Why "proof-of-work"? Also, does it have any relation to blockchain's proof-of-work concept?
Bringing back the Somali shilling
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Re: Bringing back the Somali shilling
#42>Panama has been using the dollar for decades, and this hasn't prevented it from becoming one of Central America's most successful n̶a̶t̶i̶o̶n̶s̶ tax havens. https://www.theatlantic.com/business/archive/2016/04/panama-... Fixed that for you :) Control over your currency is critical for maintaining national sovereignty, and the author waves it away like nothing. Just take what the EU forced upon Greece: https://en.wik…
Why restrict it to the nation then? Why not city currencies? There are lots of countries - like India and China - where the gap in income between regions is larger than between countries.
It's a weird concept money, and I wonder what the right level is. I doubt it is optimised at the country level, but then a "better" notion like demographic similarity may be impractical, even if better, e.g. one currency for Northern Italy and one for Southern may be difficult to sell even if preferable, and ditto a unified Basque/southern French currency, or an eastern seaboard Yuan and a country China currency.
Re: Bringing back the Somali shilling
#43Why "proof-of-work"? Also, does it have any relation to blockchain's proof-of-work concept?
The article doesn't use the words "proof-of-work" -- it's the person who posted it to HN who gave that title. But I see the analogy.
A proof-of-work currency (1) prevents uncontrolled inflation or devaluation, (2) should be difficult to generate the currency (i.e., a lot of work), (3) but easy to check the currency (i.e., check that the work was done).
The Somalias presumably have a threshold of quality at which they'd accept a fake shilling. I'm sure they wouldn't accept a blank piece of paper. They probably wouldn't accept a black and white photocopy. At some point, the quality is good enough[a] that they'd accept it even knowing that it was not produced by the government.
That satisfies the basic idea of proof-of-work: (1) It prevents out-of-control inflation, (2) involves a fair amount of work (professional printing), (3) but you can decide at a glance if it's good enough to accept it.
[a] Just for interest, this is what a real one looks like: http://banknote.ws/COLLECTION/countries/AFR/SOM/SOM0037.htm
Re: Bringing back the Somali shilling
#44Earlier quoted context omitted.
> Somalia is way worse than high-functioning governments like the United States Yet my libertarian friends on Facebook all seem to want to tear the enitre government down.
At the risk of heading even further down this rabbit hole, I'd observe that there are very many significant differences between Somalia and the United States and that the existence of government is just one small part.
If George Washington declared himself king, you might be looking today at 30% unemployment like some of the euros
Re: Bringing back the Somali shilling
#45I crazy idea I had was using counterfeiters to mint money. Make it so that the manufacturing cost of a $100 bill is $100 minus the amount you want the counterfeiter to make, so for $1 say $99. Include tons of security features, use silk, gold, diamond dust, whatever. Then just let the market do it's thing. Have money testing machines that shred fake bank notes at sight. You may or may not want to keep punishments for…
That is similar to have e.g. gold coins as currency. That is inefficient because it is hard to create enough of the currency for the economy to function optimally. It is also quite expensive.
Re: Bringing back the Somali shilling
#46Earlier quoted context omitted.
At the risk of heading even further down this rabbit hole, I'd observe that there are very many significant differences between Somalia and the United States and that the existence of government is just one small part.
If George Washington declared himself king, you might be looking today at 30% unemployment like some of the euros
What is the point you were trying to make?
Re: Bringing back the Somali shilling
#47Earlier quoted context omitted.
People actually argue that Somalia is better than it was back when it had a functioning government? Have they talked to anyone who grew up or lived through that? Nobody I've talked to from Somalia (I grew up in Minneapolis, a good chunk of my classmates from elementary and uni were Somali), nobody thinks it was a good change. The amount of death and fear is just staggering. That article reads a little tone deaf, a lo…
While I don't agree with you per-se, there's a lot of inherent survivorship bias in your sample group.
If it's survivor bias, wouldn't that make the Somali classmates' opinions even more valid (their contemporaries being dead and all)?
Or did you intend to say selection bias?
Re: Bringing back the Somali shilling
#48I crazy idea I had was using counterfeiters to mint money. Make it so that the manufacturing cost of a $100 bill is $100 minus the amount you want the counterfeiter to make, so for $1 say $99. Include tons of security features, use silk, gold, diamond dust, whatever. Then just let the market do it's thing. Have money testing machines that shred fake bank notes at sight. You may or may not want to keep punishments for…
The validation requirement for each exchange of money alone would put counterfeiters in an advantageous position.
Part of the benefit of blockchain is that this validation is automated and baked into any transaction - in real life, this is not at all easy.
Re: Bringing back the Somali shilling
#49I crazy idea I had was using counterfeiters to mint money. Make it so that the manufacturing cost of a $100 bill is $100 minus the amount you want the counterfeiter to make, so for $1 say $99. Include tons of security features, use silk, gold, diamond dust, whatever. Then just let the market do it's thing. Have money testing machines that shred fake bank notes at sight. You may or may not want to keep punishments for…
That is similar to have e.g. gold coins as currency. That is inefficient because it is hard to create enough of the currency for the economy to function optimally. It is also quite expensive.
Not only that, it's relatively easy to counterfeit - a modern currency note is probably harder to counterfeit (easier to validate) than a gold coin.
Re: Bringing back the Somali shilling
#50As an aside: I've been waiting for Libertarians to declare Somalia to be heaven on earth. I wonder why they've never picked up on the obvious real-world example of a nation with no central state government with a monopoly on violence?
The Bush Administration, under Paul Bremer, tried to build The New Iraq as the ideal capitalist state. They even implemented many things that could never get full traction in the US, like very low, flat taxes [1]. I can't say that I followed much of it closely, but at least Iraq was inspired by right-leaning principles and ideology.
[1] https://www.washingtonpost.com/archive/politics/2003/11/02/u...