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Strangecoin: a proposal for a nonlinear currency

digitalinterface.blogspot.com

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Re: Strangecoin: a proposal for a nonlinear currency

#51

Post by bashcoder »

msandford wrote: post #48
boomlinde wrote: post #46

Earlier quoted context omitted.

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…

Yeah I did, but the author seems to brush that aside and say "it needs to be accounted for directly" and I would argue that's not necessarily true. 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…

Agreed. In fact, all of the myriad secondary costs and benefits from commerce are already accounted for when you have a market that trades the currencies themselves.

Re: Strangecoin: a proposal for a nonlinear currency

#54

Post by djestrada »

msandford wrote: post #48
boomlinde wrote: post #46

Earlier quoted context omitted.

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…

Yeah I did, but the author seems to brush that aside and say "it needs to be accounted for directly" and I would argue that's not necessarily true. 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…

While it's not necessarily true that our exchanges need to account for value in this nonlinear way, I think it's an interesting thought experiment to discuss ways in which our currency can express different aspects of the value of our transactions. I'm not claiming that Strangecoin represents the "true value" of our transactions; I'm simply saying that it's another way to model our economic relations, and looking at the network in this way might reveal salient aspects of the network that are hidden from view with other currencies. So I think Strangecoin really is describing some aspect of our economic relations, and it's a perspective that money often doesn't give you. If you trade me money, I don't know where it came from or what ties it has to the rest of the economy. But if you trade me Strangecoin, the trade itself gives me a picture of your importance and influence on the rest of the economy, and I can use that information to judge the value of the trade we're engaged in.

The low transaction cost of money is partly a result of how deeply embedded it is in our social and institutional practices. I don't think it is an essential feature of money itself; other practices might come to fill similar roles. I would also suggest that the opacity of traditional currencies to certain forms of value also has a crippling effect on our economy. Economics talks about these as "externalities", but they are best understood as values that aren't represented in our trades. I'm not claiming that Strangecoin can capture all externalities, or even that it catches the important ones, but only that it captures some dimension of value that is hidden in traditional currencies.

Re: Strangecoin: a proposal for a nonlinear currency

#55

Post by djestrada »

msandford wrote: post #50
dllthomas wrote: post #47

Earlier quoted context omitted.

"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.

Yeah I think you have to go with the subjective meaning. I don't think you can talk about objective benefits, otherwise things go to hell very quickly. Where do drugs (legal or illegal), alcohol, tobacco, sugary foods, fatty foods, fast cars, hybrids, condoms, birth control pills, church donations, etc all fall? It really depends on who you are. There's no way to have an objective arbiter who determines what is actua…

I'm not sure this is a criticism of the proposal, but nothing I've said implicates an objective arbiter of value.

Re: Strangecoin: a proposal for a nonlinear currency

#56

Post by djestrada »

thisiswrong wrote: post #53

I think the "Strangecoin transactions can be nonzero sum" idea is flawed. But did I understand correctly: Would this be a cryptocurrency with a money base that expands/disappears as the 'fait value' rate goes up and down? That would be cool!

The way I've written the proposal, the raw quantity of coin doesn't change; all that changes is the rate of exchange across parties. The added value is generated by the network of transactions as an emergent property.

But there's probably other ways to do such a proposal. Again, my main goal is to put an idea like this on the table to see what people do with it.

Re: Strangecoin: a proposal for a nonlinear currency

#57

Post by thisiswrong »

aaron987 wrote: post #25

This is an interesting economics thought experiment, but I don't see this working simply because it is too complicated. Virtual currency already has a learning curve that most people haven't gotten used to. Adding strange attractors into the mix certainly isn't going to help.

I agree with your first answer. But not the second. Altcoins are an amazing testing ground that help cryptocurrency adoption, innovation, and expansion. This is especially true when "strange attractors" are added into "the mix".

I mean: how many people recently came to crypto through the 'ridiculous' Dogecoin idea? What of the recent national cryptocoin (Auracoin, Spaicoin...) wave? And what about Vertcoin, Namecoin, Devcoin? These were once all thought experiments with "strange attractors". They now exist, and are bringing a LOT of interest and experience to cryptocurrency.

Re: Strangecoin: a proposal for a nonlinear currency

#58

Post by thisiswrong »

djestrada wrote: post #56
thisiswrong wrote: post #53

I think the "Strangecoin transactions can be nonzero sum" idea is flawed. But did I understand correctly: Would this be a cryptocurrency with a money base that expands/disappears as the 'fait value' rate goes up and down? That would be cool!

The way I've written the proposal, the raw quantity of coin doesn't change; all that changes is the rate of exchange across parties. The added value is generated by the network of transactions as an emergent property. But there's probably other ways to do such a proposal. Again, my main goal is to put an idea like this on the table to see what people do with it.

So would the Strangecoin value be algorithmically controlled in any way to keep it at a constant 'fiat value' exchange rate? i.e. when the 'fait value' goes down, the % of Strangecoin confiscated during a transaction increases? (Fiat value tracked through distributed exchanges' data feeds).

Re: Strangecoin: a proposal for a nonlinear currency

#59

Post by djestrada »

gus_massa wrote: post #40

There are many problems. I’ll try to explain two: > The Universal Account (TUA): > [...] > TUA can make a payment only in the following situations: > [...] > X's account balance = 0 at t. Any additional transactions outgoing from X at t are drawn from TUA. When your wallet is empty, you can continue to make payments! Perhaps you can’t make payments directly, but pay indirectly with the other type of transactions. I s…

Good comment.

1) You are correct that the system is designed so that users can make payments and conduct transactions even in the absence of an account balance, without incurring debt. Strangecoin allows users to act as if they have effectively unlimited wealth in terms of access to coin. Nevertheless, Strangecoin allows users to judge differences in influence on the network, so they might evaluate who they want to engage in transactions with, regardless of the account balance each has. So X might want to trade with Y instead of Z, even though both are able to pay the same number of coin individually, because Y's network amplifies the transaction more than Z's, and the better overall support for Y makes the transaction more attractive.

2) You are right that a fundamental constraint on the system is that TUA has an available balance. As I mention in the document, the most important constraint on all users (including TUA) is that their balance remains stable; users want to engage in transactions that will stabilize their overall impact on the network. TUA can adjust certain parameters to ensure a stable, nonzero balance: the basic income most importantly, but perhaps TUA can also adjust individual account caps and set limits on the allowable parameters of other transactions to ensure it has a constant, nonzero balance.

This is how I was imagining TUA being a universal indicator of economic prosperity of the network. If I see my TUA income go down, for instance, I know that means a drop in the overall available funds in TUA, which means the economy overall is offbalance, with more expenses than income. And I see that global property of the network directly in my account balance, and I can use that to act accordingly. Specifically, I know that if I increase my own income (or even hit the balance cap), I'll be helping the overall economy by contributing to the TUA balance.

3) Inhibition seems to be giving people trouble. Being "too rich" isn't normally a problem for people outside of hiphop, which I think is a source of the confusion. But being too rich in Strangecoin could be a bad thing, so I included the transaction type to provide a mechanism for negative feedback. This would be useful for some situations where users are finding it difficult to maintain an stable account, and where scaling back it's overall influence on the network might help promote stability. If I'm making more Strangecoin than I know what to do with, this could be a bad thing for me financially because of the penalties that might accrue, so I might want to enter into inhibiting relationships to ease the pressure of those penalties.

Re: Strangecoin: a proposal for a nonlinear currency

#60

Post by dllthomas »

msandford wrote: post #50
dllthomas wrote: post #47

Earlier quoted context omitted.

"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.

Yeah I think you have to go with the subjective meaning. I don't think you can talk about objective benefits, otherwise things go to hell very quickly. Where do drugs (legal or illegal), alcohol, tobacco, sugary foods, fatty foods, fast cars, hybrids, condoms, birth control pills, church donations, etc all fall? It really depends on who you are. There's no way to have an objective arbiter who determines what is actua…

I didn't mean "the value we think they should be deriving." I meant that people can be mistaken (or mislead) about how much they value something even in the short term. If someone thinks they are buying a reliable car and gets a lemon, I think it's more correct to say "they didn't get the value they expected" then "their revealed preferences show they really wanted the lemon".
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