Fractional Reserve Banking and the creation of the Debtcoin

[crumbcake]

I'm not sure i see your point.  Are you saying Ireland and Iceland are currently what you would call a "Market State"?

No, I am not. You said that they had never existed, and I countered with two historical examples, which, for the record, both lasted longer than the current US slide into oblivion. (Iceland ~330 years, Ireland ~1000)

I'm still not sure what you're saying.  Could you tell me when?

Google. It's your friend.
http://en.wikipedia.org/wiki/Icelandic_commonwealth
https://www.youtube.com/watch?feature=player_embedded&v=ZZi45Mf6jYY

Oh, and by the way:
http://en.wikipedia.org/wiki/Xeer

Doing just what you've suggested.  Give me a few mins (or more)

[crumbcake]

I'm not sure i see your point.  Are you saying Ireland and Iceland are currently what you would call a "Market State"?

No, I am not. You said that they had never existed, and I countered with two historical examples, which, for the record, both lasted longer than the current US slide into oblivion. (Iceland ~330 years, Ireland ~1000)

I'm still not sure what you're saying.  Could you tell me when?

Google. It's your friend.
http://en.wikipedia.org/wiki/Icelandic_commonwealth
https://www.youtube.com/watch?feature=player_embedded&v=ZZi45Mf6jYY

Oh, and by the way:
http://en.wikipedia.org/wiki/Xeer

Though Google's pretty good as webfriends go, i'm still in the dark (skimmed through both wiki pages, haven't watched the video, though ... don't want to watch vids right now, perhaps an alternate source?)
Maybe i'm not looking for the right thing?  As i mentioned in an edit above, are you using "market state" in a highly specialized sense, as in technical jargon i'm not familiar with?  Please understand that i'm not being *intentionally* dense -- seriously don't get what you're saying.
EDIT:  Even tried the video link -- it's broken

[myrkul]

I explained the term right after I used it:

One where the service of keeping internal fighting to a minimum is provided by competing businesses, instead of a violent monopoly?

The most powerful and elite leaders in Iceland were the chieftains (sing. goði, pl. goðar). The goðar were not elected to their positions, but rather owned their title. The position was most commonly inherited, but it could also be bought or sold. The office of the goði was called the goðorð. The goðorð was not delimited by strict geographical boundaries. Thus a free man could choose to support any of the goðar of his district. The supporters of the goðar were called Þingmenn ("assembly people"). In exchange for the goði protecting his interests, the Þingmann would provide armed support to his goði during feuds or conflicts. The Þingmenn were also required to attend regional and national assemblies.

As to Ireland, that video was the best reference I had. Let me see if I can find one.

[crumbcake]

I explained the term right after I used it:

One where the service of keeping internal fighting to a minimum is provided by competing businesses, instead of a violent monopoly?

The most powerful and elite leaders in Iceland were the chieftains (sing. goði, pl. goðar). The goðar were not elected to their positions, but rather owned their title. The position was most commonly inherited, but it could also be bought or sold. The office of the goði was called the goðorð. The goðorð was not delimited by strict geographical boundaries. Thus a free man could choose to support any of the goðar of his district. The supporters of the goðar were called Þingmenn ("assembly people"). In exchange for the goði protecting his interests, the Þingmann would provide armed support to his goði during feuds or conflicts. The Þingmenn were also required to attend regional and national assemblies.

As to Ireland, that video was the best reference I had. Let me see if I can find one.

Re-reading right now (had to run out & deal with some IRL things -- back now)
Quick note for now, regarding the bolded text ("The position was most commonly inherited, but it could also be bought or sold") -- You're not suggesting this unique to Icelandic Commonwealth, are you?

[myrkul]

Here we go, this will do:
https://en.wikipedia.org/wiki/Early_Irish_law

Early Irish law is, like the Old Irish language, remarkably standard across an Island with no central authority.

On account of the structure of early Irish society, all law was essentially civil and offenders had to answer only to the victim or the victim's representative. This is important to point out, as in case of serious injury it is in stark contrast to most modern legal systems.

Notice any similarities?
https://en.wikipedia.org/wiki/Anarcho-capitalism

In Rothbardian anarcho-capitalism, there would first be the implementation of a mutually agreed-upon libertarian "legal code which would be generally accepted, and which the courts would pledge themselves to follow." This legal code would recognize sovereignty of the individual and the principle of non-aggression.

[myrkul]

Quick note for now, regarding the bolded text ("The position was most commonly inherited, but it could also be bought or sold") -- You're not suggesting this unique to Icelandic Commonwealth, are you?

Not at all, for it's quite similar to how ownership of a company is transferred now.

Oh, and to bring this vaguely back on-topic:

In an anarcho-capitalist society, law enforcement, courts, and all other security services would be provided by privately funded competitors rather than through taxation, and money would be privately and competitively provided in an open market.

[crumbcake]

Here we go, this will do:
https://en.wikipedia.org/wiki/Early_Irish_law

Early Irish law is, like the Old Irish language, remarkably standard across an Island with no central authority.

On account of the structure of early Irish society, all law was essentially civil and offenders had to answer only to the victim or the victim's representative. This is important to point out, as in case of serious injury it is in stark contrast to most modern legal systems.

Notice any similarities?
https://en.wikipedia.org/wiki/Anarcho-capitalism

In Rothbardian anarcho-capitalism, there would first be the implementation of a mutually agreed-upon libertarian "legal code which would be generally accepted, and which the courts would pledge themselves to follow." This legal code would recognize sovereignty of the individual and the principle of non-aggression.

I think i'm getting the gist of what you're saying, in which case i think we're pretty much in agreement.  I assumed you meant something far more extreme, as in "a state bound purely through the workings of the free market system," but i see now that's not the case.  Many similar "market states," as you define them, have existed.  I assumed you were speaking of more recent examples, frankly -- let's say post-industrial revolution.  I'm not sure if i could see a similar "market states" succeeding today, though, for any appreciable length of time, before failing through some internal, or (much more likely) external causes.  
But that's a different argument.  Fun reads BTW, thanks.  Not a History buff, but fun reads nonetheless.

[crumbcake]

Quick note for now, regarding the bolded text ("The position was most commonly inherited, but it could also be bought or sold") -- You're not suggesting this unique to Icelandic Commonwealth, are you?

Not at all, for it's quite similar to how ownership of a company is transferred now.

I was giving it a strict reading, something like "historically, fiefdoms could be inherited, won or bought."  Did you intend to model social constructs on business models or vice versa?

Oh, and to bring this vaguely back on-topic:

In an anarcho-capitalist society, law enforcement, courts, and all other security services would be provided by privately funded competitors rather than through taxation, and money would be privately and competitively provided in an open market.

Yes, it would be silly to disagree -- the further back in history we go, the more of exactly what you've just described we see, both elegant & hideous examples.  Anarcho-capitalism could mean so many things -- from free-market utopia to the ugliest examples of predatory laissez-faire capitalism.

[myrkul]

predatory laissez-faire capitalism.

"predatory laissez-faire capitalism?"

One of those words doesn't belong. Pick any one. But the three of them together, it makes no sense.

[crumbcake]

predatory laissez-faire capitalism.

"predatory laissez-faire capitalism?"

One of those words doesn't belong. Pick any one. But the three of them together, it makes no sense.

"Work for me, or your children starve."

[myrkul]

predatory laissez-faire capitalism.

"predatory laissez-faire capitalism?"

One of those words doesn't belong. Pick any one. But the three of them together, it makes no sense.

"Work for me, or your children starve."

"Fuck you, He'll pay me more."
or
"Fuck you, I'll start my own business."
or
"Fuck you, I'll grow a garden."

[johnyj]

FRB will not work on bitcoin. Due to the limited supply, the value of bitcoin will continuously rise, no one dare to borrow bitcoin to do business, most of businesses can not generate a return which is higher than the price appreciation of bitcoin. If they really want to borrow, they will borrow inflative fiat money at first place

Just look at those guys who provided bitcoin lending business before in the marketplace board, see how that ended up

[crumbcake]

predatory laissez-faire capitalism.

"predatory laissez-faire capitalism?"

One of those words doesn't belong. Pick any one. But the three of them together, it makes no sense.

"Work for me, or your children starve."

"Fuck you, He'll pay me more."
or
"Fuck you, I'll start my own business."
or
"Fuck you, I'll grow a garden."

You are joking.  You honestly can't imagine a scenario where there is no one to "pay you more," or for that matter, pay you at all?
You feel you can start your own business from nothing, from dirt?
You'll grow a garden on whose land, exactly?

Please, for the sake of appearances, pretend that you're not speaking to an idiot.  What you've just written couldn't possibly fly in your neck of the woods ... or does it?

Again, if i sound incredulous, it's not affected.  I honestly doubt you expected me to fall for such a farcical ruse, so what are you plannin' here?  

Edit:  Have you ever grown a garden?  I know, i love fresh cukes & onion chives too, and there's more 'maters than you can shake a stick at when they get ripe in the fall.  Very sweat-of-ye-brow-sy.  Now, ever tried to feed yourself on that alone?  Are you frickin' kidding me?!

[crumbcake]

FRB will not work on bitcoin. Due to the limited supply, the value of bitcoin will continuously rise ...

Really?  You should check out COD (coin of the day) on the alt forum.  COD's supply is limited too, and it's cheaper than BTC.  You should invest -- the only way's up!!

[myrkul]

predatory laissez-faire capitalism.

"predatory laissez-faire capitalism?"

One of those words doesn't belong. Pick any one. But the three of them together, it makes no sense.

"Work for me, or your children starve."

"Fuck you, He'll pay me more."
or
"Fuck you, I'll start my own business."
or
"Fuck you, I'll grow a garden."

You are joking.  You honestly can't imagine a scenario where there is no one to "pay you more," or for that matter, pay you at all?

You did say capitalism, yes? Specifically, laissez-faire capitalism. In such a system, there is always demand for labor, both skilled and unskilled.

You feel you can start your own business from nothing, from dirt?

Lots of people have. Especially in the US, where laissez-faire was the rule.

You'll grow a garden on whose land, exactly?

My own, of course. You did say this was laissez-faire capitalism, did you not? That means I can own land.

Please, for the sake of appearances, pretend that you're not speaking to an idiot.

I'll try. You're not making it easy.

[crumbcake]

predatory laissez-faire capitalism.

"predatory laissez-faire capitalism?"

One of those words doesn't belong. Pick any one. But the three of them together, it makes no sense.

"Work for me, or your children starve."

"Fuck you, He'll pay me more."
or
"Fuck you, I'll start my own business."
or
"Fuck you, I'll grow a garden."

You are joking.  You honestly can't imagine a scenario where there is no one to "pay you more," or for that matter, pay you at all?

You did say capitalism, yes? Specifically, laissez-faire capitalism. In such a system, there is always demand for labor, both skilled and unskilled.

I'm sorry, the only reply which comes to mind is "WUT?" Point me to a commonly accepted definition of laissez-faire capitalism including the condition of [constant] demand for [all forms of] labor, 'till then -- you're ... fabricating as you go along??  Can't we get above that?

You feel you can start your own business from nothing, from dirt?

Lots of people have. Especially in the US, where laissez-faire was the rule.

Lots of people worshipped God while amassing millions in Soviet Union, would you say that the Soviet brand of Communism is the ideal system for nurturing religious freedom & individual prosperity?

You'll grow a garden on whose land, exactly?

My own, of course. You did say this was laissez-faire capitalism, did you not? That means I can own land.

Of course you *can*, but it just so happens that you *don't*.  My scenario, I said so.  Now what?

Please, for the sake of appearances, pretend that you're not speaking to an idiot.

I'll try. You're not making it easy.

Thus far i've refrained from what the D&D set would call ad baculum arguments, taking pains to be self-abasing if there was any question of my attacking you.  
If you can't stay civil in this debate, fuck you.  Bon?
Edit:  Formatting.  Gotta learn to bracket.

[myrkul]

You did say capitalism, yes? Specifically, laissez-faire capitalism. In such a system, there is always demand for labor, both skilled and unskilled.

I'm sorry, the only reply which comes to mind is "WUT?" Point me to a commonly accepted definition of laissez-faire capitalism including the condition of [constant] demand for [all forms of] labor, 'till then -- you're ... fabricating as you go along??  Can't we get above that?

http://en.wikipedia.org/wiki/Gilded_Age

You feel you can start your own business from nothing, from dirt?

Lots of people have. Especially in the US, where laissez-faire was the rule.

Lots of people worshipped God while amassing millions in Soviet Union, would you say that the Soviet brand of Communism is the ideal system for nurturing religious freedom & individual prosperity?

I'm sorry, but what the hell does that have to do with anything?

You'll grow a garden on whose land, exactly?

My own, of course. You did say this was laissez-faire capitalism, did you not? That means I can own land.

Of course you *can*, but it just so happens that you *don't*.  My scenario, I said so.  Now what?

I live somewhere don't I? If nothing else, there's always the window garden. And the roof of my apartment building.

Please, for the sake of appearances, pretend that you're not speaking to an idiot.

I'll try. You're not making it easy.

Thus far i've refrained from what the D&D set would call ad baculum arguments, taking pains to be self-abasing if there was any question of my attacking you.  
If you can't stay civil in this debate, fuck you.  Bon?

Bon. I'm quite civil, so long as you are.

[crumbcake]

You did say capitalism, yes? Specifically, laissez-faire capitalism. In such a system, there is always demand for labor, both skilled and unskilled.

I'm sorry, the only reply which comes to mind is "WUT?" Point me to a commonly accepted definition of laissez-faire capitalism including the condition of [constant] demand for [all forms of] labor, 'till then -- you're ... fabricating as you go along??  Can't we get above that?

http://en.wikipedia.org/wiki/Gilded_Age

The term laissez-faire is used a total of three times in the "gilded Age" wiki article.  Nowhere in the article is [constant] demand for [all forms of] labor stated or implied.  
Here's a slightly more fitting wiki page, curiously titled Laissez-faire: http://en.wikipedia.org/wiki/Laissez-faire
Learn to wiki.

You feel you can start your own business from nothing, from dirt?

Lots of people have. Especially in the US, where laissez-faire was the rule.

Lots of people worshipped God while amassing millions in Soviet Union, would you say that the Soviet brand of Communism is the ideal system for nurturing religious freedom & individual prosperity?

I'm sorry, but what the hell does that have to do with anything?

 

About as much as your absurd anecdotes about self-made men in laissez-faire US, that of the golden age.  

You'll grow a garden on whose land, exactly?

My own, of course. You did say this was laissez-faire capitalism, did you not? That means I can own land.

Of course you *can*, but it just so happens that you *don't*.  My scenario, I said so.  Now what?

I live somewhere don't I? If nothing else, there's always the window garden. And the roof of my apartment building.

Yes you do live somewhere.  You're a gutter bum.  No window garden for you.  My scenario.  I said so.  Now what, gutter garden?  Maybe start a joy-through-work commune behind the dumpster?

Please, for the sake of appearances, pretend that you're not speaking to an idiot.

I'll try. You're not making it easy.

Thus far i've refrained from what the D&D set would call ad baculum arguments, taking pains to be self-abasing if there was any question of my attacking you.  
If you can't stay civil in this debate, fuck you.  Bon?

Bon. I'm quite civil, so long as you are.

Allrighty.  Was doing this a point at a time, i type slow.  A fresh start?

Edit:  If code editors didn't match brackets... FORMATTING!!!

[myrkul]

You did say capitalism, yes? Specifically, laissez-faire capitalism. In such a system, there is always demand for labor, both skilled and unskilled.

I'm sorry, the only reply which comes to mind is "WUT?" Point me to a commonly accepted definition of laissez-faire capitalism including the condition of [constant] demand for [all forms of] labor, 'till then -- you're ... fabricating as you go along??  Can't we get above that?

http://en.wikipedia.org/wiki/Gilded_Age

The term laissez-faire is used a total of three times in the "gilded Age" wiki article.  Nowhere in the article is [constant] demand for [all forms of] labor stated or implied.  
Here's a slightly more fitting wiki page, curiously titled Laissez-faire: http://en.wikipedia.org/wiki/Laissez-faire
Learn to wiki.

Tsk... I thought we were being civil? And wouldn't you say a real, historical example would make a more compelling case than a dry definition?

This emerging industrial economy quickly expanded to meet the new market demands. From 1869 to 1879, the US economy grew at a rate of 6.8% for NNP (GDP minus capital depreciation) and 4.5% for NNP per capita. The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled. Real wages also increased greatly during the 1880s.

Growing economy means demand for labor.

You feel you can start your own business from nothing, from dirt?

Lots of people have. Especially in the US, where laissez-faire was the rule.

Lots of people worshipped God while amassing millions in Soviet Union, would you say that the Soviet brand of Communism is the ideal system for nurturing religious freedom & individual prosperity?

I'm sorry, but what the hell does that have to do with anything?

 
About as much as your absurd anecdotes about self-made men in laissez-faire US, that of the golden age.  

Again with the incivility... You asked if I thought I could start from scratch, and people have. Past examples indicate future potential.

You'll grow a garden on whose land, exactly?

My own, of course. You did say this was laissez-faire capitalism, did you not? That means I can own land.

Of course you *can*, but it just so happens that you *don't*.  My scenario, I said so.  Now what?

I live somewhere don't I? If nothing else, there's always the window garden. And the roof of my apartment building.

Yes you do live somewhere.  You're a gutter bum.  No window garden for you.  My scenario.  I said so.  Now what, gutter garden?  Maybe start a joy-through-work commune behind the dumpster?

I begin to sense some hostility. Well, I can play this game, too. If I live in the gutter, then my wife clearly has left me, taking our children with her, to live with her mother. So, no children to worry about.

[ChicagoBob]

To Tacticat's original point:

In the years to come, if banks jump on the Bitcoin bandwagon and start offering Bitcoin deposit accounts, Bitcoin will become affected by Fractional Reserve Banking.
...
For this reason, since we can easily avoid bitcoins created by fractional reserve banking, it might be necessary to call them something different. Call them Bank-bonds, Debtcoin or whatever but now we have the chance, as a community, to make a distinction between the two and start using different terms which, in the end, will increase public awareness.

Our thinking has been muddled by considering dollar denominated bank accounts including checking (M1) and even savings (usually M2) as really being dollars, equivalent to currency physically in circulation (M0).  The classical scenario of money creation is this: (the first four points work for both USD and BTC)

  1 - Three people in the economy: you, me and an FRB bank
  2 - I deposit 20 MBTC in the bank
  3 - The bank loans you 16 MBTC, retaining a 20% reserve
  4 - Now I own 20MBTC and you own 16 and there are 36MBTC out there now
  5 - But wait!  The 21 MBTC limit has been breached!

Obviously some of that 36B ain't bitcoins, it is certainly not part of M0.  But in the US we call them all dollars, and we relate the full 36M to inflation forecasting because all 36M of them are available to bid up the prices of goods & services.

But how would we be able, in a bitcoin setting, to tell the difference?  It would only be possible if what you get in step 3 up there is not really bitcoins, and that's where the Debtcoins [or whatever] come in.  Thus an FRB bank could NEVER lend bitcoins to anyone.

There would have to be a facility for sending, receiving, storing Debtcoins in Debtcoin wallets.  And if they're not fully worth a bitcoin, why would anybody take out a loan like that?

Are BTC and FRB incompatible?