Open Letter to GMaxwell and Sincere Rational Core Devs

[traincarswreck]

I'm sure the central bakers have read loads of books on economics.

Perhaps you will have better chances teaching them how to make a better money?

Hear from the man:

   The script or plan for my talk linking the “ideal money” with the choices and actions of “thrift” or “savings” by persons or by “economic agents” was influenced by concerns that it would be wise not to speak too incautionsly of “the Keynesians” when the times are such that massive public opinions maybe supporting actions by which a state administration can act without going through the parliamentary processes to write new legislation.

    So in the rush of political campaigns and elections (for example in the USA) it is difficult to sell a national monetary policy which, if followed consistently on a “long run” level, would result in the specific nation state existing as if on a higher level of economic civilization.

    (For example, Sweden and Argentina might be usable, over a long time comparison, to represent comparable “economic civilizations”.)

    Therefore, I had arranged for 2012 to talk more cautiously in relation to whatever would impact with “the Keynesians” and with the political interest relating also to the scholarly factions allied with (or forming) “the Keynesians”.

    And this caution carries over naturally to 2013 also.

    ~public note from John Forbes Nash’s university homepage

   The label “Keynesian” is convenient, but to be safe we should have a defined meaning for this as a party that can be criticized and contrasted with other parties.

    So let us define “Keynesian” to be descriptive of a “school of thought” that originated at the time of the devaluations of the pound and the dollar in the early 30’s of the 20th century. Then, more specifically, a “Keynesian” would favor the existence of a “manipulative” state establishment of central bank and treasury which would continuously seek to achieve “economics welfare” objectives with comparatively little regard for the long term reputation of the national currency…~Ideal Money

You are asking me to do something Nash wouldn't dare.

[traincarswreck]

In this article I explain the movie biography, in relation to the REAL and ACCEPTED biography (because they are different since there are mistruths in the movie), and then I explain his REAL biography and everything is cited VERY well.  It's VERY dense, and so I have compressed it as best I can, but the article resonated with many general readers it seems: https://medium.com/@rextar4444/20-years-ago-john-nash-re-defined-our-understanding-of-economics-again-and-we-still-havent-4f3b7f09fd0e#.b17kzf2ol

You can read this meme board right to left and top to bottom like a book: https://medium.com/@rextar4444/the-new-era-of-nashian-economcis-meme-storyboard-for-john-nashs-proposal-for-ideal-money-dd529039f221#.f3tqj9t3u

A quick summary with quotes only: https://medium.com/@rextar4444/bitcoin-ideal-money-and-the-end-of-the-keynesian-centrally-banking-era-john-nash-predicted-this-6738b79f20ab#.4c491cgqf

A general summary by me with quotes from ideal money: https://thewealthofchips.wordpress.com/2015/07/12/a-general-summary-for-john-nashs-proposal-ideal-money/

And an esoteric summary which will make sense with the context of the above: https://thewealthofchips.wordpress.com/2015/07/09/the-totality-of-the-proposal-ideal-money/

[traincarswreck]

True, but Bitcoin wasn't designed to have a stable value. It was designed to be deflationary and you won't be able to change that. Go and start your own coin, but don't be surprised if nobody uses it.

First shut up.  2nd listen.  If bitcoin remains in its current state, it fits PERFECT as Nash premise.  Do you understand these words?  How did Nash write for 20 years based on bitcoin as the premise?

[traincarswreck]

https://steemit.com/bitcoin/@jokerpravis/how-do-we-bring-about-ideal-money

Each of is living our lives to our best ability, in regard to the hands we are dealt, and with a mix of intent to satisfy our own wants, desires, and passions, and with some level of inclination in regard to helping our family, friends, fellow man, perhaps animals, the ecosystem and/or the cosmos (ie everything in it).

We have a goal in mind, what ever that may be, and whenever it might be achieved, and we work on whatever means we deem appropriate that we somehow justify as leading to that goal.

This basically describes each of us, as the human condition, whether it was ultimately part of our ancient biological nature or whether it evolved into us as society itself evolved.

The popular misconception is that we might abandon, completely, the selfish pursuit for one’s desires and suggest that each individual should simply concentrate on serving each other, and that such actions will suffice for a society that provides far greater pleasures and alleviates for more suffering than the selfish pursuit.

The reason this is a misconception is something I will not go into here.

Regardless for those who either understand and agree or those that fully cannot (altruists), I think I can re-solve both views and any that fall in the range between.

First we must understand about the nature of money, society, and institutions, and how and why they arise. Society, that is a large collective of individuals, growing ever more complex, eventually comes to a point where the biological human being cannot be expected to perform nor understand all of the tasks required to sustain and/or grow a population.

Complex problems arise, and with them complex solutions. These solutions can be understood as technology, and especially in that it takes many individuals to build them (and so there is a certain time involved and implied).

Institutions are these solutions, often thought of as buildings, but are really just customs or complex sets of rules, and they exist not because of some history of secret societies that rule over the common man, but rather to act as sort of meta-vehicles that render complex problems into simple games, that can be approached and solved from the meta perspective.

Money too, arises (naturally!) as a technological solution to our complex social problem (we ALL share this problem right?), and so there is a special psychological problem that arises because of the nature of the problem and solution money attends to.

Money exists to solve a problem that the individual isn’t supposed to or can’t fully understand, and yet because of the nature of the solution, each of us knows and understands the “value” of money or in other words what money is for.

So a duality arises where on the one hand we have a increased and often irrationally/emotionally motivated want for money, and on the other hand we don’t really understand what money truly is or what it is for.

The problem then is exacerbated, if the money used by the people is subject to the whims of political will, whether it be of some real or fictitious elite rulers that control the quality and/or supply of a currency used by the citizens, or whether it is the citizens themselves that might exert their own political influence on the nature of the money used to serve the society.

Ultimately, and this is my conjecture, but it is also my plea, and in regard to the introduction to this paper (the individual seeking to serve their selfish wants but also possibly to alleviate world suffering), what we truly should want, is to levate an unbreakable standard between the largest institutions (nations/central banks/large currencies) in order to solve the largest (and most significant) meta-problem possible on our planet.

That problem is the Triffin Dilemma.

The bitcoin community has been fighting over trying to keep bitcoin a coffee money for the people, trying to keep bitcoin out of the hands of the big players, governments and banks. This crusade is petty, short sighted, and value-less to the individual and the society (not to mention scientifically unfounded).

Ideal Money, which is the levation of such a standard I allude to, that is for none other than the highest meta players of our global financial system, is that which will bring order to our global economy, and what that means to the individual is the attainment of each of our individual goals.

Ideal Money means, the attainment of each of the individuals selfish wants, and each of us can help each other (and our “selves”) achieve such ends by the levation of it, which happens through dialogue on the subject of “How do we bring Ideal Money about?”…which we must remember, from the very beginning of the dialogue, is a QUESTION, not a conclusion to be argued about.

[traincarswreck]

What Should We Call The Stable Unit of Value That John Nash Created?

    The metric system does not work because french chefs de cuisine are constantly cooking up new and delicious culinary creations which the rest of the world then follows imitatively. Rather, it works because it is something invented on a scientific basis…

    Our view is that if it is viewed scientifically and rationally (which is psychologically difficult!) that money should have the function of a standard of measurement and thus that it should become comparable to the watt or the hour or a degree of temperature.

    …this standard, as a basis for the standardization of the value of the international money unit, would remove the political roles of the “grand pardoners”…

[mezzomix]

Bitcoin cannot be ideal money.  Economists know this because money stable in value needs to be able to expand and contract with its underlying economy.

False.

You have no chance. Believers of the Keynesian church will always believe what their preachers (economists) tell them to believe.

[traincarswreck]

Bitcoin cannot be ideal money.  Economists know this because money stable in value needs to be able to expand and contract with its underlying economy.

False.

You have no chance. Believers of the Keynesian church will always believe what their preachers (economists) tell them to believe.

I don't know who you are speaking to but I suspect its me.  It is absolute basic common sense that a currency must expand and contract in relation to its underlying value in order to stay stable.  Bitcoin is deflationary.  Satoshi's words, people lose coins and everyone GAINS.

Also Nash (and I) are NOT defenders of the keynesian faction.  His whole thesis is they are about to lose all power.  So if you implied I was defining the keynesian faith, you couldn't have entered this thread in a more ignorant fashion.

Theymos?  come on. 

[LoyceV]

I'll get more specific but gimme a bit to think and write. But to those who say I don't explain.  You don't know I have a history in the community of writing 100's of article citing and expounding on every aspect of his works.  I was as meticulous and articulate as I am capable of, and its very easy to use google to search for it.

So what's happening is I did my homework ya'll haven't done yours. 

You're doing the same again: expecting me to do "homework" when you open an incomplete thread. I am not going to perform a background check on anything you might have ever written, it's pointless.

[prezbo]

Since this is the development and technical discussion forum I'm still waiting for concrete technical proposals for what should be done. Otherwise this is in the wrong forum.

[traincarswreck]

This is what I mean.  There are no scientists in this industry.  Asked to back up my claims but they refuse to parse through anything.  Ask me for a proposal and I show the protocol for it and they can't recognize a protocol when they see it. 

"I didn't read the argument but its wrong."

I am looking for SINCERE AND RATIONAL devs, not bitcoin enthusiasts.

It's very simply kids.  Bitcoin is deflationary, its CANNOT be ideal money.  It is a gold.  It is the premise of Nash's argument.  The goal is a stable metric of value, not bitcoin.  Bitcoin is a component only.

Grow up.

[traincarswreck]

Core needs to change its mandate to the facilitation of the levation of ideal money. Not the idealization of bitcoin that is irresponsible. 

And we need SCIENTISTS that understand science.

[traincarswreck]

Is there any forum or place for dialogue where the participants might be able to hold a candle to me in regard to the macro-economic implications of bitcoin?  I'm done with this petty bullshit.

[prezbo]

Is there any forum or place for dialogue where the participants might be able to hold a candle to me in regard to the macro-economic implications of bitcoin?  I'm done with this petty bullshit.

Probably not. By going through your post history here and on reddit I can see you are the second smartest man to have ever lived - close second to Nash. I suggest you start working on your proposal and come back when you have some actual code to show, because you are definitely the man for it.

[traincarswreck]

Probably not. By going through your post history here and on reddit I can see you are the second smartest man to have ever lived - close second to Nash. I suggest you start working on your proposal and come back when you have some actual code to show, because you are definitely the man for it.

Is that what happens when your ignorance is revealed?  When you are shown something your intellect can't grasp?  Then you attack me?  

You can't read 8 pages but you are going to try to be influential in the most important project in the world right now?

Ya I have a proposal-you are haphazard and irresponsible.

Let's talk about communication protocols: http://sprott.physics.wisc.edu/Chaos-Complexity/dialogue.pdf

Listen I'm not wrong, just because you don't want to admit I am right.   and get fucked for telling me that I am trying to brag about being the 2nd smartest to nash.  I never said or implied anything like that. It's your petty brain.   Petty mind.

PETTY PERSON.

I posted what I was requested to do.  Willful ignorance prevails and pervades here and science does not.

[traincarswreck]

You are stuck in a clearly unending debate that is serving as an opening on all political attack vectors. I proposed a protocol to alleviate the tacit assumption that is perpetuating the debate  and the divide in the community.

Ya'll have satoshi complex. Read.

[Bitinvestor]

You win, mentaltrainwreck. We're all stupid and you're the only one in the whole world who has it all figured out. Bye.

[traincarswreck]

You win, mentaltrainwreck. We're all stupid and you're the only one in the whole world who has it all figured out. Bye.

No scientist would cry like a baby like you are. 

On Perpetuating Dualities

It can be, and often is, that we are generally caught in the trap, habit, and pattern of framing our understanding, observations, and arguments such that we are simply and only perpetuating a duality that needn’t otherwise “exist”.

Such a perpetual duality might be the gun control debate, abortion, the role or place of religion in education or politics, immigration policy, left versus right, conservative versus liberal, climate change debate, or capitalism versus socialism.

But we might rather take the stance that such dualities are a signal that we cannot over come these problems without a necessary evolution, especially, and basically in the form of technology (ie debate cannot solve them).

As an example consider a debate about whether or not an immigrant arriving to a “free country” wants to take their oath WITH their, face covering religious, clothing on (“After all,” they argue, “it IS a free country in regard to religious beliefs).

Some argue, that you cannot properly ID the person, that this would be an issue if you cannot see their face, and therefore they should have to hold up to OUR standards and take their covering off.

The interesting point, being that this was argued in Canada, and the immigrant won, which suggests it is Canada’s standard to uphold such a freedom of religious expression, and to force them to take off their covering for their oath is actually NON-Canadian.

What is important to note, is that the Muslim (to be blunt), or the immigrant, seemed to understand the laws and constitutional framework of Canada better than many Canadians, and the supreme court agrees with that statement.

Now if we introduce the technology of a retina scanner, then the anti-freedom anti-religious argument has no legs and is seen to be UNNECESSARILY arguing a moot point.

To understand this, is to understand that to debate for ANY side of such a duality is simply to participate in the religious belief of unnecessarily perpetuating conflict.

[toknormal]

Bitcoin cannot be ideal money.  Economists know this because money stable in value needs to be able to expand and contract with its underlying economy.

False.

Here's the first.  Why wouldn't you explain.  I think I know why you wouldn't explain.

Here is the thing. Ideal Money is money that has stable value over LONG periods of time.  

A deflationary currency does not have that quality.

There isn't any conflict here because there have always been two types of money to satisfy each of these requirements respectively.

Consider an economy which varies in size. There is clearly a conflict between 2 interests:

 • commerce (in particular manufacturing) has an interest in keeping prices stable so they don't go bankrupt during their time-to-market period (Projected income at the start of the budgetary cycle has to match real income at the end of it, otherwise they'll constantly trade at a loss in an expanding economy)

 • savers need a store of value which means they are interested in the exact opposite - a deflationary monetary medium which accrues as the economy grows (e.g. gold)

There are therefore 2 types of "ideal money", one variable supply which is used for price denomination and one fixed supply which is used as a store of value. (When I say "one" fixed supply type, I'm using that as a collective term to cover all commodity money such as precious metals, equity shares, whatever). People switch between these according to their prevailing priorities.

By current definitions, Bitcoin is most definitely of the "type 2" category - fixed supply commodity money who's monetary design priority is as a store of value modelled on gold. It therefore definitely does not represent "ideal money" from a price denomination point of view and should not be used as such.

However !
Bitcoin *could* be used as a price denomination/inflationary world reserve currency *if* an almighty great derivatives market was created on top of it to vary the effective money supply, even though the actual blockchain token supply stayed fixed. In other words, if countries started denominating their prices in Bitcoin en-masse then the credit markets would do the same and before you knew it the blockchain supply would only represent a tiny portion of the BTC denominated commercial trade volume in the world.

This is what currently happens with fiat. A government issues the "base" money supply by issuing debt which backs the central bank printing presses. Then the credit markets multiple that base money supply several times.

Conclusion
So bitcoin is currently ideal "type 2" store of value money. It is definitely not ideal "type 1" price denomination "currency". Whether it becomes ideal type 1 price denomination currency isn't in the hands of the bitcoin devs, it's in the hands of credit markets and governments.

[traincarswreck]

We finally have someone that is willing to discuss the macro-economic implications of bitcoin.  Can everyone else (except theymos) stfu and just let dialogue open?

"Ideal Money the Motivations of Savings and Thrift"

Why do we save?  Why we seek hedge?  It's because our money inflates. The less stable in this regard, the more safety we seek.  The most stable our money, the less we need to save.

Conclusion
So bitcoin is currently ideal "type 2" store of value money. It is definitely not ideal "type 1" price denomination "currency". Whether it becomes ideal type 1 price denomination currency isn't in the hands of the bitcoin devs, it's in the hands of credit markets and governments.

Great contribution to this thread.  Sincerely.  But bad conclusion.  You conclusion should be, we cannot approach "type 1" stability, if we destroy bitcoin's properties as a type 2 (ie gold) therefore it is core's mandate to guard bitcoin's type 2 properties as a digital gold.

And if they try to make bitcoin type 1 then it immediately, even by intention, destorys bitcoin's properties as a type 2 (gold) because anyone that knows anything about keynes/hayek or szabo/nash KNOWS you cannot centrally plan or design a type 1 money in and of itself (any more than you can stir muddy water clean).

Now what in this do we not understand or feel perfectly relates to the discussion of how to bring about Ideal Money and bitcoin's relevance to that pursuit?  

…money itself is a sort of “utility”, using the word in another sense, comparable to supplies of water, electric energy or telecommunications. And then, if we think about it, we can consider the quality of money as comparable to the quality of some “public utility” like the supply of electric energy or of water.

…we may become irrational in thinking about it and fail to be able to reason about it as if about a technology, such as radio…

We of Terra could be taught how to have ideal monetary systems if wise and benevolent extraterrestrials were to take us in hand and administer our national money systems analogously to how the British recently administered the currency of Hong Kong.

...if, for example, all of the countries of the world would base the value for their national currencies on the value of the British currency then this situation would appear singular and unstable, while it was not so singular for a lot of countries to base their currency value on gold.

The historical fact seems to be that the gold standard, was, in its time, a basis that favored the prosperity of the United Kingdom and of other states, like the United States and Switzerland, that adopted the concept of the standard.

Nowadays, however, few would propose a return to the actual use of simply the metal gold as a standard...

But a modern alternative is possible, one that would provide a good standard independent of state pardoners.  This idea occurred to me fairly recently.

...if two states evolve towards having currencies or more stable value as measured locally by national CPI indices that then also these distinct currencies would tend to evolve towards more stable comparative relations of value.

Then the limiting or “asymptotic” result of such an evolutionary trend would be in effect “ideal money” but this as a result achieved without the adoption of anything like an ICPI index as a basis for the standard of value.

…intrinsically free of “inflationary decadence”..a true “gold standard”, but the proposed basis for that was not the proposal of a linkage to gold

…a global money standard could have a value similar to that of standard measures such as those of the metric system.

…this standard, as a basis for the standardization of the value of the international money unit, would remove the political roles of the “grand pardoners,”…

There is tremendous value in simply having prices quoted conveniently.

So it occurs to me to think that that which is not achieved by a grand action of establishment by “fiat” may alternatively tend to come into existence as a consequence of a process of evolution. And of course, after a certain degree of progress by “evolution” the rest of the progress could possibly be realized by a convention or a process of “fiat”.

The constitutional structure of the authority behind the euro is of the “paper money” character in that nothing is really guaranteed as far as the value of the euro is concerned. But this is typical of all currencies used in the world nowadays.

I think of the possibility that a good sort of international currency might EVOLVE before the time when an official establishment might occur.

…the possible area for evolution is that if, say, an inflation rate of between 1% and 3% is now considered desirable and appropriate in Sweden, then, if it is really controllable, why shouldn’t a rate between 1/2 % and 3/2 % be even more desirable?

M. Friedman acquired fame through teaching the linkage between the supply of money and, effectively, its value. In retrospect it seems as if elementary, but Friedman was as if a teacher who re-taught to American economists the classical concept of the “law of supply and demand”, this in connection with money.

…my personal view is that a practical global money might most favorably evolve through the development first of a few regional currencies of truly good quality. And then the “integration” or “coordination” of those into a global currency would become just a technical problem. (Here I am thinking of a politically neutral form of a technological utility rather than of a money which might, for example, be used to exert pressures in a conflict situation comparable to “the cold war”.)

Starting with the idea of value stabilization in relation to a domestic price index associated with the territory of one state, beyond that there is the natural and logical concept of internationally based comparisons.

The currencies being compared, like now the euro, the dollar, the yen, the pound, the swiss franc, the swedish kronor, etc. can be viewed with critical eyes by their users and by those who maybe have the option of whether or not or how to use one of them. This can lead to pressure for good quality and consequently for a lessened rate of inflationary deprecation in value.

…after consulting with some of the economics faculty at Princeton, I learned of the work and publications of Friedrich Von Hayek.  I must say that my thinking i apparently quite parallel to his thinking with regard to money and particularly with regard to the non-typical viewpoint regarding the functions of the authorities that in recent times have been the sources of currencies.

And this parallel makes it seem not implausible that a process of political evolution might lead to the expectation on the part of citizens in the “great democracies” that they should be better situated to be able to understand whatever will be the monetary policies which, indeed, are typically of great importance to citizens who may have alternative options for where to place their “savings”.

…we can’t really logically assume that human civilization has found the ultimate ideal of forms of social government in the times of the twentieth century. (One can imagine a future form of government where a highly advanced automaton (or array of computers) would function like the office of a City Manager with the human input to the government passing through the analogue of a City Council.)

[toknormal]

You conclusion should be, we cannot approach "type 1" stability, if we destroy bitcoin's properties as a type 2 (ie gold) therefore it is core's mandate to guard bitcoin's type 2 properties as a digital gold.

And if they try to make bitcoin type 1 then it immediately, even by intention, destorys bitcoin's properties as a type 2 (gold)

Could you just clarify what it is you're concerned about regarding core's potential to "destroy" bitcoin's type 2 properties ? (I'm not really up to speed on the original agenda behind this thread - sorry 'bout that - I just became interested because of the monetary analytics).

Surely the only way they could 'destroy' Bitcoin's type-2 properties would be to make its supply variable and subject to liquidity demand ? (i.e. abandon the emission protocol).

anyone that knows anything about keynes/hayek or szabo/nash KNOWS you cannot centrally plan or design a type 1 money in and of itself (any more than you can stir muddy water clean).

Indeed. By that do you mean that diamonds, bundles of grain, gold bars or sea shells do not come with an inbuilt 'central bank' that monitors inflation and adjusts it's own trading rate against goods and services accordingly ?

Therefore, bitcoin - being modelled on an archetype that embodies the monetary properties of the items listed above - likeways cannot be coerced into a type 1 (price stability) role ?