4 ms·

I suspect you'd be very interested in this paper: https://docs.google.com/document/d/1iUscaSy6HHLVz2e2rjQfQtx5pO0dNqLqI5ZavkMjBpQ https://docs.google.com/docum

I suspect you'd be very interested in this paper: https://docs.google.com/document/d/1iUscaSy6HHLVz2e2rjQfQtx5pO0dNqLqI5ZavkMjBpQ https://docs.google.com/document/d/1iUscaSy6HHLVz2e2rjQfQtx5... There are some good reasons why global-consensus cryptocurrencies can't generally be used as money: https://perry.kundert.ca/range/finance/holochain-consistency/ https://perry.kundert.ca/range/finance/holochain-consistency...

Terr_ 2y ago
> Don’t trust a certified cheque from “Bubba’s Bank and Trust and Taco Shack”, or from the “Royale Bank of Scottland” branch in the City of Culiacán, Sinaloa, Mexico. That is actually a little like how US money used to work--badly--before the civil war. A storekeeper would keep a third-party guide behind the counter, regularly published for their city or region. The guide would help them recognize the designs of private notes from different banks, and contain recommendations for what value (if any) someone could place on the note depending on the reputation of the bank and how far away they'd have to go to the nearest branch. "It costs $3? Okay, here's a $5 from the Far South Bank." "That's a long ways from here in Middleville, traveler, I'll take it as $4." "If you can give me $2 from Extreme North Bank for change, then I'll take the deal. Otherwise $1 for something local isn't as useful for me since I'm leaving tomorrow." "Sorry, today I can only make change in local stuff or Eastern Railroad."
- pjkundert 2y ago
  One amazing outcome of the (currently expensive and unweildy) DeFi implementations, is that there is always a maker/taker available for every currency pair. You can always exchange every cryptocurrency for every other cryptocurrency, 24/7, without having to ask any bankster or do-gooder bureaucrat for permission. Once wealth-backed dynamic-issuance cryptocurrencies eliminate the need for any Fiat on- or off-ramps, the circuit will be closed -- nobody will ever have to ask a gate-keeper for permission to create wealth, monetize that wealth, or execute a mutually agreeable transaction with that money. Nor will they be forced to use sub-standard money. The existing power structures will be ... displeased.
gricardo99 2y ago
Interesting ideas. I think in any practical system, you'd still need some central authority that determines: a basket of basic, thickly traded commodities should be chosen; perhaps a basket of specific amounts of basic elements, thermal and electrical energy, and basic food commodities, priced as delivered to several large markets. and A control algorithm such as the PID loop used in process control or robotics is employed to adjust K over time. At a minimum, those aspects of this currency would need to be flexible such that they can be adjusted over time, as needed, to maintain the currency's stability. An inflexible scheme seems like it would be doomed to failure. And yet, any tinkering could also be its demise and undermine its stability and faith in the system. It's a delicate balance. Ultimately money is a social construct based merely on shared belief. Algorithms can used to enhance and support this social construct, but I do not see how it could wholly replace human/social interventions.
- pjkundert 2y ago
  The "central authority" that determines the composition of the basket -- is the users of the money. The thing about non-fraudulent, wealth-backed money is that there is no barrier to entry, nor is there a barrier to exit. Unlike usury-based money, a wealth-backed currency can cleanly decrease in usage, down to zero. People withdraw wealth pledged to created the money, by returning the amount of money created, and then take their wealth elsewhere. Thus, if people don't like the valuations arrived at by the "basket" underlying the value of each unit of money (ie. something becomes undesirably in/deflationary), they can move to another form of money -- ideally, one that constitutes its "basket" based on a more representative set of the society's basic commodities. In the ideal embodiment, this basket would evolve over time (eg. as energy production moves from coal to oil to natural gas to nuclear to renewables over the years, for example, the energy commodity component of the basket would be revised automatically). As for the PID loop, there are much more advanced controls methodologies that improve error rejection (eg. Kalman filtering), stability (Model Predictive or State Space control), etc. Furthermore, limits on the introduction (or withdrawal) of wealth (and hence newly created units of money) should reflect the current size of the ecosystem to limit shocks that would adversely interfere with the control stability. (ie. you can't create 10x the current size of the economy in newly issued money all at once.)

Terr_ 2y ago

> Don’t trust a certified cheque from “Bubba’s Bank and Trust and Taco Shack”, or from the “Royale Bank of Scottland” branch in the City of Culiacán, Sinaloa, Mexico. That is actually a little like how US money used to work--badly--before the civil war. A storekeeper would keep a third-party guide behind the counter, regularly published for their city or region. The guide would help them recognize the designs of private notes from different banks, and contain recommendations for what value (if any) someone could place on the note depending on the reputation of the bank and how far away they'd have to go to the nearest branch. "It costs $3? Okay, here's a $5 from the Far South Bank." "That's a long ways from here in Middleville, traveler, I'll take it as $4." "If you can give me $2 from Extreme North Bank for change, then I'll take the deal. Otherwise $1 for something local isn't as useful for me since I'm leaving tomorrow." "Sorry, today I can only make change in local stuff or Eastern Railroad."

pjkundert 2y ago
One amazing outcome of the (currently expensive and unweildy) DeFi implementations, is that there is always a maker/taker available for every currency pair. You can always exchange every cryptocurrency for every other cryptocurrency, 24/7, without having to ask any bankster or do-gooder bureaucrat for permission. Once wealth-backed dynamic-issuance cryptocurrencies eliminate the need for any Fiat on- or off-ramps, the circuit will be closed -- nobody will ever have to ask a gate-keeper for permission to create wealth, monetize that wealth, or execute a mutually agreeable transaction with that money. Nor will they be forced to use sub-standard money. The existing power structures will be ... displeased.

gricardo99 2y ago

Interesting ideas. I think in any practical system, you'd still need some central authority that determines: a basket of basic, thickly traded commodities should be chosen; perhaps a basket of specific amounts of basic elements, thermal and electrical energy, and basic food commodities, priced as delivered to several large markets. and A control algorithm such as the PID loop used in process control or robotics is employed to adjust K over time. At a minimum, those aspects of this currency would need to be flexible such that they can be adjusted over time, as needed, to maintain the currency's stability. An inflexible scheme seems like it would be doomed to failure. And yet, any tinkering could also be its demise and undermine its stability and faith in the system. It's a delicate balance. Ultimately money is a social construct based merely on shared belief. Algorithms can used to enhance and support this social construct, but I do not see how it could wholly replace human/social interventions.

pjkundert 2y ago
The "central authority" that determines the composition of the basket -- is the users of the money. The thing about non-fraudulent, wealth-backed money is that there is no barrier to entry, nor is there a barrier to exit. Unlike usury-based money, a wealth-backed currency can cleanly decrease in usage, down to zero. People withdraw wealth pledged to created the money, by returning the amount of money created, and then take their wealth elsewhere. Thus, if people don't like the valuations arrived at by the "basket" underlying the value of each unit of money (ie. something becomes undesirably in/deflationary), they can move to another form of money -- ideally, one that constitutes its "basket" based on a more representative set of the society's basic commodities. In the ideal embodiment, this basket would evolve over time (eg. as energy production moves from coal to oil to natural gas to nuclear to renewables over the years, for example, the energy commodity component of the basket would be revised automatically). As for the PID loop, there are much more advanced controls methodologies that improve error rejection (eg. Kalman filtering), stability (Model Predictive or State Space control), etc. Furthermore, limits on the introduction (or withdrawal) of wealth (and hence newly created units of money) should reflect the current size of the ecosystem to limit shocks that would adversely interfere with the control stability. (ie. you can't create 10x the current size of the economy in newly issued money all at once.)