What you say has three flaws:

1. If what money buys is less valuable than the sum buying it, then the seller is defrauding the buyer.
2. Even if money only were what you say it is, it would still represent a future commodity ownership at least to whom "speculates" it into existence.
3. Despite your "speculative money" being a possible monetary representation, an actual one depends on your being aware that other people have chosen to represent money the same way as you do.

https://medium.com/@mideava/metarepresented-money-759cfe446d84

Keeping Ownership Decentralized

Money represents a future commodity ownership. However, the only way of keeping this ownership rightful, hence decentralized, is to price commodities in metarepresented money. Any otherwise priced future ownership will not remain rightfully decentralized. This article explains why, by deriving the concepts, first of generic money, then of privately concrete money, and finally of metarepresented money from direct commodity exchange.

People once pointed to Bitcoin charts as examples of the healthy price-discovery mechanism of a true market. I guess they must find new alternatives...

Not necessarily: despite beginning with an analysis of Peercoin, its results apply to all cryptocoins, including Bitcoin.

Transaction rights as the sellable reward for chaining blocks:

https://medium.com/money-versus-metamoney/5cf840491cba

Please watch this video:

http://www.youtube.com/watch?v=04MPZgyhG5s

Some people also don't like to present their arguments. Go figure.

This is the post that got me started. Please read this thread:

http://www.peercointalk.org/index.php?topic=2460.0

I gave much thought to the problem of transaction fees in the last few days and concluded that, confirming a post by Vitalik Buterin^[1], it has no market-based solution. The ultimate reason is that a market requires buyers and sellers while mining cannot become decentralized and still have sellers. Total decentralization turns mining into a public service, and sellers must be private: with only buyers left, transaction fees tend to zero.

Fortunately, I also found a protocol-based solution to the problem, which goes a step further from Peercoin:

1. The reward for chaining proof-of-stake blocks comes from newly minted currency, like in Peercoin—which mints 1% new coins a year.

2. Based on information from the block chain, an algorithm constantly adjusts destructive fees just to offset the newly minted coins.

This way we have both a stable money supply and self-adjusted fees. The newly minted coins transfer value to block miners—from those who skip minting—partially via inflation while destructive fees constantly offset that inflation, leaving a value transfer equivalent to formal payments.

Yet such a value transfer is impossible with formal payments: instead of going directly to miners, its destructive fees go to the whole network as deflation, and only then to miners according to their contribution to the same inflation offset by those deflationary fees.

^[1] http://blog.ethereum.org/2014/02/01/on-transaction-fees-market-based-solutions/

Here is a proposal for achieving consensus on transaction fees, based on the Slasher^[1] algorithm:

1. Fees would come from proof-of-stake blocks but would be voted for in each proof-of-work block.
2. Miners voting for lower fees in their proof-of-work blocks would have a higher probability of mining a proof-of-stake block.
3. Mined proof-of-stake blocks would select the fees voted for in the proof-of-work blocks providing their signing privileges.

This would create two opposite incentives for miners when voting for fees:

1. Higher fees would increase their profit when mining a proof-of-stake block that included those fees.
2. Lower fees would increase their chances of mining a proof-of-stake block.

So transaction fees should remain within a reasonable interval.

^[1] http://blog.ethereum.org/2014/01/15/slasher-a-punitive-proof-of-stake-algorithm/

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EDIT: There is a flaw in this proposal: miners with no long-term commitment would have an incentive to vote on arbitrarily lower fees merely to increase their mining probability while still enjoying the current, higher fees.

Unless money gets decentralized and stays fungible, the authority on public money steals an increasing part of its value by controlling its representation. This article introduces the reasons for that: it explains the advent of governments along with their central banks, then why only the decentralization and fungibility of money can consistently preserve the ownership of monetary value.

https://medium.com/money-versus-metamoney/8e7b9fbefd94

Money is nothing like "a unit in the system of measurement for length": it measures the exchange value of whichever it prices, rather than any of its objective properties - exchange value is neither objective nor constant.

Unlike other units of measure, money does not measure the physical properties it has in common with other objects, like a standard weight or length would do. Instead, it measures exchange value - which is never a physical property.

Regarding this, bitcoin is just like any other form of money.

The confusion between money and its representation is the basis for that between debt and money. For further information, please read this: http://bit.ly/Z9cRyY.

Are you telling me that dollars do not represent goods and services? Have we so deeply mistaken money by debt as to forget it was ever money?

However, in a sense you are correct: the damage to productive capacity, social infrastructure, social cohesion, and the environment will outlive any reengineering of the monetary system to solve the debt problem.

Inflation can finance far bigger deficits than taxes because people mistakenly blame it on merchants. Additionally, turning debt into money provides the perfect disguise for inflation as it makes money self-inflationary.


Using just inflation to pay public debt would destroy the currency too rapidly, which is why whoever controlled the government created the income tax along with the central bank.


We are stealing wealth from the future by:

1. Destroying or failing to create productive capacity - by misallocating resources.

2. Forcing future generations to repay outstanding debt instead of producing.


Mike Maloney's mistake is to be found instead in his distinction between "money" and "currency."

The fundamental deficiency of gold is that it makes no distinction between itself as a representation of monetary value and the monetary value it represents. Bitcoin makes that distinction by representing monetary value as a private key then metarepresenting as a public key.