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Apply HN: Gresham Dollar – Viral Currency for Basic Income

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Apply HN: Gresham Dollar – Viral Currency for Basic Income

#1

Post by Suncho »

Gresham Dollar (GD) is a currency designed for the purpose of providing people a basic income (i.e. regular income independent of the labor market) without the need for government funding.

Gresham Dollar is backed by the United States Dollar (USD). It is pegged to USD at par (one-to-one) using a novel mechanism such that it requires far fewer USD reserves than a central bank would normally need in order to sustain a new USD-backed currency.

Gresham's Law is an economic principle describing the observation that "bad money drives out good." For example, when the United States discontinued minting silver quarters, people held onto their old silver quarters, preferring to spend the new less-valuable quarters. Thusly, the old silver quarters were quickly driven from circulation. Gresham Dollar's core mechanism uses a hack on Gresham's Law that causes people similarly to prefer to spend their GD and hoard their USD. In other words, as GD enters circulation, it drives other currencies out of circulation. Gresham Dollar is a viral currency.

Gresham Dollar is a digital cryptocurrency. Unlike pseudo-currencies such as Bitcoin, which are inherently unstable in value, Gresham Dollar is centrally managed and is capable of being used as a full-fledged currency.

I know it sounds crazy. Ask me anything. Don't worry too much about being nice. But if you're not nice, at least start an interesting argument.

Re: Apply HN: Gresham Dollar – Viral Currency for Basic Income

#4

Post by Suncho »

Kinnard wrote: post #2

Where would people get Gresham Dollars, who would be the first to accept Gresham dollars and what would they sell for them?

Great questions!

Where would people would get Gresham Dollars:

We build our initial consumer user base by choosing an American city and handing new money (that is, GD) to the people in that city who are most likely to spend it – i.e. low income people who have a higher marginal propensity to consume (what money they get, they're more likely to spend). This money comes in the form of a regular GD income – essentially a basic income for each individual. We will gradually move on to other cities and countries and to more general populations.

Who would accept GD first:

Initially, when introducing Gresham Dollar, we tell merchants that we're handing people new money in the form of GD and it's up to those merchants whether they want to compete for those customers and that money.

We'd go around to grocery stores, convenience stores, and other places where poor people are likely to shop.

I'm sure that my answers to your questions will lead to more questions.

Re: Apply HN: Gresham Dollar – Viral Currency for Basic Income

#5

Post by rnovak »

Suncho wrote: post #4
Kinnard wrote: post #2

Where would people get Gresham Dollars, who would be the first to accept Gresham dollars and what would they sell for them?

Great questions! Where would people would get Gresham Dollars: We build our initial consumer user base by choosing an American city and handing new money (that is, GD) to the people in that city who are most likely to spend it – i.e. low income people who have a higher marginal propensity to consume (what money they get, they're more likely to spend). This money comes in the form of a regular GD income – essentially…

But the merchant pays for their merchandise in USD.

why would a merchant choose to accept this "currency", considering it's not valuable to them?

Re: Apply HN: Gresham Dollar – Viral Currency for Basic Income

#7

Post by Suncho »

rdl wrote: post #3

If it's centralized, why bother with "cryptocurrency" (blockchain stuff), vs. a centralized (blinded?) token system (or even just a database ledger system, to start)

Good question. I'm not entirely sure that we will. My is that certain aspects of the system will be distributed for efficiency and security purposes, but we'd need a central authority in charge of the currency, so we don't run into the problem of getting stuck when the economics of the situation would require a hard fork.

I've been learning about cryptocurrencies and the blockchain, but I'm far from an expert. As far as I understand, there are a few big problems with bitcoin that can only be fixed via a hard fork, not the least of which is that there's a cap on the supply of bitcoin, so if you tried to use it as an actual currency, it would be deflationary in nature, much like gold.

I'll look into the alternatives. If you have any links you'd recommend me researching, I'll check them out.

Re: Apply HN: Gresham Dollar – Viral Currency for Basic Income

#8

Post by Wissmania »

How would you handle the market that emerges between the two currencies? If Gresham Money is deemed less valuable, and some market exists between the two currencies, it seems that GD would just weaken relative to USD. I'm not sure how you could stop merchants from then just inflating GD prices, neutralizing the viral effect.

Re: Apply HN: Gresham Dollar – Viral Currency for Basic Income

#9

Post by Suncho »

rnovak wrote: post #5
Suncho wrote: post #4

Earlier quoted context omitted.

Great questions! Where would people would get Gresham Dollars: We build our initial consumer user base by choosing an American city and handing new money (that is, GD) to the people in that city who are most likely to spend it – i.e. low income people who have a higher marginal propensity to consume (what money they get, they're more likely to spend). This money comes in the form of a regular GD income – essentially…

But the merchant pays for their merchandise in USD. why would a merchant choose to accept this "currency", considering it's not valuable to them?

TL;DR: The currency is valuable to them.

The core mechanism behind Gresham Dollar is that each unit of GD lives for a limited amount of time (e.g. 30 days) after which it expires and we replace it with an equal amount of USD from our reserves. Whenever someone spends GD, we reset that GD's lifetime (e.g. back to 30 days).

So the merchants would be getting their USD. They'd just have to wait.

When the first credit cards were introduced, American Express convinced merchants that it was worth a small transaction fee to accept a more convenient form of payment. It should be even easier to persuade merchants to accept money that customers otherwise wouldn't be spending at all. In either case, the merchants benefit by offering customers a new way to make purchases. When they accept credit cards, they have to pay a transaction fee. But when they accept GD payments, the fee they pay is time.

Pretend you're a merchant. I come up to you and say, "Hey we're giving people this free money. Do you want these people as your customers?" What's your answer?

Re: Apply HN: Gresham Dollar – Viral Currency for Basic Income

#10

Post by rnovak »

Suncho wrote: post #9
rnovak wrote: post #5

Earlier quoted context omitted.

But the merchant pays for their merchandise in USD. why would a merchant choose to accept this "currency", considering it's not valuable to them?

TL;DR: The currency is valuable to them. The core mechanism behind Gresham Dollar is that each unit of GD lives for a limited amount of time (e.g. 30 days) after which it expires and we replace it with an equal amount of USD from our reserves. Whenever someone spends GD, we reset that GD's lifetime (e.g. back to 30 days). So the merchants would be getting their USD. They'd just have to wait. When the first credit car…

So you're co-opting them into a credit issuing agency?

What if your company goes bankrupt in that 30 days?

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