This bring to mine an idea I had a couple of days back. I haven't seen the Football pool game being done using bitcoins.

For those who don't know the game. It is a 10 by 10 grid of squares. Each persons buys one or more squares for a standard price. Sometimes a dollar. Often a quarter. Normally, all 100 squares must be sold before the game. Each person chooses they squares they want from among those remaining. The are all arbitrary at this point so none can be known better than others.

After all are sold, a random process is used to assign the numbers 0-9 to the horizontal and vertical axis. The horizontal represents the low order digit of one teams score. The vertical represents the low order digit of the other team.

At the end of each game quarter. The square owner who matches the digits of the score is awarded 25% of the pool.

I doubt the game generalizes to low scoring games like the other world football/american soccer.

This is not an archetypical pyramid scheme. But it is of the class "Ponzi scheme". One were the benefits to investors are paid from their own money and/or subsequent investors money.

You are betting on the gullibility of others relative to your gullibility. (i.e. Am I the first to be gullible or the last to be gullible?)

I'd like to submit that I think the most apt description of bitcoin is that it is most like a Global Exchange Trading System (GETS) which is a variation on the LETS concept that isn't for hippies.

Descriptively it differs because it's community is loosely knit and global rather than an intertwined small-town. As such, there can be no commonly trusted party to operate and monitor the system, so that function is trusted to redundancy and mathematics. (block list)

LETS communities can rely on "local knowledge" of peoples historical behavior and intentions. As such it is perfectly reasonable for them to advance credit to people (negative balances) in certain situations. In a GETS community advanced knowledge of all parties and intentions is not practical or even preferred. As such, GETS operates on a zero credit policy. (no negative balances)

Also, since GETS trade globally, there is no "national currency" that can be used for equivalence. As such, GETS defines it's own unit for accounting purposes. Since this currency must necessarily vary against some national currencies, the LETS strict "no interest" principle cannot be preserved.

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I think if people understood LETS they would intuitively understand GETS. The rest of the bitcoin details are just one possible GETS monetary policy.

He declared himself an equal sovereign to King John and wrote his own 300 plus page magna carta!

I don't think it took the English nearly 300 pages and they FORCED the king to sign it. I think he is a very silly silly man!

Just for reference:

Market capitalization/capitalisation (often market cap) is a measurement of size of a business enterprise (corporation) equal to the share price times the number of shares outstanding (shares that have been authorized, issued, and purchased by investors) of a public company.

I don't think the un-generated shares would be counted. They would be authorized shares, but they have not been issued through their IPO phase yet.

Edited above and reposted so you don't have to look up.

I really wanted pride of place on this one.

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It is very important to any new venture to NOT define it in terms of a well known scam. No one here would say bitcoin is like a Ponzi scheme except without the scam part.

But that is what you are doing by saying, it's like issuing stock in a corporation, except without all that bother of actually creating a product. Let's just consider the stock the product and get right to selling it! It's a limited edition product, so its price will vary based upon supply and demand.

Trust me, that metaphor has been used for thousands of scams. It is equivalent to a "red flag" warning to all authorities.

You are really much better saying bitcoins are like sets of collectable poker chips. Some people will want them, some will not. If lots of people want them you can sell each poker chip separately.

I found that hilarious!

1.38M BTC right? It is much less in USD at the moment I think.

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.

I want to be the first to say "No, they are not!"

I'll edit this to support that statement later. :-)

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It is very important to any new venture to NOT define it in terms of a well known scam. No one here would say bitcoin is like a Ponzi scheme except without the scam part.

But that is what you are doing by saying, it's like issuing stock in a corporation, except without all that bother of actually creating a product. Let's just consider the stock the product and get right to selling it! It's a limited edition product, so its price will vary based upon supply and demand.

Trust me, that metaphor has been used for thousands of scams. It is equivalent to a "red flag" warning to all authorities.

You are really much better saying bitcoins are like sets of collectable poker chips. Some people will want them, some will not. If lots of people want them you can sell each poker chip separately.

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"?

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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.

Galuel,

I am curious about your views on the relationship between Universal Dividend and Local Exchange Trading System "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.

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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.

Could this be a competition of programs wanting to run a the "lowest" priority? Where bitcoin just competes less hard.

For example freenet wants to run at -10 priority but bitcoin only tries to run at -9 priority.
 

I want to add the concept craighto mentioned. LETS. Local exchange trading system.

Bitcoins differs from LETS in several ways but it is similar in other important ways. One very important similarity is both currencies are virtual and created/backed only by the  shared participation of a voluntary, self selected, community.

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This is from wikipedia but I think people will see the parallels with bitcoin.

"A number of people have problems adjusting to the different ways of operating using a LETSystem. A conventional national currency is generally hard to earn but easy to spend. To date LETSystems are comparatively easy to earn but harder to spend. The success of a LETSystem is therefore determined by the ease with which a person can spend their LETS credits, and improve their quality of life by participation. Placing difficult arrangements or unreasonable service fees in the way of LETS members will produce difficulties in the future."

I looked up some of the terms used by the guy who coined the concept and term. He would consider coin generation positive interest and transaction fees negative interest.

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!"

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.

Thank you for the LETS analogy. I had not heard that term in it's originating context. I agree it makes a good point of reference. It seems to differ mostly in terms of "equivalence to the national currency" and "no interest".
 

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. :-)

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

Nice start!

I dare you to put a definition for "commodity". ;-)