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Show HN: Offset – Credit card powered by trust between people

offsetcredit.org

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Re: Show HN: Offset – Credit card powered by trust between people

#71

Post by jaekash »

pjc50 wrote: post #68
jonahbenton wrote: post #10

Congratulations. You have reinvented tally sticks. Snark aside, I wish you lots of luck, have thought about this model a lot, think there is probably a small place for it in the world. Two suggestions from random stranger on the internet, take them for what they're worth: * don't use the word "money." This is a private credit network, not money. Private credit networks sometimes become money, but they don't start out…

I'm not really clear on how this is supposed to interact with the real payment system: is it a credit card, with a normal acquiring bank? Is there an extension of credit? Because all credit is also money creation! (Broad money). Anyone with a pen can create money by writing an IOU. This is one of the things the goldbugs don't seem to understand properly. Also, if this is some form of geek "hawala banking", how does i…

> Because all credit is also money creation! (Broad money). Anyone with a pen can create money by writing an IOU. This is one of the things the goldbugs don't seem to understand properly.

I cannot do fractional reserve banking. And if I can't do that then I can't really create money. A bank can have a fraction of the real hard currency that others can spend in "reserve" (physical or electronic). I cannot do that, I cannot borrow you $50 and some other guy $50 if I only had $50.

So I dunno, depends on what you mean by money creation, but writing an IOU is different from what money creation is in the sense that most people mean. It is closer to issuing a bond, which is not really money creation.

Re: Show HN: Offset – Credit card powered by trust between people

#73

Post by sunshinerag »

jonahbenton wrote: post #10

Congratulations. You have reinvented tally sticks. Snark aside, I wish you lots of luck, have thought about this model a lot, think there is probably a small place for it in the world. Two suggestions from random stranger on the internet, take them for what they're worth: * don't use the word "money." This is a private credit network, not money. Private credit networks sometimes become money, but they don't start out…

Could you care to explain what you mean by "... but fundamentally there is a tension between store of value and medium of exchange"

What is the tension?

Re: Show HN: Offset – Credit card powered by trust between people

#74

Post by throwaway0x00ff »

It's interesting to compare this model to the Lightning Network on top of Bitcoin. Essentially, the Lightning Network uses this kind of "friendships" (payments channels) with the exception that parties do not need to trust each other in order to transact. It would be interesting to add LN to this page: https://docs.offsetcredit.org/en/latest/intro/blockchain_com... Basically, the differences between LN and Offset would be the security foundation (bitcoin contract) and origin of money (we put actual bitcoin in channels).

Offset's model of relays, nodes, transactions encoding, routing, multi-path payments could very well share a lot with the Lightning Network's model of nodes, gossip protocol, onion routing, and so on. I could even see both systems work together.

I am still going to try Offset with my friends, could be a good experiment!

Re: Show HN: Offset – Credit card powered by trust between people

#75

Post by susano »

Cool stuff! This seems to effectively be a digital, distributed, implementation of a LETS[1], a system which has had some popularity in various places at various point of the last 40 years.

This sort of system is particularly useful in communities where there is a lack of money. For instance say everybody is unemployed and nobody as money to buy anything, but people would be happy to trade services/goods with each other if there was a way to do it efficiently. They could barter but that is inefficient and it is difficult to match services/goods of different value.

Because the system allows monetary creation, it enables people to start trading even when nobody has money.

It may be useful to check out the circumstances in which LETS were/are used, as it may be a good indication as to which types of community may be most interested in using Offset.

[1] https://en.wikipedia.org/wiki/Local_exchange_trading_system

Re: Show HN: Offset – Credit card powered by trust between people

#76

Post by Nursie »

I'm amazed how many people are on the "Inflation Bad!" bandwagon these days.

Having a flexible money supply that can be manipulated by a central authority for the benefit of the economy as a whole seems to me like a good thing.

I like this aspect - "You will not get rich by joining early", but I fear that without get-rich-quick mania, adoption will be limited.

Re: Show HN: Offset – Credit card powered by trust between people

#78

Post by splintercell »

bildung wrote: post #66
splintercell wrote: post #56

Earlier quoted context omitted.

If you're going to be so specific about the meaning of the term investment than this is equivalent of saying that when you hide money under the mattress it is not outside the mattress. His point was that when money is hidden under the mattress it is not serving an important function which would be if it wasn't under the mattress. I disagreed with that and explained how it worked.

I'm not trying to be pedantic, but saving and investments are two distinct activities with distinct economical outcomes. Fruitfully discussing economics on the internet is hard enough as is, deviating from standard meanings of core terms isn't exactly helpful.

Yes and I understand, my point is that savings and investment aren't really qualitatively different activities. Savings are investment in money, and 'Investment' is investment in non-money goods.

Re: Show HN: Offset – Credit card powered by trust between people

#79

Post by ZoomZoomZoom »

technotony wrote: post #23
centimeter wrote: post #16

Earlier quoted context omitted.

> there is a tension between store of value and medium of exchange This tension only exists under Keynesian reasoning. It goes away when you use a theory that does a better job handling equilibria. The Keynesian claim is that if you have a deflationary medium of exchange, people won’t spend it. This isn’t actually true - the end result of a predictable deflationary asset (e.g. something with a fixed or essentially fi…

It's less that they won't spend it, and more they won't invest it. As you point out if you can get exposure to global capital growth by keeping your money in cash you will do that. This starves the world of risk capital being invested in new projects, the net benefit of which is responsible for capital growth. So nobody invests and technological progress drives to a halt (well maybe governments invest in military tec…

Why wouldn't they invest if potential profitability of investment was higher than that of not spending their money?

The problem is, the poor have almost no access and no knowledge of the savings instruments other than cash, so that means that in some way inflation forcibly drains their money to risk investment.

Re: Show HN: Offset – Credit card powered by trust between people

#80

Post by bildung »

splintercell wrote: post #78
bildung wrote: post #66

Earlier quoted context omitted.

I'm not trying to be pedantic, but saving and investments are two distinct activities with distinct economical outcomes. Fruitfully discussing economics on the internet is hard enough as is, deviating from standard meanings of core terms isn't exactly helpful.

Yes and I understand, my point is that savings and investment aren't really qualitatively different activities. Savings are investment in money, and 'Investment' is investment in non-money goods.

But there is a qualitative difference! Storing excess capital into money is "saving". Using this saved capital to buy a car for private use, or videogames, is consumption. Using the money to produce more capital, like buying a machine for work, or even "buying" a degree at a university, is investment. The transformation of money into another store of value or physical thing is is not automatically investment, and the economic results are different.
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