> If I give you a dollar for a burger, then I've lost a dollar and gained a burger, and you've gained a dollar and lost a burger. Assuming this was a fair trade (that dollars and burgers are of approximately equal value), then as a result of the transaction we've simply rearranged who has which good, and no additional value was created in the process. This is incorrect. I sell a burger because I value it less than yo…
Strangecoin: a proposal for a nonlinear currency
41–50 of 72 posts
Re: Strangecoin: a proposal for a nonlinear currency
#42Earlier quoted context omitted.
Ah, so he's counting on the scarcity of the 'external' account balance (eg. Dollars) to keep people from cheating? But if there are dividends to be made which are proportional to # of Strangecoin accounts, not just the wealth flowing through them, it seems people could cheat that system. I think some level of verification should happen to limit people from gaming the system. Or...did he mean there would be a master S…
More, I think, that while you may be able to create yourself a clique of accounts, artificially inflating the number of users, that clique will have no more links to accounts outside the clique than you would have if you only had a single account. Since your basic income depends on your interaction with the rest of the network, not just with your clique, you wouldn't gain any global advantage.
Re: Strangecoin: a proposal for a nonlinear currency
#43Re: Strangecoin: a proposal for a nonlinear currency
#44If money's still just flowing from accounts into other accounts, then it's something that would be doable with dollars or Bitcoins if the people involved signed appropriate contracts. Some of your proposed transactions have real-world equivalents; "coupling" sounds like creating a joint account for a married couple. Others, like "inhibition", I don't understand their motivation.
What's Strangecoin for, exactly? Are you supposed to be buying goods and services with it? Why have features like continuous-time transactions or free money for all, what benefit is gained from them?
Re: Strangecoin: a proposal for a nonlinear currency
#45"If I give you a dollar for a burger, then I've lost a dollar and gained a burger, and you've gained a dollar and lost a burger. Assuming this was a fair trade (that dollars and burgers are of approximately equal value), then as a result of the transaction we've simply rearranged who has which good, and no additional value was created in the process. What I've lost you've gained and vice versa, so that the total value between us has not changed after the exchange is over."
I can see how a person would think that, but it's not really correct. If that was true then nobody would have any reason to hold either dollars or burgers or whatever; we'd constantly trade them for one another since they are of literally equal value. Who cares which $10 bill they have in their wallet? Nobody since $10 is $10 is $10. Hell, most people don't even care if it's $10 or 2x $5 or $5 and 5x $1, so long as they don't need singles for the vending machine.
But we don't see that kind of behavior in the economy, which leads us to the conclusion that when people exchange things they're not exchanging things of equal value. They are of nominally equal value, which leads to there being a price. But if they were truly of equal value then the guy selling a burger is making $0 profit (something he is unlikely to do) and the guy buying a burger technically isn't any better off either. Why would two people make an exchange where neither is better off? In aggregate they wouldn't even if there are some exceptional cases where they would.
When people exchange things they are trading something which subjectively to them is of equal or lesser value than the thing they are getting. That also explains why people buy just one burger instead of ALL the burgers. When someone is hungry it shifts their subjective valuation of burgers higher and money lower; once satisfied their preferences shift back to "normal" and they stop buying burgers.
An economy already has value creation "baked in" because when people exchange things they only do so when it increases total satisfaction. People tend not to make trades which decrease satisfaction or merely hold it equal. The transaction cost helps ensure that is the case.
Everything else equal before the trade satisfaction was X, after the trade it was X + Y. Y is the amount of increased satisfaction that prompted one or both parties to engage in the trade. Now obviously someone could argue that Y is negative but that doesn't hold water. People don't buy things that are "too expensive" or "crappy" or whatever you'd like to call it.
I will concede that my argument might seem tautological. I might even agree. In the absence of a third party with a gun I can't see how or why two people would choose to enter into a trade that don't benefit at least one of them, and probably both.
Re: Strangecoin: a proposal for a nonlinear currency
#46From the article: "If I give you a dollar for a burger, then I've lost a dollar and gained a burger, and you've gained a dollar and lost a burger. Assuming this was a fair trade (that dollars and burgers are of approximately equal value), then as a result of the transaction we've simply rearranged who has which good, and no additional value was created in the process. What I've lost you've gained and vice versa, so t…
Of course, when I give you a dollar for a burger that's not really a zero sum transaction, because otherwise we wouldn't be motivated to enter into the transaction in the first place. I give you a dollar because I want the burger more than I want the dollar, and if you accept the trade it's because you want the dollar more than you want the burger, so in a fair exchange we both feel like we've come out ahead. In other words, there is some additional value in our fair exchange that is not accounted for in the burgers and the dollars alone.
Re: Strangecoin: a proposal for a nonlinear currency
#47From the article: "If I give you a dollar for a burger, then I've lost a dollar and gained a burger, and you've gained a dollar and lost a burger. Assuming this was a fair trade (that dollars and burgers are of approximately equal value), then as a result of the transaction we've simply rearranged who has which good, and no additional value was created in the process. What I've lost you've gained and vice versa, so t…
Well, at least that they don't both believe will benefit them.
Re: Strangecoin: a proposal for a nonlinear currency
#48From the article: "If I give you a dollar for a burger, then I've lost a dollar and gained a burger, and you've gained a dollar and lost a burger. Assuming this was a fair trade (that dollars and burgers are of approximately equal value), then as a result of the transaction we've simply rearranged who has which good, and no additional value was created in the process. What I've lost you've gained and vice versa, so t…
I think that you should have kept reading the article beyond that point. From the article: Of course, when I give you a dollar for a burger that's not really a zero sum transaction, because otherwise we wouldn't be motivated to enter into the transaction in the first place. I give you a dollar because I want the burger more than I want the dollar, and if you accept the trade it's because you want the dollar more than…
The problem is that I value my first gallon of water every day very highly for drinking. The next gallon also pretty highly for drinking and brushing my teeth. The next two gallons are for cooking and stuff, so they're less precious; the next five gallons for bathing and sanitation; the next 10 for cleaning and washing, etc. All the way down until we get to the market price which in Houston for water that comes out of the tap is $0.01 per gallon.
I think it would be utterly exhausting to list out every subjective value that I place on every thing that I exchange for every transaction of every day. It's something that I can do in my head with very little effort since for many transactions the value/cost delta is high and I don't need to do careful accounting.
One of the great things about money is that it has basically zero transaction cost as compared to bartering which has a substantial either time cost to find the best price, or price cost to find a deal in a short period of time. Engaging in these kinds of nonlinear transactions (if they need to be done honestly) would bring an economy to its knees.
Re: Strangecoin: a proposal for a nonlinear currency
#49I was always dispirited by how conservative in sentiment Bitcoin and most altcoins were. It always felt to me that Bitcoin was mostly redundant to gold, neglecting the inherent advantages of ecurrency. Something more ambitious deserves to be implemented. That endorsement aside, the inhibition transaction does disturb me. It would seem to encourage mob-like behavior in the culture of early adopters, as heretics of wha…
In the transactions I describe, inhibition is a two-sided transaction, meaning it requires approval from both parties. Presumably parties won't enter into such transactions without good reason for consent.
Re: Strangecoin: a proposal for a nonlinear currency
#50From the article: "If I give you a dollar for a burger, then I've lost a dollar and gained a burger, and you've gained a dollar and lost a burger. Assuming this was a fair trade (that dollars and burgers are of approximately equal value), then as a result of the transaction we've simply rearranged who has which good, and no additional value was created in the process. What I've lost you've gained and vice versa, so t…
"In the absence of a third party with a gun I can't see how or why two people would choose to enter into a trade that don't benefit at least one of them, and probably both." Well, at least that they don't both believe will benefit them.
It really depends on who you are. There's no way to have an objective arbiter who determines what is actually beneficial and what merely seems to be beneficial. At least that I know of. The problem seems intractable to me.