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Author Topic: Ecosystem of virtual money.......need expert analysis  (Read 741 times)
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April 24, 2013, 03:32:34 AM
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Internet technology has a history of dramatically reducing capital costs associated with certain activities and enterprises, which brings wide availability to the people.

For example, today anyone can publish a book, create a video channel, set up a website, blog, online store, or get a project funded without all the overhead of inventing and maintaining these complex systems.

As the technology spreads and becomes available to anyone, the old organizations which used to be the biggest and most efficient can no longer compete because their core infastructure has become commoditiezed. For example, the music industry's distribution ability and production studios are slowly becoming commodities. Newspapers and broadcast television is no longer the only source for news.

Bitcoin is doing this to the banking industry. The system of trust, bank transfer protocols, and exchanges are becoming commodities. All that overhead isn't fundamentally needed anymore.

But I don't believe bitcoin will replace the current system as a singular competitor, because that's never what happens when entire industries become commodities.

What will happen is that anyone will be able to start a crypto currency just like anyone can now start a youtube channel - the difference being we're talking about governments and corporations rather than individual people.

All that is required is that payment for employees and raw materials be paid for in one's currency, and one accepts one's currency in exchange for whatever goods are produced.

For example, we could have usacoin in which the US government requires taxes to be paid in it, and it uses it to pay for government employees and other expenses. There could be cokecoin which Coca Cola uses to pay it's employees and expenses, and which it accepts for Coke products. There could be amazoncoin, fordcoin, etc.

The value of any one of these coins would depend on how many there are and the total gdp of whatever the sponsoring entity is.

This would solve a number of issues. The money supply would be flexible because anyone could create their own currency as needed, as long as they had something of value to offer. The issue of early adopters getting very rich simply so people could gain access to bitcoin would be solved because there would be no singular deflationary currency. The entire system would self-regulate because every unit of currency would represent some sponsoring group producing a real product. There wouldn't be an artificial need for a reserve currency simply so two producing entities could trade with one another.

Loans would no longer be needed to start new enterprises. The debt-based model would yield to the intrinsic money model based on goods, services, and credit. Investors would buy the coins early, and if a successful business is created, those coins would become much more valuable. If there is a default, assets would be liquidated and bid upon by whoever holds the coins.

Fractional reserve banking, loans with interest, debt-based money, and central monetary policy to balance money supply with economic activity would all become a thing of the past. None of that will be needed anymore for the simple reason that money will no longer be limited by monopolies, interest rates, or physical supply. Rather, it will be directly proportional to credit and economic activity.

Note that strictly speaking none of these would be currencies, but rather they would be money. Currencies do need to compete in the market since they are simply a medium of exchange, but money doesn't compete with other money since it has or represents value. Another difference is the inflationary or deflationary aspect. It might be ok for money to be deflationary, but there could be issues with a currency being deflationary.

I'm hoping we can get some experts (economic, monetary, technical) to analyze things from this perspective to determine if this is realistic, and if so, what the implications are.
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April 24, 2013, 07:48:31 AM
Last edit: April 24, 2013, 10:37:33 AM by jdbtracker
 #2


What will happen is that anyone will be able to start a crypto currency just like anyone can now start a youtube channel - the difference being we're talking about governments and corporations rather than individual people.

All that is required is that payment for employees and raw materials be paid for in one's currency, and one accepts one's currency in exchange for whatever goods are produced.

For example, we could have usacoin in which the US government requires taxes to be paid in it, and it uses it to pay for government employees and other expenses. There could be cokecoin which Coca Cola uses to pay it's employees and expenses, and which it accepts for Coke products. There could be amazoncoin, fordcoin, etc.

The value of any one of these coins would depend on how many there are and the total gdp of whatever the sponsoring entity is.


Loans would no longer be needed to start new enterprises. The debt-based model would yield to the intrinsic money model based on goods, services, and credit. Investors would buy the coins early, and if a successful business is created, those coins would become much more valuable. If there is a default, assets would be liquidated and bid upon by whoever holds the coins.

Fractional reserve banking, loans with interest, debt-based money, and central monetary policy to balance money supply with economic activity would all become a thing of the past. None of that will be needed anymore for the simple reason that money will no longer be limited by monopolies, interest rates, or physical supply. Rather, it will be directly proportional to credit and economic activity.

Note that strictly speaking none of these would be currencies, but rather they would be money. Currencies do need to compete in the market since they are simply a medium of exchange, but money doesn't compete with other money since it has or represents value. Another difference is the inflationary or deflationary aspect. It might be ok for money to be deflationary, but there could be issues with a currency being deflationary.

I'm hoping we can get some experts (economic, monetary, technical) to analyze things from this perspective to determine if this is realistic, and if so, what the implications are.

I'm no expert but I am an enthusiast.

  I think your talking about stock, we could trade stock from one company to another directly. if companies followed this methodology they could invest in stock of their partner companies that provide value to them.  

  so if company A, creates a lot of paper and knows their volume is high, they can buy stock in the paper recycling industry, so their over all worth increases as well, it could work as an indicator of a economic ecosystems health. Company B in another sector makes computers that do not need paper, company A realizes that the savings they will gain is greater than the value of the stock they have in the paper recycle-rs, they can safely sell their stock to buy stock in Company B before they begin their purchases.  of course Company A being smart, analyzes the market to maintain stock in the paper recycling industry and realizes there are still other companies that require their services to maintain over all gains. 

markets like these are predictable and stable because of their slow movement, so the actual market level can be calculated as long as all the factors of that company are known... which are suppliers... highly guarded secrets.

  this system would create a measurable marker of interest in specific companies or industries, if the appropriate companies can be analyzed by region, sector, customer base etc, effectively indicating developing trends in the real world.

  There may have to be a separation here between this form of investment and direct investment, since direct investment is limited and any extra resources granted to a company will simply be wasted if their is no need for that company to expand, it will simply gather pools of capital that sit idle.  In a firmly established industry gaining any greater efficiency is very difficult, more money will not solve their problems if they can't expand their customer base.

 Though for an intermediary step to maintain a companies safety, Kinda like a buffer zone, the company could introduce that money system that you are mentioning a little further down the page, like the tokens at arcades or casinos right?  I like it keeps the companies safe during this development period of Bitcoin.

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April 24, 2013, 11:01:36 AM
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you're essentially describing Paul Grignon's (of "Money as Debt" fame) proposal of a "Digital Coin":

http://www.youtube.com/watch?v=28V7AI5x8jQ

There's no implementation or proof of concept though, not even a paper or just a draft how this could work in a functioning and secure manner.

However, it can largely be done within Ripple as far as I can see, because essentially everybody can create their own currencies there.

In this context, Bitcoin may be one of many coins, with "Bitcoin Corp." being a global open payment system with certain properties (enabling more privacy that Ripple's XRPs or probably any other corporate coin), where its units of value would be "privately" (but transparently in public) issued by the Bitcoin miners, and development happens open and transparently in online communities like this.

https://localbitcoins.com/?ch=80k | BTC: 1LJvmd1iLi199eY7EVKtNQRW3LqZi8ZmmB
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April 24, 2013, 12:27:24 PM
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you're essentially describing Paul Grignon's (of "Money as Debt" fame) proposal of a "Digital Coin":

http://www.youtube.com/watch?v=28V7AI5x8jQ

There's no implementation or proof of concept though, not even a paper or just a draft how this could work in a functioning and secure manner.

However, it can largely be done within Ripple as far as I can see, because essentially everybody can create their own currencies there.

In this context, Bitcoin may be one of many coins, with "Bitcoin Corp." being a global open payment system with certain properties (enabling more privacy that Ripple's XRPs or probably any other corporate coin), where its units of value would be "privately" (but transparently in public) issued by the Bitcoin miners, and development happens open and transparently in online communities like this.

You just blew my F@#$@@# mind!!!! Thats exactly what it is! Holy!

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April 24, 2013, 04:32:56 PM
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Internet technology has a history of dramatically reducing capital costs associated with certain activities and enterprises, which brings wide availability to the people.

For example, today anyone can publish a book, create a video channel, set up a website, blog, online store, or get a project funded without all the overhead of inventing and maintaining these complex systems.

As the technology spreads and becomes available to anyone, the old organizations which used to be the biggest and most efficient can no longer compete because their core infastructure has become commoditiezed. For example, the music industry's distribution ability and production studios are slowly becoming commodities. Newspapers and broadcast television is no longer the only source for news.

Bitcoin is doing this to the banking industry. The system of trust, bank transfer protocols, and exchanges are becoming commodities. All that overhead isn't fundamentally needed anymore.

But I don't believe bitcoin will replace the current system as a singular competitor, because that's never what happens when entire industries become commodities.

What will happen is that anyone will be able to start a crypto currency just like anyone can now start a youtube channel - the difference being we're talking about governments and corporations rather than individual people.

All that is required is that payment for employees and raw materials be paid for in one's currency, and one accepts one's currency in exchange for whatever goods are produced.

For example, we could have usacoin in which the US government requires taxes to be paid in it, and it uses it to pay for government employees and other expenses. There could be cokecoin which Coca Cola uses to pay it's employees and expenses, and which it accepts for Coke products. There could be amazoncoin, fordcoin....

FIRST of all, the USA already requires payroll tax deposits to be done by electronic transfer.  Ergo, "e currency" their way their style.  All and any new currencies COMPETE.
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