Is this a ad hoc correlation, or is velocity decrease a cause of technological advancement ? 

It is not a matter of "approving".  It is a matter of having the ability to issue real dollar equivalents.  FED-approved banks can do this, because of their reserve at the FED, against which the FED will issue real dollars fresh from the press.  The FED can guarantee certain bank accounts independent of the bank itself.  So people having money there are relatively sure that they will see their actual dollars if they want to withdraw it, even if the bank has problems.

The equadorian gouvernment cannot print "real dollars".  If people want to get out their "dollars", the equadorian government or its bank will have a big problem, and will have to issue limiting rules.  They can only pretend for these points to be dollars under very restrictive conditions of redeeming or paying abroad... which means it are not really dollars.

If I were an Ecuadorian citizen, I would immediately redeem my points against genuine dollars, to be amongst the first.  Like in a bank run.

But that is exactly the whole point !!  Why would you buy an i-phone 6 TODAY, when you can buy that SAME i-phone 6 next year for less money (when the i-phone 7 will come out) ?

Because THAT is the anti-deflationary argument: people won't buy stuff TODAY because the SAME STUFF will be cheaper tomorrow.  (not newer and better stuff, the SAME stuff).  Well, we observe empirically that this is simply NOT TRUE.

Why did people buy personal computers when they knew that 3 years later, they could have gotten a machine with similar performance for a much lower price ?

But this is exactly contradicted by the observation that people are willing to spend a night before an Apple shop to buy an i-phone 5 when it came out, while if they waited for a year, they would have gotten that same i-phone 5 for much less money (namely when the i-phone 6 came out).

So this myth is empirically not true.

And not just for i-phones.  It has been true for the personal computer market since about 3 decades.  The SAME product in the computer market devaluates like hell, and nevertheless it is part of the biggest industry (consumer electronics) on this planet.  If you go to the supermarket, and you look up the price of a specific computer NOW, and you look at its price 6 months from now, you will see that it has lowered in price (simply because more performing machines came out).  So, according to this myth, NOBODY would buy computers, because they will be cheaper 6 months from now.  That is NOT what is observed, on the contrary.

So this "people will stop buying because it would be cheaper for them to buy the same thing 6 months from now" is simply NOT TRUE.

And that kills the main argument for "inflation is needed for people to spend stuff and deflation will kill consumption".

I like more to think not of the velocity, but of the inverse.  That is the (harmonic) average HOLDING time of the currency, in other words, the equivalent of "bitcoinyears".  It is an amount of "store of value".

If you store 1 bitcoin for 2 years, or you store 2 bitcoins for 1 year, or you store 100 coins for a week, these are equivalent concerning the amount of store of value, and contribute to the 1/V value.

There is an aggregate demand for "store of value" (which is a general human action decision), and then there is a specific demand for store of value in bitcoin, another in gold, another in stock, another in dollars, another in this and that.  currencies are players in that market, and they have variable market share of the agregate demand for store of value, which by itself changes according to the mood of people.  If 99% of the population is convinced that the world will end next week, the aggregate demand for store of value will probably plummet.  If 60% of people think that there are difficult years ahead, maybe the aggregate demand for store of value will increase.  How much from that demand bitcoin, gold, etc... will be able to pick in is a matter of competition on that market.

The particular part of the demand for store of value in bitcoin will determine the 1/V of bitcoin.

That store of value can have different aspects: from "just in between earning and consumption" to "investment for the longer periods".

Absolutely.  It doesn't make sense to have a centralized decentralized currency

If the idea is to have central control and accountability, then there is no NEED for the bitcoin protocol.  The whole cryptostuff was incorporated in bitcoin just to be able to get rid of central control.  If there is central control, there's no need for mining, there's no need for difficulty, there is no need for nodes or this or that.

After all, the central authority can play "miner" but without the difficulty.  It can make public a block chain, but without difficulty, and PUBLISH simply the hash of the last centrally approved block.  Everybody can then check that the block chain corresponds to that hash, and can see all transactions in it.  As the central authority is to be trusted (voluntary, or by force), there's no need for the mining competition.  The central authority would also have a protocol to choose the "block reward", and as such issue more or less coins.

A "statecoin" would be a simplified version of bitcoin.  It would be a total disaster if imposed.  The central authority could see all transactions, cash couldn't exist, and we would be at the opposite of what bitcoin stands for.

The point is that banks are doing this, but these banks that do this, do that with the agreement of the central bank issuing the money we're talking about.  The Ecuadorian government is trying to play "American bank" without committing to the regulations issued by the FED.  They behave like a rogue bank.  After all, the printing possibility of a US bank comes from the fact that they have an agreement with the FED: people trust an American bank because they have a reserve at the FED, and because the dollar is imposed as legal tender in the USA. 
The points on the Equadorian accounts will be legal tender in Equador if the Equadorian government asks taxes in these points, and within Equador, these points will be "national money", but they will not be redeemable against GENUINE dollars abroad, if the Equadorian CB doesn't have sufficient reserve dollars to honor all redeeming of points into actual dollars.
An American bank doesn't suffer from that problem because it is supported by the FED.  But the Equadorian CB isn't.
So these points will FLOAT against the dollar, as if it were an independent currency.  Ans because the Equadorian CB cannot print actual dollars, in contrast to the FED, it has a finite reserve of $$, and if it uses that reserve to sustain the course of points against $$, it will end up not having any any more.  The FED can print $$, but the Equadorian CB can't.  It can issue POINTS.  It can make believe that it are dollars.  But it can't ISSUE dollars.  It can make believe it issues dollars by getting real dollars out of its reserve.  But that will only last so long.

No, now they make their population BELIEVE that they can print dollars.

The point however, is, that if you want to use these "dollars" abroad, people will want to see REAL dollars.  So or the CB of Equador has a significant stock of real US dollars, or these points they call dollars are just a make-believe.  Now, as every monetary asset has this make-believe in it, there's nothing really wrong with that, but I wonder whether they really "print dollars".

I could do that too, you see.  In my town, I could set up a server to which I allow people to access with their phones, and have "points" on them which I call "dollars" or "Euros".  As long as people are selling stuff TO ONE ANOTHER and use their accounts, they may believe they are actually using dollars or Euros, and adopt prices as if they were.

However, the day that they want to purchase oil from Saoudi Arabia, I'm not sure that the Saoudis will accept points on my server as "dollars" or "Euros"

They might go to a bank, or an exchange, to exchange their "server dollars" into bank dollars, but then an exchange rate will be installed...  So then they will see that their "points on my server" are only worth $0.01 or so
(not 0, because after all, you CAN buy bread at the bakers' in my town with it...)

No, in fact.  Of course, a high velocity REQUIRES fast payments.  The velocity cannot be higher than one over the time it takes to make a payment evidently.  If it takes 20 minutes to complete a single transaction, then the velocity can never be larger than 1 year / 20 minutes.

But in the velocity of money, it is not the speed of a single transaction that counts, but the NUMBER of transactions in a given period (say, a year).  As such, it is a decision of the consumer to do so, and not inherent in the payment protocol.

After all, with cash, it takes what, 5 or 10 seconds (the time to take the bills out of your wallet, count them, and hand them over).  But it is not because you got the cash in 5 or 10 seconds, that you will spend the money every 5 or 10 seconds, right !

If you get cash for something you did (say, your labor), and you get that cash in 10 seconds, you're not going to spend it immediately.  You're going to spread your spendings over the time it takes to your next salary.  So the transaction time doesn't intervene much in the velocity of money.

You would indeed cause inflation if you (and everybody else) decided to get rid of your money sooner.  To buy up everything you need for the next month right away when you receive it, and when the store holder where you buy wants to get rid of the money you give him also immediately, and so on.  THEN you would get inflation: when you do not want to HOLD the money any more.
In extreme cases, this is hyperinflation: you've lost all faith in the money and you want to get rid of it as soon as you can.  Weimar Reichsmark for instance.

In fact, in your link, you mention something which is rather interesting.  If fast payment methods are used to liquidate a DEBT, then it was the DEBT that caused the inflation, and not the fast liquidation of it !

Credit card companies create money because they allow debt.   If you spend $50 with a credit card, you didn't receive those $50 yet.  The merchant accepts the $50 PROMISE because he has confidence in Visa or Mastercard that he will be able to spend that promise.  So it is the merchant, accepting your credit card payment, where he accepts not real dollars, but a promise from Visa to give him $50, that creates money: the PROMISE from Visa turned into money, as if it were really $50, because the merchant accepted that (because he knows that his bank will accept it too).

Now, Visa wanted to make that promise to the merchant, because Visa ultimately made you promise that you owe them now $50.  So ultimately it is YOUR promise to pay $50 that allowed visa to promise $50 to the merchant: visa was just an intermediary because of confidence.  A merchant will have more confidence in visa than in you, and will accept $50 promises as "money" from visa, but not from you.  Visa, on their side, are willing to accept a promise from you.

So all these PROMISES to pay $50 have turned into money as if it were actual dollars, and it is this generalized acceptance of promises for dollars as dollars that increase the money supply.

When people accept promises (debt certificates) as money, the money supply increases of course.

Of course, one day you will pay off your debt to visa.  At that moment, money is destroyed.  Each time a debt is reimbursed, money is destroyed.  But ON AVERAGE, Visa has many outstanding debts, and that is money creation.  Not that they print dollars, no.  The money creation comes from the fact that people accept promises from Visa as money.

Indeed !  The non-argument is easily wiped from the table when you look at one of the biggest markets on earth: consumer electronics.  You know that the i-phone you spend a fortune on today will cost much less next year when the newer model will come out.  Nevertheless, people cue in front of an Apple store to be the first to buy it at high prices when it comes available.
We've seen the same effect in the personal computer market for 2 or 3 decades now.  People want to consume here and now, even if it will be WAY cheaper next year, for the same, or even a better product.

Nobody will delay much of his consumption because it will be 2% cheaper next year.

But a little deflation has a HUGE advantage over a little inflation: you do not need a bank any more if you want a modest interest rate on money.  You can just KEEP it.  A little deflation is a disaster for banksters, who are supposed to distribute part of the seigniorage that comes with the money printing necessary to sustain inflation in a growing economy. 

What is problematic though (and especially for banksters) is that in a slightly inflationary system, you have an advantage if you live on debt.  If suddenly the rules change, and you find yourself indebted in a deflationary system where the debt is expressed in the monetary asset that deflates (that rises in price), then you are in deep shit too.

So a little deflation (which you get on average with a supply stable currency) would avoid having a huge amount of banksters and be good for the economy simply because of that (all the resourses spend on banking can now go to do productive stuff) ; but a sudden change from inflation to deflation will make more than one go bankrupt, because of the debt spiral in which he finds himself.

People say that in a deflationary system there can be no loans.  But that is not true of course.  Only, loans will have only very small interest rates.  A zero-interest rate loan will cost the debtor a real interest rate of the order of the growth of the economy (= the deflation rate).  Indeed, if he borrows 1000 shinkels today, and will have to pay back 1000 shinkels in 2 years, then those 1000 shinkels to pay back can buy about 4% more (assuming a deflation rate of 2%) than what he borrowed.  He has to earn about 4% more value to pay back the loan.  In fact, that would be a normal return on investment: if you have your average Joe investment, you should at least produce the average economic growth on the capital, otherwise you better do something else, if people on average can have that ROI.

Point is, nobody is going to lend you 1000 shinkels to get 1000 shinkels back in 2 years, with the counterparty risk.  If you have 1000 shinkels, you will just KEEP them.  So if you lend out 1000 shinkels, you want to get somewhat more back, at least to cover the counterparty risk. 

Which means that the borrower will have to have a higher-than-average ROI on the capital borrowed, in order to be able to pay back the loan.  Which is a good thing.  It means that people will only invest in "over-the-average" return activities.

In as much as this would slow down the economy, it would also slow down the (average) deflation, and as such, it would automatically lower the effective interest rate (which is the asked interest rate, plus the deflation rate). 

It would stop encouraging people to invest with debt in lower-than-average efficient economical activities, and as such prevent misallocation of resources, which is the big problem with an inflationary system.  There would still be debt, but much less, and only debt that has a high potential for investment and return.
 
Which would be the big disaster for banksters.

No, I don't think so.  The point is that denoting prices in any inflation index you like, is first of all FREE (you can pick the index you want, you can hedge against the basket you want - free in the sense of freedom, and not imposed by any central authority with obscure agenda), and second, and most important: it doesn't create seigniorage.
The biggest problem with a supply-changing currency is the seigniorage.  The seigniorage is lucrative, and goes to institutions and people which get something for nothing.  That creates corruption, and "want for more".  It is the fiat printing seigniorage that creates the bulk of the financial sector (which is the main beneficiary of the printing of money).


Of course, because they are expressed on loans expressed in that currency.  A loan expressed in a "price index" would have the interest rate that goes with the stability of that price index (which, by definition, is stable against itself, right !).


I'm not sure if you include the cost of the structures built upon the seigniorage, and the damage they do (the financial institutions in other words), the risk induced by the corruption of the regulator and all that.


Yes, the advantages are huge: no seigniorage and no corruption of the regulator.


I don't see why.  They get the same thing.  If I am paid 100 baskets, then I can buy 100 baskets with that.  If one day, these 100 baskets are worth 50 shinkels each, and the next month, they are worth 49 shinkels each, this wouldn't change anything for me, because the first month I receive 5000 shinkels, and the next month I receive 4900 shinkels.  But all prices have lowered too (as they are expressed in shinkels, but calculated in baskets).

It wouldn't change anything.


What's the cost of a multiplication ?

If you can avoid a corrupt regulator, and a whole mass of people getting tons of seigniorage at your expenses, I would think that that balances largely out.


A number on a website and a multiplication is more costly than the price of half of the City ?

Yes and no.   For the moment, for sure.  The point is that the "price of a bitcoin" needed to do a certain number of transactions, with a certain amount of time in between them, is exactly what the monetary formula gives you:

P x Q = V x M.


P x Q is the total price (in bitcoin) of all goods and services bought with bitcoin in a certain period, say S, the total sum of bitcoin expended to buy stuff.

V is the number of times on average the same bitcoin participates in a buying action of such good or service in the given period (say, a year).

M is the amount of bitcoins in circulation. 

Now, V is the inverse of the (harmonic) average hold time T of a coin.  Indeed, you do not immediately upon reception of a coin because you sold something, buy something else with it.  If you sell a car today against coins, you will probably not spend all that money in the evening.  So all coins are held a certain time on average in between two interactions.  A dollar is held a few months on average for instance. 

Let us assume that a coin is held on average half a month.  That would put V to 24 (if the period is a year).  Now, with finally 20 million coins in circulation, that would bring us to a total sum spent on goods and services of 480 million bitcoin.

Every year, one will buy for about 480 million bitcoin goods and services under these assumptions.

If your bitcoin is worth $10.-, then that means that every year, for not more than about $ 5 billion goods and services are bought with bitcoin.

If you want to buy MORE stuff, then there's no alternative but for the price of bitcoin to go up (or for the holding times to go below half a month).

If you want to buy 20% of all of the black market (estimated $ 300 billion, so $ 60 billion bought with coins), then a coin needs to be at least 12 times more expensive, or at least $120 a coin.  (under the assumption of a spending every 2 weeks).

So the price of a coin cannot be arbitrary low if it has to buy large volumes of goods and services.

That's only because you denominate it in something you do not mean to denominate.  Money is a vector of value, and shouldn't necessarily be seen as a measure stick of value.  If you denominate things in money, and you actually wanted to denominate them in something else (namely, that of which you want the "price to be stable"), then it is much simpler to denominate it directly in that value.  That's what I wanted to say.


The Ideal Fisher Index is TWO baskets (a current one, and a past one).  For every pair of baskets, there is an ideal Fisher index.  I don't see why you couldn't denominate a loan, a salary, or whatever, in your preferred Fisher index for instance (as long as you find a partner that accepts that to be the counterparty).


Why would the interest expressed in your favorite index be different from the index in your money that has stabilized said index ?


I'm not sure you got what I was trying to get at.  If shinkels inflated 900%, but the loans were expressed in baskets (that thus inflated also 900%) I don't see what that would make them "less onerous".  I don't see why you say that real bank profitability has been annihilated.  After all, if they gave you a loan expressed in baskets, then now your pay-off is also 9 times higher (in shinkels).  In fact, by giving you a loan in baskets instead of nominated in shinkels, the banks hedged against the inflation risk !


What unproductivity brought by price inflation ?  If your income would be lower with respect to the basket, it would also be (absolutely) lower in your stable money, because it would mean that the relative price of my labor went down as compared to the basket.



Let us imagine that there is supply-stable money, so with fluctuations in the basket price.
But let us now suppose that we express ALL PRICES in "basket" (or any price index you like).  That ALL financial contracts are expressed in baskets even though they are executed in supply-stable money (so with fluctuating amounts as a function of the price variations in the basket).

So the "actual accountant money unit" is the basket, but the transferred assets accounting for it is the supply-stable money.

Tell me in what way that would be any different from an ideal price-stable money ?


You now switch to HYPER inflation.   With a supply-stable money, you rarely get a hyperinflation  Last time that there was a hyperinflation with gold must be a long time ago

The problems caused with inflation are mainly the loss of value of savings, and the gain in value of loans (that is, it is TOO EASY to get credit, and the easiness is the value loss of the savers).  People are frustrated in their desire to hold value, and are somehow forced to spend on things they don't really want to, and are not able to spend it in the future on things they would have liked to have.


Because a price-stable currency is a chimera, for the two fundamental reasons that are always the same:

- the computation problem
- the motivation problem.

The computation problem is the problem that no central authority knows all of human action in the economy to be able to direct it as it (pretends to) intend.  In this case, the regulator will have incomplete knowledge of the index he's trying to keep fixed, the index itself will be artificial and not correspond to what people really want stable, and he will know it too late.  So the ideal regulator doesn't exist, and you will have at best a bunch of amateur-apprentice-sorcerers playing with the money supply based on incomplete, half misunderstood, and too late information.

But the motivational problem is much worse.  A regulator claims to do something (for the general good) because that's his reason of existence and the reason for his monopoly of power, but in reality, a regulator consists of groups of corrupt people who always abuse the power for a hidden agenda up to a certain point.  That agenda can be political, financial, or just self-interest.

So, in short, if you have a money that CAN be regulated, it will be abused to favor "the friends of the state".  If something can be abused, it will be abused.  Power corrupts, and absolute power corrupts absolutely.

The fixed supply money has no lever arms that can be abused, and even with all the problems that come with it, this is the main advantage: no self-declared well-intentioned regulator can fuck it up.


Ah, but that is because V and the definition of M are interchangeable.  You can claim that credit creates M1 or M2 money, but you can just as well see that as several steps of M0 money.  So whether you take the fractional banking leverage into M (so you go from M0 to M2), or whether you actually include it in V, is up to a point a matter of taste.

Isn't the decline in V not simply a re-allocation of velocity into "fractional banking" ?  After all, over that period, the use of bank accounts, and non-cash means of payment increased, which in a certain way increased a lot the M2/M0 ratio I suppose.  Is that not the compensation that we see with V ?


Normally, that would mean that there is a higher demand for money, which would make that money's price rise (that is, the price of services and goods would lower because money is scarce).  You would get a deflationary effect, until there is again sufficient money to do all the things you wanted.

You cannot imply anything about bitcoin here, because the price of bitcoin is not determined by the demand for bitcoin to buy goods and services with it.  The "price of the dollar" is.  Dollars are used to buy goods and services (including labor, which is called wages) with them.  With bitcoin this is for the moment a marginal part of the demand.  Which is why bitcoin is by far not a currency yet.

I don't see why you say that.  Now, on one hand, it is very good that no large financial structure can be built on it, after all, most of that is abuse.  However, I don't see why you couldn't build any necessary system on it.  Loans can just as well be expressed in any good, or in a basket, than in currency.  You can just as well take a loan in "basket index" against an interest in basket, just as well as in naked currency.  This is the same as taking a loan in naked currency, and hedging against the risk of the basket price changing.

In other words, nothing stops you from defining your own "price stability" (as long as you find someone else to borrow you against those conditions).  You could also have your salary indexed on that basket, if you want to.  Why not.  The currency is just the vector, not the measurement per se.

You are going to define your "price stability" against a given basket, a price index.  Let us say that that basket's price is, at time t0, equal to 1000 shinkels, and that I want to buy a house for 1000 000 shinkels.  So I borrow "1000 baskets".  If someone is willing to accept to lend me 1000 000 shinkels, denoted in "1000 baskets", and taking an interest of, say, 5% annually (in baskets), then that would be TOTALLY EQUIVALENT concerning risk, return, and everything, with me taking a loan in your "price stable money", because if your central bank is doing its announced job correctly, namely keeping the basket at a price of 1000, then this is exactly what I would be doing.

Imagine that there is inflation, and that the price of the basket rises to 10 000 shinkels.  Then I have to pay back not 1000 000 shinkels, but rather 10 000 000 shinkels.  But hey, no problem, because there was a factor of 10 inflation, right ?  I would also earn 10 times more.  With your "price stable money", I would be in exactly the same situation.  And if you say "hey but if your wage doesn't follow the inflation in shinkels ? ", then that would mean that my wage got RELATIVELY lower wrt the general price level, which in YOUR WORLD would mean that I earn less.  So the difficulty I would be facing would be the same.   If I earn only 5 times more, and inflation is 10 times, then I'm having the same burden (a factor of 2) with my loan than when total price stability is kept, and my wage is halved.

So in as much as people would WANT basket-price stability, there's nothing that stops you from having loans expressed in baskets, rather than in money directly.  In fact, you don't care about the underlying monetary asset if you do that.


What does that mean ?  V has lowered ?   People are hoarding systematically more money now than 100 years ago you mean ?

This is very true.  Now, you CAN have supply stability, and you can try to find tricks to make you believe you have price stability.
But in principle, in a dynamic economy, prices are not stable, as they are also signals.


With supply stability, you will have price fluctuations.  If they rise, you can call that "inflation", and if they fall, you can call that "deflation".  However, in the long run, on average, a supply-stable system gives you on average deflation equal to economic growth.

If you have an annual growth (whatever that may mean ) of 3%, then you will have an average annual deflation of 3%, and hence an average annual increase in buying power of any amount of money laid aside. The *fluctuations* come from the variability in demand for storage of value in the currency, which will change (human action) according to the mood of the moment.  This will induce temporary inflation or deflation, but in the long run, we can assume that the store of value demand averages out to a certain value, and then P will go like 1/Q.

In fact, that comes down to the same.  Velocity is the inverse of "demand for store of value" (in the currency at hand).  Rising velocity means that people are less keen on holding the currency ("bitcoin days destroyed").  That can come from external factors, such as simply a general decrease in demand for "store of value" (could we talk about aggregate demand for store of value ? ) or because they don't trust the currency any more and shift their store of value to other assets (houses, dollars, gold, silver, food, whiskey, ...).

Hyper inflation - as you pointed out - doesn't have to come solely from printing.  In fact, hyperinflation comes from the fact that people don't trust the currency any more at all, and want to get rid of it as soon as they receive it.  That makes the velocity go to infinity (and hence the value of the currency to zero).  You can also say that it makes the holding times of the currency go to 0.

In as much as V is too often seen as a fiddle parameter to make the monetary equation come out (P Q = V M), it has a genuine economic meaning: the inverse of the holding times of the currency.  During hyper inflation, people don't want to hold the currency any more.

The fear of the deflationary spiral is the opposite: people hoard the currency "to infinity", which makes the velocity go down to zero in the long run.

Both are (dual) "run-away" conditions, dominated by the holding times (one over V) and not so much by the monetary mass M itself.  Doing crazy things with M can INDUCE this effect, but other things can just as well.

No, this is an old, wrong, and recurring story that debt-based money with interest can only exist with infinite printing, because "you have to pay more back than has been printed/lend out".


Of course not, because short-term lending is not the ONLY source of money. 
If it were the sole source of money, then you would be right, but it isn't.  If the same "printer" also lends out on longer terms, and spends, on these longer terms, more than the interest just due on these longer terms, the spendings of the money lender (the CB) can cover paying the short term interests too.

This kind of story confuses always the quantity of money, and the fluxes of money.  Loans, and interests, are FLUXES of money.  The velocity of money allows you to have a total flux of money which is larger than the amount of money. (it is the ratio).


They do spend it, for instance on salaries of their employees, and on dividends of their share holders ; on golden parachutes of their CEOs and on all the goods and services they buy for their functioning.

Printing a $100 bill takes much less resources than anything you can buy with $100, right

Only bitcoin takes about as much resources to "make" them than what you can buy with it, if the mining cost approaches the block reward.

Hello,

I'm wondering if a small development in electronics would be worth-while:
taking thermal noise from a resistor, amplify and digitize it, and turn it into a random number generator, a key generator or something similar ?
I would propose a small module based upon a USB link.  The important thing is that the electronics would be open and evident (no hidden FPGA program or so, just standard non-programmable electronics) and open source software reading the thing so that it is clear that no tricks are used for faking random numbers.

Would there be a market for such a product ?  That is, would it be worth-while to develop such a thing ?

No, there is no need, for creation of additional debt or growth or whatever.

Is this so difficult to understand ?

What is needed for a finite money supply that is nevertheless lend out with interest, to be sustainable, is simply ONE SINGLE CONDITION:
that the lender (who is entitled to receiving the interest) SPENDS at least the amount of interest on goods and services.

That's all.

If I print 100 pennies, I lend them to you, and I ask 101 pennies back next year, that's obviously not going to work if you have to pay this back IN ONE SINGLE GO.

But if I print 100 pennies, I lend them to you, and I ask 50 pennies back in 6 months from now, and I ask 51 pennies back in one year (totalling 101 pennies back), then this is very well possible on ONE SINGLE CONDITION:
that between 6 months and 1 year from now, I BUY something from you  worth (at least) 1 penny (the interest).

It goes like this:

a) I print 100 pennies, I have them now.

b) on the first of january, I give them to you.  Now I have 0, and you have 100 pennies.

c) on the first of july, you give me 50 pennies.  I now have 50 pennies, and you have 50 pennies.

d) on the 3rd october, I buy an apple from you, against a penny.  I now have 49 pennies, and you have 51 pennies.

e) on december 31st, you give me 51 pennies to liquidate your loan.  I now have 100 pennies again, and you have nothing.

f) if you want to, we can start over next year.


The important point in this game is that I GOT AN APPLE FOR NOTHING while we were shifting pennies.

This is why I'm in this game for a start: I want to get free apples.  So I WILL spend some of the pennies you give back to me.  Otherwise this doesn't serve me any purpose.  If I print money, I want to enjoy goods and services for it.  (I'm the state, right !....)

You see that at no point, I had to print an extra penny, we had to have growth or whatever.  At no point, you had to subscribe to another loan.  You only had to produce an apple, and give it to me for free (against a penny, which was the interest you had to pay me, which I got out of nothing because I printed the pennies for nothing).