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Shelling Out: The Origins of Money (2002)

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Re: Shelling Out: The Origins of Money (2002)

#31

Post by woodandsteel »

dalbasal wrote: post #10
Wildgoose wrote: post #4

I highly recommend that people read "Debt: The First 5,000 years" by David Graeber which is a fascinating and erudite exploration of the development of money.

I've made that recommendation, with mixed results. I think it has less impact unless you studied/read a little classic economics. Most economics "schools" start from a standard Smithian narrative for the invention of money. Spot traded goods, durable goods as values stores and eventually some sort of money. The money supply narrative is completely separate. It's explained via the "money multiplier" effect, which turn…

So social obligation precedes debt and money. That's interesting.

I think classical economics starts with barter because its psychology and anthropology is one of humans being basically autonomous creatures who at some point voluntarily come together to engage in social relations.

However, what the science actually shows is that human beings have always been members of complex societies, and human psychology includes many social motives and mechanisms.

Re: Shelling Out: The Origins of Money (2002)

#32

Post by CryptoPunk »

doots wrote: post #25
CryptoPunk wrote: post #13

Earlier quoted context omitted.

>>It's essentially a penny stock deception, where the early users who generated the coins for low cost, or free, control the majority of the supply to manipulate the market spot price and than launch marketing campaigns and propaganda in an attempt to convince the uninformed public to buy their software coins. While I welcome a debate on the public welfare effects of cryptocurrencies vs fiat, and disagree with your b…

The distribution of cryptocurrency and unfair access to minting and production of what's claimed and marketed as currency is completely relevant given the subject of the paper. The math behind Bitcoin or altcoins reveals a system that grants production of the supply to a minority which worsens with time. New users aware of the game theory behind the math know it's not worth buying or mining. Of course, one can gamble…

I don't see how cryptocurrency and the issue of whether its mining is fair (I would argue its the fairest method of distribution ever devised, given in the case of every major cryptocurrency, 1. information about it was published before mining on it began, even if only a small number of nerds had the foresight to immediately take advantage of that information, and 2. its mining method makes for a totally competitive market that is blind to any factor except time and capital expended, but I digress) is relevant to a paper on the origins of money.

If the OP has an axe to grind against it and those with the foresight to start mining early, maybe they can wait for a more relevant story to emerge. As it is, the comment is guaranteed to rapidly divert attention away from the main topic of the submission into yet another debate over cryptocurrency.

Re: Shelling Out: The Origins of Money (2002)

#33

Post by nosuchthing »

CryptoPunk wrote: post #32
doots wrote: post #25

Earlier quoted context omitted.

The distribution of cryptocurrency and unfair access to minting and production of what's claimed and marketed as currency is completely relevant given the subject of the paper. The math behind Bitcoin or altcoins reveals a system that grants production of the supply to a minority which worsens with time. New users aware of the game theory behind the math know it's not worth buying or mining. Of course, one can gamble…

I don't see how cryptocurrency and the issue of whether its mining is fair (I would argue its the fairest method of distribution ever devised, given in the case of every major cryptocurrency, 1. information about it was published before mining on it began, even if only a small number of nerds had the foresight to immediately take advantage of that information, and 2. its mining method makes for a totally competitive…

The question purposed is "are cryptocurrencies a worthy alternative to existing mediums of exchange".

While future iterations may change, we can examine existing implementations.

Upon investigation of the math/economics/game theory behind Bitcoin and most other existing altcoins it becomes evident that the longer a cryptocurrency has existed, incentive to opt in decreases due to the work economics baked into the code.

Old users expend low capital costs to produce a product (in this case an alternative money token), and then the rules change for new users who exert the same work energy to receive less payment. (early users were paid in larger block rewards for less effort, i.e. a user with a CPU on day 5 will be paid signifigantly more than a user with the exact same CPU on day 500, and by day 5000 the same work is worthless)

An economic model that pays some people more for the exact same work is exploitative.

If all users are paid a consistent amount for the same work, this particular disincentive for new users would not be a problem.

Re: Shelling Out: The Origins of Money (2002)

#34

Post by CryptoPunk »

nosuchthing wrote: post #33
CryptoPunk wrote: post #32

Earlier quoted context omitted.

I don't see how cryptocurrency and the issue of whether its mining is fair (I would argue its the fairest method of distribution ever devised, given in the case of every major cryptocurrency, 1. information about it was published before mining on it began, even if only a small number of nerds had the foresight to immediately take advantage of that information, and 2. its mining method makes for a totally competitive…

The question purposed is "are cryptocurrencies a worthy alternative to existing mediums of exchange". While future iterations may change, we can examine existing implementations. Upon investigation of the math/economics/game theory behind Bitcoin and most other existing altcoins it becomes evident that the longer a cryptocurrency has existed, incentive to opt in decreases due to the work economics baked into the code…

>>The question purposed is "are cryptocurrencies a worthy alternative to existing mediums of exchange".

The question was never posed by the story submitted. It was asked as a segue into a missive against cryptocurrencies and the alleged unfairness of those with foresight to mine early getting rich as a result of the market value of what they mined rising.

>>and then the rules change for new users who exert the same work energy to receive less payment.

Like I said, not only is this inaccurate (e.g. the rules never change in mining), this is a major diversion from the topic of the story, and is going to turn this into another cryptocurrency debate, which you seem intent on having.

Re: Shelling Out: The Origins of Money (2002)

#35

Post by nosuchthing »

CryptoPunk wrote: post #34
nosuchthing wrote: post #33

Earlier quoted context omitted.

The question purposed is "are cryptocurrencies a worthy alternative to existing mediums of exchange". While future iterations may change, we can examine existing implementations. Upon investigation of the math/economics/game theory behind Bitcoin and most other existing altcoins it becomes evident that the longer a cryptocurrency has existed, incentive to opt in decreases due to the work economics baked into the code…

>>The question purposed is "are cryptocurrencies a worthy alternative to existing mediums of exchange". The question was never posed by the story submitted. It was asked as a segue into a missive against cryptocurrencies and the alleged unfairness of those with foresight to mine early getting rich as a result of the market value of what they mined rising. >>and then the rules change for new users who exert the same w…

  Like I said, not only is this inaccurate (e.g. the rules 
  never change in mining)
You are incorrect.

https://blockchain.info/charts/difficulty?timespan=all

https://bitcoin.stackexchange.com/questions/40411/can-a-smar...

The topic of the story covers the history of money.

The comment merely informs the history of crypto currencies like Bitcoin which is marketed as an alternative money ( "Bitcoin, an Electronic Cash System" ). The minting, economics, and game theory of said crypto currencies is the highlight of the comment in regards to money/value/exchange systems.

The author of the paper, Nick Szabo, is a direct contributor to the concepts behind the current trend of crypto exchange systems.

See:

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

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

Re: Shelling Out: The Origins of Money (2002)

#36

Post by frabbit »

woodandsteel wrote: post #31
dalbasal wrote: post #10

Earlier quoted context omitted.

I've made that recommendation, with mixed results. I think it has less impact unless you studied/read a little classic economics. Most economics "schools" start from a standard Smithian narrative for the invention of money. Spot traded goods, durable goods as values stores and eventually some sort of money. The money supply narrative is completely separate. It's explained via the "money multiplier" effect, which turn…

So social obligation precedes debt and money. That's interesting. I think classical economics starts with barter because its psychology and anthropology is one of humans being basically autonomous creatures who at some point voluntarily come together to engage in social relations. However, what the science actually shows is that human beings have always been members of complex societies, and human psychology includes…

That is roughly what I take from it. Graeber presents evidence to back up the idea that debt is precisely that which cannot be repaid or quantized and that the attempt to do so is "naturally" (from several examples) taken as an abnormal or hostile act. There are some really fascinating anthropological stories to support this. I really recommend the book.

Re: Shelling Out: The Origins of Money (2002)

#37

Post by frabbit »

novalis78 wrote: post #12
dalbasal wrote: post #10

Earlier quoted context omitted.

I've made that recommendation, with mixed results. I think it has less impact unless you studied/read a little classic economics. Most economics "schools" start from a standard Smithian narrative for the invention of money. Spot traded goods, durable goods as values stores and eventually some sort of money. The money supply narrative is completely separate. It's explained via the "money multiplier" effect, which turn…

I would also suggest 'The origin of virtue' which has a chapter on money and explains a similar idea based on evolutionary psychology (game theory, altruism, social behavior of apes) - quite fascinating as it connects social narratives with genetic strategies to better replicate.

And to add to this Unto Others (Sober and Wilson). That has a much more specifically genetic/evolutionary slant to it. I liked it a lot.

Re: Shelling Out: The Origins of Money (2002)

#38

Post by CryptoPunk »

nosuchthing wrote: post #35
CryptoPunk wrote: post #34

Earlier quoted context omitted.

>>The question purposed is "are cryptocurrencies a worthy alternative to existing mediums of exchange". The question was never posed by the story submitted. It was asked as a segue into a missive against cryptocurrencies and the alleged unfairness of those with foresight to mine early getting rich as a result of the market value of what they mined rising. >>and then the rules change for new users who exert the same w…

Like I said, not only is this inaccurate (e.g. the rules never change in mining) You are incorrect. https://blockchain.info/charts/difficulty?timespan=all https://bitcoin.stackexchange.com/questions/40411/can-a-smar... The topic of the story covers the history of money. The comment merely informs the history of crypto currencies like Bitcoin which is marketed as an alternative money ( "Bitcoin, an Electronic Cash Sys…

The difficulty changes don't involve a rule change. The difficulty is always determined by the same set of rules.

>>The author of the paper, Nick Szabo, is a direct contributor to the concepts behind the current trend of crypto exchange systems.

That only tangentially connects this to cryptocurrency. The topic of the paper is the origins of money, with a heavy emphasis on early human prehistory. Like I said, if you have an axe to grind against cryptocurrency and those who had the foresight to mine it early, save it for another thread and don't turn this one into yet another debate about it.

Re: Shelling Out: The Origins of Money (2002)

#39

Post by nosuchthing »

CryptoPunk wrote: post #14
jsykfyi wrote: post #9

Earlier quoted context omitted.

The same problem exists, regardless if its a fiat central bank or open source decentralized software token system: how is the money distributed and created? https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Private_currency https://en.wikipedia.org/wiki/Liberty_Reserve Even given the Cryptocurrency ecosystem, there's threats of fraud like Tether (theory: https://hackernoon.com/the-curious-ta…

>>or the inherent history and math behind Bitcoin and many proof of work cryptocurrencies distributing the supply to only a small group of users and cutting off the ease of producing more coins as easily to later users who use the software. Keep in mind that the value of money derives from the net utility it provides in all of the trades it is used in throughout its lifetime. By implication, the only scenario where a…

How do you foresee cryptocurrency alleviating those problems when existing capital can simply produce and acquire the majority of coins/tokens in existence?

For all we know the executives at the Goldman Sachs spent a few million dollars slowly purchasing BTC any any of the other altcoins since day 1.

Money only has value if someone is willing to accept it. Existing capital merely transfers into whatever other forex, seashell, or feather trading system there might be.

  For long-run wealth distribution, what matters most is 
  avenues to extract economic rent on a recurring basis
That's oddly simplistic. No mention of wages, education, and tax policy?

  regulatory capture, political privileges, etc, and new   
  forms of money like cryptocurrency could alleviate these.
How would new forms of money impact any of those?

There's certainly the possibility it could make all of those issues 1000x's worse.

Re: Shelling Out: The Origins of Money (2002)

#40

Post by dalbasal »

frabbit wrote: post #36
woodandsteel wrote: post #31

Earlier quoted context omitted.

So social obligation precedes debt and money. That's interesting. I think classical economics starts with barter because its psychology and anthropology is one of humans being basically autonomous creatures who at some point voluntarily come together to engage in social relations. However, what the science actually shows is that human beings have always been members of complex societies, and human psychology includes…

That is roughly what I take from it. Graeber presents evidence to back up the idea that debt is precisely that which cannot be repaid or quantized and that the attempt to do so is "naturally" (from several examples) taken as an abnormal or hostile act. There are some really fascinating anthropological stories to support this. I really recommend the book.

.. not exactly that it cannot/is never paid back, but that it is never fully cleared, in normal circumstances.
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