Show HN: Offset – Credit card powered by trust between people • Hacker News Board

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

#91

Post by rjmunro » Mon, Jun 08, 2020, 2:09 PM UTC

peter_d_sherman wrote: post #43

>"Money creation in Offset Money in Offset is created and destroyed by users. Offset is designed so that the money supply changes to match the market. As the market expands, the money supply increases. When the market shrinks, money is destroyed. Therefore, You will not become rich by joining Offset early. The total sum of balances in Offset is always zero. Consider two Offset friends: Bob and Charli. If Bob’s balanc…

> If there's no limit, no "credit limit",

There is a limit. It's the limit set by your friends.

> If there's no limitation on what constitutes an identity, then what prevents someone from signing up multiple times as different users

Nothing, but it doesn't matter:

> .. and giving themselves extra "credit" (ability to take) and taking, that way?

They'd only be able to give extra credit to themselves. No one would give credit to any of the extra users they have created, so the extra users would not be able to pay anyone anything.

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

#92

Post by pjc50 » Mon, Jun 08, 2020, 2:17 PM UTC

dpatru wrote: post #29

technotony wrote: post #23

Earlier quoted context omitted.

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…

I think your assertion that inflation (money printing) is necessary for inflation is wrong and certainly not obvious. Investment necessarily comes from savings. One must not eat some of this year’s corn so as to have next year’s seed. Whether state-forced savings through inflationary bank loans is better than voluntary private savings should be answerable by studying history. Was there better investment historically…

> One must not eat some of this year’s corn so as to have next year’s seed

Corn is a productive asset that generates more corn. Money is not, in and of itself, a productive asset. One of the essential insights of Keynes was that it was possible for real productive capacity (machinery and labour etc) to be idle simply due to lack of liquid money to flow through the system. This was why consumer credit was so crucial to kickstarting modern consumerist economies: like Ford paying workers so they could afford the products, injecting credit allowed consumers to buy items creating jobs to make products, which jobs then allowed consumers to pay off the loans.

"Shortage of specie" has been a real economic problem at times; e.g. https://www.cambridge.org/core/journals/journal-of-economic-...

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

#93

Post by tkfu » Mon, Jun 08, 2020, 2:35 PM UTC

Is there any concept of a distinction between the size of the line of credit you're willing to extend to a person directly, and the credit you're willing to extend to that person's friends (and friends-of-friends, etc.)?

Most of the time, if a friend asks for a loan (unless it's a really trivial amount), my response will be along the lines of "Sure, what do you need it for?" If my sister asks me to lend her 500 euros because she's short on rent, I'd say "Yes, of course!" But if she asked me to lend her 50 euros because her smack-addict downstairs neighbour really needs it to fix their sink (my sister's a soft touch who likes to help people and always gives folks the benefit of the doubt), I'd say hell no.

David Graeber went into a lot of the issues around this in his book "Debt: The First 5000 Years". The element of debt that's monetary and recorded in ledgers is only half of the story. Most of the truth of how we relate to debt is much more socially intertwined.

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

#94

Post by Enginerrrd » Mon, Jun 08, 2020, 4:23 PM UTC

splintercell wrote: post #55

Enginerrrd wrote: post #38

Earlier quoted context omitted.

Yes, but hiding your money in the mattress doesn't create jobs, businesses, innovation, etc. I fail to see the "issue in Keynesian thinking" you're talking about.

It does. When you hide money under your mattress this is equivalent of you giving your money to all the US dollar investors out there in proportion to the amount of investment they're making. So let's just say if there is a small economy where there are only two investors you and Elon Musk, and you decide to skip investing in any business and hide money under the mattress, then this is equivalent of you giving the mo…

Ah ok I see your angle now, but I think there's a critical flaw.

Your investment into the general market is really only the amount of interest earned on deflation of that amount.

Compare this with investing the whole amount into a local bakery. The utility difference is dramatic.

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

#95

Post by toomim » Mon, Jun 08, 2020, 4:54 PM UTC

d10 wrote: post #27

Interesting! For folks who like this idea, I recommend looking up Ryan Fugger's Ripplepay ( https://classic.ripplepay.com/ ). That was inspiration for Ripple Labs, who unlike Offset did go the cryptocurrency route (XRP). I appreciate that Offset is not spawning a cryptocurrency where it doesn't need one. There are other projects influenced by Ripple and Ripplepay which are also not their own currency. For example Syn…

Great summary! Let me add that the Lightning Network is also related.

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

#96

Post by johnrgrace » Mon, Jun 08, 2020, 5:19 PM UTC

fiatjaf wrote: post #3

stagas wrote: post #2

This looked initially like a cool idea, then I realized that to trade with someone you have to have a mutual credit line with them, or through someone who already has a credit line. How is this any different than the current model, where the bank/government/central money issuer is our mutual credit line and why wouldn't this model eventually end up with banker-type people managing the credit for everyone? You could g…

If one, this would be open. The current banking system doesn't suck because people are greedy or bankers are bad people. It sucks because it is closed and no one can join. (If you're tempted to say: "no, anyone can join, they just have to fulfill the regulations blablabla", then this is your answer.)

Anytime a business or person let's their customer pay after work has been done there is an extension of credit. The trade credit system is massive and anyone can join.

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

#97

Post by fragmede » Mon, Jun 08, 2020, 5:24 PM UTC

jaekash wrote: post #71

pjc50 wrote: post #68

Earlier quoted context omitted.

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 c…

If I have $50 and I use my credit card, and send $50 each to my very trusted friends A, B, and C via, say, Venmo, is that not fractional reserve banking, built on top of my credit with my bank? I've not independently created any money since this only works because of my bank's credit to me, but I've still created $100, no?

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

#98

Post by thoughtstheseus » Mon, Jun 08, 2020, 8:13 PM UTC

aSplash0fDerp wrote: post #24

thoughtstheseus wrote: post #17

A nation-state will ban or monopolize any competitive alternative to state-backed currency or debt (obligation transfers). Just look at current macroeconomic policy around the world, vast sums of obligations ("debt") being created.

Autonomous/robotic manufacturing/production could very well bring back bartering, depending on your definition of innovation. Gerbil wheel economics (debt until infinity) doesn't take into account low-cost, low-labor 24/7 manufacturing, so don't invest too much logic in antiquated theories that require libor-rate'esqe techniques to make it believable.

Going “back” to bartering is a myth. Human interactions were greatly more complex and varied prior to money and debt standardization.

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

#99

Post by deevolution » Mon, Jun 08, 2020, 9:15 PM UTC

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…

A deflationary money would incentivize more careful investment and consumption, rather than rampant malinvestment and wasteful consumption which is detrimental to our health and our environment.

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

#100

Post by realcr » Mon, Jun 08, 2020, 10:36 PM UTC

splintercell wrote: post #55

Enginerrrd wrote: post #38

Earlier quoted context omitted.

Yes, but hiding your money in the mattress doesn't create jobs, businesses, innovation, etc. I fail to see the "issue in Keynesian thinking" you're talking about.

It does. When you hide money under your mattress this is equivalent of you giving your money to all the US dollar investors out there in proportion to the amount of investment they're making. So let's just say if there is a small economy where there are only two investors you and Elon Musk, and you decide to skip investing in any business and hide money under the mattress, then this is equivalent of you giving the mo…

I really enjoyed reading this.