Open Letter to GMaxwell and Sincere Rational Core Devs

[Carlton Banks]

The uselessness idea is new since the gold standard and has led us to this massive bubble where prosperity has not really been achieved because it has been on on the backs of future work.

Remember that the "borrowing future prosperity" model is a consequence not of paper money per se, but of the sovereign bonds used to "back" it's value. It's a reflection of the virtue of uselessness in money being a sophisticated concept; just like with Bitcoin, many regular people will not buy the idea that inventing a form of money is valid, so some narrative about what makes the money valuable is required to aid acceptance. Telling people that it's good money because it's even more perfectly useless than the last form of money will be typically difficult to swallow.

[sidhujag]

the whole purpose of using currency is that it has no value in itself

Indeed, the great paradox of money is that the less useful it is economically, the better it is as money. This is why grains and salt gave way to silver and gold, and aided a second stage in the evolution of monetary theory: of these useless materials, the better is that which is best at being itself (i.e. durability).

Paper money, of course, embodies the uselessness property almost perfectly, explaining partly it's attraction. Bitcoin comes even closer to truly useless than any other money so far, not least because economic uses for the others gradually emerged over time.


I don't think you've quite grasped the consequences of this, however: the desired uselessness of money is a true and pure paradox, as it's precisely gold or fiat bill's relative uselessness that made them so useful. Hence why their value was more stable than that of the monies that came before them.

Isn't that the exact opposite of what Nash is saying in his Ideal Money paper? The ideal currency would be of the highest transfer utility and that is solved by linking it to a metric that is publically auditable (GDP, energy efficiency etc) some kind of economic unit would create inflation/deflation scenario's to achieve economic stability through the monetary unit. The uselessness idea is new since the gold standard and has led us to this massive bubble where prosperity has not really been achieved because it has been on on the backs of future work.

Central bank inflation targetting is asymptotically closer ideal than what gold was just because they had the ability to target inflation/deflation gauging econonmic activity, however it is nor publically auditable nor trustless and thus crypto-currency is a better and asymptotically more ideal than fiat today.

Money is conceived and used as a universal good. And that's the paradox: paper with people's faces printed on is universally useless, as a good. It has no purpose. Except as money. Useful, because it's useless.

However, having not read Nash (yes, I'm currently bracing myself...), it's possible that he alighted on a revolutionary idea: that in actual fact, a genuinely universal good (such as energy itself, of which all other goods are patterns of composition) is in fact ideal money. trainscarwreck?

Who have you read if you haven't read Nash? are these your own ideals you are applying to the problem domain? Sure Nash only has nobel prize on game theoretical math and many decades of experience with an IQ that is through the roof lol I don't know who to put my money on. But seriously what he says makes total sense, so much as that I made some "nashian" changes in my own crypto-currency, by adjusting inflation based on "work" on the chain because I can detect number of service transactions being created per block.

[danda]

yes, personally I think that Satoshi knew *exactly* what he was doing with the 1Mb cap, and that it would most likely never be changed.  At least he had to consider that when he pulled his disappearing act.

Depends if 1 MB cap was added as a missing property to his vision, or as a short term technical solution.

he understood the long term properties of the system.  That it would become harder and harder to change, the more people use it.

[sidhujag]

The uselessness idea is new since the gold standard and has led us to this massive bubble where prosperity has not really been achieved because it has been on on the backs of future work.

Remember that the "borrowing future prosperity" model is a consequence not of paper money per se, but of the sovereign bonds used to "back" it's value.

No its called leverage, the fractional reserve banking mechanism is a direct definition of trying to create prosperity out of future work.

[Carlton Banks]

are these your own ideals you are applying to the problem domain?

Yes, although it's unlikely they're original, someone else is bound to have recognised this too. I'm sure a more refined or more universal theory can make better sense of the uselessness paradox.

[sidhujag]

are these your own ideals you are applying to the problem domain?

Yes, although it's unlikely they're original, someone else is bound to have recognised this too. I'm sure a more refined or more universal theory can make better sense of the uselessness paradox.

I kind of did the same but realized that my thinking was aligned with nash's although obviously he has refined them to alot more details and a more elaborate theory whereas my ideas are just abstract (truthful ideas as you would put it), there is no way I could have put that much time and thought nor do I wish to as much as someone like the late Nash did who spent his whole life on the subject.

[IadixDev]

https://www.amazon.com/Ascent-Money-Financial-History-World/dp/0143116177

[cellard]

I really like the useless paradox!

Ideal money would need to be even less useful than paper money and would probably not be paper money.  At least you can wipe your ass with paper money.  Have you ever tried to wipe your ass with a credit or debit card?  But you can chop up your coke with a credit card.  So what would be less useful than a credit card?

Well, the ultimate paradox with bitcoin is, it can take several forms. For example, you can print a paper wallet and then it is also useful for lining up some good ol coke in a hooker's ass, hopefully bought by the hundreds of dollars a single bitcoin will be worth in the future.

It can also be a weapon. You can store a seed in Cryptosteel and im pretty sure you can kill someone if you throw it strong enough into someone's head.

And so on.

[AgentofCoin]

yes, personally I think that Satoshi knew *exactly* what he was doing with the 1Mb cap, and that it would most likely never be changed.  At least he had to consider that when he pulled his disappearing act.

Depends if 1 MB cap was added as a missing property to his vision, or as a short term technical solution.

he understood the long term properties of the system.  That it would become harder and harder to change, the more people use it.

Satoshi added it based upon Hal's recommendation, due to the "discovery" of a
spam/bloat block attack vector. Which means, either the 1MB cap was:

(1) coincidental and can result in an "Ideal Money" possible future.
(2) intentional and designed to compel the future "Ideal Money".

Since the second option would be malicious and since Hal did many important things
for Bitcoin, as well as spoke about second layer payment systems and how they could
work with bitcoin, which contradicts "Other alternatives" value, I do not believe Hal's
recommendation was "intentional", nor do I think Satoshi added the 1MB cap knowing
something that Hal was unaware of (meaning he would add the cap at some point in
time, regardless of Hal's correct input of an attack vector).

So, in conclusion, bitcoin may now, due to its current deadlock, actually fulfill the theory
of "Alternative Options/Other Alternatives", but it was not designed as such. In fact, it would
have to evolve into such, as Nash claims must happen, and bitcoin may now have done so.

So, Satoshi and Hal did not consciously cause this, IMO.

(Edit: I wish to clarify my statement about Satoshi adding the 1MB cap as being
malicious if intentional to bring about an "Alternative Option" possibility. In this sense,
I consider it malicious since it was not publicly disclosed as to its "secret higher purpose".
Though it could be argued that Satoshi could not have ever disclose such, since then it would
impact the projects ability to "evolve" into the "Alternative Option" in a "natural" way. Though
it is not truly natural but should be considered a "Naturally Manufactured Alternative Option".

On the other hand, if we acknowledge one or both purposefully did do so, then bitcoin's
Value as the "Alternative Option" decreases and "Ideal Money" does not manifest, since
we have now broken it's "natural occurrence" by showing "intended manufacture".
So if you believe Bitcoin was created as this weapon, then we must all lie to ourselves
including the public, otherwise as per the theory, it will not manifest the "Ideal Money".

Either way, I still stand by my prior conclusion that Satoshi and Hal did not consciously
implement the 1MB cap to bring about the "Alternative Option(s)". )

[AGD]

What happens when Bitcoin deflation ends in 2140? Wouldn't this be a factor to stabilize Bitcoin value and therefore could be Ideal Money in the long run?

deflation is not the correct word in this sentence. bitcoin's value will NEVER be stable.  BITCOIN CANNOT BE IDEAL MONEY. Bitcoin is deflationary, which means "increases in value over time", things that increase in value over time are not stable in value, because stable in value means that its value DOESN'T CHANGE.

So there must be one entity, that defines the price of ideal money for all times, because when the value changes it will never become Nash's "Ideal Money" ever again. That sounds pretty much like a big brother scenario to me and therefore is not decentralized and "ideal" at all.

I like Bitcoin, because it is the the best store of value atm and easy and quick to send/recieve transactions. It is proven by math and cryptography to be very secure and can still adapt to future issues. When my government shuts down my bank account I still have Bitcoins to trade. If I have to flee because of a war or whatsoever, it would be easy for villains to steal my money, gold, diamonds etc, but it will be quite difficult to even know about my Bitcoins.
The idea of storing a value behind a very big number is simple but genious. Thanks!

[AngryDwarf]

It's nice to think of Satoshi Nakamoto as a nash economics inspired visionary who desired to stabilise fiat to save the world, rather than some poker playing gambling addict.

Yup I think one of those is far more likely than the other. Regardless, bitcoin fits nash's premise perfectly.

Perhaps Satoshi Nakamoto was Nash. It might explain why he has not gambled his bitcoin on a game of poker, and it is left just sitting there.

https://en.wikipedia.org/wiki/John_Forbes_Nash_Jr.

https://en.wikipedia.org/wiki/Ideal_money

Sorry if I cannot keep up with this thread. I need bookmarking technology introduced on the forum.

[IadixDev]

But for me currency cant be an absolute metrics, and it's always estimated in relation to something else, either it's another currency, price of oil, gold, or banana, the goal of currency is not necessarily to have intrinsic absolute value to be used as a metrics for anything. And you can only say what it worth in relation to another thing, much like speed/energy metrics with relativity.

[traincarswreck]

Yes, I understand and agree - but that only worked when nations intentionally created a peg between the value of their currency and gold, or used gold as currency outright, isn't that true?

It seems unlikely to me that any nation will voluntarily tie their currency to the value of Bitcoin - so what I am asking is a clarification of how the 'finger trap' works...  How can Bitcoin irresistibly cause change in existing currencies?

But one cannot logically feel confident of the adoption internationally of an ideal system of currency or currencies in an achievement analogous to the achievement of the metric system or of “the euro”. Such a result would necessarily have a political content since it is the states that control and supply the various currencies that are in use at the present time.

Here, evidently, politicians in control of the authority behind standards could corrupt the continuity of a good standard, but depending on how things were fundamentally arranged, the probabilities of serious damage through political corruption might becomes as small as the probabilities that the values of the standard meter and kilogram will be corrupted through the actions of politicians.

…for the government of a state, acting on its own independently of other states, to rationally contemplate the evolution of the inflation rate for its currency towards zero there are clearly some very relevant considerations relating to tax revenue expectations.

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

…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”.)

It can't be a peg because then nixon could just end the peg based on a political whim.  It the system needs a new compass that entices rational self interest to work towards the desires of the people.  Not altruistic cooperative interest, rational SELF-INTEREST.

[traincarswreck]

Just to send my two cents, i saw people putting in relation the notion of metrics with currency, but maybe that need to be put also in a more relativistic perspective with the use of metrics, as in there is no absolute immobility or motion with currency, and you can never really tell easily if it's the price of things that are increasing or the money inflating, or the opposite, currencies are not supposed to be absolute value in themselves, at least since the 70's, but even before, the whole purpose of using currency is that it has no value in itself, and as it come to the use of money in term of market buying power, it can never be seen as the absolute metric of the value of something. Even more as the economy shift to more and more chaotic looking system where value are constantly taken in complex schemes that become completely non deterministic.

You've not addressed any of the RATIONAL and REASONED argument proposed in this thread or by Nash, and you are confused about everything.

[traincarswreck]

This is what I was looking for:

You DID read the first comments then jump to the end.  Turns out everything is incredibly detailed isn't it?  You know for 4 years I have been told I present nothing in detail, simply because my accusers can't read?

[IadixDev]

I really like the useless paradox!

Ideal money would need to be even less useful than paper money and would probably not be paper money.  At least you can wipe your ass with paper money.  Have you ever tried to wipe your ass with a credit or debit card?  But you can chop up your coke with a credit card.  So what would be less useful than a credit card?

Well, the ultimate paradox with bitcoin is, it can take several forms. For example, you can print a paper wallet and then it is also useful for lining up some good ol coke in a hooker's ass, hopefully bought by the hundreds of dollars a single bitcoin will be worth in the future.

It can also be a weapon. You can store a seed in Cryptosteel and im pretty sure you can kill someone if you throw it strong enough into someone's head.

And so on.

The idea of currency is still that the value on market is not based on the intrinsic value of the physical asset.

[IadixDev]

Just to send my two cents, i saw people putting in relation the notion of metrics with currency, but maybe that need to be put also in a more relativistic perspective with the use of metrics, as in there is no absolute immobility or motion with currency, and you can never really tell easily if it's the price of things that are increasing or the money inflating, or the opposite, currencies are not supposed to be absolute value in themselves, at least since the 70's, but even before, the whole purpose of using currency is that it has no value in itself, and as it come to the use of money in term of market buying power, it can never be seen as the absolute metric of the value of something. Even more as the economy shift to more and more chaotic looking system where value are constantly taken in complex schemes that become completely non deterministic.

You've not addressed any of the RATIONAL and REASONED argument proposed in this thread or by Nash, and you are confused about everything.

Im addressing the idea of ideal currency based on constant stable absolute value.

Typing in cap dont make you look more rational and reasoned ijs.

[AngryDwarf]

Don't worry, When people do not realise if they are eating BS or not, it tends to disagree with them.

[traincarswreck]

I'm not speaking to all the irrational discussion going on.

The introduction of a good great awesome super good medium of exchange does not solve a problem in this world.  Basically and nearly every one of you is still functioning on the premise that it does.

The problem to solve is a stable metric of value.  Instable money doesn't do this.  And no, we are not referring to price.

Price and value aren't the same thing.

Bitcoin isn't stable in value, bitcoin doesn't provide a stable metric for value.

Value isn't subject. Thats something civilizations without a stable metric for it believe.  It's a religious beleif.

Bitcoin can't be stable in value.

Yes Nash's works about Ideal Money have cosmological implications (ie e = mc^2) which is why Nash tried to talk to einstein about his insights because in the 50's.

Hal Finney wasn't ignorant to Nash (http://extropians.weidai.com/extropians.1Q02/3146.html):

I've just started reading Sylvia Nasar's biography of mathematician John
Nash, A Beautiful Mind, on which the current movie is based. Nash made
major contributions to economics among other fields before descending
into schizophrenia. But this list of his earlier character traits sounded
eerily familiar:

 - "His heroes were solitary thinkers and supermen like Newton and
    Nietzsche."

 - "Computers and science fiction were his passion."

 - "He considered 'thinking machines', as he called them, superior in some
    ways to human beings."

 - "At one point, he became fascinated by the possibility that drugs could
    heighten physical and intellectual performance."

 - "He was beguiled by the idea of alien races of hyper-rational beings
    who had taught themselves to disregard all emotion."

I think you could find people on this list who would share many of
these views. Attraction to Newton, Nietzsche, computers and science
fiction; exploration of drugs and supplements to enhance body and mind;
emphasis on rationality as a means to the truth; all are common elements
of Extropian thought.

Hal

The moment Satoshi added the 1mb people immediately realized that it would be next to impossible to change.  Satoshi and finney knew it before they did it.  That's obvious.

And Nash didn't need that information to extrapolate from it.  Nash's doesn't need  you to tell him how the system works.  He just know, read his biography.

Nash knew all this in the 50's.  It's what fucked him up so bad. extremely rational foresight.

[DrVaribo]

Just to send my two cents, i saw people putting in relation the notion of metrics with currency, but maybe that need to be put also in a more relativistic perspective with the use of metrics, as in there is no absolute immobility or motion with currency, and you can never really tell easily if it's the price of things that are increasing or the money inflating, or the opposite, currencies are not supposed to be absolute value in themselves, at least since the 70's, but even before, the whole purpose of using currency is that it has no value in itself, and as it come to the use of money in term of market buying power, it can never be seen as the absolute metric of the value of something. Even more as the economy shift to more and more chaotic looking system where value are constantly taken in complex schemes that become completely non deterministic.

You've not addressed any of the RATIONAL and REASONED argument proposed in this thread or by Nash, and you are confused about everything.

Im addressing the idea of ideal currency based on constant stable absolute value.

Typing in cap dont make you look more rational and reasoned ijs.

Guys, what is the ideal currency? What should it be? After all, I agree that Bitcoin and Fiat have their qualities needed by users. I'm not exaggerating. Fiat is also needed. But bitcoin with full legalization can completely destroy the statehood and will rule the corporation.