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It's not much different from Bitcoin really. Who owns a particular coin is based entirely on the consensus of who owns what, and for a coin to change hands you

It's not much different from Bitcoin really. Who owns a particular coin is based entirely on the consensus of who owns what, and for a coin to change hands you just tell everyone it has.

grondilu 9y ago
I actually was expecting a reference to bitcoin in the article, as this stone money was talked about on bitcoin forums as early as 2011 IIRC. It was considered quite a good analog.
rcthompson 9y ago
I think it's also similar, to a lesser degree, to modern card-based banking, in which all the money physically sits in a vault and only changes hands virtually. (But this lacks the concept of ownership being determined by distributed consensus.)
- Sir_Substance 9y ago
  >I think it's also similar, to a lesser degree, to modern card-based banking, in which all the money physically sits in a vault and only changes hands virtually. That is in no way how modern banking works. Only about 1/7th of the money in peoples bank accounts in the US has a physical counterpart in any bank vault, almost all of the "money" in bank accounts is purely virtual. Most money today is not printed by the mint but instead wizarded into existence in a fashion pretty much the same as how world of warcraft gold is created, but with regulatory restrictions in place around the wizardry to create desired economic outcomes. When a crisis prompts the population to collectively attempt to withdraw more than this reserve 1/7th, it's called a "run on the bank". The bank is unable to fulfill it's obligations[1], and economies break down as faith in the currency collapses. This is exactly what happened to Cypris in 2012. The whole system basically hinges on a significant majority of the population not scrutinizing the banking sector too closely. If you'd like to know more, there are quite a few great youtube videos on fractional reserve banking, and it's absolutely worth investing an hour to watch one of the longer ones. This one is pretty good and approachable, although it's certainly biased: https://www.youtube.com/watch?v=4AC6RSau7r8 https://www.youtube.com/watch?v=4AC6RSau7r8 [1] It's actually more complex than this. Central banks can help prop up other banks in this case, but central banks also have their limits in the case of a nation-wide run on multiple banks.
  - lojack 9y ago
    Very few people realize that when they give their money to the bank, the bank owns 100% of the money and all you get is a promise by the bank to let you withdraw an equivalent amount money with certain restrictions (usually also insured by the FDIC). With fractional reserve banking the bank isn’t lending out your money... they’re lending out their own money, and you also have a contract with the bank for a similar amount of money. When a crisis like Cypress happens, it isn’t a failure of the bank to return its customers money, it’s a failure of the bank to honor their contracts.
  - rcthompson 9y ago
    Oh yeah, I forgot about fractional reserve banking. I did learn this at some point, but it's not something I think about on a daily basis.
  - caf 9y ago
    The reason most of the money isn't in the bank vaults isn't because it's "virtual" or was created out of thin air - it's far more prosaic than that. It's just because it's been lent out by the bank. In principle, if everyone who the bank had loaned money to was able to immediately repay it, then you could unwind everything and make everybody whole again. The bank run occurs because this can't happen - the people the bank has loaned the money to simply cannot repay immediately, because they've spent the loan on non-liquid assets. The fundamental purpose of the bank in such a system is to fund long-term, risky and therefore expensive debt (such as to someone who wants to start a business) with short-term, secure and therefore cheap debt (eg a savings account).
    - ithkuil 9y ago
      when a bank lends out money, that money ends up (for most part nowadays) in another person's ... bank account.
guitarbill 9y ago
Seems like those stones are harder to steal than Bitcoin from the average exchange :D
- once_inc 9y ago
  But a lot easier than getting them from a hardware wallet like a Ledger or Trezor. Exchanges are hacked because of human stupidity or laziness. Hardware wallets are significantly harder to hack.
ejcx 9y ago
What we REALLY need is these Micronesian money stones to be logged on the immutable blockchain.
- jcranmer 9y ago
  For the record, I had a vision of the blockchain here being a physical chain that you thread through these stones instead of a virtual ledger.
- fred_is_fred 9y ago
  Pretty sure yap.io just got Series A based on your post here.
yiiii 9y ago
Maybe therefore the cryptocurrency Nano was formerly known as RaiBlocks (while the orginal currency on Yap was rai stones).
- once_inc 9y ago
  Correct: https://www.reddit.com/r/RaiBlocks/comments/7l9o9y/raiblocks_name_is_awesome_just_an_idea/ https://www.reddit.com/r/RaiBlocks/comments/7l9o9y/raiblocks...
ozim 9y ago
I am doing initial stone offering in my backyard. Starting in two days, supply is limited so value can only go up, bring your friends so they don't miss opportunity as well!

It's not much different from Bitcoin really. Who owns a particular coin is based entirely on the consensus of who owns what, and for a coin to change hands you just tell everyone it has.

grondilu 9y ago

I actually was expecting a reference to bitcoin in the article, as this stone money was talked about on bitcoin forums as early as 2011 IIRC. It was considered quite a good analog.

rcthompson 9y ago

I think it's also similar, to a lesser degree, to modern card-based banking, in which all the money physically sits in a vault and only changes hands virtually. (But this lacks the concept of ownership being determined by distributed consensus.)

Sir_Substance 9y ago
>I think it's also similar, to a lesser degree, to modern card-based banking, in which all the money physically sits in a vault and only changes hands virtually. That is in no way how modern banking works. Only about 1/7th of the money in peoples bank accounts in the US has a physical counterpart in any bank vault, almost all of the "money" in bank accounts is purely virtual. Most money today is not printed by the mint but instead wizarded into existence in a fashion pretty much the same as how world of warcraft gold is created, but with regulatory restrictions in place around the wizardry to create desired economic outcomes. When a crisis prompts the population to collectively attempt to withdraw more than this reserve 1/7th, it's called a "run on the bank". The bank is unable to fulfill it's obligations[1], and economies break down as faith in the currency collapses. This is exactly what happened to Cypris in 2012. The whole system basically hinges on a significant majority of the population not scrutinizing the banking sector too closely. If you'd like to know more, there are quite a few great youtube videos on fractional reserve banking, and it's absolutely worth investing an hour to watch one of the longer ones. This one is pretty good and approachable, although it's certainly biased: https://www.youtube.com/watch?v=4AC6RSau7r8 https://www.youtube.com/watch?v=4AC6RSau7r8 [1] It's actually more complex than this. Central banks can help prop up other banks in this case, but central banks also have their limits in the case of a nation-wide run on multiple banks.
- lojack 9y ago
  Very few people realize that when they give their money to the bank, the bank owns 100% of the money and all you get is a promise by the bank to let you withdraw an equivalent amount money with certain restrictions (usually also insured by the FDIC). With fractional reserve banking the bank isn’t lending out your money... they’re lending out their own money, and you also have a contract with the bank for a similar amount of money. When a crisis like Cypress happens, it isn’t a failure of the bank to return its customers money, it’s a failure of the bank to honor their contracts.
- rcthompson 9y ago
  Oh yeah, I forgot about fractional reserve banking. I did learn this at some point, but it's not something I think about on a daily basis.
- caf 9y ago
  The reason most of the money isn't in the bank vaults isn't because it's "virtual" or was created out of thin air - it's far more prosaic than that. It's just because it's been lent out by the bank. In principle, if everyone who the bank had loaned money to was able to immediately repay it, then you could unwind everything and make everybody whole again. The bank run occurs because this can't happen - the people the bank has loaned the money to simply cannot repay immediately, because they've spent the loan on non-liquid assets. The fundamental purpose of the bank in such a system is to fund long-term, risky and therefore expensive debt (such as to someone who wants to start a business) with short-term, secure and therefore cheap debt (eg a savings account).
  - ithkuil 9y ago
    when a bank lends out money, that money ends up (for most part nowadays) in another person's ... bank account.

guitarbill 9y ago

Seems like those stones are harder to steal than Bitcoin from the average exchange :D

once_inc 9y ago
But a lot easier than getting them from a hardware wallet like a Ledger or Trezor. Exchanges are hacked because of human stupidity or laziness. Hardware wallets are significantly harder to hack.

ejcx 9y ago

What we REALLY need is these Micronesian money stones to be logged on the immutable blockchain.

jcranmer 9y ago
For the record, I had a vision of the blockchain here being a physical chain that you thread through these stones instead of a virtual ledger.
fred_is_fred 9y ago
Pretty sure yap.io just got Series A based on your post here.

yiiii 9y ago

Maybe therefore the cryptocurrency Nano was formerly known as RaiBlocks (while the orginal currency on Yap was rai stones).

once_inc 9y ago
Correct: https://www.reddit.com/r/RaiBlocks/comments/7l9o9y/raiblocks_name_is_awesome_just_an_idea/ https://www.reddit.com/r/RaiBlocks/comments/7l9o9y/raiblocks...

ozim 9y ago

I am doing initial stone offering in my backyard. Starting in two days, supply is limited so value can only go up, bring your friends so they don't miss opportunity as well!