Bitcoin Forum

Hi,

BitCoin seems a very great project, we started to think the same idea (no center money system tool) in the LiquidBank project in France.

However we think limitating money is an error, money shood increase in regular basis of 5%/year given to each participant in the collectivity, accordingly with long term economic growth.

Could you take some time to read in French the "Universal Dividend" Money System ? http://fr.wikipedia.org/wiki/Dividende_Universel

Or by Google Translation : http://translate.google.com/translate?hl=fr&sl=fr&tl=en&u=http%3A%2F%2Ffr.wikipedia.org%2Fwiki%2FDividende_Universel

Please let us know about the monetary system you propose to use.

I suppose BitCoin is a tool able to be used for separates money systems ?

I don't see how this encourage bitcoin users to create services and goods for the economy. In fact, by starting a business, encourage others to start a business, so a bitcoin user gain a "dividend" in the form of economic growth. Much more so, if they start a business.

A growing money system encourages to invest or buy, instead of a deflationnary or stable one, which encourages keeping it and invest later.

So Monetary mass must grow, not stay at the same level. In fact if you stay it at the same level you stay at zero.

When you start creating money, you should not stop it, because if so you give advantage to the first ones in the system who earn money for free, and the later ones who might give goods to obtain their first credits. This is not fair.

If we want generation after generation of users entering the system obtaining a quite equal part of the money created, a regular %/year of money must be created (see demonstration in http://fr.wikipedia.org/wiki/Dividende_Universel

And without an Open clear and ethic money creation system, I won't use that money. I won't start investing in a money system I think is not designed in a complete ethic way, spatially (which is the case of BC because it anounces equal distribution of the created money) AND temporally (equal distribution IN THE TIME also, the next generation of users, should not be out the creating money process, and as possible earn the same relative part of existing money like the old ones).

In a system where everyone can get money for nothing money is worth nothing. A system where some can get money for nothing is a system of slavery.

In bitcoin no one is getting money for noting, you must help process transactions to get the new money and anyone who can do that can get the money.

This is nonsense since computer prices keep deflating. Economies grow when they have capital or saving. More saving, mean more resources to spend. All this will balance out when people start spending money again.

I will join a revolt as soon as there is one if such things is happening. I cannot be a leader since I don't have any knowledge in cryptography.

A growing money system is great!

Growing numbers is just arbitrary and does not grow the system. The system grows whenever more people accept bitcoin as payment.

The only way to be sure that everything will be totally fair is to put me in charge.

With that settled, I decree that we increase the value of all French wine by putting an additional 5% water into it each and every year. Not only would this be absolutely fair to all, but the quantity of fine older wine will actually increase!

My brother Louie will be there shortly to oversee the nominal taxes and regulatory system this will require.

A toast, to equality and fairness!

Indeed. Please don't water down my wine or my money.

it seems like the same tired arguments are made over and over that some how the act of "spending" stimulates the economy and that the act of "hoarding" hinders it.  From this fallacy flows every justification for monetary inflation.

The act of spending is simply an act of trading one good for another.  At the end of the day there is NO DIFFERENCE in the physical economy whether something was "spent" or not only who controls what real asset.  There are just as many profit opportunities for those who know how to allocate resources.  The money held from circulation does not reallocate resources and thus does not affect the ability of everyone else to be productive.  

So the question is why do people trade?  They trade because they want something else more than what they have.   Both parties are better off by every trade.  If I am better off holding my gold in speculation that in the future other goods will be more plentiful than gold then that is good.  It means I delayed consuming other goods and let others consume them because I had no better ideas.  Forcing me to "find something" means poor choices.  

So the question becomes, does increasing the rate at which goods change hands actually improve anything?  Or does the inefficiencies of having to manage a "hot potato currency" cause people to make rash decisions in an attempt to avoid a loss caused by someone arbitrarily creating something from nothing in the name of some economic religions view of "the greater good"?  

The only "inflationary" money supply I support is the one that gives me all of the new money.  If you have a problem with me having it... then why should you expect me to give it to you so you can distribute it in what ever scheme you think is most fair?   After all, anyone trying to "manage" an economy is first claiming authority and therefore ownership of it and thus if they had the power to decree 5% dividend then they must also have the theoretical power to decree that they get it all because they are deciding how it should be "given" away.

In effect you want to steal %5 of my bitcoins value each year and give it to someone for nothing.If you want bitcoins its easy,find something to trade for them.

Cool!

Something I disagree with more than the permanent deflation concept!
 

A "growing money system" encourages speculation since you are influencing people to spend or invest more in the short term than they would naturally do. Since prices are going up there is no incentive to save in money and all the incentive is to "save" in form of commodity or investment. Following what you propose is how people is forced to play in the Wall Street casino or buy all type of things to keep their savings (buying houses is great, they always go up in price and the rest of the mambo jambo...) just to preserve their savings. This is why big banks always promote this type of system.

I certainly dont want that type of events happening in the bitcoin community. Encouraging speculation is not what a monetary system is about.

It seems no answer has read the definition of Universal Dividend : http://fr.wikipedia.org/wiki/Dividende_Universel

1) When you create 5% of Money / year, it is a small amount of creation rate, which allow the new people entering the money system to obtain the same part of money creation as the old ones.

2) A new people entering a money system is not a "money for nothing", the fact is that when a human interact, give information, receive information, is a value.

3) Creating money for a technological reason (increasing the number of nodes) instead of human reasons (allowing exchanges by money for each individual HUMAN member), will have a result to exclude people for the system, and attract machines.

4) If you think a human being is not the fundamental creator of ALL value, and so that money CANNOT be created in other way than by each individual member of the human collectivity which want to exchange goods with a universal accepted way we call money, so in fact, we cannot agree.

5) AGAIN you should read AND take time to understand http://fr.wikipedia.org/wiki/Dividende_Universel with all the links of SUCESSFULL REAL implementations of Universal Dividend : SCEC Italia, Alaska, Namibia, Brasil, BIEN etc...

6) If your purpose is to build a community of exchange of values between CONSCIOUS men, without giving the DIVIDEND of the enterprise to the members, so I won't join it for sure.

7) BitCoins seems a great technical implementation, which is very near the system we want to design, so probably if it possible as an open source system we'll make a fork and propose a Universal Dividend as a money system based on that technology.

It's sure if people don't agree the way the money can be created, they should not associate in such a trading system.

Money is only the way to exchange in goods in a circular way for ALL the members accepting it as a COMMON way to do that in the SPACE and in the TIME.

Galuel,

I read the wikipedia article. (I jumped the math part).

Not only there are some wrong economic ideas, but mainly, the ethical principals it bases on are very wrong.

You start from the idea that there is such a thing as an universal positive right (http://en.wikipedia.org/wiki/Negative_and_positive_rights). This is a denial of human self-ownership. Positive rights are only fair if acquired by voluntary contracts. A universal positive right means someone should be forced to give you something simply for the reason that you exist. This is servitude, partial slavery. It's unethical.

About "rémunérer tout le travail non marchand", this is an ethical absurd that derives from the false premise of universal positive rights.
If somebody decided to perform a work that absolutely nobody is willing to pay for, s/he should not earn anything for it. Will to pay for something means you are willing to exchange part of your work for this something. If you do something nobody is willing to exchange their work for, they should under no conditions be forced to. That's a form of slavery, and from the economical point of view, it's clearly a waste of resources. It's a form of subsidy, and like all subsidies, it destroys wealth.
And by the way, the examples of "travail non marchant" given on the page are bad ones. Most of, if not all those activities can be remunerated voluntarily. Some will not be remunerated as well as highly demanded jobs, but this is perfectly reasonable and fair. You should be remunerated proportionally to what you give to society.

Sorry if I sounded rude, but it seems that you understand well some stuff, like the fact that the current monetary system is crap and causes economic cycles, but by starting from wrong ethical principals you may derive some dangerous absurds.

Anyway, the only fair/ethical monetary system - which, as usual, happens to be the best economic solution - is a free one, where everybody is free to choose whatever they want to use as exchange means. If you agree with that, it's fine, people that agree to use this constantly inflationary currency would agree in given part of their savings to others. I see no problem in that.
But if you wish to force that through state law, and that was the impression I got from the wikipedia page, then, well, we have a really strong disagreement there.

Regards

@caveden

"A universal positive right means someone should be forced to give you something simply for the reason that you exist. This is servitude, partial slavery. It's unethical."

So a mother should not give attention to his children in an ethical way, that's exactly you are saying. You don't understand human as a social living being. By this idea you propose to be a "choice" his life for the wolf child.

Of course they are positive rights for ALL. And those who are taken care today will take care others tomorrow. This is the sens of economic exchanges. I do for your today, something, and you'll do something to other tomorrow, thru a monetary compensation.

"If you do something nobody is willing to exchange their work for, they should under no conditions be forced to".

And so ? What is Linux ? What is Internet ? You use things you didn't work to because some incredible work was done by developpers for free content which means NOT "gratuit" where is your payment for all that ? It means that if you don't consider the COMMON goods as NO DIRECT EXCHANGE goods, you are wrong about the idea of society. Some goods take value BECAUSE they are used by all with NO DIRECT EXCHANGE. It's the case of language, free code, free work, free organisation, free care of mothers towards his children etc... IT MEANS NOT "gratuit"... So a part of the money MUST valuated all that free given goods to the sociaty participation in the value of the enterprise we name society who give DIVIDEND of the GLOBAL growth it benefits.

"You should be remunerated proportionally to what you give to society."

THIS is the fundamental point a wrong view.

WHO decide of the value of "what you give to society" ? "thanks to all the people who died for society and bye bye ?".

Should you die for society ? Why did people dye for it ? What is the value of the french inventors of photography and cinema who gave the invention to the society without any rights ?

You are not (an NO ONE is not) able to estimate "proportional remuneration of what anyone give to society" it's impossible to agree between all about the notion of "value" now and for the future... So an intermediate way to monetise that, is to share the global dividend of society to all members.

How could anyone estimate the value of Guntimberg gave to society hundreds years ago, now, and for the future ?

You should relativise your notion of value because space is growing, and nothing in the universe has value in front of expansive transformation. So is the universe of human society where the common value is more than each individual sum of acts.

No, there must not exist universal positive rights since they violate the principle of self-ownership. And the only way to ignore the principle of self-ownership without creating an ethical code completely incoherent to the human nature is to establish a society where some own others. That's normally considered unethical by definition. Try reading this: http://www.lewrockwell.com/hoppe/hoppe11.html

And this (positive natural rights) is completely contradictory to the meaning of economic exchanges. An economic exchange is something done voluntarily. If you force me to do something, that's definitely not an economic exchange. (once a philosopher defined it as "political exchange" :) I don't remember his name) 


Only if it's voluntary. Otherwise it's probably theft if not worse.


Society itself. That's the value of stuff. What people are willing to give for it. For it to happen, all exchanges must be voluntary.

Bitcoins is growing.

Here money creation will halt, even if it doesn't halt it would be unfair by your rule because first comers would still have more money than later ones.

Bitcoins doesn't know about identity, you can't know which user is new or not. Money creation comes from CPU computations. You don't want your universal dividend ending up to whom can efficiently create bitcoins ? :)
Before applying some 'maths' you should see if it is even possible.

So don't use that money.


Also your dividende universelle operation just looks like a vast blogspam operation using wikipedia to promote your creationmonnetaire.info blog. Quite obvious looking at the wikipedia history.

Honestly, when someone starts with this type of charlatanery it looses any credibility. Its obvious that you want to use cheap tricks and not acomplish anything constructive.

And I will do something for you even when I dont know you, I will give you an advice: Dont come to a place and start going over peoples head telling them they dont understand human nature (and obviously implying you do completely). First, take the head out of your ass, come down to earth with us mortals, and then consider that the ideas you regard as "moral" are just evil, abusive, inmoral and degenerated.


Linux is an open source kernel or the community that programs it. Whatever you consider they are both VOLUNTARY. Nobody is going to take you seriously if you say that you have the privilege (or positive right, call it how you wish) of forcing anyone to program something for you. Linux and the linux community has nothing to do with what you are proposing.


Internet is a network of computers, just in case you didnt notice.

If self ownership exist who earn the earth ?

Who earn USA ? Descendant of Native Indians so ?

Your description doesn't feet with reality. In reality a nation can impose citizens, and impose some collective obligations like respective collective rules, pay collective contribution thru specific rules (and often non "ethic" rules with such or other point of view...).

Self-ownership created Latifundios in South America under Spanish period http://fr.wikipedia.org/wiki/Latifundio ...

Self-Ownership is detmined by the Collective Onwership which decide to allow or not some part of private ownership under certain rules. By not respective this evidence of mass power of collective rules of societies some kings lost their heads in the past.

So reality is : when self ownership over-rules collective feeling of equity it is breaked. Because of Collective property is more important in term of stability and power in time.


You cannot separate laws, politics and economy, they are NOT different they are interdependant.

You won't be able to develop any trading system that is AGAINST collective interest of a majority of citizens. If you take for your own more than a supportable part of collective ownership, you will receive big advertisement. Take care.


No. The law can impose you to do some things, like paying taxes for using collective goods that are : The space you live in which is not your, the justice, the security, and some collective investments. You must do that or you will have problem, because it's denying the fact you don't live alone, but into a collectivity.


That's the role of democraty, and laws. Society change his point of view and change the common direction it wants to take by this way.

So you cannot separate a money system from the collectivity using it, and the laws inside that community. If collectivity decide what you are doing is against its stability, against its own volontary decision, it will stop you.

So Voluntary has two aspects : Your own will and the other's will, that can be contradictory. If you don't accept others will, so you might find a solution to live in other part than the collective society is established, or to develop a revolution to change collective will. But don't think it's possible to follow you own will ignoring collective's one without consequences.

All men are equal, but some men are more equal than others.

EQUALITY IS A REVOLT AGAINST NATURE!

There you go. You admit it.

When you talk about the community, in reality you are talking about the majority of the people in a region, because its imposbile that everybody has the same view about something. So you are actually advocating the rule of the majority, and by violent means if necessary. I find it repulsive.

You have an example with prop8 in California. The majority decided that gay people should not marry, when is something between the two and does not affect anyone else. Yet, the majority decided they had the positive right to ban it and they did. From your point of view its fantastic and very moral. From my point of view its inmoral.

Fortunately, in the USA they still have what its left of the rule of law, and the Supreme Court decided the majority should not get its way, and the individuals had the right to associate as they will, without the majority imposing their views on them.


Nobody is talking about going alone. He is talking about a community where self-ownership and natural rights are respected.

The fact that you talk again and again and again and again about a community does not mean you are a team player or care about the others. It just mean you like to talk about it a lot. Everybody (or almost everybody) wants to live in a community, surrounded by other people and stablish colaboration with them. But what you are advocating is going futher than collaboration and having the majority impose its will violently over the rest of the people. I find your view extremely immoral and repulsive.

Yes I understood that, and all the other stuffs seem to me very good and interesting !


Yes. In fact you are right. It's impossible to propose a complete equality in time in front of money creation, first people in the system still have more...

However the demonstration says "generation compromise". Between infinite difference (Something for the first and zero for the last), and zero compromize the universal dividend propose a medium way thru a relative constant creation of money in time (and not A LOT at the beginning, and zero for the infinite time).

(In fact expansion of Universe work in the same way : Expansion of space, with great initial expansion, and then Hublle constant expansion thru time, which is the way to physically compensate gravitationnal concentrationnal effect respecting laws of physics).


I agree, identity is the key of the problem. Universal Dividende consider Human Being as the crucial "node" of the economic system, where here it seems to be a computer connected to internet.

New or not is not a problem, universal dividend is a dividend for all. But Identity is a problem of course. But you don't solve it buy reporting money creation on a computer node. You identify a node, and so 1 single person could be running all the nodes it wants. You risk to work for 1 person owning lot of nodes, you think this is "ethic" ?


Of course Identity is the heart of the problem I agree.

It's not because this is a central point you should abandon that. In "material life" this problem exist too, including in economic problems. It's not a reason to not use a money system.



Not at all. This idea is developped since long time. Here you have a law proposition made in Assembly, France in 2006 : http://www.assemblee-nationale.fr/12/pdf/propositions/pion3378.pdf

Here you have the BIEN (basic income international network) : http://www.basicincome.org/bien/

Here you have the experiment made in Namibie : http://arecom-geneos.com/~fbosque/rev-exe/revenudexistence-et-namibie.pdf

Or the SCEC in Italia : http://www.arcipelagoscec.org/

And many others links on the article demonstrating it's absolutely not a new idea.

In fact you should be sensible to this development (and this is why I spend time to post here) because you beatifull project is very near that Idea.

You just think it's more justificated to create money associating it with a machine, better than with human being as a "node" of an economical collectivity.

With the problem of identitty solved, I prefer for sure exchange value with humans better than with nodes.

---------

Thanks for your contributions, I appreciated it very much, the questions are the fundamental ones.

Absolutely : Man is a total revolt against nature. He wants and succeeds in liberating itself from his natural animal condition.

The biggest irony is that an individual who clearly wishes to change the norm of bitcoin society against majority's wishes.

"We don't like majority rules or democracy or whatever!"

But anyway, I am not liking Galuel's anti-individualistic attitude one bit. I'll REBELL if Galuel get his way.

Whatever. Man cannot escape from his nature of being an unequal entity in the world of men. It's impossible. In fact it would be hell if we are made equal.

Not at all. When I talk about a community, I mean a collective association of free men, who accept to associate between them.

But a community might also understand it is often part of a bigger one, and so the rules it want to apply to itself might be be also done understanding the rules the biggest community have. If not there is a conflict.


No at that point, we must consider this community has said it's point of view. In fact this is local democracy. Can we change that ? Which system should be use ? Anyone say the rule is my rule, I don't care about democracy ?



In fact here, the laws of the large community of USA, in which California is, says : no your local decision doesn't feet with community laws, so, you can't do that. Those laws can be seen as "unfair" by local Calfornia people, but it they still want to stay in USA community they must apply that.

Another way to organise is like in Swizerland (and I like this), where all the rights become from the local to the global with delegation power. And a "canton" can say "no at this point I don't delegate the global the power to decide those things.


I am for the maximum of liberty, but I also understand, that my liberty depends of the collectiviy I live in, and this imposes some rules sometimes not compatible with my liberty. If this compromise is no more acceptable, so I may think about acting for changings rules, make a revolution, or quit.

Welcome to our community. People here are individualist anarchists, or at least the majority of them. They don't take kindly to democracy or ideas of democracy. The community has clearly spoken against your idea.

Equal has many different aspect. Equal in respect of rights, can include equal in respect of the right to evaluate what is value and what it is not.

If we are not equal respecting this point, how can human be ok to consciously accept the same money ? Accepting the same money, is not aving the same point of view concerning value, it's respecting the different value anyone can produce, and a universal way to exchange it between members for the benefit of all.

I have no idea what you're talking about.

Money arise out of voluntary exchange amongst individuals. That is all. There is no need to respect whatever values, etc.

Of course you need it. The money creation system you use, respect or not other's value definition. If I define the fundamental creation of value as the individual man, I can affirm it's not fair to create money for the first ones in the system, without thinking of the last ones who will enter the economical community, who will bring their own.

I suppose you don't respect the idea of private property.

You like to strip a rich man's dignity and his pride so you can make society equal. You make the poor and the unproductive master of rich men. More over, you make even the poor who earn more than other people slaves too.

You know i'm french so you should stop trying to impress me with that ridiculous proposition only made to get media attention :)

Also what you propose is different and not possible to do with bitcoin.

and stop your spamming : https://encrypted.google.com/search?q=creationmonnetaire.info+galuel

else i will just also SEO your blogspam (http://www.creationmonetaire.info/) too.

Impress who ? To do what ? This is nonsense.


Perhaps, I don't know at the moment. If it is an open source project it should be possible to make a fork.


What is this exactly ? I don't understand ? Is this an order ?


And this is a threat ?

Which Spam ? I don't hide my identity, it's openly written in my blog, and I always use the same pseudonyme. I have no problem to openly exchange ideas.

Yes. Make your own digital currency. Stop brothering this community.

Come back when you have proven the currency to be superior to bitcoin.

The OP's ideals of fairness and logic have clearly fallen short of the mark.

Seed Bitcoins are already distributed as fairly as mathematically possible among the participants. We have democratically listened to his proposal for their re-distribution, and have universally chosen against it.

Failing to improve the system as it exists, if he truly wishes to channel Bitcoins to his unfortunate friends, he will have to acquire them first, and via the same methods that we used to obtain ours.

I think Galuel is just what this community needs. It was getting a bit self-congratulatory here.

It's nice for the libertarian to get to see that they're not just trying to separate themselves from "conservative" monetary policy. They are separating themselves from "liberal" monetary policy as well!

I have read the French website and I think the ideas probably sound good in a coffee shop. But perhaps not to the shop creator. Perhaps not either to the waitresses forced to serve the layabout philosophers. But I'm sure it sounds good among the beatniks.

Personally I think it is silly and quite obviously ill conceived. But as contrast, it's invaluable. It highlights that, quite possibly, there are ideas being discussed here that play best on the gun show circuit.

By the way, I love gun shows! :-)
 

Actually, I think most people miss his point so I'll try to clarify it.

Bitcoins are NOT "fairly" distributed yet. Some are. The vast majority are just waiting to be distributed. But the existing mechanism is presumed "fair enough" for the current community.

It bitcoins were already "fairly distributed" we could simply stop generating anymore. Since enough are already generated to last in perpetuity. The reason people want to see coins continue to generate is qualitatively for the same reason that Galuel wants increased generation. The only thing disagreement is quantitative.

What Galuel is trying to point out is that even if coins are "fairly distributed" among the bit coin users of today. They are NOT fairly distributed among next week's bitcoin users. If you look at that set of users instead of the current set of users, it is clear that some got more coins simply for showing up first. Not for putting in more effort.

Built into bitcoin is a tyranny based on time. At least that's the way he sees it.

Many will agree with him. To dismiss that out of hand is to make the same mistake Obama did with the tea party movement. Never under estimate how man, (or how strongly) other people perceive you as an idiot.

No. I used the term in its proper sense. The community has come together, has accepted, and is actively using the Bitcoin. That is fair.

To use "fair" in the Obama sense; "Now it the time to achieve greatness, to get your fair share of this great democracy, because I'm going to slap together something that re-distributes things to my supporters FAIRLY" is bullshit, and the people here have all smelled it.

When you can make a "fair" that works, you'll understand.

I wasn't trying to slam your definition of "fair". I really wasn't. I was simply pointed out that while we all agree that there is a fixed number of bitcoins, and a process for distributing them. The process has NOT completed. It seems inappropriate to use the past tense. In reality bitcoins are "distributing themselves" in a process that everyone is required to agree is fair. Or you don't get any.

I agree with your closed definition of fair. It is equivalent of joining a Soccer league and then complaining that it's "not fair" that the goalie gets to use his hands. The correct response is, "It's not EQUAL that the goalie gets to use his hands, but it is FAIR that the goalie gets to use his hands, because (insert your own reason here). In reality, all reasons tend to converge on, "because if we made it more (insert your complaint), the game sucks and nobody wants to play."

In American football, defensive blockers can use their hands, but offensive blockers can't. It is fair but not equal, because if it were equal the game would be boring.

But the rules are not "fair" because they are unchanging. In reality, sports rules often change to make the game *MORE* fair. Pick your sport and there will be a list of important changes. American football, "pass interference, roughing the passer/kicker". Soccer/hockey "offsides rules, blue lines." etc.

I point this out because that is the sense of the word FAIR that I was using, and I'm presuming Galuel was using. (But not Obama. :-) )

If 1,000 people want to use Bitcoin but 6,000,000,000 don't, Bitcoin is still fair.

But if you can make changes to Bitcoin so that 6,000,000,000 people want to use it but 1,000 don't, the changed system is *more fair*, and much more relevant.

This differs from Obama's definition of fair, which is "Fuck those guys who believe differently from me. They're idiots and can't hurt me. They'll get my definition of fair and they'll like it!" That definition of fair tends to cause revolutions.

The core of the argument that new comers are "owed" something simply because they are new.  So the question becomes "who" owes them a share of the bitcoin stock.   

If the answer is "from all existing bitcoin owners according to their ability to all new bitcoin users according to their 'need' for 'fairness'" then I smell a communist rat. 

What is fair to the existing owners of bit coins?   Would bitcoins have any value at all if it were not for the existing owners making sacrifices and taking risks to invest in bitcoins on speculation that they may be worth something? 

It is like the hen the works all day to harvest wheat to make bread and no one helps her and then, after the bread is made, all of the other barn yard animals want a "fair share" of the loaf. 

The bitcoin users who opt in this system and actively trading are in fact taking a risk. They are banking on the success of bitcoin.

I'm not arguing that anyone is an idiot. I'm just trying to clarify the issue Galuel is concerned about. (I hate his solution by the way.)

Suppose that Bitcoin had launched slightly differently, but otherwise was exactly the same implementation.

Suppose that it was launched as a closed beta, but there was already considerable interest. Suppose 10,000 people submitted requests to join the first day. But suppose Satoshi decided that he needed to monitor the system closely, because his reputation as a software developer depended on it. He simply wanted to spot and fix bugs before they would have any wide spread consequences.

So to be fair, he decide to randomly choose 100 people the first day, then to choose 100 new random people to join each day for 100 days until the initial request list was exhausted. After that the system would leave beta and anyone could join who wanted.

Would this have been *more fair* or *less fair* then the "he who hears of bitcoin first, joins first" approach that is being used?

I say, it depends on if you got your acceptance the 1st day or the 100th day. But you may feel differently.

In reality, which option is more fair is a personal thing. Its subjective. This is why avoiding government impositions is so great. Because both groups can get to try what they think its more fair (or whatever they want). If it was a authoritarian system whether the leaders decide or whether it is voted, only one system could be implemented.

If this guy wants to do the other system, fine. I hope him good as long as the system is voluntary. But that kind of system will only work through government force, and, in my opinion, that is what he is aiming at, hiding it behind nice and moral-sounding arguments. But if he really wants to create and try such a system as a voluntary currency, its fine with me and I hope he succeeds.

With steady deflation there is an automatic universal dividend (purchasing power) to all owners of coins. 

Thus bitcoins are like stock in the economy.  As the economy becomes more profitable (produces more) the value of the stock goes up.

I absolutely don't want to impose any system.

I just think, and propose arguments for Universal Dividend as the best system for creating money because of spatial symetry (All created money must go to the members), and time symetry (During a living time each individual should receive more or less the same amount of created money, and no generation should be prefered from the time point of view).

The fair point of view concerning symetry is considering space and time, and not one or the other. For instance when you create money from a central bank this is assymetric space money, and from a specific generation it's an assymetric time money.

And in fact, of course, I will run this system within an existing one, or in a new one, without imposing it.

I agree with the contractual necessicity of volontary adoption of a money system.

Thanks for your contributions.

The French website suggests that the concept of paying dividends proportional to how many coins each person possesses would be what is commonly called "regressive". (i.e. The rich get richer relative to the poor.)

Paying dividends in proportion to the population, (one person, one share) is more "progressive". (i.e. The poor gain relative to the rich.)

If you don't force people to use it, won't this happen:

1. Get free money from Galuel.
2. Sell it, if it is worth anything at all.
3. Put it somewhere where it won't be debased by 5% per year, like bitcoin.

Regarding the symmetry point, I can see how symmetry in time might be ideal or pleasing, but the only way to start something is to break symmetry. Even your system is unfair to people who died in 1980. They got none at all.

Agreed.  And that is the end of the agreement.

What you call rights I evaluate to negative value and will not participate in such a system.

By definition those rights must be forced on the participants by the system.  As no individual has the right to force such on another individual, then no collection of individuals and thus no system has that right.  Your proposed system is a violation of rights, not a guarantor of rights.

Therefore, where such a system becomes apparent to me, I will fight against and attempt to destroy such system or the aspects of such system which attempt to extort any such so-called rights.

Exactly.

I arrived in the San Francisco Bay area in 1964..  It seems I was a newcomer to the gold rush and I missed out.

Who is going to pay up and give this newcomer my share of the gold?

Of course you're right, this can happen. Someone can go into the system, spend his part of created money, and not giving back something.

It is yet the case in real life lot of people receive more apparently than they give (ill people, young people, not honest people etc...).

It's the risk of the system, the same risk like build any society : hope that the association will still be more benefit than staying isolated, starting by giving something to others in exchange of money, is the fundamental risk of any money system.

BitCoin has the same risk. But in fact between the firts ones who will get the fixed 21 million Bitcoins, some will perhaps do quite nothing than keeping his part of created money, and when 21 million will be reached, spend it, and go away.


You're right but one aspect : we can do nothing for the past, but only for the present and infinite future. This part of time is the only part we can act in.

I think that you are not understanding Bitcoin. It is not possible to get coins for free. You must do computational work which helps the system to be secure in order to get them.

Also the coins will not stop being created for over 120 years.

Yes, people will take things sometimes that they have not earned, why would you build a system specifically to benefit these people and harm those who are producing? Do you not think this will cause the producers to stay away? They will not stay away because they do not want to help people, they will stay away because they want to chose who to help.

Giving coins to everyone every year has a practical problem also. How do you ensure that different people are actually different people? Will you set up a bureaucracy of identification? I suppose they will be paid with new coins as well? And perhaps an agency to police them, since they may abuse the power of creating money. Being important and powerful people they ought be selected democratically no? Alas, elections are not free.

You should read about bitcoin and consider all that it accomplishes with no central point of failure or control. And also think of the fairness of everyone getting value for value provided. And the goodness of then being able to choose whom to help with that value, themselves, family, friends, or strangers.

I said earlier that I agree with that point, it's a problem to understand. Cooptation is a solution.

In any case confidence is the key of all society and money system, it's impossible to do anything without confidence.

If you don't trust human being you will have problems in whatever you want to do.


I said also in my firt post here I am enthousiast about BitCoin tool as a non-centralised P2P encrypted money system, we yet started such an idea here under the name of "liquidbank"...



A specific value, which in my point of view is not a "value", and in any case money should not be backed by any particular value, and as it is said in BitCoin Site itself, which is great think I share :


Nothing else and it is fair. No one should impose any specific "value" to others, and we can share a common money if it's way of creation is fair concerning all specific definition of what is value or not by all the member, that is to say, created on every member present, and future.

In my point of view Bitcoin is quite the perfect tool to developp faire money it only miss the definition of individuals as real "value" of economic system, and time-space symetry in money creation.

But the tool himself is very great, money system is a collective agreement independant of the tool to manage it.

I don't know what you're talking about. Money is entirely a human invention and is used and valued by humans.

Galuel, I just wanted to thank you publicly for the very interesting information you provided.

*Note* To everyone who disagrees, read if you'd like, but please don't reply to this specific message. I'm already familiar with your perspective and so is everyone else. I get it, this is wrong and that is wrong. If you point it all out, I won't be able to help but to read what you have to say, but I'm really not interested, so please save us both the time. Thanks! (...I hope.)

The current principle of Bitcoin is to distribute the currency as fairly as possible in as short a time as is possible. Under the current system, priority is given to establishing a long term currency which will eventually have zero inflation. The unevenness of distribution is simply a necessary evil to arrive at the end goal as quickly as possible.

Before reading your suggestion, I preferred the idea of having the amount of bitcoins stay the same forever. Even though it seems very different than the current system, it's actually very similar since the percentage rate of increase of currency is decreasing in both cases. It's just happens much more slowly than the current implementation.

Because of the design choice of Bitcoin, it tends to disproportionately attract people who prefer the current design and goals of Bitcoin. Please don't take their replies personally. For most of them, Bitcoin very effectively achieves the goals that they're interested in, so suggesting a design change which is completely opposite to what they desire is very undesirable from their prospective.

In the current implementation, inflation starts at an extremely high rate and falls quite quickly with time. The first block creates ฿50 and then within ten minutes there is 100% inflation when the second ฿50 is created. Likewise the second week, the second month and the second year each have 100% inflation over the first week, month and year respectfully. Of course all this time the daily inflation rate is dropping at a constant rate. But after roughly the fourth year, and every subsequent four years, the rate of decrease drops dramatically. As I was saying two paragraphs ago, before reading your suggestion, I preferred the steadiness of having the same amount of bitcoins awarded forever because it is more fair and because the stability of it seemed like more elegant of a solution. But it bugged me that the rate of inflation would constantly be curving from very high at the beginning, to extremely low the more time passed. But after reading a bit about your suggestion from a few different sources, I see why it was bugging me. What I really prefer is a constant rate of inflation, and possibly to have that rate modified by difficulty of generating a verified block, which is roughly representative of population. The current rate of inflation is WAY higher than 5% because the current total amount of bitcoins is so low in comparison to how many bitcoins are generated every ten minutes. Having a constant yearly inflation rate of 5% or so really wouldn't be all that dramatic. You'd have to distribute at a much higher rate at the beginning because the effective rate for 10 minute intervals on 5% annual percentage rate when there's little to no money distributed to begin with would not work. But after some base goal is achieved, it would hardly be noticeable. If you started by distributing 50 packs of currency like Bitcoin now, the only difference you'd see is that an extremely small fraction of a bitcoin would be added to the amount of bitcoins awarded for generating a block of bitcoins. But you'd still have the same chance of winning that extra currency by generating a block. And just because the rate of increase/inflation would be constant, doesn't necessarily mean that the value would go down. I mean, look at Bitcoin right now, the rate of increase/inflation is extremely high, yet the price of bitcoins skyrocketed when demand increased suddenly.

Anyway, I could go on, but I've already rambled for too long. I just wanted to let you know that you got through to at least one person here. Hahaha!

So you have a theory of distribution and need a currency to implement it?  I suppose a Bitcoin-like currency could be modified to behave in this manner.  If I understand correctly, Universal Dividend is like social security or welfare, but for every citizen and built directly into the currency instead of being levied by taxes.  In that regard, I see this as a noble effort.  I'd rather the wealth generated by money creation be spread around instead of benefiting a small elite class (like it is now).

There are some problems though...

Short of a revolution, you will not get any government to adopt this system.  Like a bunch of drug junkies, governments are now dependent on the central banking system.  You're only hope is to create a private currency.  A modified Bitcoin-like currency could be a solution.

The Bitcoin Project is trying to create an electronic gold standard.  Universal Dividend is really at odds with that.  It is experimenting with socialism.

Thanks. I read your post, and would like to propose some more points to think about.

- Not think about inflation rate as a global information because starting money creation is infinite rate of inflation, but think about inflation PER INDIVIDUAL member in the time, and over life expectancy. When a people die how much money will he have earn from money creation, can we compare with next generation people will own ?

So think money as a RELATIVE power of exchange between individuals in time, and what can they expect to use thru the creation system (and about the exchange system it's part of their own choices, but the creation system is part of present and future members choice as a collectity agreement).

- I understand generating money thru blocks wich is part of the collective security system of exchanges. So perhaps it could be interesting to think in a mix, where generating blocks create the same relative individual money in time, and not an arbitrary changing (in fact deflation rate) relative money creation. By members running an individual node, and not as much nodes as they can.

In any case, my purpose is NOT to incite BitCoin to change his money system. My purpose is only exchange ideas, and propose to think Universal Dividende because I thought a lot on it, and I'm personnaly as many people I talked with it's the only system which respect the changing point of view about value, of future generations of human beings, fundamental, and universal part of any economic system (there's nothing else as universal than individual human being in any economic system).

And we think in France BitCoin a great tool corresponding to a Universal Dividend System. So we think about a fork implementation for it.

I see two fundamental problems with using a Bitcoin-like system to implement a Universal-Dividend-like system:

1. How does the system identify "individuals" ?   If you've got a completely automated way of doing that I really want to know about it!  freebitcoins.appspot.com could really use a foolproof system for identifying individuals.

2. If everybody gets a dividend, why would anybody bother running a block-generating node?  What is the incentive for doing the work needed to support the system?

Yes I agree with that opinion.


No I'm deeply liberal and want everyone to be able to be reachest, but without taking advantage on creating money, and would like a universal money progressively adopted in space and in time. It takes long time for a money to be adopted, and it's in large part because of it's design which give it universally usable in every part, at any moment, for all exchanges.

If you create a money for a restricted amount of people, whatever it is, even gold, it won't be universally usable for exchanges, and so others money system will compete, and universality goal will never acheive.

If you think in an ethic, symetrical creation system of money, potentially present at minima in all parts, in all times, the goal of universality is possible to acheive, and using that money where and want you want possible, respecting all individuals by assuring a progressive, low, and symetrical way of creation.

Progressive Cooptation can be a solution (everyone give agreement and when a certain number of votes is ok, the new member come in).

Any other solution is welcome to improve this.

(NB : when Europe includes countries in Euro System it's a cooptation based on confidence between central powers, not citizens choice, but governments are elected so...).


Yes I posted earlier about it. A solution could be to have two conditions to have the dividend :

1) be an individual human being coopted.
2) Run Block generation code to improve security system

Could be ok for me. Block generation could be the minimum to do to be part of the money system, and so Dividend could depends on it.

I think we had the same idea Liberty.

I was considering posing for discussion a currency with the following monetary policy.

1. At birth every real human person is given 100 "birthcoins" bTC.
2. On death of each real human person 100 bTC is removed from circulation.

In such a system, the quantity of currency would grow in direct proportion the the number of people. In effect, "Our money is backed by ourselves."

My goal was to remove the tyranny of time for the new comers, but maintain "sound money" principles.

------
People will argue about, how you remove bTC from circulation. Having the government burn it from the collected tax revenue makes sense.

However, I came up with another way in my head. I think this is what the universal dividend is touting. But I might misunderstand it. I was reading an auto-transalated version. Galuel please correct me if I'm wrong.

What if we couldn't come up with a "fair enough" way to ever remove money the dead people's money from circulation?

In that case what we would need to do is keep a running count of how many people had been born (B) since the start of the currency. (i.e. The total number of allocations of 100 bTC.) We would also need to keep a count of how many people had died (D) in the same time period.

Then we would simply make new birth allocations using this ratio so the relative allotment per birth doesn't diminish over time. Let's call these coins "Inflating Birthcoins" (IBC).

The birth allocation ratio would be = (B)/(B-D)  It's simply the amount of bTC ever created divided by the current population. When someone is born, that is the share of currency that *represents* their birth. By its nature that would be an ever increasing ratio. But for any moment in time let's call it the "universal standard" for equality.
Each birth dynamically generates (100 IBC * B)/(B-D) and that amount is put in an account for the new baby.

So at any point in time, you could measure your wealth against my originally stated monetary policy at the top by using the inverse ratio = (B-D)/(B)   That dynamic ratio always takes you back to "universal stand currency".   (100 bTC = 1 person)

------

I would call both IBC and bTC "sound money" because neither is randomly inflating based upon outside whims. But I may be misunderstanding the definition others use for sound money.

And though there is monetary inflation of Universal Standard Currency as the population grows, there are no "Progressive" policy goals. Simply stability goals.

My aim for the system would be that if a loaf of bread cost (1 bTC) in your grandfather's generation. It would cost (1 bTC) in your grandchildren's generation. Of course it would cost a lot more in IBC, but using the universal standard ratio, everyone could see that things were remaining stable.
The previous statement was a mistake. The system proposed here is obviously a "price deflationary" system. As there are productivity increases, the total commodity value will grow relative to the total currency. Just as with bitcoin.

Given the electronic nature of birthcoins, it is actually trivial to do all the accounting in IBC internally, but to always display prices and trade in uBC. That keeps people from having to change paper price tags every time a few people are born.

Galuel, I was thinking about per individual when I said "and possibly to have that rate modified by difficulty of generating a verified block." In the current system, the best way to estimate an individual is by the amount of CPU cycles of an average individual. Unfortunately that average increases with time. Of course a different system could use other measures to determine the actual user count. One of the documents I read mentioned different suggested inflation rates and the 5% was recommended over the others and that's why I mentioned it. I also read about other related stuff, but I'll save that for another time. The article you pointed out was a good starting point for the topic. :)

Red, I don't see any way of reliably linking one account to one human in a decentralized system. Once you settle for a centralized system, the possibilities for economic policy is pretty much limitless. Of course it's always going to be limited by the degree to which people trust or are dependent on or are at the mercy of the central authority.

Galuel:

What is "Progressive Cooptation". Also I'm not sure I'm understanding your use of "Cooptation". That is a word I haven't seen in common US English.  Could you define both for me please?

Also, I used you as an example in another thread (http://bitcointalk.org/index.php?topic=808.msg9163#msg9163). Just FYI.

Also, you called yourself "deeply liberal". That may not translate into US English as you expect it to.

In the US we have a scale that theoretically goes "Left" to "Right".  (Forgive me Libertarians, but you tend to draw yourselves off the scale as part of a triangle.)

Communist -> Socialist -> Liberal -> Conservative -> Fascist

However, in common political usage here we only use two terms. "Liberal" often associated with Democrats. "Conservative" often associated with Republicans.

When Europeans say they are "more liberal" they often mean, "less socialists". But in the American mind that makes them WAY LEFT of mainstream Democrats here. And it doesn't sound anything like our equivalent phrase "I'm more conservative".

@red

There is no absolute reason to prefer stable inflation rate for money creation better than allowing credit to new ones taking from old ones, mathematically, but there are lot of psychological reasons :

- Everyone should be incited to invest and succeend earning more money, it's possible to have 100% winners in Universal Dividende and only 50% maximum in stable money...

- Taking money to people is not welcome... People always do all possible to avoid it...

- Creating money for all is better welcome. All the peole is ok to receive more money, but the reachest will probably buy something instead of keeping too much money would COULD lose "value" (relative thing, because of investment could generate new value unexpected next day...).

- Economy generally growth. I we compare times, for sure I prefer to live in 2010 than in 1850, even if in 1850 I could be relativly reachest compared to the other peole, I see myself richest of 99% of all people of 1850, I live longer, I can use internet, medical technology, travel by train, and can also dream of a fly in Space... So money grow with economy because next human generation will be proprietary of better goods than ours, and so will need more money to exchange it, time after time, and progressivly, as innovation replaces old goods.

- Growing (but slow growing) dividend is the only fixed common value we could all be sure, anything else depending of the sum of global work each one will done. It's difficult to generate confidence in a system where ALL the things can change at any moment because of births and deads etc... At least, a little amount of money is sure.

We also have to think about people who don't think about money system. Could be genious people generating great value for all, and we need, I think, giving them some stability at minima, representing by our common money : a fixed rate dividend of global growth, whatever growth will be.

A system of cooptation vote is possible : for instance if 30% of the members vote for newcomer (thru their own interface), he comes in.

Decentralized, doesn't mean without collectivity control about money, which is a collective agreement !

It means that during time an acceptable number of newcomers can come in (progressive), after aproval of an amount of full members (cooptation). This is to be sure of a new individual identity coming in, and not a duplicate one, or whatever...

Also, I used you as an example in another thread (http://bitcointalk.org/index.php?topic=808.msg9163#msg9163). Just FYI.


I can define : I want as much liberty as possible for individuals, and a state in charge of organising ONLY BUT GOODLY justice, education, and security, and of course "fair money", avoiding too much power concentration (anti-trust), which is an objective of long term we didn't acheive in Europe (too much state power), neither in US (too much money stolen thru centralised banks power).

I like countries organised like Holland, Swizerland or Spain. i also like US in many aspects, but not about money policy.

I consider our liberty is always relative, because it depends on other's liberty, and certainly of next generation's one.

Anarchists don't like the idea of the state handling justice, education, security, or monetary policies. In fact, they don't want the state to handle anything at all. In addition they're anti-democratic and opposed to the idea of majority rules.

As we can see, you were hardly able to get any traction with your ideas because the underlying ideology generate incompatible ideas. Your refusal to understand libertarian ideologies has make your ideas more unpalatable than usual.

Have you read the text I indicated? Had you done it you wouldn't be asking such questions.


Don't say bullshit. Self-ownership was never respected in Latin America.


There is no such a thing as a "collective" capable of taking decisions. Only individuals and, by extension, institutions can make decisions. The "collective" can't make a decision.
If you can't make decisions, you can't own anything.

There is no such a thing as "public property". There is only "state property". And if you assume that the group of people that is in the state is the owner of everything within a certain imaginary line called "country", you are not respecting the basic idea of every individual having the same set of universal rights.
Just read the text I linked, it explains better than I can.


Taxes are theft. I've already wrote about "collective goods".


You seem to really believe in the dictatorship of the majority. That's not only unethical as any other dictatorship, as it has some horrible incentives in it you probably don't see.
Every law that does extreme good for a little bunch of people and that harms just a little a wide, big and disperse group of people will always be approved, even if the net balance is way negative. No wonder why the current monetary system is so awful, no wonder all these financial laws etc


Again, collectivity isn't going to decide anything. Governments, they might. (but I don't think they'll manage to stop bitcoins that easily ;-))

Regards

By joining any money system, you approve a collective rule... You're part of the collective decision.

You're in agreement with X individuals. Or you're in agreement with Group X that is composed of individuals who is in agreement with each other.

Generally speaking, bitcoin users agreed with each other pretty much 100% since they all run the same software. When the bitcoin community decide on something other than running nodes and the like, it means that approximatively 90 to 95% of the community decided to do something, or at least there's a large number of individuals doing something about it, and there's no opposition.

From a human point of views, individuals are the atomic decision makers. Groups cannot act, think, or taste. Individuals can think, act, or taste. A group's action that is seemly in harmony is an aggregation of thousand of individual decisions that happen to agree with each other. Within groups, there are dynamics, incentives, and disincentives, that individuals act upon. If the dynamic is not right, individuals won't act in harmony.

Groups are an abstraction, a nice categorizing system that people often abuse to ignore the fundamental reality of human actions and the often messy reality of group dynamics.

That is why you cannot say that Google is wholly categorically good or bad, despite people saying such things. This is why you see things like Google having the ball to face the Chinese, or Google compromising with Verizon. Different people in different part of the companies can act differently.

Some anarchists are Frenchmen, but it is not possible to say that they identified with and support the states because they're French nationalities.

That's exactly definition of Universal Dividende as monetary creation on the only universal basis of all human acts : individual, present, and future member of the economic collectivity.

I won't brother to understand what the hell is Universal Dividend, other than it's some kind of basic income that maximize an individual's version of fairness.

There can be no collective that act or thinks, only individuals.

There is no individual that act or think, only a collection of brain atoms excited by complex past and present conditions, which generate some "ideas", "dreams", "images", "fears" or "desires".

I see nothing else, no "individual" exist, it's just a convention of denomination of a phenomenom, as collectivity is.

Yes, agreed. Absent of outside verification, there is no know way to assure one-and-only-one account is created for each human.

However, we do have outside verification. Each state tracks births and issues birth certificates. It does the same for death certificates. The world outside bitcoin including the legal system relies on these certificates. Even the federal government relies on these certificates when they create social security numbers.

Since there are 50 plus entities doing this, I'd call it a decentralized system. Though one made up of mutually trusted peers. So there does exist a decentralized system that can serve this function. However, I do accept your assertion that such a function cannot be arbitrarily decentralized and still remain verifiable. (a la bitcoin)


But given that there is a plausible way to create a trusted mapping of initial accounts, births and deaths, I'd argue that my hypothetical is well supported enough for discussion of its monetary policy benefits relative to other monetary policies.



Yes, I'll stipulate to that. However, I'm not as skeptical of central authorities as many Libertarians. Nor am I as trusting of central authorities as many Liberals/Socialists.

Generally I trust individuals to act in their own self-interest. But contrary to what Liberals believe I see clear evidence that un-coerced cooperation is self-perceived as being in ones self-interest. I find this true of rich and poor people alike. Cooperation is simply fundamental to human nature. Even for Libertarians like me who want to retain the fundamental right to be uncooperative.

Those brain atoms generate a sense of self, an individuality. Our neurons cannot be linked together with other brains to create a collective brain and collective scenarios.

Even when there are cases of brain merging, the two individuals retain their own memory and sense of self.

Let me ask a fundamental question.   What is your stance on people who opt not to use your currency?    Will you make it legal tender and outlaw everything else?

If you do not make it illegal to use anything else then the rich simply will not store their wealth in your currency.   If you do make it illegal, on what moral ground?  Do you prevent the rich from buying in gold and making contracts in gold?   

Any system you come up with must compete with all other systems or use force to shut them down.  If you were to create a universal dividend of some kind, I would gladly sign up for it, take the cash and buy gold.   Anyone else with any sanity would do the same.   

Let me ask you another question... say your dividend was 200% or 1000%?   Why 5%?   

Arbitrary laws and forced wealth redistribution schemes never survive if a competing system is available.   Thus, to implement your system requires that you control the guns and that you threaten the population to comply with your system.  So, unless you are willing to *kill me* and everyone else on this board for disagreeing with you, you system is fundamentally flawed and not sustainable.

I'm learning that what you think are "psychological benefits" I see daily evidence of being "psychological drawbacks".

Stipulated: that ONLY investing currency should cause an INCREASE in net value to you. You're hoard of currency shouldn't work when you are not working.

However, your 100% winner statement is either absolutely wrong or absolutely unsupported.
If you increase currency levels 5% and prices increase 5%, then each equivalent share has exactly the same commodity value. If 1.00 original coin bought a loaf of bread before. 1.05 in inflated coin will buy a loaf of bread.

Because you gave "something" to everybody doesn't make the process a "win" for everybody.

The rich lost in their personal value as measured in loaves of bread.
The poor won in their personal value as measured in loaves of bread.

You know this, so I presume the deception was on purpose for persuasive effect. FAIL


I think you mean "taking money from people. I do welcome others taking money to me! :-)

But stipulated. People don't like taxes.

Again this is a deliberate deception. It still fails on me.

Creating money is welcome to those without money. Not to those who value money as a commodity. It doesn't matter to me if I receive more money, but still lose value. That concept only effects the naive or stupid. That is often why they don't have money to begin with.


This is an argument in favor of "price inflation". Since it makes rich people's currency worth less, they will spend it on things that either 1) generate additional currency to make up for the loss or 2) commodities that increase in value as measured by the currency.

Stipulated: This makes it EASIER and CHEAPER for smart people with productive ideas to borrow money and create additional commodity wealth.

Woot! A point of personal agreement! Don't make it unnecessarily hard for smart people to move quickly.


NOTE: I just notice I made an error in my previous post. I'll fix it momentarily.

Stipulated: Everyone is richer on a per-capita basis when using a ratio that compares (total commodity value in existance)/(number of people currently alive)

This ratio increases not with mere production increases, but instead with productivity increases. (i.e. each person produces more value now than they did then)

In my proposed system you still continue to get richer in total commodity value. However, prices drop so it takes less currency to buy a loaf of bread. (This was a mis-statement on my part previously).


I don't understand this. Can you restate it?


This is confusingly stated, but it seems like a purely standard liberal political platitude.

I couldn't disagree more strongly, but I am quite certain even your average "right winger" in France would seem a "leftist" when measured relative to where I live.

So my general response is, if I am "one of those people generating great value for all" then no. Hell no, does it make any sense at all for me to create great value for you, then to have you take my share of the value I created also.

This requires an example.

Say, I create a process for baking bread that uses less than half of the energy, time and man-power than the existing process. Using my new process I bake bread faster than most others. Now there has been BOTH an increase in *production* and an increase in *productivity*.

Because of the increase in productions, YOU and everyone else "receives great value" because the price of bread fell by half. So the money you already own buys twice as much bread. That is huge value for YOU.

But the productivity increase is the root of MY value. I baked more bread than others, I sold it at a lower price than they did, and still took some profit for myself. That value is MINE. I deserve every bit of it. If I want to give it away, that is MY business not yours.

I assert with all possible strength the following statement:

IF I increase my own personal productivity and/or the productivity at of others, while at the same time bringing society as a whole additional aggregate and individual value as a direct result of my increased production,...

THEN, there exists NO MORAL REASON for you to take ANY of the value I gained as a result of my productivity invention. In European terms, I would say I have "moral rights" to my creations and to profit from them. Exactly the same moral rights as if I had written a book, or made a sculpture.

Exchange anything has some value for you. I don't need gold, and don't want, it doesn't matter for me gold, or any value you think it's value it's your point of view not mine. And my point of view today is not the same as tomorrow because value change every day and is different in space and in time.


Because the process of money creation has to respect the more stability possible (low inflation rate from the beginning to infinite), as well as respect next generations of members. Life expectancy is 80 years, and to reach of 1/N equal sum of buy power (BP) of the created money between N members of different generation of people, 2%/year is too low (BP = 1/N * 79% with 21% of inequity), and 5% / year is fine (1/N * 98%). As low as possible + time equity with an 80 years life expectancy converge towards 5% / year as near the best compromise.

The good inflation rate for the Dividend depends of life expectancy.

Universal Dividend Justification N°2 (http://fr.wikipedia.org/wiki/Dividende_Universel#Justification_N.C2.B02) (generational compromise in front of money creation process)

So it's not a problem concerning any specific value.


Rich is not equal to have money. Rich have can have goods, and not money. It's a choice to keep money and not goods.

If you think bread is a specific value very important to estimate your money create a money backed on bread !

I think any specific value as no universal value but human being. I don't care about bread. And if all people buy bread, I will be able to buy something people don't bye, if all the people sell bread, I'll buy at a better price perhaps, if I decide to.

So looking at inflation looking at any specific value in a very strong mistake undestanding economy as a whole thing.


Not only. It's very difficult to recover taxes... People hide what they have. taxes = bad idea in any case.

+ value is not money. Value is all what you own including money which can be a very small part. So speaking about value considering the tool of exchanges that is money is also a mistake.



So don't create BitCoins.



Yes, they'll do what they think it's good, what they think "this is value and this is not" and when selling it perhaps the market will say "ok you took a risk, but this is something I don't want to pay what you expect.

Do you know which prices of what will increase or decrease in a growing economy, where tomorow people will buy "XYZ" instead of "ABC" due to innovation ?

I don't know what is value for others, I have no idea at all. I have an Idea of what is value today for me, but even for tomorow I don't know, and without any doubt, not idea at all of what will be for my children.




In an innovative economy if money is not dense and stable in space and time confidence cannot developp for investment. In a local part of economy, because of lack of money, investment stop, people try to developp another money system. Not because they don't produce, not because they are "poor", because money is not present, because it has been created only on the past and stocked in another local economy, or it's been created in others parts of the space.

Because money is not universal.

A minimum "flux" of money is necessary if the goal is allowing universality of exchanges elsewhere. Money is not value. It's a tool to exchange it.




You don't think about collective goods, which value depends not of selling it, but to the fact that a lot of people can use it. So those goods inflate rapidly, and give collective value to society (so it's also during time evolution of language, mathematics, science, as collective goods).

This is what you do with all open source systems developped to run internet, and to developp digital economy. You profit for it, and the developpers have received nothing, because they expect a return they don't see.

You should discuss with open source and open content producers about that point.

What you think about money (not inflate it !), they do it with goods (digital value inflate) without a minimum money compensation in the system we live.

Goods inflate, and money should not ? We have a problem of logic here.

Thank you Galuel!  The contrast you provided allowed for an epiphany.

The funny thing is, the revelation was that the current central banking mandate is the correct one! :-)
At least from my perspective it is. And I feel confident I can coherently explain why. No conspiracies required. Who'd a thunk!

Maybe I'll start another thread.

Since my english is not perfect, sometimes I'm not sure to understand subtile sentences like "allowed for an epiphany", if it's a joke or not ?!  ;D

In any case the problem with bank system with a central banks is the fact that money is not symetricly created in space and time, but only towards arbitrary value, decided by centers of decisions, creating bubles AND HOLES (we only speak about bubbles, but where money is not created we have holes).

It's impossible to see stability of money creation in such a system, where lots of values are denied.

Symetric money delegate idea of value to individuals, with a universal way to exchange it.

Agreed, the percentage of *arbitrary* inflation does not matter for this discussion. (Non-arbitrary inflation is discussed at the end.)


OK, I said some inflammatory things prior to this section. I guess that justifies the defensiveness of this reply.

Rich in this context meant - Currency rich. i.e. Those who possess their wealth in currency.
Poor in this context meant - Currency poor. i.e. Those who possess their wealth in stuff (Me).

I'm well familiar with wealth that is not currency. Most everyone is. Please interpret all my responses from that point of view.

Bread is an important commodity because it is perishable. I know I'm going to need to buy lots of it next year, but I can't buy it now. It serves as a common archetype for consumption.

It doesn't make sense to "back a currency with bread" in the same way as you could with a non-perishable commodity like gold. But you knew that.

By making specific examples for discussion, I'm not misunderstanding the economy as a whole thing. I'm simply trying to address the economy as a sum of individual commodities and the desires of those who consume them on one fashion or another.


Absolutely, that is why the amount of currency available is trivial compared to the amount of commodity value in existence.


The birthcoin example, did not arbitrarily inflate as bitcoin is currently doing. It merely attempted to remove the tyranny of time from the fixed currency model. There is a lot of discussion of what constituted "fair" on this site. Also what constitutes "sound money". The birthcoin example was intended as a "fairer" way to initially distribute coins, without introducing too many variables at once.

I've already addressed elsewhere that the idea of bitcoin trickling money in over time is completely inconsistent with of principles of a fixed quantity of currency. I find it curious that bitcoiners use inflation as an incentive to sell future deflation.

I've also discussed in detail (elsewhere) the fact that I personally feel, building persistent price deflation into a currency is completely counter-productive.


In reality, I think (when averaged over a whole economy) generalized price deflation is "a bad thing". I also think generalized price inflation is bad as well. However, the balance point is NOT at zero. A little deflation is a lot worse than, a little inflation is. That point is supported elsewhere on this site. Therefore, defending against generalized deflation is a priority, and if that cost a little inflation, overall its a general win.

But to be clear, adding more inflation when you are not in danger of deflation, is "a bad thing" from my point of view. I am not "a progressive" in this regard.


Fair enough. No one could think of a better number to quantify growth.


Thank you for the restatement. We are in complete agreement.


You didn't accept or reject this statement. Is that an oversight?


I do write open source software. I have considered everything above. It has no effect on the point I made.

I can write a book or a post and give it away. That doesn't mean I have received no benefit. My perception of the benefits for doing so is up to me not to you or society at large. That is why I only respond to certain posts. Some are not worth my time.

But if I have freely given away an insight to you that you use to benefit you and the others around you...
Then let me stipulate for the record, "You owe me nothing! Ever! Not even if you get rich in supermodels!" I've already taken my personal benefits thank you. While I speak for myself here, I'll make the stronger point that this hold true for everyone.

The same moral rights I assert that protect me from your taking my benefits, also protects your productivity increase share. This hold true if you bought my ideas, or I gave them to you for free.


I wish to understand this statement but I don't. Can you restate it, please?

Are you saying, how can open source writers continue to write open source software if they can't figure out how to support themselves? If they can't figure out how to support themselves, that doesn't make their problem into my problem. Nor does that make it OUR problem. Why on earth would you think it should?


Stipulated for the record. I think that currency levels should increase decrease as necessary so that (on average over the whole economy) prices remain constant. Where the most important prices to remain constant are the prices of the things that most people need to preserve their life and livelihood.

As non-inclusive examples of the category: Food, electricity, water, fuel, internet access!
Commodities that could inflate or deflate relative to the above without me caring: Gold, luxury goods, recreational drugs

The reason my example included a deflationary economy was purely so its differences could be compared relative to bitcoin.

Your English is much better than my French!

No it was not a joke. It was sincere thanks. Thank you again!

The reason I wrote it that was is because early in the thread I saw value in contrasting your ideas with the more common ideas held by people posting on this site. I though the contrast would help bring their ideas into focus. Instead it focused my own. :-)

I'll write about my insights later.


Yes, that is the way current money creation is perceived.

I'll argue later that money creation should not be symmetrical in time or space. I'll also argue that money bubbles and holes cannot be prevented using fixed preset formulas. As such, money *creation* should not be seen at stable, but money itself should.


I'll argue symmetric redistribution is simply a social policy tool. It should be kept separate from monetary policy.

One equation can't serve two masters. :-)

Doing that you decide specific values for which you estimate price, and you deny fair money creation for the next generation compare to yours. Next generation who want to buy, invest, sell completely different things you cannot even imagine.

They say to you : "We don't matter price, we just want as relative money created as you during our whole life, so don't steal money creation for your own profit. You have been able to have what you have because of cooperation of your generation within a money system in which you created money, so we want the same. If you don't agree, then we'll build another money system, and we don't want your 'not fair' money".




The fact is since my english is far from perfect, I didn't understood this completely...  ;)

I cannot think in the individual part only. And in monetary part only too. I think individual and society as well, and money and goods.

There is no ethic reason to steal your work, and you have moral right to profit for them. But also when you benefit from others works given to you, you have moral compensation to accept some money is dedicated to retribute collective adding value, which cannot be valuated by direct monetary exchanges (case of free software).

It's the two parts of Local / Global

I think it's not moral to use those kind of global value, and not accept a global money compensation for it.

So the exact mirror of : you have moral right to profit from your creation (from a money compensation point of view) is : // you have moral obligation of NOT using global value if you don't accept global money compensation for it.


I assure you Universal Dividend develop interest in this population, in France one of the most famous site for Open Source, FramaSoft, published this article (http://www.framablog.org/index.php/post/2010/05/17/dividende-universel-valorisation-libre-non-marchand).


I fully understand this point of view, but in my opinion it's not efficient.

We cannot think a money system from a specific point of view. We may think about the people at present and future time, in a fair way. Our value are not theirs, but we try to build an universal tool for exchanging it between them thru space and time.

Money is a collective way to exchange goods, it cannot be created for some people and not for the others, by deciding this from a specific point of view.




Money is the mirror of a certain part of goods (lot of goods are also directly exchanged without money compensation). The quality, or quantity, or innovation of goods, globally need more money tomorow to developp. If not, there is no adequation between expected money, and work.

The creative and continue process of money creation IS the fundamental incitation of growth (inflation of goods).

It's BECAUSE this process is cahotic and not based on a regular basis, that fear appears about what people can expect tomorow, crises, bubbles and holes.

Long term economic investment need a long term fair money system. When the money system is something which says "tomorrow we will have -1% of money, and next week +10%, and in 5 years we don't know because our money system is totally instable by contruction", that IS the cause of crisis, bubble, holes, and lose of confidence nothing else.



Because of lack of money compensation, they will build their own money system. For sure.

If the old money system propose a change to monetise the part of global value all people work for (not only Open Source, Mothers for their children and lot of other big work...), then the need of an other money system will disappear.

If lots of money systems developp is because the lack of money due to a non-fair non-symetric non-timespace-dense and old money system.


I don't agree at all. I don't know what is "prices". I only know how much money there is, how it is created in space and time. Any other things concern individual choices.


I don't want any specific values I DONT CARE AT ALL, be a part of a money creation system.

in fact quite all those things were not "essential" 100 years ago, and none will be existing in 300 years. And I'm totally sure than an ascete don't care about all what you could define, but he give something we can't imagine to those he teaches. Every human being is a universe of full value, nobody has the right to deny.

By defining "essential values" in fact you deny "other's essential values", like gold was in past. Exactly the same. All this are very big mistakes towards intense creativity of individuals, able to develop an entire personal universe of life.

I don't want any human being define what is value and what it is not, what is essential and what it is not, what is high price and what is low price.

I don't want a money created on any other base than human being as ONLY fundamental and universal part of ANY economy of past, present and future, until we meet other intelligence able to trade with us.

Interesting topic and debate. Here are my thoughts, layman that I be.

The act of creating currency does not create wealth. The new unit of currency is produced from “nothing”. Since it is not possible to create something from nothing, the 5% new currency which has been created becomes an informal 5% tax on everyone who uses that particular monetary system.
 
Creating money so that people who don’t have any can have some just because they exist is an interesting social idea, but it does only harm to the currency itself.
Helping people to produce a substantive item (by skill, craft, blackmail, whichever tickles you best) and to earn currency is the only way to empower them and retain the value of the promise to goods (currency) which they have worked for. If you wish to help those who have nothing, why place this burden on the currency? Rather levy a real tax by means of legislation to do so, and keep the purpose of the currency pure.

This, in my opinion, is the greatest power of the bitcoin system. Once the creation period is complete, it will be the purest currency the world has seen since the days of the barter system where goods themselves were the currency. With the current corrupt systems of currency, it only takes one dictator to wipe out lifetimes of production earned; Zimbabwe being the most extreme example of this.

There seems to be much debate on the creation of bitcoins. Having read the forums, documents, wiki and most important, the white paper, I think everyone should understand the creation of the bitcoins is a finite process with a specific purpose to the way it is done.  That purpose is twofold. First, and most important, is to create a proof of work which will secure your bitcoin in future. Second is to introduce them in a way which will mirror the acceptance of bitcoins as a tradable item. The creation period does reward those who produce the chain of proof, so in a way the network is being “taxed” by act of creation to pay these nodes. This reward system will eventually be replaced by transaction fees and the tax will disappear in favour of directly rewarding those nodes which do work for the system. Only when the system reaches this point, will the bitcoin have a true and pure value associated to it.

The need to increase money supply, be it in the form of “Universal Dividend” or otherwise is an artificial need, and as I have said, a hidden tax. The only need in terms of currency supply would be that enough “paper” exists to write your promise on. The bitcoin structure provides enough “paper” for the foreseeable future and its value will be firmly set in what you can exchange it for. Why complicate a currency any further?

Willsway, if future inflation is stealing from past participation, then isn't it fair to say that past inflation is stealing from future participation? The current inflation rate is EXTREMELY HIGH. Do the means justify the ends? It's EXTREMELY beneficial to the past participants if it is adopted by the later participants. But why should the future participants accept to have had the high inflation stolen from them simply because they didn't know about the project or were not born yet? Isn't it in their advantage to group together and start the whole process over again so that they can also have the opportunity to steal from future participation?

I completely agree with that point.

That's why we'll make a fork.

As it is designed in fact BitCoin is a mutual credit limited, which concern only first users, and has no interest for other ones, but the ones who want to work for them.

Only universal credit thru space AND time is fair. Ignoring future is the biggest mistake all conservative thought has made starting that beleiving gold is other thing than a metal, and thinking money should not benefit to all the people and represent value if it's limited.

If limited money is a value, so keep at zero money, you have infinite value.

Look, if you tell people that you are going to be debasing the currency and that they can use it or not then that isn't stealing. So it's wrong to call the method in the OP stealing.

But I don't want to invest into a system where my contribution is able to be watered down and given to everyone every year forever. It's also my guess that other producers won't want to get involved either.

The people at the beginning are taking a risk, and they are the only reason the currency will have any value at all in the future. If people want to get involved by supplying more backing in exchange for an agreed upon amount of coin then they can, if not then they won't. It's my guess that they will, that's why I'm earning bitcoin by processing transactions and by supplying goods and cash. There is no guarantee that I am right and my various investments will pay. I am pretty confident judging my the growth of the community over the last month. There are people who were confident even earlier when it appeared even crazier and riskier, they will get paid more for the same investment.

tl;dr: What is the best way to tie one person to one identity in a global decentralized system such that on average over consecutive daily, weekly or monthly intervals, each identity only represents one willing and real participant in the system? More participation, less difficulty and less cost are the kind of measurements which determine how good one method is over another.

Edit: This question is important to me and I want wider feedback, so I reposted the question in the general forum (http://bitcointalk.org/index.php?topic=817.0).

Galuel, I had never heard the word cooptation before and because of your non-native English, at first thought it was a misspelling of cooperation. You were correct in how you used it and I don't know how widely the word is understood by native English speakers, but if Red's and my understanding is representative of average native English speakers, then for future reference, you should define it before using it, or use a similar more widely understood word. For everyone else's sake, cooptation (alternately spelled co-optation) (to co-opt as a verb) as used in this thread, means assimilation, naturalization or initiation. And cooption is a cooptation, which I assume is an instance of cooptation. The definition was taken from Wiktionary and like I said, I can not recall ever having encountered the word before this thread.

I am quite interested thinking about how cooptation (hehe, I'm using a new word :D) can be most effectively performed within the constraints of a decentralized global organization. In a centralized system, you can simply gauge simple participation which is difficult to scale and then continually check for cheating. This is essentially what many closed websites do. They're not closed in the sense that they're trying to keep everyone out, it's just that they're trying to tie one person to one account to promote and maintain a positive cultural environment.

I admit the current system of distributing coins probably isn’t ideal but it would take a great deal of statistical analysis I’m not enamoured to do to prove that… but the word “stealing” would only be valid if you propose the act of creating the network is not work of production for which money is earned and the rest of the network is taxed for to pay.

Current nodes produce at risk, since there is a very real risk they may not realise the value of their production thanks to many factors (such as bitcoin ultimately failing) which I will not mention in detail.

Current nodes should be seen as miners who are mining a finite resource at risk. They then take the product to market and trade it for something they can use. If they wish to add to the risk by hoarding bitcoins in anticipation of future riches, how is this different from purchasing shares in a high risk company? If the company does succeed, the rewards will be high, as the share price spikes. People who then notice the share and offer to purchase it, at lower risk, do not complain that those who purchased the original share did so at 1/1000 of the price. Why? Because the share has value and they are after the value they can realise. They do not care to take the risk the early adopters did.

Ultimately the bitcoin value will stem from demand + usability vs supply. Since future participants will never be aware that once one could “mine” for coins and since mining for coins is not the objective of the currency but essential work to secure it, why would they feel hard done by? And should they find out, why would they care? The mine is empty and they still have a useful means to purchase products and services. If one of the early adopters then chooses to flood the market they will devalue their own wealth and the effect will be short lived (as debated in many forum topics).
 
So the question is, why would future participants care about past inflation if the value they currently place on the currency acquires them that which is equal to the production they produce? They would only be concerned if their currency became meaningless and stole from their day to day production.

Should these future bitcoiners decide to create their own currency, face all the risk of creating their own mine, put the effort in to make it succeed and generate value and if the succeed become rich in the process, good on them. Competition is never a bad thing.

FreeMoney, your contribution is being watered down every ten minutes, and at a rate much much higher than 5%. The point is that the creation of the money has to happen at some point, so why distribute a MASSIVE amount up front and then ZERO later? Well, the incentive is clear, the early adopters want to force their advantage on later adopters. But it's voluntary, so later adopters have no incentive to accept such blatant inequality. The sum of future participants is much greater than past participants. Future participants will contribute much more to society than you ever will, so why should they be shafted? The goal is not to devalue your money. Since the money has to be created at some point in time, the rate of creation might as well be equal over time to give all participants an equal opportunity. Despite what you think, your efforts are not inherently more valuable than future generations and future generations will not accept the inequality of the past. You can either force the masses to adopt Bitcoin after you have obtained your wealth or you can wait and watch for it to fail once the next generation starts to take over.

Willsway, the project is open source. The future generation can join together to create an improved currency with very little effort. Identical goods and services offered by future participants are just as valuable as identical goods and services offered by current participants.

@ Galuel

I thought we were reaching some common understanding with a few quantifiable places where we disagree. But now it is seeming less so. I need to validate my understanding of your positions before I feel comfortable proceeding.

-----

It now seems this universal dividend concept is just a proposed solution to "the bootstrap problem".

Meaning, we want a new currency to exist, but it can't exist until we distribute some amount of it.
If we create and distribute this amount of currency out of thin air now, "to be fair" to people who come later, we must continue to create X() amount of currency from thin air forever.

Is that the only problem you are trying to solve?

Or are you saying, the EU should be paying a universal dividend every year, because they created a new Euros out of thin air and "to be fair" they should/must continue to do so?

-----

It also seems you are trying to recreate the Christian notion of "original sin" in your economic system.

Meaning, you were born into this world/culture. As such, you owe us for all the nice things we have provided for you. This is a debt you can never repay. No matter how much you donate, we will always say that there are other intangible things to which you continue to benefit, therefore you continue to owe us. And if that seems unreasonable, think of future generations, you owe us because of your debt to the future.

Is that your philosophy? Is there ever an amount of money or commodity I could give to "society" where they would say "Thanks! you don't owe us anything now. Everything you earn now is guilt free!"

-----

When you speak of work that benefits society but is otherwise not directly uncompensated you seem to know its value in total (5%/yr), but deny that anyone can fairly put a value on any of the composite parts.

For example, say I enjoy writing Vogon poetry. There is no current market for Vogon poetry (http://en.wikipedia.org/wiki/Vogon) because everyone knows that reading Vogon poetry akin to torture. But that doesn't matter. I'm contributing to society anyway by writing Vogon poetry. You can make no judgement as to what value future generations might place on reading Vogon poetry. Who knows? After all who could have predicted people gullible enough to listen to trance music.

But you decide I'm entitle to payment now, on speculation that it might benefit society in the future. Is this your logic for everyone receiving a share of new money?

-----

Anyone feel free to tell me I'm totally misunderstanding these ideas. I'm not trying to be sarcastic. This is the way it is seeming to me.

Agreed, they will have past experience to their advantage. However the work done which I mention has little to do with the code (urm, dear developers, I know you slog away at the keyboards like caffeine slaves, no disrespect implied). The real work, in terms of the currency, is creating a secure proof of work to prevent things like forgery, etc., which users currently perform with their cpu's. The other part of the work is convincing other people of the value of the work done (in this case the bitcoin) by offering them something they can exchange for a coin. The relatively small and few non-exchange items on the trade page is proof of how difficult it is to create value. The new currency would have to reproduce all of that work. To tell the truth I am surprised the Bitcoin has achieved it's current value against the US $ and feel it is rather inflated thanks to fundamentalist followers who want the concept to work rather than a true value pegged to production. The question is, will the future project have this advantage? If the motivation of the future generation is to create coins to enrich themselves rather than to create a "pure" means of exchange, would that greed not tempt them into corruption and thus reveal the true intent in the modifications? If the new system was based on a fundamental objection to a current one, as bitcoin is, they could have the same advantage and if so, good on them for then putting in the work to create value and a better world.

I think where we differ ideologically is that I believe money should be pure and untainted by direct human intervention. I find the current need to generate coins an unfortunate necessity because it distracts from creating any real value. In a perfect world, money should not be "created" - ever. Production should. Yes, there should be enough money (or as I say, paper) in circulation so that all who choose to use it can deliver a promise of value to someone they purchase from. To create a constant amount of money (5% a year) to infinity which is in no way tagged to production places an unnecessary burden on the currency, forcing it to play a role which is beyond its scope, and opening it up to abuse by the powerful. I have a problem with the idea that creating the paper (bitcoin or another currency) should be profitable. Since the perfect world does not exist and one cannot create "paper" from nothing the miners are important. This is why I say the current generators of the paper we need to use should be seen as miners selling effort for value.

I'm sure you are right to some extent, but don't forget about supply and future expectations of supply. There are about 3.5M available bitcoins. I don't know how many USD there are but it's more than a few orders of magnitude more. There is way way way more demand for $$ than BTC, but there is way more supply too is all I'm saying.

What will your majority do to someone who refuses to participate in your system?Forgive me for saying this but I get skittish whenever I hear "social good".Or "its for the children","we know best".Any sort of system that is set up as majority morality will inevitably destroy individuality.

hehe, you're right, I shamelessly ignored the speculators didn't I :)

The fact that there will be only 21 million bitcoins forever and the fact of inflation is factored into the price. Bitcoins is very predictable and people can plan their economic calculation around that.

Red, I just happened to find the correct Wikipedia articles in English. Universal Dividend can also be translated as Citizen's Dividend (http://) and it's only one part of the solution. There is also Universal Allocation from the French, which is called Basic Income (http://) in English on Wikipedia.

According to the English Wikipedia stub, Citizen's Dividend (Universal Dividend) is just the state paying a dividend on state owned assets like Alaska does. But all the principles are quite inter-related, so here's my understanding of how the currency creation principle works. The basic idea is that the percentage of income created over an average person's lifetime should be as equal as possible from generation to generation. The percentage of increase could be any amount so long as it is constant. But as long as you are increasing income, you might as well do it at the most effective rate to promote healthy economic growth. The problem with no creation is that the currency tends to migrate to certain communities, which isn't bad in and of itself except that it leaves insufficient funds in other geographic communities for healthy economic activity.

Running businesses requires steady supplies of money and products, if you have too much or too little of either, economies can grind to a halt. This can be demonstrated by natural disasters like the earthquake in Haiti along with the corresponding relief effort. Yes, people need immediate help, but sudden instability of products and money causes the whole economy to fail. So although there is rice on the boat, money in the hands of the biggest suppliers and lots of labor is available, the amount of rice is varying so much that its price is spiking up and down making the supplier's job difficult, but he can at least take out a loan to survive the turbulence but the retailers are running out of money without the ability to take out a loan, so they can't afford to make the trip to check whether the supplier has rice available and the laborers have spent all their money on over priced rice which is no longer available. So everyone just does their best to survive until the economic wheels start moving again.

The five percent inflation is simply the best percentage rate to grease the economic wheels, but there's nothing magic about it being five percent. If you were an expert in the relation of currency expansion to healthy economic activity, you could just as readily suggest 3.5% or 7.5%, but it's not fair to have the average inflation rate be 7.5% while you are acquiring wealth and 3.5% after you've acquired your wealth.

Now to complicate things further, Basic Income (Universal Allocation) states that the current western monetary work ethic is a fairly recent human invention which developed during the industrial revolution. The idea is that this idea of individuals working to obtain as much monetary wealth is unnatural and unhealthy. The natural order is to have an extended family unit, where everyone is contributing fairly equally according to the needs of the family and everyone in the family receives the basic necessities of life (not to mention healthy social interaction). Basic Income suggests that because mankind now has enough basic necessities to go around, every individual should get an allowance to cover the basic necessities of life regardless of their monetary economic activity and that the result will be that everyone will be useful members of society. Some members of the family will work to obtain extra monetary wealth so that the family can maintain and improve the family's quality of life and other members of the family do domestic work so that the children will grow up to be contributing members of society instead of going postal at school or at work.

The five percent inflation does affect the wealthy, but not really. Chances are that if they obtained enough money to be wealthy and if the economy is working properly, they'll most likely continue to earn more than 5% percent of their acquired wealth per year. Whereas if the economy was unhealthy, they would more than likely make less than in a healthy economy. Yeah, they're losing wealth, but at the same rate as everyone else and since they're already good at obtaining wealth, they'll no doubt obtain a larger portion of the created wealth, which means more proportionate money in their pockets.

Basic income, on the other hand, would no doubt affect their mass of wealth noticeably. But the argument goes, that if the whole of mankind in more healthy, then then not only will the poor be better off, but the rich will also be substantially better off even though they might sit and pout that a mother can sit at home with her kids and do absolutely nothing but watch TV and drink beer all day while he's been working his ass off all day so that he can have a fancy car and a big empty house.

Edit: I made a few minor wording corrections.

Thanks for the explanation in English. :)

The main problem is how to verify users of an inherently anonymous commodity.Gold cant tell if you have mined other gold for instance.This probably ties into the need for a verification process that doesn't verify you to a central agency such as the state.I see no problem with Galuel creating a separate bitcoin project to create a competing commodity my problem is if the existing bitcoin users are forced to use it.The more implementations of bitcoin like currencies the less likely the current monopoly central banks can shut it down.May the best system win and there is nothing stopping everyone who uses bitcoins from using socialistcoins lol.Whether you could exchange them between each other is the main benefit.

If the socialistcoin project has the same fundamental security as bitcoin then people might use it.If it leads to getting us off the destructive central bank method i am all for it.

Thank you very much NewLibertyStandard!

I'm moving to France! I've got to try for some cooptation!

You're welcome.

Exactly! I really want to figure it out (http://bitcointalk.org/index.php?topic=817.0), but a practical solution may not exist. :'(

It sounds dirty when you say it like that... :D

I want to believe that you all have brains and honestly want to help humanity.  However, I see many arguments that are not supported by sound logical deduction. So, I will try to address some of them now and ask that you all respond to my earlier question about those who choose not to use your system.

1) What is the penalty for people not using your money?

2) Why should anyone voluntarily use your money?  

Holding currency in an inflationary monetary system is like depositing money in a bank at a negative interest rate.   You do not do it unless you have to.   I do not care what "fairness" reasons you may have, you must still face the reality of everyone making decisions that are best for them.   So speculate all you want about a grand scheme to "fairly" distribute a currency between all people from generation to generation, but all your speculation is for nothing because you would have to convince individuals to accept your money system and there is no reason for them to prefer your system unless they are the ones receiving "something for nothing".    

For the sake of fairness, let us assume that all resources in the world were evenly distributed among all people. Equal land, resources, bitcoins, dollars, gold, silver, etc.   This is as "fair" a situation as one could hope to create given the God-like economic power your system requires.  Now a new baby is born.  Who must give up a share of their resources to support this new baby?   Everyone?  Just the parents?  At what point does the baby receive his "share"?  18?    

Now suppose two people make a trade.  Is the resource allocation still equal?  Is it better or worse than before?   Why would they make a trade?   Clearly the trade would not have happened unless both parties perceived they were better off than before.  This is the heart of all voluntary transactions and thus all voluntary transactions increase to sum of each individuals perceived value of assets owned.

Now, take a resource from someone and give it to someone else.  How do you prove that this benefited society?  Clearly one person experienced a loss of value and another a gain in value.   Both parties cannot be said to have gained from this forced transaction.  Because all value is relative and individual it is impossible to prove that the benefits to the person receiving free resources outweigh the costs to the persons from whom resources are taken. Using the threat of violence and death to force one individual to give up his resources for another based upon an unprovable utilitarian economic calculation seems quite barbaric and is equivalent to forcing a personal religious belief on all "for their own good".

Everything I stated above holds and does not depend upon any concept of "money", simply barter starting with an even division of all resources.  

So based upon those principles what is money but another resource that was evenly allocated to all people?  Sure you can make more money just like you can make more of anything.  The result of increased supply is lower exchange values.   There is nothing more immoral about creating money by what ever means than creating a loaf of bread.   It is just another good on the market.

So someone created a bitcoin and is offering them on the market.  It does not matter that it is 50 BTC per block or 20BTC per block or 0 BTC per block.   It does not matter how they get distributed, whether auctioned, or what ever.  The point is that there are only so many bitcoins around and if you want one, you need to find someone who has one and offer to trade.  End of story.  

You are now proposing the creation of the Universal Dividend Coin.  Offer it on the market as yet another good.  This particular good is given for free to everyone simply for existing and its supply grows at a known rate.  Each year it loses value relative to anything that remains rarer (assuming demand is equal).   Thus compared to a bitcoin or even gold the Universal Dividend Coin would be losing value.  

So what does any sane individual do?   Take your free dividend, sell it and buy a bitcoin.  They have just transferred their wealth from an asset losing value at 5% per year to one gaining value at 5% per year (assuming the goal of the 5% inflation rate was price stability).  Thus there would exist a demand for bitcoins and a much lower demand for the Universal Dividend Coin.

Now the next question is, why would anyone offer goods or services in exchange for this universal dividend coin (UDC)?  Would it make sense to acquire an asset that is losing value at 5% per year?  Would not said merchant immediately exchange this UDC for a BTC?  If both are equally easy to trade, why would a merchant pick UDC over BTC to begin with?
  
So we can see here economic proof that unless you outlaw BTC and any other currency then no one with a brain would ever hold a UDC for any longer than it took them to find a better ROI than -5%.  

Thus the conclusion is that the government would have to create a tax on someone and then issue "social security checks" to all.   The UDC is just a "fancy" way to implement such a tax, and wealth redistribution scheme but it can only succeed if all other currencies are illegal.  

bytemaster, nothing I described attempts to make people equally wealthy. There would still be rich and poor, just not starving. Bitcoin has infinite inflation over a few years. A constant inflation rate has infinite inflation spread out over infinity. Bitcoin therefore has an infinitely higher inflation rate than an constant rate of inflation. Why do people accept an infinitely higher inflation spread out over a few years instead of an infinitely lower inflation rate spread out over eternity? If you are not a botnet operator, then you would be guaranteed to generate a larger portion of the total number of bitcoins given a constant inflation rate as opposed to the infinitely higher inflation rate that we are currently experiencing.

It's a lot harder to plan for inflation when the rate of inflation starts EXTREMELY HIGH and stays EXTREMELY HIGH for the first four years, curving continuously down with huge drop offs every four years than to plan for an inflation rate which is constant from the beginning to the end of time excluding the very first bitcoins created.

It's crazy how people can write an enormous reply, without referring to any bit of content from your post. Let me try too!
---
I am immensely grateful that you did the research and I didn't have to. But, I didn't read anything that didn't strike me as textbook European Liberalism/Socialism.

You mentioned once that you were a "very traditional USA democrat". Did you find any of that enlightening?


The first section seems to be the standard: "The country/state is like a corporation. Each citizen should receive an equal share of the profits but the (X) are hoarding all the profits for themselves!"

The second section seems to be the old Robin Hood refrain. "We should take from the rich and give to the poor, because everyone knows (Y) and all that money is just going to flow back to the rich anyway. The rich are always happy. Why shouldn't we make the poor happy too? After all, its better for the rich to live in a world filled with happy poor rather than violent poor!"

It seems very much like those decade old internet chain letters, where someone periodically updates (X) and (Y) to the demons of the day. In today's case the current demons are (X) = the central banking system and (Y) = corruption/conspiracy/incompetence. The solution is money creation.

Today the they assert "government supported banking" is "incompetent" and instead of fairly distributing the profits from "money creation" they neglect "holes" and send the money to "bubbles". Distributing the 5% profit equally fixes that.

I've seen the same thing, but "elected officials" were "corrupt" and "tax-revenues" profits went to "insiders". Distributing tax-revenue profits equally fixed that.

We used to tax the rich to give to the poor, but as Galuel pointed out. Taxes are unpopular with everyone at the moment. Money creation is a more politically correct way to take from the rich.

I think the first false analogy is that where the state is like a corporation, it is much more like a non-profit corporation than a for-profit corporation. And also the fact that most countries whose citizens make this assertion, tend to be deficit spending so there are no profits.

The second metaphor fails, because in reality they usually mean, "take from the rich and give to the middle-class like me!" But what happens is a taking from middle and working classes, to give to those who find working inconvenient.

But that's just me. I'm a Republican. :-)

Red, my comment to you may have been misdirected. You asked about cooptation and I think somebody asked somebody about Universal Dividend and I thought it was you but I don't feel like searching through to verify whether that's correct or not. I was interested in the topic and wanted to write a reply to the question that I'm now not sure even existed. Anyway, if any of my comments confused you, or anyone else, sorry. Take them for what they're worth whether they're directed correctly or not.

I wouldn't say enlightening is the right word. I found it very intriguing. I do lean left, but I'm definitely not a socialist. It's not because of the negative connotation of the word socialist that I'm not a socialist. In fact it has quite a positive connotation to me personally and I very much respect socialists. The Democratic philosophy just appeals more to me than socialism. Some conservative principles also appeal to me, but unfortunately the word Republican holds a negative connotation in my mind. But I live in a very conservative area, so I very much like many Republicans personally.

I don't mind other people being rich and I'm not out to give everyone an equal amount of money. But I am in favor of giving all people as much of a standard minimum dignity as possible no matter their situation. I'm not talking about Basic Income, but rather compromises reached by congress working together or not working together. I'm quite satisfied with what congress comes up with because we elected them and they're just doing the best they can for the most part. Now that's not entirely true, because I'm much less satisfied when Republicans have the majority, but even then I wouldn't say I'm terribly dissatisfied. It's just that I'm quite polarized and like it when we (Democrats) are in power, making our progress. So nationally, I'm quite satisfied right now and I don't want banks or the Federal Reserve or the government to fail.

But Bitcoin is very interesting in that it offers a playground of sorts to try out fiscal theory without risking the wellbeing of millions or even billions of people. I'm quite practical minded when it comes down to real politics, but low risk experimentation to find and create superior solutions is wonderful.

Concerning the rate of inflation in the current implementation as compared to my ideal implementation, the actual impact is not that different in either case. In one case you have a certain amount of very divisible coins in some people's possession and in the other case you have a slightly different amount of very divisible coins in the same people's possession. The exchange rate might be a bit different, but for all practical purposes, they're going to be just as useful in either scenario. But just because they're effectively the same on our very small scale doesn't mean I should just say they're pretty much the same while we're having a conversation about the topic. Sure, some of my hyperboles might be a bit extreme, but I'm just trying to express concepts that would actually be quite meaningful if they were applied on a much larger scale. I don't think that the Basic Income would really work with the current implementation of bitcoin, but I still find it interesting to think about how it could be implemented and what the effect of it would be if it was implemented.

I wouldn't like to be in a money system where money globally inflate, and I receive nothing too. BUT you missunderstand Universal Dividend which is NOT such a thing. ALL members receive the Dividend.

In fact you must understand the real effect of Universal Dividend on your own goods.

Imagine you have a f fraction of the total money. You receive a 5% dividend, that is to say your money is then f + 5% / N where N is the number of participants.

Your PERSONAL (Local IS NOT global) inflation of money is (NEW MONEY - OLD MONEY) / (OLD MONEY), that is to say :

(f + 5% / N - f) / (f) = 5% * (1/N) / f

So your PERSONAL inflation MONEY rate DEPENDS exactly of the money you own, il you own exactly 1/N of money your personal inflation rate IS TOTALLY EQUAL than GLOBAL one, and you "lose" nothing in this point of view. If you have LESS money than 1/N than your personal inflation rate is HIGHER, and it's progressively LOWER if you keep more than 1/N fraction of money.

So the change of your value Goods + Money is a completely personnal choice depending of your estimation of how much prices of GOODS will change, and how much fraction of total money you own when you make your decision. If have less than 1/N money you will have more than 5% and so perhaps you estimate it's good, but if you have more, you will have less than 5% and you'll think is not ok.

If you have much more 1/N fraction of money, and keep it, the prices of the goods will decrease as an effect of DEFLATION because the reste of economy will have less money, so with less money much lower are the prices in money. So it's absolutely NOT CLEAR to know what to do, and you always take a risk.

So a little inflation rate is good to maintain correct money circulation in economy.
Little inflation rate is good to share money creation process in front of time and next generations
Little inflation symetricly allowed is good to attract new members, and so new producers

5% is not arbitrary ! 80 years is life expectancy.

The total fraction of money each member of a fix community of N in long term can receive so :


see DEMONSTRATION in Universal Dividende Justification N°2 (http://fr.wikipedia.org/wiki/Dividende_Universel#Justification_N.C2.B02)

And to reach 1/N created money for all, you need f(x) = [1 - 1/(1+x%)^80] to be as near 1 as possible, and as low as possible to reach the most efficient point.

http://img11.hostingpics.net/pics/9200265_pour_cent_inflation_optimisation.jpg

The most efficient inflation rate for a 80 years life expectancy is between 4,75% and 5,25% with a very near ratio near 1/N of 0,98.

Watch, we'll get a great new currency widely adopted and suddenly life expectancy will triple. :P

With 70 years of life expectancy 0,98 is reached with a 5,50% Dividend, and with 60 years with a 6,50% Dividend.

It's absolutely NOT arbitrary ratio.

It's about 1/N money creation for each individual member during his life for all times.

By the way, since 5% is the optimal dividende for an 80 years life expectancy we can estimate what should be the universal dividend in monetary zones.

There are 15 000 billion US dollars in M3 more or less (see M3 shadow stats (http://www.shadowstats.com/charts/monetary-base-money-supply)) for 303 millions of citizens.

So the Dividend whould be in 2010 of : 15 000 / 0,303 * 5% / 12 = 206 dollars / month / citizen

In EuroZone we have M3 = 10 000 billion euros in circulation and 322 million of citizens.

So the Dividend whould be in 2010 of : 10 000 / 0,322 * 5% / 12 = 130 euros / month / citizen

With great differences into the zone : Minimum social in France is around 500 euros / month / citizen, like in Germany, and minimum legal work income is around 250 euros / month in EuroZone countries such Slovaquia and Hongria (which is not legal is France and Germany where minimum work income is around 1200 euros / month).

All your numbers are great and all, but assuming you do not outlaw competing currencies, why should anyone save in your currency?  If no one in their right mind would save in your currency, why should they use it for any transaction at all? 

You say there are no "poor" in your system.  That means that there is no incentive for a large number of people to work.  Many may simply choose to "live off of the dividend". 

Why use the currency instead of a tax and redistribution scheme?  Clearly, if there is a way to avoid the tax then people will.

Fundamentally your view depends upon the idea that the rich did not earn and are not entitled to what they have and that the poor do not need to earn it. 

Clearly, if the majority feel that no one should be "poor" and everyone should have a minimum level of food, shelter, clothing then let that majority set up a charity and give those people a dividend.

All that has nothing in relation with a money system. I never said there is not "poor" I don't care at all about poor and rich, I just say a faire money system don't create money for some and not fot the others.

That's all. What you do individually and become poor or rich is part your individual choices and individual feeling about what is rich what is poor. What you do with common tool is part of common agreement which needs to be fair to be accepted for most people who is just able to think about what is fair and what is not fair.

Well if your stance is that you believe more people would voluntarily adopt your system then go ahead and give it a try. 

My point was that all free-market money comes into existence as a commodity that people must trade for to gain access to.   No one just "gets money" unless that creator of that "money" decides to give them some.   But simply giving people "free stuff" will not make a money system more fair or even more desirable.   

Liberty, now I really feel like an ass! I was being snide about the fact that someone else (not you) wrote a long post not responding to you, just prior to when I was typing. I started writing one as off track as his.

But in between others posted and the association got lost.

Your long post was perfect and exactly what I was looking for!

I shouldn't try to make jokes so late at night. Sorry to cause you grief! (hanging head)
 

So DON'T create money please. Because this is a ponzi scheme.

I favor the same thing, but within limits of course. I'm sure "as possible" means you have your own limits.
In general though, I think this dignity should be furnished by many small groups, rather than a few huge ones.

So we can agree on what we want to happen. Maybe we disagree on how it should happen. Maybe not.

I'm in complete agreement with you here too!

I like it better (more of the time) when the republicans are making "progress", than when the democrats are in power. But I don't dispair in either case. I choose to be here. I've traveled but this is home.

Even with the Dems in power (soon to be out :-)) I don't want anything to fail. That is like rioting and burning your own neighborhood when your team loses. It's silly.

In general I think the Fed has been hugely successful in their actual job, which is to prevent deflation and keep inflation stable. Others have failed at their jobs, but the Fed has not.

In total agreement. That is why I stay around!

Bitcoin is cheap philosophy experimentation. We could launch inflating, deflating, and stable money for the cost of a used car.

But the last thing I want is The Fed experimenting with philosophy.

Again, sorry for the grief!

Galuel, would you mind responding to this (http://bitcointalk.org/index.php?topic=796.msg9306#msg9306)?

Or even to this (http://bitcointalk.org/index.php?topic=796.msg9399#msg9399)?

Thank you!

All money is "created" and is not a ponzi scheme unless you introduce fractional reserve banking or create it as an interest bearing debt.

Gold coins were minted to make them suitable as "money".   Bit coins are calculated, encrypted, and tracked to make them suitable for money.  Money is not a thing, it is an attribute of a commodity that has universal demand.  Cigarettes act as money in prison.  There is nothing wrong with creating more cigarettes or more gold coins.   The thing that makes gold, or bitcoins, or silver suitable for money is that it is DIFFICULT to create the money and the creation process is not POLITICAL.

I say ANY Money System that is not symtricly created in space and time is a ponzi scheme. That's what I say. Money is an universal (Global - Common) tool for exchanging goods. We cannot create-il in an assymetric way, that is to say from any center point in Time-Space (considering the Time-space of the money system itself, not the whole one).

As a COMMON tool, it is all members ownership.

It's a spacial Ponzi shcheme if it's created in a particular space point, and it's a time ponzi scheme if it's created in particular time points. It's a time-space ponzi scheme when it's created on particular space spoints and date points (like is the official money = a time-space pyramid ponzi scheme).

(Time-Space is not a pyramid. Time-Space is a 4-Dimensionnal Sphere with no particular point of view in front of physics laws, with hubble constant rate of inflation)

Value is not the same from an individual point of view, neither from a date point of view because this is individual choice. But Money as a COMMON tool has to be created without any particular point of view, as space is

BitCoin is 100% ok considering the space perspective, and not ok considering the time pespective as its initial money system works. BitCoins appears with correct analysys as a time Pyramid Ponzi Scheme (and not a time-space one like official money).


Logic, Science, Physics, Mathematics, fair rules games to enjoy, and changing the rules when we discover a not-fair effect, that's my philosophy.

I don't want people organising Ponzi Scheme, this kind of things breaks relationship between the players for bad reasons, create wars, revolutions, blood and fears.


It's just one way between lots of possibilities to understand what is Universal Dividend. You can also see it as :

* A little part of Global transmission to next generation to complete individual transmission.

* Considering the only universal and fundamental node of any economy is the human beings.

* Millions of individual investments made by all on each individuals, with risk as low as possible because of the large number. So if some don't provide the expected "return" on all future times (who will juge this ?), the others success will compensate the investment.

* The global economy zone as a big enterprise owned by individual shareholders, who receive so a yearly dividend.

* Fair Money System

* Want to live in society and be able to exchange with all members without lack of money and central control.

etc...

Lot of possibilities to see it. All are ok for me. I just remark each individual accept better one or other, so I adapt when explaining it.

My vision is a space-time one, which is not easy to see if you didn't study Relativity, so it's often necessary to translate it in each individual global paradigm.

"I say ANY Money System that is not symtricly created in space and time is a ponzi scheme."

You can say that all you want, but it does not make it true.   First of all you need to demonstrate that the system will crash (mathematically unstable) and that there is fraud and misrepresentation involved. 

A 100% reserve gold backed currency system is not a ponzi scheme.  It would be stable from now until the end of time in the absence of fraud or technological invention that makes creating gold trivial.  The proof is that every free exchange of goods/services among people improves the total wellbeing of society as judged by the individuals themselves  (not some outside party) or the exchange would not have happened.  Disprove this and then we can talk about the need for "forced exchanges" and "centrally planned" economic models.

Further you must prove how a forced exchange (even if designed into a bitcoin like system) actually causes a net benefit to society.   

You still have not addressed my point that no matter how good and fair in space-time your idea is "in theory", if it does not account for human nature then it is not workable and thus a bad idea.  Thus, explain by what process your system would naturally be selected in the absence of aggression?  How would it "out compete" a competing system such as bitcoin or even a 100% reserve gold standard?

No and it's not money. It's a share of a specific good. Not usable in all space, all times, for all exchanges, not a value for large number of human beings.

It's nothing interesting.

Who said the currency had to have value for a large number of human beings?   Does that make a dollar a good system?

Your digital "UD currency" is also not usable in "all space" and "all times" for "all exchanges" and is certaintly not a value for a large number of human beings.

So, answer my other points.  Why would your system if it existed be "naturally selected" by all people among all competing alternatives?   Focusing on gold misses the point!

I've yet answered that point. It's neither a theory, neither an idea, it's YET an experimental fact, I gave all links necessary to study real experience about this (Namibia, Brazil, Alaska, Italian SCEC etc...) that are also pointed on the wikipedia article, BIEN network, etc... Thanks to study the result of all those experiments, and study the proposition of lots of politicals including it now in their propositions in Europe, South America, Africa and elsewhere with all the material you will find over there.

Experimental proof is the only way to justify any idea.

For example for Gold backed money, experiment shows it has been rejected long time ago yet, like Newton Theory was rejected after Einstein revolution.

Take time to understand deep thought.

Yes it is.


Your questions have no answer in the paradigm I describe.

All of your examples required aggression and/or "communal" property to implement.  Need I bring up the problem with tragedy of the commons?

100% reserve gold standard did not fail, fractional reserve banking fraud and government debasement of gold failed.  The people did not want gold debased nor did they want a system where banks issue unbacked "payable on demand notes that do not pay interest".  In fact, it looks like what will happen with the dollar fraud fails is a return to gold/silver.  

But, i will look into your "examples" deeper.  

You claim I need to take time to understand "deep thought", but you speak from ignorance about the amount of time I spend in "deep thought".  

How does it work in the middle of the amazon without electricity?   How would it work post-emp?  

Lets attempt to avoid a "Is to! Is not!" shouting match and instead try to explain it better.

I am familiar with the Alaskan universal dividend.   So lets start here.

1) It started with land owned by government upon which oil is found.  Thus its origin is a lack of private property and a political debate over how the "proceeds" should be spent.  The universal divided has paid a paltry $7B over 30 years while the state and favored oil companies profit from the rest.  Net result, resource allocation by force and politics and a squandering of wealth caused by "spending other peoples money".   

2) Requires central "authority" to altruistically manage and distribute the wealth generated from the "common" resources.   The supposed "owners" of the land were given no right to the resources themselves, only what was left after the government decided what to do.

3) Vast majority of "dividend" invested with bankers and the stock market scam.  Once again denying the supposed owners, property rights to their share.  In effect, the government is buying peace while maintaining a need to "tax" people.  In a state like alaska, there should be no taxes at all if all citizens truly own the resources and the resources produce more revenue than the government needs to "defend liberty and provide justice". 

Of course everyone "likes" free money systems.   The question is, does this free money system actually make the best allocation of resources?   Suppose 1,000,000 people move to alaska, do you think the people there would be happy about a 60% reduction in their dividend, the over crowding, the change in culture?   

It is very popular for those who get something for nothing, but for every individual who gets something for nothing SOMEONE ELSE must get NOTHING FOR SOMETHING.   


 

I too think this is an important debate.

Galuel's proposal with NewLibertyStandard's supporting arguments has sparked some interesting idea's and a healthy debate about alternatives. It would be interesting to see a simulation which compares the current bitcoin system with alternatives such as these so one can calculate possible outcomes, and further the debate in a positive way. Unfortunately this is beyond my level of skill, so it would be interesting if someone with the experience could create such a module for simulation.

I wasn't sure whether it was directed at me or not, so I replied just in case. No worries. :D

+1

I didn't manage to follow this whole discussion, but since the beginning, actually from the wikipage itself, it's possible to see that this whole idea of universal dividend is just a form of income distribution. Income distribution is a kind of subsidy, it's subsidizing the poor. Like all all subsidies, the more you subsidize something, the more of this something you get. The more you subsidize "poverty", i.e., the lack of means to produce enough to have a decent life, the more you end up with people that lack such means and depend on this subsidy.

Anyway, if done voluntarily, I have nothing against it. I'm just practically sure it wouldn't work, for the reason others described.

If done trough the force of the state, then, of course, it's unethical and worse than a free monetary system. Sure, it would be much better than the current monetary system we live in, since there would be only "simple inflation" at a controlled rate and not inflation to manipulate the interest rates. But even a forced gold standard would be less bad, I guess, than a forced income distribution through inflation.

Thank you Galuel for your direct response.

I understand everything you are saying with 100% clarity. You have done a fine job at conveying your points. Your English really is way better than my French!

However, I also see with 100% clarity, that there are no actual new ideas being proffered here. Just different rationalizations for the same "false paradox" that I've discussed many times. It is what is commonly known as "an epic fail".



This was a little condescending so let me just say, "spare me." Let's just say my colleagues actually fly in space. I'm not exactly clueless about the concept of four dimensions.



This and its associated list make it clear that what you are doing is merely an exercise in persuasion. You don't care the reason people accept what you want. It is only important to you that they accept what you want.

So we have a false implication. You are asserting that your premise is true. However, you will accept anything (true or false) as justifying (implying) your assertion. That means logically the relationship between the two (the implication) is necessarily incorrect.

So in effect your argument can be summarized as saying: (my premises is true)(does not imply)(anything I'll say to persuade you)
T !--> X   There is simply no point in me having that discussion with you. It's arbitrary rationalization.

----

The mathematics behind your premise has existed in space and time for longer than I have. It has always been false. It doesn't matter if you change the rationalization.

I take X% of Y from everyone in a group based upon the quantity of Y they hold. I give each person Sum(X*Y)/N. Where N is the number of people in the group.

Do you think this is a new concept? It had been tried over and over again. It is a repeated EPIC FAIL. Not theoretically, empirically. I won't quote examples. You are European. You know more examples of this failing than I do.

----

It really doesn't matter what rationalization you use to imply something false. It is logically irrelevant.  X --> F means nothing, just like T !--> X above.

The following "mathematical proof" comes to mine.

A roulette strategy was touted that went:
1) Bet on Red or Black
2a) If you win, you've doubled your money.
2b) If you lose, increase your next bet so the amount you'll win will cover your previous loses.
3) Therefore, you can never lose at roulette.

Of course, all Frenchmen think that is a silly strategy because they invented roulette. So they will no longer listen to your silliness.

So you tell them, there is this American game. It is so stupid it doesn't even have red or black. Just a bunch of cards. It's called blackjack, but what the silly American's don't know is there is an obvious strategy to beat blackjack, it goes like this!

1) Bet
2a) If you win, you've doubled your money.
2b) If you lose, increase your next bet so the amount you'll win will cover your previous loses.
3) Therefore, you can never lose at blackjack.

SEE!!! I told you!!! No Red or Black at all!!! It's a sure thing!

(I posted this as an edit of my last post, but since you, Red, posted before I got done writing it, I thought I'd make it its own post in case you don't glance backwards.)

Red, I have also traveled a bit and although there are some things I really like about other places, I overall much prefer home.

I lean pretty much as far left as I figure can realistically be compromised upon given the current polarized political environment in the United States. If Republicans didn't exist to keep the Democrats in check, then Democrats would splinter into far left and center left factions and although I'm far left now, if the current restrictions didn't exist, I'd probably move to the center left which would be the new conservative.

This next election is going to be about as interesting as a mid-term election can be, since both parties seem to be about equally confident and the majority balance could change. Good luck to ya... but I hope ya'll fail! ;)

*Edited Again and Yet Again* I think I'm done now.

Liberty thanks for not making me look up! :-)

I know how you feel, I fight with my brothers a lot but when all is said in done we're still brothers! If the Democrats didn't exist for balance, I'd be right there with you!

By the way, I edit a lot, I just don't tell anyone! :-)

I totally agree with you on the next election, it's like that supposed Chinese curse, "May you live in interesting times!" Good luck to you too. But you don't stand a chance! ;)

How the Universal Dividend could be implemented
---------------------------------------------------------

I'll use four countries for example but feel free to add all of them if you wish.

Suppose country's currencies were ranked by their value. For example.

Euro > Dollar > Yuan -> Rupee

Now say the Europeans said to the Americans, "We want to use your currency, but ours is worth more." So we are going to print enough new Euros so they have even value with Dollars. We are going to distribute them as a Universal Dividend to all Europeans. They are going to all love it because they'll all get new money.

So the Americans agree and they decide Euros and Dollars are now interchangeable. But the American people now start thinking, "Hey how come the Europeans got a dividend and I didn't?

So the Americans and Europeans say to the Chinese. "We want to use your currency, but ours is worth more." So we are going to print enough new EuroDollars so they have even value with Yuan. We are going to distribute them as a Universal Dividend to all EuroAmericans. They are going to all love it because they'll all get new money.

So the Chinese agree and they decide Euros, Dollars and Yuan are now interchangeable. But the Chinese people now start thinking, "Hey how come the EuroAmericans got a dividend and I didn't?

So the Chinese, Americans and Europeans say to the Indians. "We want to use your currency, but ours is worth more." So we are going to print enough new EuroDollarYuan so they have even value with the Rupee. We are going to distribute them as a Universal Dividend to all EuroAmerChinese. They are going to all love it because they'll all get new money.

So the Indians agree and they decide Euros, Dollars, Yuan and Rupees are now interchangeable. But the Indian people now start thinking, "Hey how come everyone else got a dividend and I didn't?

+----+
|    |
|    V
| So to be fair, they decide to print 5% more EuroDollarYuanRupees so everyone can get a truly Universal Dividend.
| They are going to all love it because they'll all get new money.
|
| But the very next day, 10,000 children were born and they said, how come everyone else got a dividend and I didn't?
|    |
|    |
+----+

 
This could so totally work!

And we Europeans and Americans are going to love it, because it is so totally fair! It only takes from the really rich to give to those who need it most. Like us!

Wait! You're saying I'm the really rich? WTF!

I'm afraid you don't know what it is to define a formal system. It has nothing to do of true or false which are always relative things depending of the formal system you define (paradigm).

You should read Gödel's incompleteness theorems (http://en.wikipedia.org/wiki/G%C3%B6del%27s_incompleteness_theorems)

To define a paradigm such as "The only Universal and Fundamental value of all economic system is individual human being", it is not a question of true or false. It's a question of defining a paradigm, a formal system in which you can developp what is true and what is false into that system knowing that in all formal system they are things true you cannot demonstrate (Gödel).

If you need to exchange about economics on other paradigm, it's not what I'm explaining, it's not what I discuss about, It's not what about I exchange with. You can create another discussion on the paradigm you want, define it, apply it and follow it if you think it will give good results, do it, learn about the results, change it if it's not good, keep it if it's good.

I have a degree in computer science. I'm well versed in Gödel, Turing, and Church.

I understand your concept when you say "formal system". What I'm saying is the formal system you are proposing is already been tried and it is a repeated FAIL.

If you are trying to say, I'm designing a formal system. As such, things which are true and things which are false EXIST, but you can't through logic, mathematics or programming PROVE these things to be true or false. Then yes that statement is true.

But I you say, "We should do this! It is good!" and you assert that, I cannot disprove such a thing formally, than you can't prove such a think formally either.

You can say, "This is an experiment and it will prove itself over time. Just like a program either shows itself to "halt" or "not halt" given enough time, even though no one one can formally prove what it will do."

So I'm saying, "I HAVE SEEN this program run before. It halts. It halted the first time. It halted the second time. It halts every time because there are no changes to it or its inputs. Get over yourself.

It's been done, I've seen it. It fails.
Because you don't understand how it could fail doesn't mean it will stop failing.

-----

There is an old American bit of sarcasm that goes:

If you are not a liberal when you a young, you have no heart.
If you are not a conservative when you are old, you have no brain.

Congratulations, you've discovered your heart.
Keep on searching, perhaps you'll discover...

If you think you identified precisely some clear causes and conditions in which a desire effect don't occur, you should then try to change causes and conditions to obtain the desire effect, or simply abandon to desire this effect.

Just do as you think it will be good, and stop doing what you clearly identify as bad.

I can't say more to you.

Thank you for having read what I written here.

Regards,

Thank you very much for the discussion. Even though I disagree it was interesting and worth my time. I like to know how others view the world.

I did abandon the desired effect long ago. But for the same reason I abandoned my desire to become a sea Pirate. It turns out the reality didn't match my imagination.


I wish you great personal success persuading other people. For you that is a personal quest. The adventure will pay you dividends in your future.

I also encourage you to build a bitcoin clone that implements your monetary policy. I posted a plausible way to get others to switch from bitcoin to your model in another thread.

http://bitcointalk.org/index.php?topic=808.msg9163#msg9163

Currencies like bitcoin are an inexpensive way to explore economic philosophy questions without putting at risk society as a whole.

Cheers!

I like your thinking on this.The states were supposed to be doing this so that if one system gave you grief you could just move to another state to a system you agreed with.The Federal government has quashed this and now everyone has the same thing whether they agree or not!There is also no wild west left where the pioneers can escape to to try a new life.I think the internet and bitcoins gives us a way out to try new things and experiment freely.

Agreed! If you have only one of any important enterprise than by definition it is "to big to fail". As such, whatever it does tends to get rationalized as "necessary". There is no trivial way to rebut the rationalization because there are no easy comparisons to make.

From my point of view, it is much much better to have 50 independent state governments each making their own decisions.

The important thing is we have 50 simultaneous experiments in which to compare any subject. But is is not a competition, there are only winners. A state being less successful in one area, wins by being able to easy adopt proven ideas from a state that has actually demonstrated more success. No state will be "smarter" in every area of government. In effect, each state gets the benefit of trying 50 experiments, at the cost of trying 1.

When I say I am a conservative. This is what I mean by the term.

The opposite view is one which states philosophically, "For any given problem, there is one person who is "smarter" than all others on the subject. We should find that person and put them in charge of solving the problem." By a false implication, they consider that the "optimal approach".

I tend to see those I call liberal as having that point of view.


I assert that on any given subject of governance, the best out of 50 solutions decided on by "average" individuals, tends to be better on average than solutions chosen by the "best" individual.

I think this point is well supported by evolution. Which works not by survival of "the fittest", but by death of "the unfit". Better one bad approach die so that 49 can live. I think Spock said that. :-)

----
By the way, it is fun to watch the Europeans learn this lesson as they gradually submit to their federal government.

While at the same time North American governments try very hard to teach their citizens to obey without questioning, and succeed at doing so by surrounding them with notions that outside America every country is lagging behind someway or another.

Heh, sorry, I had to put some fuel in the fire, but I suck as a troll. Seriously though, our federal government? Europe, as a community, is a total failure. Each one of us, big or small, is so much convinced we have to best solution/society/enterprise/tax system/"add your own here" that the only thing we agree on is that we should all be granted subsidies... the exact distribution of them is obviously something we will never agree on for the reasons stated. So I really fail to see where you are getting your kicks from :)

This is a lie.

Originally the premise was that new people (who did not have anything) would be given money and this would make it more fair.

So which is true?

Either value is taken from people with existing holdings (in order to add value to those who previously had nothing) or nothing is given to people who have nothing.

It is one or the other.  It is impossible to be both.

A ponzi scheme takes from the most recent joiners to give to the previous joiners.

I don't see that in any of these discussions.

You cannot just arbitrarily change the meaning of words and expect to have rational discourse.

That is probably more true than you expected.

Newton's theory is not rejected.  Newtonian physics explains perfectly well what can be observed above an atomic scale, such as things we interact with every day as well as planetary orbits.

Einstein added another level of depth or precision to physics, taking us down to atomic units and predicted what was not possible to observe with the human eye.  It did not invalidate Newton.

And while gold back money may have been rejected, it was rejected by those who wanted to exploit the monetary system for their own gain.  Gold backed money prevented that exploitation.

Isn't that what you are trying to accomplish?

Yes, that is not much of an exaggeration.

But you neglect to mention that many of our citizens hold European/Canadian systems as the pinnacle for "social programs". I can't tell you now many times I've heard, "Why can't we have free health care like the Canadians or the Swedes or etc. Why can't we have open acceptance of recreational drugs like the Dutch. Why can't will all have Ménage à trois like the French."

If the federal government wants us to change they say "shouldn't we be more like them?" If they want us to stop questioning them they say, "WTF! Do you want to be like them?"


Bring the FIRE! Woot! :-)

The interesting thing most Europeans don't seem to realize is that in the US. Texans know their system the best. Californians know theirs is way better and Texas sucks. New Yorkers think "WTF? They let those people govern themselves? I thought we were in charge?" And we all think, "Who the hell are these Washington people to tell us what to do. They are not even good enough to be a state."

Really, it is the same here. Each state knows with all certainty that it is better than all the others. We dislike the way other states do things, but we tend to dislike their ways less than we dislike the way "outsiders" do thing. So we don't tell you guys about our internal squabbles.

I've never been to Sweden or Canada, but I can tell you that we pay a lot for our "free" health care, in form of mandatory taxes. Of course, the ones who can afford just pay those taxes *and* the private health care. It is certainly better for those of the lower income spheres, as they at least get the basic health care for free, but the invoice is still paid up by everyone.

On a related note, I have been to Paris a couple of time and didn't get any 3-way action. It's just like minting bitcoins, I guess, you just have to be lucky :)


Well, I don't think that is accurate, really. I may be more on the inside, as I have worked with / for US people most of my professional life, and have good friends scattered along most of the states, but we do know about the rivalries between 'neighborhoods', which you call states or parts thereof. Even the TV shows depict that all the time, and at least in Portugal we have every American show, and then some. The truth is that while that is changing slightly, we have always worshiped the States and everything that comes from that side of the pond, to the point where it's just nonsense. I love the States, and if it wasn't for immigration rules (I'm too proud to let my life be investigated just so I can live there, although I have nothing to hide) I'd probably be living there. I already pretty much work there!

I don't know what your relation with Europe is, but believe me there is a world of a difference between the American States and the European Countries. Lets just say that Americans have a tendency of uniting against any external foe (an action I usually dislike, based on the way this is done, but the heart is certainly in the right place). We, Europe Countries, are each other foes for better or worst, and the fact that every one of us is taught how amazing we were in 'the times of our kings' and history is measured in thousands of years around these parts, the 'cultural bias' we tend to hold very dear for some reason makes us very unlikely to see our fellow Europeans as the same as us. It's sad, really.

And again I get as off-topic as I can, just like on almost every other thread I comment on! I'll get myself banned eventually :p

I was exaggerating a bit for effect. There is of course no comparing several millennium of competitive rivalry with a couple hundred years of mostly "coopetition".

But I have been to Europe several times, and had the good fortune to work with and live among Europeans both there and in the states. (IRL and internet) Your point is well taken because the British refuse to even call themselves "European" unless they are talking to an American. To them, you people are the Europeans. They use phrases like, "I'm going over to the continent." If you are an American that seems hilarious.

Just for reference, I've never been to Portugal or Spain, but I have family members who have travelled there many times and loved it. I've been to Italy, Switzerland, Austria, Germany, France, and England. And had the great fortune to work or live with people from Italy, Romania, Hungaria, Russia, France, England, Belgium, and I'm probably forgotten some.

I suspect you are an exception, but there is a tendency among European travelers to come here, visit New York and then they fly over and visit LA. (The most european thinking parts of the country.) Upon return the report back to their friends, "I've been to the states!" Which is true, but misses some of the character of the continent. Hell they didn't even meet anyone with a gun rack in the back of their truck! How can they say they've been here! :-)

It is like Americans going to London and Edinburgh and saying, "I've been to europe. And guess what! Those people are so much like us! Most almost speak our language!"

Thanks for the reading material.  I'll look into it.


As to the bolded:  That is the big fallacy promulgated by the Monetarists which is nonsensical.  There is no logical reason why the money supply must increase at the same rate as economic output.  What is needed is greater resolution (divisibility) of the monetary unit.  With a more diverse market for goods of ever increasing quality and decreasing costs of production (to their commodity value lower bound, obviously) there is a need to refine the comparison of one item to the other in terms of the medium of exchange.  It is the arbitrage between the perceived value of the two items that the market is seeking to reduce to zero.  Any monetary unit with an arbitrary limit on division (say the dollar at $0.01) will fail as a means of comparison without revaluation.  This is ultimately why the Monetarists adopted the slow but steady inflation scheme as their preferred method.

Bitcoin has built into its structure nearly limitless divisibility.  Satoshi currently has 8 decimal places programmed in, but that number can be changed at will due to market pressures and the open-source nature of the software, if we're ever so fortunate to get to that point.

Ta,

Not at all. It's about how creating money : for all, or for some ? In a time-space (global) perspective only dm/m = Constant => m = Exp (ct) is a solution.


This is the classical asymetric mistake.

Who bring value ? The old on a money system, or the newcomers in the money system ?

Who decide ? You ?

From the newcomer point of view the old ones own possibly no added value, from the old ones newcomers possibly own no added value, from a Universal Dividend point of view no Human Being has power to decide for the others what is value and is not (but human being itself, as only universal value of any economic system).

Money is NOT value. Joining a money system has nothing to do with value, but with a common tool for EXCHANGE value, in a fair way between members.

I'm sorry it's not what you beleive. Relativity Theory (http://en.wikipedia.org/wiki/Theory_of_relativity) is about structure of Time Space at very LARGE scale, and not at all about atomics, which revolution (who invalidated Newton too) is Quantic Physics (http://en.wikipedia.org/wiki/Quantum_mechanics).

Both invalidate Newton Theory. But Newton Theory is still acceptable theory between certain frontiers as a correct predictive theory, but fail in many aspects like Mercure Perihely (http://en.wikipedia.org/wiki/Tests_of_general_relativity) problem as one of the most know historically (but also about what is space, time, don't predict Big Bang, Black Holes, Time change with speed, constant light speed for all observers etc. etc...).

Value is not a thing, it is a personal judgment call.  Everyone will value everything differently and the most anyone could hope to say is that  A > B > C where A, B, and C are different things.  But for another individual C > B > A and both are perfectly valid value judgements.  There is no unit of "value". 

So, money is just another thing which people value differently relative to other goods and services.  If people didn't have different value judgements then why would they even bother to exchange anything as the exchange would not represent an increase in their own perception of value?

A price is just the average rate at which people tend to exchange two goods.  People tend to desire an intermediate good that has universal demand to facilitate their trade.  Thus money is nothing other than the good which is easiest to barter with and prices are just a side effect of average exchange rates.

So when you give me money you give me nothing of value?   Why would I trade something of value for nothing of value? 

If money had no value then giving someone money is pointless. 

If you argue that money is just a temporary "credit" and its value is realized when it is "spent".  Then giving someone money is equal to giving them what ever they decide to buy with that money.

Thus your system money is used to facilitate exchange of value from those who hold the money to those who receive the new money from nothing.

Galuel,

I am curious about your views on the relationship between Universal Dividend and Local Exchange Trading System (http://en.wikipedia.org/wiki/Local_Exchange_Trading_Systems) "credits" as a currency. My specific question is, in your view would a UD need to be paid to make the system "fair" to new/future participants?

In a LETS system, there is no initial currency and no inflating currency. There is simply an accounting of services provided. So for example, say 1,000 people decided to start a LETS system. Each person's initial share of credits is ZERO.

Now suppose they say that a 1 haircut = 1 days ration of food = 1 LETS credit. So if a farmer gives a barber food in exchange for a haircut they are both even. Their balances do not change. But say the farmer needs to go to the dentist today, so he doesn't have time for a haircut. However the barber still needs to eat. So the farmer gives him food anyway. The barber's account balance is now -1 credit, he owes his service to the community. And the farmer's balance is now +1 credit. The community owes him whatever equivalent service he might want.

In a LETS system, there is never any inflation or deflation. There is also never a shortage of actual currency because there isn't any. It simply accounts for how much each person has cooperated with the community. In effect the system is "delayed gratification neutral" there is no advantages to saving in LETS credits for the future. There is no advantage in spending all you have now. One day's food today, will never buy you 2 haircuts tomorrow, nor will it buy you 1/2 a haircut tomorrow. (Ignoring for the moment any attempt to keep 1 LETS credit equal to 1 unit of a national currency. Because, I don't know why this is useful for the LETS definition.)

A LETS system characterizes each participant's cooperation using two publicly displayed values. 1) your current balance. 2) your total trading volume. The second characterizes your commitment to the community over the long term. The first characterizes your recent behavior.

So say a long term member of the community, (measured by his large trading volume) gets sick, it maybe necessary for his balance to go negative for an extended period of time. However, the community can decide to continue rendering him services because they feel comfortable that upon his recovery, he will again provide his valued services to the community.

However, say a new person joins the community and he decides to take a lazy approach to life. If he produces little for the community (measured by a low trading volume). If he decides to slack off and his balance turns negative, others are perfectly justified in saying I will not render my services to you. I am not confident you will provide anything in return to the community.

-------------

In such a system, I can see no possible way for someone to justify a universal dividend. However, I expect they some would justify it anyway. I'm curious as to what those reasons might be.

@Red

Here are different kinds of LETS. There are Credit Limited LETS, with for instance 1000 for each, -500 / +500 limits of money for each individuals, and of course UD.

BitCoin as (his first money system that should take another name than the P2P tool itself) is a limited Credit LET like.

But SCEC  (http://www.arcipelagoscec.org)is much more near a DU since it give a fixed amount of money to each participant (so much more than 5% / year, but with decrease in time).

In fact to reach 5% / year, with a fixed amount of money f, it needs :

f / (f * y) = 5% => Y = 1 / 5% = 20 years to reach it... See graph (http://upload.wikimedia.org/wikipedia/commons/a/af/Dividende_Monetaire_Zone_Euro.jpg)

Of course LETS users understand quickly what is a DU, but they stated often from just a few years with few participants, the initial fixed amount of money is enough without visible problems, since 5% / year, only double the monetary mass for a 15 years period (1,05 ^15 = 2).

It depends generally of the SEL system, number of members, period of existence etc... Each money system has his own history of experience.

I have read about LETS before.   Unless the system is tied to a commodity (like a national currency or gold, silver, bitcoin) they are nothing less than a centralized accounting system for individual IOUs.   They require some kind of "price fixing among services" in order to reduce the "number of unique units of account".   For example a hair cut by Galuel may not be worth the same as a hair cut by Red.

If you accept that the credits are denominated in some commodity, then what LETS becomes is a socialized interest-free 0% reserve lending system.  Everyone knows that the credit cannot be redeemed now and they have no promise of when it may be redeemed in the future!

If you instead argue that credits are denominated in the services of the individual issuing them, then you either have price fixing or 1 unique currency per person.  

In such a system every individual (if smart) would max out their credit in exchange for real goods/services and then revert back to a commodity based money for all remaining trades in an effective play on the "something for nothing" scheme.  This is similar to spending a universal dividend but not accepting payments in universal dividend currency.   All credit is unsecured with no means of compelling repayment outside of social shunning or taxes as the debt is not to an individual but to the "community".   Because it is interest free it can be carried "forever".  

The interest free nature of the credits violates economic laws regarding the time-value of goods/services.  

It is interesting to see that such systems have been setup, but most appear to struggle or fail and none thrive.

I am confused about your post, but it is clearly my ignorance not a defect of your communication skills. Most of my confusion is for abbreviations I do not understand.

I agree that Bitcoin is "like" the "limited credit LET" you describe.
I don't know of SCEC and the site appears to be in Italian. I'm not sure what "much more near a DU" means. Is DU = UD?
I'm not sure I understand the point of the graph. Given the scale and resolution, I can not derive the functions behind them.
Do they say, create a linear amount of currency until you reach a total amount of X in year 13. (parabolic part of the rate graph)
Then create a parabolic amount of currency 5%? (linear part of the rate graph)
I don't know SEL. Is that an abbreviation for "selection system"?

---

However, everything you have written here is addressing a case that I did not propose. I know that the example I gave is not bitcoin-like at all. So I'm unconcerned with how this relates to the bitcoin project.

The example LETS I described uses a zero initial starting balance. And it allows each participate to review the behavior of other participants and individually decide if they want to advance them credit in each particular transactional situation.

For example if Fred had a negative balance and he asked me for Food because he was starving, I might give him food on credit (increasing his negative balance). However if Fred asked me for beer in exactly the situation, I might decline him the credit. Each transaction is an individual judgement. Not a community mandated one.

Modifying your statement, I'll call it:

It is a Negotiated Credit LETS, with for instance 0 for each, -inf / +inf system limits. However, it is not community mandated to trade in EVERY negative balance circumstance. Transactions where both participants balance remains positive might be mandated. (No arbitrary discrimination in trade) But transactions that increase an individual deficit must be negotiated between the participating parties.

It is for this particular case I'm interested in understanding the benefits/justifications for UD. I do not see any.

This is a unique post in which I agree with most everything you've written! :-)


Agreed. It is an accounting system for services rendered to a community over time. There has to be some sort of standardized unit to facilitate trade. Also to allow people to compare prices to the services quality of differing vendors.

I can't see a way to bootstrap a system without initially declaring at least some standard prices as universal benchmarks. Kind of like declaring a meter as the distance between two marks on a rod in Paris. But an amateur haircut might be worth (.85) of a professional haircut (1). And a stylist might charge (1.15) times a professional haircut. Everyone could compare the prices and determine if the difference in service warranted the difference in price.

I won't argue this. I don't know of any LETS system that argues such pricing would be helpful.

What you argue is clearly a potential behavior, and arguably the most likely behavior. But It is not necessarily the "smartest" behavior, unless you started from the not unrealistic point of view that the entire venture was doomed to failure at some point.

I don't think it actually does. Since there is no commodity backing anything, and there is an ability to generate credits/debits on demand. There is nothing which need change in value based upon supply, demand, or expiration. If everyone endeavored to keep a zero balance in credits, then all potential time-value relationships would still be respected among different commodities. In my example, the LETS credits are decidedly not a commodity. That is the spirit in which the terms inventor meant them to be.


Yes, that is quite interesting.

However, it makes it a useful tool in which to formalize the rules in which one system succeeds and a different one fails.

Yes to all !


SEL (Système d'Echange Local) = LET (Local Exchange System)


I understand but I'm not in favor of such a system.

For me money (and in specifically UD) is the solution to solve what I call the "time-space 3 producers problem"

At t=0 X want Vy (value produced by Y), Y want Vz, and Z want Vx, and for X Vz is no value, for Y Vx is no value, and for Z Vy is no value.

They can exchange in a circular way, and create money for that in equal proportion to each one to do it in a fair way.

At t X,Y and Z are died, but an economy remain (after many years of CONTINOUS transformation), it remains A,B,C exchanging Va, Vb, Vc, which are totally different values than Vx, Vy, Vz, which are considered by them as no value.

And so on, generations after generations.