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A couple of questions: 1) Could you describe the problem you are trying to fix in more detail? Who needs GD and why can't they use USD instead? You mention bas

• Suncho 11y ago
  1) Could you describe the problem you are trying to fix in more detail? I'm trying to solve the problem of how to get income to consumers in a reliable and efficient way that causes a minimum of economic distortion. Consumers must be able to spend in order for the economy to function. Historically, we have relied on the labor market to distribute money to consumers. We have expected consumers to be able to trade their labor to employers in exchange for money to spend. But the labor market's primary function is not to distribute spending money. It is to match labor with the businesses who utilize it. Different businesses require different types and amounts of human labor. It would be an amazing coincidence if compensation for labor somehow aligned with a favorable distribution of incomes in our economy. That's why it doesn't. That's why it never has and it never will. And because consumers lack adequate income, we produce less and our productive capacity gets under-utilized. If it gets too bad, you have a collapse like the Great Depression during which, we shut down factories and actually lost productive capacity. Our society has this belief that you jump-start the economy through investment (bank loans), etc. In the run up to 2008, spent credit that they had to pay back. If they had real money instead instead of borrowed money. The problem I'm trying to fix is the business cycle, or at least its harmful effects on the real economy. I'm also ultimately hoping to provide a universally accepted currency for the global economy. TL;DR: The problem I'm trying to fix is an inefficient economy. * Who needs GD and why can't they use USD instead? * If the government wanted to hand me the printing press, this whole enterprise would be a lot simpler. One way to think about Gresham Dollar is that it's a work-around for not being able to print more USD. * You mention basic income. Why is another currency needed for that? * It's not. But you do need to be able to create the money that you hand out to people. I used to think that the best way to pay for a basic income is through taxation, but I don't think that anymore. It'd be easier to do it through issuing new currency (i.e. deficit spending). * Who needs GD and why can't they use USD instead? * The economy needs more dollars to be distributed to consumers. Since we can't create new USD, GD is a substitute. Anyone who lacks an income needs GD. Any business who wants business from those people needs GD. Mostly, the overall macro-economy needs GD. Furthermore, the ultimate goal of GD is to be the world's currency. At some point, there may be Gresham Euros or Gresham Yen, but the end goal is to have a universal currency. * How will the basic income be provided, wouldn't you essentially have to fund it out of your own pocket. * We will need investors not only to fund our operations, but also to supply the USD reserves necessary to back the Gresham Dollar currency itself. The return on these investments will come in a different currency (GD) than the currency that was initially invested (USD). This works because, by the time we've succeeded (which I call the transition date), GD will have supplanted USD as the primary currency that people use. If we succeed, the investors won't care about USD anymore. If we fail, as with any investment, investors will lose their money anyway. As issuers of our own currency, we are in the position of being able to negotiate exact returns with our investors. We can therefore fund ourselves entirely by issuing a peculiar type of debt, which we call Future Gresham Dollars (FGD). If an investor provides us an initial investment of $5 million USD, for example, we can promise to pay them back e.g. $50 million GD at the transition date. That investor will be said to own 50 million FGD. A Future Gresham Dollar is essentially an IOU for a Gresham Dollar payable at the transition date. Since our FGD debt is denominated in GD, it's impossible for us to default on the debt. We create new GD to pay it. Gresham Dollar is crowd funded. Any time we want to boost our USD reserves, we can do so by selling new FGD. We will provide an interface to allow any Gresham Dollar user to buy FGD. While we may receive some large investments, anyone can participate in the crowd funding by investing any amount. Future Gresham Dollars are essentially discount bonds that all share the same date of maturity (the transition date). This means that Future Gresham Dollars are fungible – i.e. one investor's FGD is interchangeable with another investor's FGD. Investors can therefore trade FGD amongst themselves thereby creating secondary market for FGD. Users can set their own buy and sell prices for FGD. They can make money by dealing in FGD. We will set our own price for selling FGD to the market. Whenever our USD reserves are growing faster than we need, we will raise our FGD sell price to slow down our influx of USD. Investors may then prefer to buy FGD from each other on the secondary market. Selling FGD to another investor before the transition date can yield a more immediate profit. Furthermore, if we properly underprice our initial offering of FGD, our initial investors will be able profit right away. We may additionally set our own FGD buy price to prevent the value of FGD from falling too far. Our buy and sell prices, taken together, will define a price spread inside which FGD dealers can trade. When we buy FGD, we'll only ever pay in GD rather than USD because paying in GD has less of an effect on our USD reserves. Given that FGD is fungible and freely traded, we can conceptualize FGD as a currency of its own. Immediately prior to the transition date, because it will soon convert to GD, FGD will already have been circulating at close to the value of GD. Although FGD's value fluctuates with time, it will inevitably converge to the value of GD as the transition date approaches. The payout simply consists of relabeling all FGD as GD. Nothing dramatic happens on the transition date. There's no impact on the economy or the money supply. In addition to setting personal buy and sell prices, users can always buy and sell FGD at whatever price is offered by the market (spot price). When making Gresham Dollar purchases, users can pay using FGD by automatically, at the time of payment, exchanging FGD for GD through the dealer market at the spot price. In addition to the money they stand to make, individuals might invest (buy FGD) because they support our objective to provide people with a basic income and stabilize the world economy. Investors often care about changing the world for the better. * If you think someone else would fund it, how would you make sure GD are used? [untangle the currency from basic income for me] * The basic income is a primary way in which new GD is introduced into the economy. Once the money is created, the GD can circulate freely among people who accept it. It has value on its own because it will convert into USD when people hold it. At first, only a few thousand people will have the basic income, but the plan is to expand to cover more and more people. GD are basically the same as USD, but people get paid their basic income in GD because we can't create new USD. Is that what you meant when you asked me to untangle the currency from the basic income?
• Suncho 11y ago
  * 2) Walk me through the process of opening an account, buying a shirt from WalMart, buying a USB stick from Amazon and buying an Apple at my local market. * Every Gresham Account has a balance in GD and a balance in USD (for when the GD auto-convert). There are a few different account levels: "Basic accounts" receive a continuous income and we gradually roll them out to every individual until it becomes a universal basic income. In the mean time, anyone can sign up for a "starter account." Starter accounts allow you to accept and spend GD, but they don't provide the basic income. In the long run, every individual with a starter account will be upgraded to a basic account. The initial basic accounts are going to be handed out at homeless shelters and soup kitchens etc. If you're you, you would sign up for a starter account online and you'd get your basic income at some day in the future. There are reasons why you might want to open a starter account even though it doesn't provide you a basic income. The process would look a lot like signing up for a PayPal account. For the rest of your question, you can keep imagining that it works like PayPal. You can use PayPal at merchants that accept PayPal. There are numerous point of sale payment systems that we could potentially integrate with. We haven't worked out the details of which methods of payment we'd support (phone, QR code, debit card, etc.), but the bottom line is that the merchant has to accept GD. Ideally, we'd like to set something up where you have something similar to a debit card that automatically draws from your GD balance if you have GD and you're transacting with a merchant who accepts GD, but that draws from your USD balance (or a linked bank account) otherwise. We'd like to make it as seemless as possible. If possible, we don't want anyone having to make the decision about whether to spend GD or USD. * 3) What's the legal requirements for this? Would you need a banking license to operate the exchange and infrastructure? * The legal stuff is extremely tricky. I spoke to a lawyer about this and I don't think we'd need a banking license at first, but regulations are a challenge to be sure, especially once we get big. Framing it as a kind of "store credit" or "gift card with renewing balance" system to start might be the easiest way to go. Right now, digital currencies in the U.S. are regulated and taxed as commodities. So there's some precedent in place, but what we're planning to do goes well beyond the scope of Bitcoin. * You say it's a cryptocurrency. How do you manage the monetary exchange in a crypto fashion? * Each account will have a GD balance and a USD balance. Every time new GD is added to an account, it is tagged with an expiration time. If the GD is not spent, we adjust the respective balances in the accounts when it matures. Users' USD balances will amount to claims USD deposits in on our distributed network of US bank accounts that we will use to maintain our reserves. * How would you think the US government would view GD (especially since it is supposed to help with a basic income)? * It's hard to say. The U.S. government is pretty slow. Gresham Dollar is designed to take off pretty fast. My hope is that by the time we get noticed, we'll be too big to fail, or rather, too big for them to shut us down. They might have trouble taking away incomes from poor people. But they might nevertheless freak out about how we're affecting economic and monetary conditions. This is definitely a concern. The plan is to expand internationally, so eventually no one country would really be in a position to stop us.