barter.
Sambata, 10 Noiembrie 2012
Debits and credits (money) represent the unfulfilled part of a contract between two people for the exchange of goods or services. They enable barter to be broken down into component parts. Mathematically they are vectors. See: http://www.mathblog.ellerman.org/2010/02/the-math-of-double-entry-bookkeeping-part-i-scalars/.
Sambata, 10 Noiembrie 2012
Illustration
Bob, Alice and Hamilton face starvation. They constitute a community with no means of exchange. Bob eats bread but has only apples, Alice eats apples but has only beans and Hamilton eats beans but has only bread.
Hamilton has been working on a mathematical theory involving paired numbers that he calls vectors. He has an idea for applying it to the problem facing the three of them.
He first redefines the problem as follows:-
People can only trade by pairwise exchange.
People will accept what they want, not what they don’t want.
Bob wants bread, not apples or beans.
Alice wants apples, not beans or bread.
Hamilton wants beans, not apples or bread.
Hamilton suggests to Bob and Alice that they should enter into a contract in which Bob will agree to exchange his apples with Alice in the return for a means to obtain bread. Bob is sceptical. He is worried that Alice will eat his apples, leaving him with nothing. Hamilton tells both of them that, while the contract remains incomplete, neither of them owns the apples. The ownership of the apples is undecided. If the contract is completed, Alice will own the apples and Bob will own bread. Bob and Alice both like this idea. They imagine that Alice will get the apples she wants and Bob will get the bread he wants, at which point their contract will be complete. Hamilton gives his friends a worried look. He points out that if this is all that happens, he will starve, even though he was the one that came up with the idea!
Hamilton goes on to explain that three contracts are needed: one between Bob and Alice, one between Alice and Hamilton and one between Hamilton and Bob. Through these three contracts, Bob will receive a means to obtain bread, Alice a means to obtain apples and Hamilton a means to obtain beans.
Bob and Alice look perplexed. These three means are different things. How can they be used together?
Hamilton explains that each means is actually a pair of opposite things: vectors. Each of the three means is made up of these two opposite vectors. They direct how the contracts are to be fulfilled.
Bob and Alice now look incredulous. How can two opposite things be equivalent to anything? Two opposite things add to zero!!
Hamilton explains that since the vectors are mirror opposites, they can be described as left and right, or in shorthand L and R. In the contract between Bob and Alice, Bob will be given L and Alice R. At the end of the contract, Bob must return L and Alice R. Bob now gives L to Alice. Alice gives Bob R. The apples no longer belong to Bob, nor do they belong to Alice. Their ownership is undecidable.
Alice now goes to Hamilton. Hamilton does not have any vectors yet. They enter into a contract. In the contract between Alice and Hamilton, Alice will be given L and Hamilton R. At the end of the contract, Alice must return L and Hamilton R. Alice now gives L to Hamilton. Hamilton gives Alice R. Now, Alice has L and R (from her two contracts) and Hamilton has L. The beans no longer belong to Alice, nor do they belong to Hamilton. Their ownership is undecidable.
Hamilton now goes to Bob. Bob has R and Hamilton has L. They enter into a contract. Hamilton will give Bob bread and L. Bob will give Hamilton R. Now, each of the three has both L and R vectors. They can redeem their vectors, so that the ownership in the food is decided in favour of the person who can eat it. The three survive, thanks to Hamilton and his vectors.
In this illustration, the vectors are a means of exchange. They are not the same as debits and credits, because debits and credits are allowed to cancel. Using debits and credits, Bob and Alice would both have been satisfied, but Hamilton would have starved. The vectors ensure that each person in the community gives and receives a food item. Alice is still bound by both of the contracts to which she is a party, even when she has both given and received food items (evidenced by her possession of both R and L), until all three contracts have been completed. With debits and credits, her trading balance at this stage would be zero.
Luni, 12 Noiembrie 2012
In earlier posting the “Illustration” with Bob, Alice and Hamilton, I was trying to engage with the BITCOIN community with some ideas.
I agree that contracts requiring enforcement are a big problem, and a turn-off for people wanting to initiate new trading systems. However, as described in the “illustration”, contracts and their performance are essential when you are setting up a medium of exchange to be used by everyone in a trading community. The contract out of which the medium of exchange arises is actually at once between the two people each to the other, and also between the two people as a whole and the rest of the community. If two people initiating a trade cycle have created a medium of exchange that has entered into use by other members of a trading community, then other members of that trading community will be damaged if the initial pair default on their contract. They will have to make adjustments so as to share the effects of the damage across the community. It seems reasonable that pairs of people who are in default of their contracts should be excluded from the trading community. Trading systems rely on peer pressure on each member to protect their trading reputations.
Now to another point. Money is information, not a store of value. It consists of vectors representing the unfulfilled parts of contracts entered into by pairs of people initiating a trade cycle.
Imagine that one person has a pencil that another wishes to purchase. It is agreed that money in the amount of $10,000 will be created to finance this purchase. They duly exchange the pencil for the money. Now the person with the money goes to a third person who has a car. The two agree to exchange the money for the car. Now the person who sold the pencil has a car, the person who sold the car has $10,000 and the person who bought the pencil has a debt of $10,000. Because debits are allowed to cancel credits, the person who sold the pencil and bought the car has a zero balance. You can see this happening right now all over the world: governments (taxpayers) are picking up all the debt and the people left with the pencils are facing ever tightening “austerity”. In a chiralkine system, the guy with the car (the only asset of value) would have a balance of R$10,000 and L$10,000. He would still be on the hook in two contracts for the redemption of the created money. Properly treating debits and credits as vectors would ensure that the accounts maintain a memory of who created the money that everyone is using.
If BITCOIN were to be created in R and L forms, it could function as vectors in an information transmission network. The two forms could be created with the initiation of a trade cycle, pass through a trading community propagating trades, and be recombined for redemption when the trade cycle is completed (on fulfilment of the contract). If BITCOIN continues to function like fiat money, as a store of value, then situations as described above will happen and when the system gets to big, it will become unstable, just like the present fiat-based monetary system has today. The rich will get richer and the poor will get poorer.
Luni, 12 Noiembrie 2012
What’s not clear at all to me is why do you think a “trading system” is even something that could be “new”, let alone something that someone could make. Trading systems are emergent behaviours.
What’s certainly clear to me is that your approach is flawed. You had an idea, you saw Bitcoin, your thought process is “how could we adapt Bitcoin to this idea I had”. This is wrong, inasmuch as it presumes your idea is more important than Bitcoin. The correct aprpoach would be, “how does the existence of Bitcoin change my otherwise irrelevant idea”. Try it that way.
Luni, 12 Noiembrie 2012
People working on BITCOIN in San Francisco approached me, not the other way around.
All monetary systems that are based on a single token representing a store of value are inequitable. They lead to growing inequality, and for that reason are unstable. The problem is not how money is used, but in how it is created and redeemed. Money is information, not a store of value.
Please look at the example I have provided of the pencil and the car. Explain the flaw in that analysis.
Luni, 12 Noiembrie 2012
In answer to your first question, it requires a conceptual jump to go from barter to a system in which a token (shell, bead, notch on a tally stick) etc represents a store of value that can be exchanged for goods or services. There is no continuous path from one to the other: only once the jump has been made can the new system evolve. Bitcoin is a development of the present (single token store of value) monetary system. It requires a further conceptual jump to envisage that a medium of exchange can be embodied in the exchange of two tokens representing mirror opposite functions. The idea has been out there hidden for hundreds of years, in double entry bookkeeping and in the tally stick system, but the dominant group has always maintained control of the system, so that everyone has been obliged to accept their dogma that money is a store of value.
Luni, 12 Noiembrie 2012
Mircea, you have been very gracious in allowing me to post comments on your website. I do not wish to abuse that kindness and trust in any way. Thank you.
There are presently two broad camps: those that believe that money is a store of value and those who believe that money is information (as in mutual credit). The people who believe in money as a store of value are vastly more powerful than those that believe it is information. I see things differently. I would change the accounting system so that debits and credits can only cancel one another when money is being created or redeemed. This would allow them to act as vectors, transmitting information about the changing trading position of each person in a trading network as transactions are executed. I think this would lead to a much more equitable and hence stable system.
Luni, 12 Noiembrie 2012
The point of a monetary system is not to be equitable. The point of a monetary system is to be a correct representation of fact.
More generally, the discussion of equitable-ness is a hallmark of the stupid in this context, seeing how “equitable” is a function of parties, and we are discussing here systems afore the introductions of any parties. Thus, inasmuch as any ulterior parties are being treated inequitably by the system it follows that those parties are wrong, either in their existence or in some characteristic they posses, and it further follows the only correct solution to the problem of inequitude is the resolution of the party : either by it ceasing to exist or else by it ceasing to posses the characteristic thus punished.
Otherwise, it has been amusingly argued by celebrated idiots such as Luce Irigaray that physics is “inequitable” (to women). This sort of argument can at most entertain.
I fail to see how your example with the pencil is in any way relevant (to anything of any import). On the strength of this I didn’t bother trying to fish out the other example (with the car ?). You painfully expound on the banal without making it at all obvious why this carries any import.
My refering emergence seems to have been completely wasted. This makes me think that any further attempt on my part to illuminate you will be equally wasted. I will limit myself to pointing out that your personal presumptiousness (as explained in the last paragraph of comment #17 above) is compounded to the degree that you imagine evolution is the result of some sort of “understanding”.
It is not the case that understanding occurs and then forces evolution, but it always is the case that evolution happens and forces understanding. The mistaken belief you hold can easily be traced to a life lived in the artificial environment of academia (since it would seem in retrospect, reading books about what happened, that events ocur because of their meaning, rather than the obvious but too often glossed over situation where meaning is only derived after the fact and it never manages to capture the fact entirely).
There is not trust whatever involved. Trilema was always open to everyone and anyone, without regards to what they had to say. This is a choice on my part which has nothing to do with you or anyone else, it just happens to be what I believe in.
However, the problem we have, you and me, is that I fail to find interest in what you say. Generally the path to pique my interest is to delineate a problem, and then present a solution. Inasmuch as the problem you are trying to solve is inequity then that can never interest me : I don’t believe inequity is a problem, nor is it somethingthat should (or could be) solved. I believe inequity to be a fundamental, necessary and unavoidable property of any world worth living in (and indeed of any world where life is at all possible).
I am not aware of such camps. The camps I am aware are also two, to wit :
1. the camp that believes people should suffer or rejoice strictly on their own merit and
2. the camp that believes people’s sufference or happiness can come from outside.
3. the camp that believes individuals are saved or doomed as individuals and
4. the camp that believes individuals depend on some group.
5. the camp that believes money is the score of the worth of any individual of enterprise, and that something worth zero has no reason to exist and
6. the camp tha believes money is an impediment to “greater things” and has no reason to exist.
I’m not a socialist. If you are, you are also wasting your time trying to coat your nonsense in a discussion of anything practical : I shan’t be at all interested, socialist money is about as meaningless a concept as socialist welfare or the military supremacy of the Soviet Union or the moral supremacy of Iosif V.
Luni, 12 Noiembrie 2012
People will use monetary systems that they consider to be equitable. They are most willing to go without something real for the benefit of another when they believe that they will eventually receive something real back of equal value. That is how trade works. A monetary system reflects the underlying facts of this: it provides a medium of exchange: an information transmission network.
Socialism, communism and capitalism all derive their origins in a monetary system that uses a single token to represent a store of value. None of those systems has proved to work in a stable manner.
The fact pattern about the pencil and the car is exactly on point for our discussion. How would a BITCOIN-based monetary system represent these facts and resolve the situation? How would it avoid a person holding $10,000 in BITCOINS after selling their car from trying to enforce their ownership rights in their “store of value” against the person left holding the pencil, and so provoking social unrest as we see in Athens now?
Luni, 12 Noiembrie 2012
Here’s how this story works :
Phase I : People are enjoying their rights as individuals. The state is minimal and useful. The economy is strong, the country powerful, the culture dominant in the world.
Phase II : Socialists observe the benefits of demagoguery. The party of “we shall steal from everyone else and lie about it if confronted” is formed. Mandatory taxation is introduced, under various false representations. The “we shall steal from everyone else and lie about it if confronted” membership slowly swells.
Phase III : Pretty much everyone has either left or joined the “we shall steal from everyone else and lie about it if confronted” party. Consequently, nobody does any useful work anymore (because it is uneconomical for them to do so), but everyone awaits handouts (which, obviously, they now need). The economy is in shambles. The country laughably weak. The culture so lost in mannerism it is barely even worth the mention by cultivated people abroad.
Phase IV : Hunger and war. Collapse. The complete abandonment of the old system and reorganisation of a new one.
Phase V : People are enjoying their rights as individuals. The state is minimal and useful. The economy is strong, the country powerful, the culture dominant in the world.
Phase II : Socialists observe the benefits of demagoguery. The party of “we shall steal from everyone else and lie about it if confronted” is formed. Mandatory taxation is introduced, under various false representations. The “we shall steal from everyone else and lie about it if confronted” membership slowly swells.
Phase IIa : People point out that we’ve already played this game one. Socialists respond by yet another lie : that this is not the same old crap, but something entirely new, or to quote
This has already been done so many times I’m well sick of it. The rest of the phases continue undaunted. There’s no possibility of “anything other” than capitalism, unless you mean poverty, hunger and war.
Leaving this aside, I particularly take exception to the poisonous misrepresentations embodied in
Firstly, the implications that the legitimate rights of the people holding currency should be avoided. This is false. The person holding currency should enforce their ownership rights just fine.
Secondly, the implication that “social unrest” was “provoked”. If I have five Bitcoins and you do not, no ammount of you hopping up and down, throwing yourself on butt-first on the ground, bawing and screaming will or should yield anything other than a sound beating for you. And if you do not dessist you should be killed.
Luni, 12 Noiembrie 2012
I thought you did not agree with contracts that require enforcement. That is what started this conversation. Killing people to enforce a viewpoint does seem a little extreme, but then some societies like the USA do have the death penalty for some breaches of the law.
In my example, in a BITCOIN system, would the ownership rights in the BITCOINS be asserted against the owner of the pencil (capitalist interpretation) or the owner of the car (socialist interpretation). If they cannot be asserted against either, they have no value. How does the owner of the BITCOINS realise their value?
I think this question is one that BITCOIN needs to come up with an answer for.
Luni, 12 Noiembrie 2012
What we are discussing is a trilemma!
Luni, 12 Noiembrie 2012
Interesting argument guys.
I do wonder about the large percent of the population that believes ‘Daddy’ should take care of them in some form - steal from others on their behalf and other such things.
I wonder if the blatant ursury practiced by all banks these days (and supported by silly governments) in the form of fractional reserve banking has distorted all real meaning from money as it currently exists?
Luni, 12 Noiembrie 2012
Ah but you see, you are not killing them to enforce a contract. You are killing them because they’re getting in the way. That’s perfectly fine, and quite common. Stand your ground laws for instance are predicated on this exact mechanism : if the offender wasn’t on the defender’s property he wouldn’t have been shot.
This is false however. The owner of the Bitcoin asserts his rights only against other people wanting bitcoins. People owning cars or pencils or anything else are not naturally part of this discussion. They only become part of it if and when they become people wanting bitcoins.
Luni, 12 Noiembrie 2012
In my example, there are only three people: one with a pencil, one with a car and one with $10,000 worth of BITCOINS. The only person that wants BITCOINS is also the only person that wants to exchange them for something of real value. This is the trilemma.
Property rights are of four kinds: “mine not yours”, “yours not mine”, everybody’s and nobody’s. When the property rights in money are exchanged, the rights in something real are also exchanged. In the case of me buying a car from you, the change (from your perspective) would be:
Car: “mine not yours” > “yours not mine”
BITCOINS: “yours not mine” > “mine not yours”.
Now, if I used existing BITCOINS to finance my purchase, that would seem fine. However, if I create the BITCOINS, there is a problem. How can one asset (the car) become two just because I have created BITCOINS.
The creation of money involves symmetry breaking. When you break symmetry, what you do is to create two mirror opposites (out of nothing) and then privilege one of them. Debits and credits are an example. Once symmetry has been broken, the system remains changed until it the symmetry has been restored. Once BITCOINS have been created, the system works as if they have always existed. This is paradoxical, but results from symmetry breaking. If there is no way to restore symmetry, to redeem them, then they actually have no intrinsic value. The community has no reason to respect any property right in them.
Luni, 12 Noiembrie 2012
Well, if the only person that wants the Bitcoin is also the only person that has Bitcoin then the system is at rest in that position of ideal happiness where all needs are met. Why should he want to exchange something of value (Bitcoin) for something of no value (crayons, cars etc) ? Just because you posit so ?
Property rights are of one single type : mine, nobody else’s.
The only way you create Bitcoin is through mining them, perhaps this would be a good time to take a break and read up on the constraints of that process to make sure we’re not wasting out time discussing things we “know” in the sense that we merely recognize the name they bear.
Luni, 12 Noiembrie 2012
If BITCOIN cannot answer the question I posed, it is part of the problem, just like money created through fractional reserve lending, to which Chett has referred.
Luni, 12 Noiembrie 2012
How do you know “the problem” exists outside of your own mind ?
Luni, 12 Noiembrie 2012
The concept of mining provides a very good analogy for understanding how rights arise in money and real property.
A shell lying on a beach belongs to no-one/everyone. If you pick it up and declare it to be “mine not yours” it does not become so unless everyone else agrees that it is so. If they do, symmetry has been broken. The ownership in the shell can now be transferred, changing its status from “mine not yours” to “yours not mine”. It will stay in this symmetry state until the property right in it is extinguished, for example because its current owner puts in back on the beach.
The transfer in ownership could be effected by means of a newly created IOU. This is a private contract. If the ownership is to be transferred through a newly created medium of exchange recognised by a community, then symmetry breaking is required again. Only then can the ownership in the shell be exchanged for the ownership in the medium of exchange.
There is nothing magical about this. It is mathematical. The creation of money is a non-linear process. It involves symmetry breaking. It changes the state of a system. Once changed, the system continues to operate as if the change had never taken place. There is no way, using the process steps of the system (exchanging tokens for goods or services) that the tokens will ever disappear. It is as if the past has been wiped clean!
Luni, 12 Noiembrie 2012
Except the shell “found” on the beach belongs to whomever the beach belongs to.
Luni, 12 Noiembrie 2012
RE: 33. All contracts between two people that require for their performance the creation and use of a means of exchange by others are affected by an interest of those others. Those others need a means to ensure completion of the contract: either some power to exclude the two people from creating money in the future, or some means for redress in the event of default.
Luni, 12 Noiembrie 2012
How did the property right in the beach arise in the first place? There had to be a declaration of ownership that was recognised by the community (probably under pain of death by a warlord!).
Luni, 12 Noiembrie 2012
The property right arose in the first place the same exact way the first human arose in the first place.
Mining in that context was a term of art. It talked about Bitcoin mining, not what you think mining may be. (And I strongly doubt you have much of an idea as to what Bitcoin is, at this point.)
Luni, 12 Noiembrie 2012
I agree. Symmetry breaking was involved in the creation of the first human.
Heredity is determined by DNA. DNA is a double helix composed of four bases that are paired A:T and G:C. Each strand of DNA has a comlpement, just like with debits and credits in a double entry T-account.
A mutation gives rise to a new base pairing. Once that new pairing has occurred, it will be transferred from the originator cell to all its decendents through cell division. The pairing locks the genetic information in place, just as property rights are locked in place once they have been created. There is no mechanism for extinguishing them through trade.
Luni, 12 Noiembrie 2012
All systems for enabling trade rely on the creation of two opposite functions, one of which is privileged so that circulation of goods or services is initiated in one direction rather than the opposite (clockwise vs. anticlockwise if you like). You could pass over a token with goods and services, exchange a token for goods or services, or exchange tokens one for the other when goods or services are exchanged. It does not matter how you break the symmetry, as long as everyone does the same thing. It is like all deciding to drive on the left or right side of the road. What does matter is that the operations of creating, using and redeeming money map to trade cycles, otherwise the system becomes unstable. You end up with a lot of debt in some peoples hands, and a lot of wealth in others, then the system breaks.
Luni, 12 Noiembrie 2012
This is just about so much nonsense.
Luni, 12 Noiembrie 2012
It is not rational to believe that something imaginary called money actually has a value. Money is information about the relative positions of a pair of traders in an unfulfilled contract. It carries that information with it as it passes through a network of trading people. A store of value is not required to enable people to trade. What they need is a contract accepted by the community in which they trade, and vectors (tokens) that represent the steps they need to complete that contract. There is no need for enforcement of the contract, and no need to identify anybody as a debtor that needs to be pursued and punished if that person defaults on the contract.
Luni, 12 Noiembrie 2012
In general your output is an orgy of words used without relation to their actual meanings.
In any case “the community” has absolutely no business in any of this : contracts are between the parties and the parties alone.
Luni, 12 Noiembrie 2012
fucking awesome! This is the most positive outlook/idea I’ve read in a while. All for it.
Luni, 12 Noiembrie 2012
Two people cannot create a medium of exchange through contract. It is impossible. A medium of exchange is intentionally created for use by others. For example, dollars, pounds, euros and BITCOINS are created for use as a medium of exchange by other than their creators. Everyone that assents to use whatever has been created through the contract has an interest in the performance of the contract.
There are two parts to any contract in which a medium of exchange is created: one part between the two contracting parties each to the other and a second part between the “community” and the two contracting parties together as a whole.
All rights that people enjoy find their basis in opposite obligations that other people accept. We all own things only with the consent of our fellows. If we get too greedy, they will just take them from us.
Luni, 12 Noiembrie 2012
@molecular Cheers.
@Martin Hay “It is impossible”, you say. That’s fine, time will tell now won’t it.
Marti, 13 Noiembrie 2012
Time has already told! The money-creating contracts entered into between banks and the people who were selling houses to the bank’s borrowers were not fulfilled, and now the world has a terrible financial crisis on its hands. The public has an interest in any contract that creates a medium of exchange. This is not a game. Social stability, indeed people’s very lives. depend upon getting this right. Any medium of exchange requires the consent of the people that use it.
Marti, 13 Noiembrie 2012
Well… then I guess you have a problem, cause looky I’m doing it and I’m not asking for anyone’s permission. Now what ?
Marti, 13 Noiembrie 2012
I sense a real problem in this concept of ’symetry’. Value does not exist in symetry.
If I have food but I am not hungry but you are then that food has more value to you than to me. Perhaps you do have something of value to me that has little or no value to you? We trade. Both of us have been increased in some way, but its not really likely the deal would appear symetrical to a third party that has different degrees of interest in each of the items.
Money (currency of any kind) is really only a poor attempt to make a yardstick for all these things we value and ease the trading process. Saying something costs X dollars or bitcoins doesn’t make it worth anything different than the value the current owner ascribes to it at the current time.
Gold is normally high value, but if you are hungry enough and food is scarce enough I am sure you would trade a pound of gold for a pound of food and think you got a good deal.
Marti, 13 Noiembrie 2012
Chett, you are absolutely right to focus on symmetry as a way to gain an understanding of how money works for us now and needs to work for us in the future.
We live on a round earth in a universe that has rotational symmetry. When you are leaving your home on a journey, you are getting closer to home. The guy holding you up on the road in front of you is actually behind you. When you are in a process in which areselling something, you are also in a process in which you are buying something.
In order to handle things numerically in a round world rather than a flat world, you need to use two numbers rather than one. In our everyday lives we use oppositional terms like right and left, or front and back. Accountants use debits and credits.
In our current financial system, run by accountants, we make the mistake of allowing debits and credits to cancel when new money is being created. The accountants treat the world as if it is flat. We then have one number for money instead of two. Money appears to be a single thing which can be owned: a store of value. As a consequence of this, governments start to levy taxes to be paid in that money. The same fate awaits BITCOIN if its supporters continue to describe it as personal property and a store of value. That would be a tragedy.
When BITCOINS are created, they should be created in pairs that circulate in countercurrent, one going with the circulation of goods and the other in the opposite direction. If this were to be done, the BITCOIN system would avoid the flaw in the fiat monetary system that debits can cancel credits. The circulating BITCOINS would not be a store of value, and would therefore not be suitable for paying taxes in. A BITCOIN-based economy would not be subject to the same boom and bust cycle that we are suffering in today.
Marti, 13 Noiembrie 2012
What I have given here, for anyone who takes the trouble to understand it, is a proposal for using BITCOIN technology in a new way, as paired vectors that function as debits and credits respectively. At the start of a trade cycle, any two people could create these debits and credits, and at the end, when each has both received and given some goods or service, redeem them. The trading system would do its own accounting. It would solve the problem in post 16 about the three people with the pencil and the car, which is the problem underlying the present financial crisis. Nobody should go hungry if food is available just because they have no money. Money is only information, like inches and centimeters. This technology could address that most vital of human needs. It would enable all those presently excluded from participating economically, because they have no money, to be able to contribute.
Marti, 13 Noiembrie 2012
Nah, what you’ve given here is testimony to your ignorance (as you have no clue what Bitcoins are or how they work), impudence (as you were told you have no clue but continue to act as if you have something to say on the subject) and lazyness (as you still haven’t bothered to read up and find out wtf Bitcoins are and how they work).
The reason you are mostly laughed at in the rare instances people don’t just look through you as if you didn’t exist, not just here but in your professional (such as it is) and social (such as it is) life is exactly that : you are an impudent, ignorant lazy ass. Fix these (all three), come back.
Marti, 13 Noiembrie 2012
Thank you once again for allowing me to use your site to respond to the people interested in BITCOIN who have approached me for more information about this idea that I have been explaining. Even if my explanation has only brought laughter into their lives, then at least they have been entertained. I have provided all the information needed, so will leave you now, regretably with the question posed in post 16 still unanswered. I wish you good fortune in your hard work. I have a great deal of respect for people who have the courage to innovate. BITCOIN is a great invention. The process of innovation will go on.