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Interesting, thanks for the substantive reply. I'm not convinced fully but I think you've highlighted a problem area. The thing I see is that the coins the ric

Interesting, thanks for the substantive reply. I'm not convinced fully but I think you've highlighted a problem area. The thing I see is that the coins the rich community got for the food still have value. They can trade them for other resources, workers, and still manufacture things. Let's say this is a bakery. They can still buy flour and eggs and hire bakers (let's say this is a bit bigger than a mom and pop shop). So people still need to work at some level, but they will have enough money to buy bread and feed themselves always. I'm wondering how that balance works though (aka how much of COL is actually given by the UBI, and what variables change this). > If there's noone funding the system, then noone can get real stuff out of the system I don't think this is true. See currencies everywhere that no longer hold to a gold standard, etc. No one is funding the value behind printing money. Why it works is because of confidence and agreed upon value of the currency, which is required here in the same way. I'm wondering how this could possibly tie in with a deflationary currency used in tandem with it, and an exchange rate between UBICoin and StagantCoin. I'm spitballing here with little economics background though so I'm not claiming there isn't a central flaw there, but I'm curious what results.

PeterisP 9y ago
Okay, in the example of the poor community, the rich community can trade some of the coins back to the poor community for labor. Assuming that the farmers aren't as poor, the poor people have no flour or eggs to sell, but they can sell off some labor. However, let's assume the third community, who are homeless and permanently unemployable for mental health reasons, and (for the sake of argument) will never ever earn a coin from anyone else. Since this system enforces a 1-to-1 exchange rate, can you name any practical difference whatsoever between Alice trusting one of those people for 1 coin (i.e. they'll be able to trade with someone in a scenario where that someone will get 1 AliceCoin and Alice will get 1 Homelesscoin) and simply gifting 1 AliceCoin as charity? IMHO there is none, except Alice would be able to "keep score" of how much she has given to charity. This is a key issue here, that with this system trust isn't simply "Bob is who he claims to be", in this system trust means "I'm willing to guarantee that Bob's coins are as good as mine by agreeing to an automatic 1-to-1 trade", in essence you're willing to co-sign any purchase Bob makes since sellers will happily take your coins instead of Bob's; and in any environment where's an innate disbalance (i.e. your coins actually are more valuable than Bob's because more people will trust your coins) this arbitrage will be exploited up to your trust limit, resulting in you losing your coins and gaining Bobs coins instead. The same applies with community coins; no matter what happens, the coins of some communities will be de facto more valuable than others, so any link of trust between these communities will be arbitraged by that built-in 1-to-1 trade option until that trust runs out and trade between those communities stops. If someone makes a 1-to-x trade reflecting the actual difference of market power, then again people can exploit the built in 1-to-1 trades - so there's a strong disincentive for anyone to make that trust between those communities, since you have to bet (and spend!) your resources in keeping the different currencies linked. The system doesn't provide for "partial trust" of say, 1-to-0.8; you have to be totally sure that Bob's coins are as good as yours, since by making the trust link you're willing to trade all your coins for Bob's coins automatically (with no confirmation or refusal possible) at a 1-to-1 rate. There's a lot of theory and experience for national currencies pegged to each other - and how it can get exploited for financial gain (e.g. Soros had some profitable deals).
- adjkant 9y ago
  I see what you're saying, but you haven't convinced me of this disbalance. What incentive do sellers have to accept AliceCoin over HomelessCoin if everyone adheres to this 1 to 1, even though de facto this is not the case if you consider economic resources? > Since this system enforces a 1-to-1 exchange rate, can you name any practical difference whatsoever between Alice trusting one of those people for 1 coin (i.e. they'll be able to trade with someone in a scenario where that someone will get 1 AliceCoin and Alice will get 1 Homelesscoin) and simply gifting 1 AliceCoin as charity? The key difference is that she has lost no value if everyone holds to the 1 to 1 always. This is an important distinction, you're right. However, I don't see any incentive to break from 1 to 1 if everyone is holding to it. If the grocery store accepts HomelessCoin, I have no preference for AliceCoin. If everyone breaks from 1 to 1, then you suddenly have to calculate and consider the value of billions of currencies now. Who wants that? What value do I get out of that change? This coin is inherently built upon the idea that we are not tying individual coin value to someone's economic value. The seller should just want more coins, and it doesn't matter who they come from.
  - PeterisP 9y ago
    The "... if everyone holds to the 1 to 1 always. " part is a lot of wishful thinking. As I said, look at the real world examples of currency pegging failures, many of them artificially engineered by large scale market activities. 1) There is an innate difference in practical value, initially even if some coins have just a bit more liquidity i.e. wider range of acceptors as others. 2) If everyone holds to the 1-to-1 agreement forever, then there's no difference between the coins and everyone can freely make the trust deals. 3) If the 1-to-1 does not hold forever, then the people who were betting on the link failing can earn a lot of free coins in this arbitrage, taking them off of people who have made the 1-to-1 trust deals - draining their resources until the assigned trust limits run out. 4) Thus, there's a strong incentive for skilled, resourced people to try to break any 1-to-1 peg between any arbitrary communities, since they can earn a lot of coins if this trust breaks. Especially since it's an automatically enforced 1-to-1 without fees, it's a safe bet - if you fail, then there's no effect, if you succeed, you win a lot. Someone will eventually do so, and the 1-to-1 will break. This system design contains rewards for would-be exploiters of trust, so this design will be exploited.
jerf 9y ago
"The thing I see is that the coins the rich community got for the food still have value." I think in your replies you are begging the question, though. The question at hand is precisely where the value comes from. "Why it works is because of confidence and agreed upon value of the currency, which is required here in the same way." The fundamental base of the United States Dollar is that you can use a dollar to buy one dollar's worth of protection from the United States-affiliated men-with-guns from coming and taking you to prison for not paying the United States Government what it has determined to be its fair share. The US Dollar is built upon the confidence that the United States can and will do this to you, not a vague confidence in the currency for currency's sake. (This is why when governments collapse, their currencies collapse; any alternate theories of value are obligated to explain that connection as part of their theory of how currencies obtain value.) Currency is a unit of exchange, not really intrinsically valuable in itself except inasmuch as it exists in a market for which it can be exchanged. As a UBI proposal, this system very clearly has a mechanism for people to consume resources; the question is, who is going to put them in, and for what purpose? Even waving at BitCoin isn't enough to answer this question. BitCoin has always been about exchanges, not unilateral consumption. I think it may help you to ponder this question: Nothing stops you from creating adjkantCoin today. You can simply declare yourself to have a thousand of them. There is a deep and profound way in which that's exactly what this system does. How do you walk down the street and convince your grocer to take any of them in return for his apples? And don't consider it from your point of view... consider it from the grocer's. I am not asking this because it's impossible per se; BitCoin did indeed pull it off to some extent. But it's non-trivial, if you do successfully put yourself into the grocer's shoes, and something that this system will need to be able to answer many times over in order to work. And I don't see that answer right now. I'm not even sure it has a stable answer if you magicked it into existence, I'm deeply unconvinced it has an answer to get from here to there in the real world.
- adjkant 9y ago
  I completely agree it's non-trivial to convince people to adopt this system. However, once adopted, I don't think the 1 to 1 problem highlighted in this chain exists. If I had to give a very simple argument for why adopt, I think it would have to come from a place of "UBI would work if we all did X and you could still make money that could be exchanged for good and services with a similar inflation rate, so this currency is better than dollars. We should switch to it. Don't believe it will work? Look at Bitcoin!" In that way, pointing at Bitcoin naively can actually have value to validate the possibility of the coin's success. The biggest problem is of course not convincing one grocer, but the whole world at once. > "The question is, who is going to put them in, and for what purpose?" I fully agree with the question and its importance. I think the answer is everyone at once on the premise of "we're all in this together" and for the reason of "pursuit of a better social system". I don't think this will likely happen, but I think that theoretically, it's possible to function (the concept not this specific coin, which would need quite a lot more study to make this claim with). My hope is that given study and time, this idea has the potential to inspire a final system that could eventually be implemented this way in say 100 years, maybe sooner, maybe later. PS: Did not downvote, even if I disagree I appreciate the substance and am sad to see the downvote on such a substantive discussion.

PeterisP 9y ago

Okay, in the example of the poor community, the rich community can trade some of the coins back to the poor community for labor. Assuming that the farmers aren't as poor, the poor people have no flour or eggs to sell, but they can sell off some labor. However, let's assume the third community, who are homeless and permanently unemployable for mental health reasons, and (for the sake of argument) will never ever earn a coin from anyone else. Since this system enforces a 1-to-1 exchange rate, can you name any practical difference whatsoever between Alice trusting one of those people for 1 coin (i.e. they'll be able to trade with someone in a scenario where that someone will get 1 AliceCoin and Alice will get 1 Homelesscoin) and simply gifting 1 AliceCoin as charity? IMHO there is none, except Alice would be able to "keep score" of how much she has given to charity. This is a key issue here, that with this system trust isn't simply "Bob is who he claims to be", in this system trust means "I'm willing to guarantee that Bob's coins are as good as mine by agreeing to an automatic 1-to-1 trade", in essence you're willing to co-sign any purchase Bob makes since sellers will happily take your coins instead of Bob's; and in any environment where's an innate disbalance (i.e. your coins actually are more valuable than Bob's because more people will trust your coins) this arbitrage will be exploited up to your trust limit, resulting in you losing your coins and gaining Bobs coins instead. The same applies with community coins; no matter what happens, the coins of some communities will be de facto more valuable than others, so any link of trust between these communities will be arbitraged by that built-in 1-to-1 trade option until that trust runs out and trade between those communities stops. If someone makes a 1-to-x trade reflecting the actual difference of market power, then again people can exploit the built in 1-to-1 trades - so there's a strong disincentive for anyone to make that trust between those communities, since you have to bet (and spend!) your resources in keeping the different currencies linked. The system doesn't provide for "partial trust" of say, 1-to-0.8; you have to be totally sure that Bob's coins are as good as yours, since by making the trust link you're willing to trade all your coins for Bob's coins automatically (with no confirmation or refusal possible) at a 1-to-1 rate. There's a lot of theory and experience for national currencies pegged to each other - and how it can get exploited for financial gain (e.g. Soros had some profitable deals).

adjkant 9y ago
I see what you're saying, but you haven't convinced me of this disbalance. What incentive do sellers have to accept AliceCoin over HomelessCoin if everyone adheres to this 1 to 1, even though de facto this is not the case if you consider economic resources? > Since this system enforces a 1-to-1 exchange rate, can you name any practical difference whatsoever between Alice trusting one of those people for 1 coin (i.e. they'll be able to trade with someone in a scenario where that someone will get 1 AliceCoin and Alice will get 1 Homelesscoin) and simply gifting 1 AliceCoin as charity? The key difference is that she has lost no value if everyone holds to the 1 to 1 always. This is an important distinction, you're right. However, I don't see any incentive to break from 1 to 1 if everyone is holding to it. If the grocery store accepts HomelessCoin, I have no preference for AliceCoin. If everyone breaks from 1 to 1, then you suddenly have to calculate and consider the value of billions of currencies now. Who wants that? What value do I get out of that change? This coin is inherently built upon the idea that we are not tying individual coin value to someone's economic value. The seller should just want more coins, and it doesn't matter who they come from.
- PeterisP 9y ago
  The "... if everyone holds to the 1 to 1 always. " part is a lot of wishful thinking. As I said, look at the real world examples of currency pegging failures, many of them artificially engineered by large scale market activities. 1) There is an innate difference in practical value, initially even if some coins have just a bit more liquidity i.e. wider range of acceptors as others. 2) If everyone holds to the 1-to-1 agreement forever, then there's no difference between the coins and everyone can freely make the trust deals. 3) If the 1-to-1 does not hold forever, then the people who were betting on the link failing can earn a lot of free coins in this arbitrage, taking them off of people who have made the 1-to-1 trust deals - draining their resources until the assigned trust limits run out. 4) Thus, there's a strong incentive for skilled, resourced people to try to break any 1-to-1 peg between any arbitrary communities, since they can earn a lot of coins if this trust breaks. Especially since it's an automatically enforced 1-to-1 without fees, it's a safe bet - if you fail, then there's no effect, if you succeed, you win a lot. Someone will eventually do so, and the 1-to-1 will break. This system design contains rewards for would-be exploiters of trust, so this design will be exploited.

jerf 9y ago

"The thing I see is that the coins the rich community got for the food still have value." I think in your replies you are begging the question, though. The question at hand is precisely where the value comes from. "Why it works is because of confidence and agreed upon value of the currency, which is required here in the same way." The fundamental base of the United States Dollar is that you can use a dollar to buy one dollar's worth of protection from the United States-affiliated men-with-guns from coming and taking you to prison for not paying the United States Government what it has determined to be its fair share. The US Dollar is built upon the confidence that the United States can and will do this to you, not a vague confidence in the currency for currency's sake. (This is why when governments collapse, their currencies collapse; any alternate theories of value are obligated to explain that connection as part of their theory of how currencies obtain value.) Currency is a unit of exchange, not really intrinsically valuable in itself except inasmuch as it exists in a market for which it can be exchanged. As a UBI proposal, this system very clearly has a mechanism for people to consume resources; the question is, who is going to put them in, and for what purpose? Even waving at BitCoin isn't enough to answer this question. BitCoin has always been about exchanges, not unilateral consumption. I think it may help you to ponder this question: Nothing stops you from creating adjkantCoin today. You can simply declare yourself to have a thousand of them. There is a deep and profound way in which that's exactly what this system does. How do you walk down the street and convince your grocer to take any of them in return for his apples? And don't consider it from your point of view... consider it from the grocer's. I am not asking this because it's impossible per se; BitCoin did indeed pull it off to some extent. But it's non-trivial, if you do successfully put yourself into the grocer's shoes, and something that this system will need to be able to answer many times over in order to work. And I don't see that answer right now. I'm not even sure it has a stable answer if you magicked it into existence, I'm deeply unconvinced it has an answer to get from here to there in the real world.

adjkant 9y ago
I completely agree it's non-trivial to convince people to adopt this system. However, once adopted, I don't think the 1 to 1 problem highlighted in this chain exists. If I had to give a very simple argument for why adopt, I think it would have to come from a place of "UBI would work if we all did X and you could still make money that could be exchanged for good and services with a similar inflation rate, so this currency is better than dollars. We should switch to it. Don't believe it will work? Look at Bitcoin!" In that way, pointing at Bitcoin naively can actually have value to validate the possibility of the coin's success. The biggest problem is of course not convincing one grocer, but the whole world at once. > "The question is, who is going to put them in, and for what purpose?" I fully agree with the question and its importance. I think the answer is everyone at once on the premise of "we're all in this together" and for the reason of "pursuit of a better social system". I don't think this will likely happen, but I think that theoretically, it's possible to function (the concept not this specific coin, which would need quite a lot more study to make this claim with). My hope is that given study and time, this idea has the potential to inspire a final system that could eventually be implemented this way in say 100 years, maybe sooner, maybe later. PS: Did not downvote, even if I disagree I appreciate the substance and am sad to see the downvote on such a substantive discussion.