P2P Social Currency (Money 2.0) - P2P Foundation2024-03-28T16:59:56Zhttp://p2pfoundation.ning.com/forum/topics/2003008:Topic:7140?commentId=2003008%3AComment%3A7648&feed=yes&xn_auth=noThe latest draft is is locate…tag:p2pfoundation.ning.com,2008-12-04:2003008:Comment:81462008-12-04T05:36:51.000ZEvolving Trendshttp://p2pfoundation.ning.com/profile/EvolvingTrends
The latest draft is is located at:<br />
<br />
<a href="http://p2pfoundation.net/P2P_Social_Currency_Model">http://p2pfoundation.net/P2P_Social_Currency_Model</a><br />
<br />
Comments can be made under this seriously messy/long thread :) or under the original blog post <a href="http://evolvingtrends.wordpress.com/2008/10/21/p2p-social-currency-money-20/">here</a>
The latest draft is is located at:<br />
<br />
<a href="http://p2pfoundation.net/P2P_Social_Currency_Model">http://p2pfoundation.net/P2P_Social_Currency_Model</a><br />
<br />
Comments can be made under this seriously messy/long thread :) or under the original blog post <a href="http://evolvingtrends.wordpress.com/2008/10/21/p2p-social-currency-money-20/">here</a> Thank you Chris!
I love that…tag:p2pfoundation.ning.com,2008-12-02:2003008:Comment:81082008-12-02T18:15:52.000ZEvolving Trendshttp://p2pfoundation.ning.com/profile/EvolvingTrends
Thank you Chris!<br />
<br />
I love that you took the time to mingle with amateur "money designers"<br />
<br />
We have good ideas when it comes to adding "meaning" to each transaction to direct money flows to be in sync with people's conscious values.<br />
<br />
However, we (or speaking for myself) lack the deep perspective you have on existing alternative systems like Ripple (with whom I just had a brief exchange, and they did mention your work as a reference)<br />
<br />
So I'll be looking at it and thinking about it.<br />
<br />
Thanks…
Thank you Chris!<br />
<br />
I love that you took the time to mingle with amateur "money designers"<br />
<br />
We have good ideas when it comes to adding "meaning" to each transaction to direct money flows to be in sync with people's conscious values.<br />
<br />
However, we (or speaking for myself) lack the deep perspective you have on existing alternative systems like Ripple (with whom I just had a brief exchange, and they did mention your work as a reference)<br />
<br />
So I'll be looking at it and thinking about it.<br />
<br />
Thanks again.<br />
<br />
Marc We are used to thinking that…tag:p2pfoundation.ning.com,2008-12-02:2003008:Comment:81042008-12-02T11:25:42.000ZChris Cookhttp://p2pfoundation.ning.com/profile/ChrisCook
We are used to thinking that Money must necessarily <b>be</b> credit, as is our conventional money, which is created by credit institutions as interest-bearing loans.<br />
<br />
In fact, while credit (aka time to pay) is a necessary part of a monetary system, credit need not -indeed, should not, IMHO, be "monetised".<br />
<br />
By way of example, the WIR is a B2B barter exchange in Switzerland where billions of Swiss Francs' worth of goods and services change hands on credit terms. Defaults on debit balances are…
We are used to thinking that Money must necessarily <b>be</b> credit, as is our conventional money, which is created by credit institutions as interest-bearing loans.<br />
<br />
In fact, while credit (aka time to pay) is a necessary part of a monetary system, credit need not -indeed, should not, IMHO, be "monetised".<br />
<br />
By way of example, the WIR is a B2B barter exchange in Switzerland where billions of Swiss Francs' worth of goods and services change hands on credit terms. Defaults on debit balances are rare, because participants must give a mortgage over their property by way of security. ie the WIR is "property-backed"<br />
<br />
The point is that no actual "fiat" Swiss Francs change hands in settlement of WIR credit. Instead, "money's worth" is exchanged by reference to Swiss Francs as a "Value Unit".<br />
<br />
The actual economic value provided by banks is that of an implicit guarantee of the borrower's (or buyer's) credit, and any "interest" charged covers not only a payment to depositors, but also defaults and operating costs.<br />
<br />
The approach I advocate is of mutually guaranteed "Peer to Peer" credit within the framework of a "Guarantee Society" consensual agreement. No interest is charged, but both sellers and buyers pay a service charge and a provision into a default pool operated (by a Service-provider-formerly-known-as-a-Bank) to support the use of the mutual guarantee. Users have guarantee limits, rather than credit limits, and may settle credit not just in conventional "fiat" money but in money's worth of goods, services, or other obligations (cf RipplePay).<br />
<br />
The "Pool" is owned mutually, not by the Bank, as now.<br />
<br />
In relation to "Money's Worth" I advocate the "Unitisation" of land rental values and of energy (in particular) within a partnership - rather than Company or Trust - legal framework.<br />
<br />
See<br />
<br />
<a href="http://lebleu.org/blog/2008/11/20/chris-cook-on-asset-based-finance-to-the-rescue-of-the-housing-crisis/#disqus_thread">http://lebleu.org/blog/2008/11/20/chris-cook-on-asset-based-finance...</a><br />
<br />
This is the actual presentation I gave in Dublin which has additional explanation ....<br />
<br />
<a href="http://www.feasta-multimedia.org/2008/Chris_Cook.mov">http://www.feasta-multimedia.org/2008/Chris_Cook.mov</a><br />
<br />
Whereas this presentation<br />
<br />
<a href="http://www.slideshare.net/ChrisJCook/financing-energybeyond-peak-credit-presentation/">http://www.slideshare.net/ChrisJCook/financing-energybeyond-peak-cr...</a><br />
<br />
covered unitisation of energy.<br />
<br />
In my view unitised energy is capable of becoming a global currency, replacing the dollar, while national currencies will be based on unitised land rental values.<br />
<br />
The outcome will be a networked P2P "Clearing Union" similar to that proposed by Keynes at Bretton Woods, but created bottom up, not top down, and with no intermediary institutions. <<
Demurrage is much mo…tag:p2pfoundation.ning.com,2008-11-21:2003008:Comment:78272008-11-21T19:56:23.000ZEvolving Trendshttp://p2pfoundation.ning.com/profile/EvolvingTrends
<<<br />
Demurrage is much more than a tool to punish excessive saving. Actually to use it in the way you propose seems to me a misuse of a perfectly good regulation valve in a monetary system. (A bit like using the electronics in a regulating circuit to administer electroshocks rather than doing its regulating function.)<br />
>><br />
<br />
That's exactly why I thought it was 'punishing' ... electroshock.<br />
<br />
BUt I'm against taking something from someone and giving to another. That's forcing one person to…
<<<br />
Demurrage is much more than a tool to punish excessive saving. Actually to use it in the way you propose seems to me a misuse of a perfectly good regulation valve in a monetary system. (A bit like using the electronics in a regulating circuit to administer electroshocks rather than doing its regulating function.)<br />
>><br />
<br />
That's exactly why I thought it was 'punishing' ... electroshock.<br />
<br />
BUt I'm against taking something from someone and giving to another. That's forcing one person to give something to another person without that person reciprocating right then, i.e. "trade" not "give"<br />
<br />
But taking away something (a percentage of savings) from someone and holding it then giving it to someone else in return for something (energy) which is to make them recirpocate is sort of OK, even if not completely OK because you're making them reciprocate.<br />
<br />
<<<br />
3. I like your reasoning on increase of the value of energy with abundance. But I shudder at the prospect of the price of energy being kept artificially high.<br />
>><br />
<br />
It's not about keeping the price artificially high. It's about keeping it just above the threshold below which energy production costs more than the price of energy (which can happen if someone invests in building massive energy production facility that operates in the negative, to drive prices down on purpose, also called "dumping"<br />
<br />
<<<br />
Speculative boom and bust won't happen if energy production is widely distributed.<br />
>><br />
<br />
I'm interested in the logic.<br />
<br />
<<<br />
<br />
Question: What kind of a police state would be needed to prevent people selling their excess energy production to their neighbors (without going through the energy bank) or even to prevent them from producing that energy in the first place? I say regulation of price (even with good intent) is fraught with dangers and will lead to all kinds of unintended consequences.<br />
<br />
<br />
>><br />
<br />
<br />
I am interested in two things: 1) how do you prevent someone from "dumping" energy and driving the price down on purpose to stave off competition, without having a cap, and 2) how do you prevent speculative boom and bust?<br />
<br />
<<<br />
You need a better mechanism in the system to respond to both the too much and the too little of money in circulation. That is the bane of today's money system. They have no regulating mechanism except for monkeying with interest rates (so banks will lend more or less money). You know where that led eventually - breakdown of the system. Can't get a loan these days to save your soul, even with US Congress injecting hundreds of billions into the banks...<br />
>><br />
<br />
By tying money creation to energy creation which is tied to higher productivity, it's possible to end up with too much money if productivity drops not due to energy but due to laziness or some other factor. So what do you do with the excess money? If money is never saved and instead is put into appreciable assets, those assets depreciate and that's that.<br />
<br />
The key problem, and the reason I like demurrage without re-dsitribution (even as electroshock) is because together with credit points it helps reduce savings.<br />
<br />
If energy growth does not lead to productivity growth then the society is failing, not the money system. :)<br />
<br />
I'm prepared to stick to that for the simulation.. and see how it goes.<br />
<br />
Can't solve ALL of society's ills by redefining money. You can solve some. And you don't need to add to the problems by forcing non-reciprocal giving, i.e demurrage with re-distribution which amounts to taking money from one guy and giving it to everyone without every giving back something as part of that singular transaction. I'm OK with demurrage without re-dsitribution where you take money from one guy and give it to Peer Bank and peer bank uses that money instead of printing more new money to pay for more energy, which equates to trading money for energy, not giving away money for nothing. <<
You have no real mec…tag:p2pfoundation.ning.com,2008-11-21:2003008:Comment:78252008-11-21T19:35:11.000ZEvolving Trendshttp://p2pfoundation.ning.com/profile/EvolvingTrends
<<<br />
You have no real mechanism for injecting money into the system to take care of growing need for money, except a very approximate need to fill the energy buffer.<br />
>><br />
<br />
<br />
Why do you need to inject money in the system more than the need to drive productivity, which is done through the injection of energy...<br />
<br />
?<br />
<br />
<<<br />
Money must stay in circulation and you have only a relatively tasteless carrot to make sure it does.<br />
>><br />
<br />
<br />
Taste is subjective. Credit points are very tasty to me.…
<<<br />
You have no real mechanism for injecting money into the system to take care of growing need for money, except a very approximate need to fill the energy buffer.<br />
>><br />
<br />
<br />
Why do you need to inject money in the system more than the need to drive productivity, which is done through the injection of energy...<br />
<br />
?<br />
<br />
<<<br />
Money must stay in circulation and you have only a relatively tasteless carrot to make sure it does.<br />
>><br />
<br />
<br />
Taste is subjective. Credit points are very tasty to me. But if they're not tasty to you, they may not be tasty to others.<br />
<br />
So then as I said before to discourage excessive saving (beyond some psychological safety buffer) you could use demurrage but that's a limp stick if you think credit points are a tasty carrot. In other words, two methods are better than one if each method's appeal is subjective, which is what our arguing here proves. I think demurrage is a limp stick, useless, and you think credit points is a tasteless carrot, useless. Together they may be more useful.<br />
<br />
<<<br />
Let's clear up that question of money losing value relative to the growing economy. It's true that the economy can grow, but money value is a question of buying power. Are you suggesting that money generally will lose buying power as the economy grows?<br />
>><br />
<br />
If wealth accumulation happens through accumulation of appreciable assets then yes, as assets appreciates money will lose buying power if it doesn't appreciate too, i.e. if it just sits there.<br />
<br />
<<<br />
"So people who save too much money, i.e. savings beyond what is a reasonable security buffer (which is a psychological safety net not an actual needed one), those excessive savings can be subject to demurrage."<br />
<br />
I think that's a positively bad idea. First off - who decides what is a reasonable buffer. Secondly, why would you punish someone who decides to save up until they can make a large purchase - like buy a house or start a business - and who would likely exceed the limit considered reasonable amount of savings?<br />
>><br />
<br />
Regarding the first point, that's why it's better to let people save until they realize that saving money does not help them. But if we were to design a more proactive system, we'd have something to encourage people not to save too much money. Too much can be decided based on size of household. I mean who decided taxes? The government does. In this case, Peer Bank sets a limit on how much a given household/business can save, and that varries based on household/business size. It is bad because being proactive is bad. But that's the line of thought behind demurrage, i.e. to be proactive about making sure people don't save up too much money and slow down the flow of money. So you argue for demurrage but how do you apply demurrage? to all savings?<br />
<br />
Why not let people save enough buffer to allow them to buy food etc while arranging for loan or getting their energy production capacity increased. And back to demurrage being bad, IMO, why not let people save, period. It only hurts them long term not to invest the money into assets or create more money thru credit points.<br />
<br />
<<<br />
Secondly, why would you punish someone who decides to save up until they can make a large purchase - like buy a house or start a business - and who would likely exceed the limit considered reasonable amount of savings?<br />
>><br />
<br />
They can borrow money from 1000s of peers at once. Why save up for something when you can get an interest free peer loan?<br />
<br />
<<<br />
Its general use is painless, especially if everyone benefits from the money collected by demurrage being re-distributed.<br />
>><br />
<br />
To take away something from one person and gives it to another is against one of those ideals. Those are the basic principles, and every model has to have some. I like demurrage without re-distribution (money goes back to Peer Bank and used as new money again) and that's in conjunction with credit points.<br />
<br />
<<<br />
<br />
You still have no good mechanism that allows growth of monetary mass in response to growth of the size of the economy the system serves, and shrinking of the monetary mass in response to a shrinking economic base. There is a real need for both.<br />
<br />
>><br />
<br />
The growth of monetary mass is tied to growth in productivity level which is tied to growth in energy supply. The abundance of energy increases productivity (as energy is converted into work) and monetary mass (as money is printed in return for peer energy production.)<br />
<br />
If you have another need to grow monetary mass other than productivity then let me know what that is! As productivity increases the monetary mass is increased and assets appreciate as productivity grows. It's really a productivity based model. 1. Demurrage is much more tha…tag:p2pfoundation.ning.com,2008-11-21:2003008:Comment:78232008-11-21T16:02:02.000ZSepp Hasslbergerhttp://p2pfoundation.ning.com/profile/Sepp
1. Demurrage is <b>much more</b> than a tool to punish excessive saving. Actually to use it in the way you propose seems to me a misuse of a perfectly good regulation valve in a monetary system. (A bit like using the electronics in a regulating circuit to administer electroshocks rather than doing its regulating function.)<br />
<br />
2. Physical wealth creation happens every time a producer produces and the economic system allows the exchange of that product for something valuable the producer may…
1. Demurrage is <b>much more</b> than a tool to punish excessive saving. Actually to use it in the way you propose seems to me a misuse of a perfectly good regulation valve in a monetary system. (A bit like using the electronics in a regulating circuit to administer electroshocks rather than doing its regulating function.)<br />
<br />
2. Physical wealth creation happens every time a producer produces and the economic system allows the exchange of that product for something valuable the producer may desire. Ideal (virtual?) wealth creation could be the accumulation of either money or of credit points.<br />
<br />
3. I like your reasoning on increase of the value of energy with abundance. But I shudder at the prospect of the price of energy being kept artificially high. Energy price is basically self regulating by the interplay of two factors: production and consumption. In my view, neither production nor consumption should be interfered with (by capping the price). Speculative boom and bust won't happen if energy production is widely distributed.<br />
<br />
Question: What kind of a police state would be needed to prevent people selling their excess energy production to their neighbors (without going through the energy bank) or even to prevent them from producing that energy in the first place? I say regulation of price (even with good intent) is fraught with dangers and will lead to all kinds of unintended consequences.<br />
<br />
4. You need a better mechanism in the system to respond to both the <i>too much</i> and the <i>too little</i> of money in circulation. That is the bane of today's money system. They have no regulating mechanism except for monkeying with interest rates (so banks will lend more or less money). You know where that led eventually - breakdown of the system. Can't get a loan these days to save your soul, even with US Congress injecting hundreds of billions into the banks... "New money will only be creat…tag:p2pfoundation.ning.com,2008-11-21:2003008:Comment:78212008-11-21T15:39:47.000ZSepp Hasslbergerhttp://p2pfoundation.ning.com/profile/Sepp
<i>"New money will only be created to fill Peer Grid with enough energy as a buffer for future demand but that buffer is limited in size."</i><br />
<br />
Hmmm - that's even worse than I thought. You have no real mechanism for injecting money into the system to take care of growing need for money, except a very approximate need to fill the energy buffer.<br />
<br />
<i>"...but if some people decide to save all their money then they either starve, have no clothes or have no life, and how many people do that given…</i>
<i>"New money will only be created to fill Peer Grid with enough energy as a buffer for future demand but that buffer is limited in size."</i><br />
<br />
Hmmm - that's even worse than I thought. You have no real mechanism for injecting money into the system to take care of growing need for money, except a very approximate need to fill the energy buffer.<br />
<br />
<i>"...but if some people decide to save all their money then they either starve, have no clothes or have no life, and how many people do that given that money saved does not grow in value at all and does lose value relative to the growing economy."</i><br />
<br />
Some people may save half their money and it will still be a problem. Money must stay in circulation and you have only a relatively tasteless carrot to make sure it does.<br />
<br />
Let's clear up that question of money losing value relative to the growing economy. It's true that the economy can grow, but money value is a question of buying power. Are you suggesting that money generally will lose buying power as the economy grows?<br />
<br />
<i>"So people who save too much money, i.e. savings beyond what is a reasonable security buffer (which is a psychological safety net not an actual needed one), those excessive savings can be subject to demurrage."</i><br />
<br />
I think that's a positively bad idea. First off - who decides what is a reasonable buffer. Secondly, why would you punish someone who decides to save up until they can make a large purchase - like buy a house or start a business - and who would likely exceed the limit considered reasonable amount of savings?<br />
<br />
<b>Clarification:</b> Demurrage is not a punishment. It is a tool that allows to regulate total monetary mass and tends to prevent accumulation. Its general use is painless, especially if everyone benefits from the money collected by demurrage being re-distributed.<br />
<br />
You still have no good mechanism that allows growth of monetary mass in response to growth of the size of the economy the system serves, and shrinking of the monetary mass in response to a shrinking economic base. There is a real need for both.<br />
<br />
p.s. I'll be off for a few days - family affairs to take care of :) Hi Sepp,
In Summary:
1. Dem…tag:p2pfoundation.ning.com,2008-11-20:2003008:Comment:78042008-11-20T22:47:46.000ZEvolving Trendshttp://p2pfoundation.ning.com/profile/EvolvingTrends
Hi Sepp,<br />
<br />
In Summary:<br />
<br />
1. Demurrage is good for preventing/regulating excessive savings (i.e. savings beyond the psychological buffer)<br />
<br />
2. Wealth creation happens through accumulation of appreciable assets. No other way. You can have potential wealth, too, by accumulating credit points.<br />
<br />
3. The value of energy increases with its abundance (more can be done with more energy) but its price is regulated dynamically with respect to demand (so it does not go up or down on its own, i.e. no…
Hi Sepp,<br />
<br />
In Summary:<br />
<br />
1. Demurrage is good for preventing/regulating excessive savings (i.e. savings beyond the psychological buffer)<br />
<br />
2. Wealth creation happens through accumulation of appreciable assets. No other way. You can have potential wealth, too, by accumulating credit points.<br />
<br />
3. The value of energy increases with its abundance (more can be done with more energy) but its price is regulated dynamically with respect to demand (so it does not go up or down on its own, i.e. no speculative boom and bust) and kept above the threshold below which the financial gain from producing and selling excess energy is less than the cost, i.e. not economically feasible.<br />
<br />
4. New money is only created by Peer Bank when Peer Gird needs to refill the buffer it keeps for future energy demand/spikes. Otherwise, Peer Bank simply acts as a financial hub for the p2p exchange of peer produced energy for Peer Dollars and Peer Dollars for peer produced energy. Clarification:
<<
the…tag:p2pfoundation.ning.com,2008-11-20:2003008:Comment:78022008-11-20T22:23:33.000ZEvolving Trendshttp://p2pfoundation.ning.com/profile/EvolvingTrends
Clarification:<br />
<br />
<<<br />
the value of energy increases with its abundance (more can be done) but price is controlled so it doesn't go up on its own. This way the extra margin (in value) is converted to higher productivity as energy is converted to work, e.g. powering cars, powering factories, etc<br />
>><br />
<br />
Should read:<br />
<br />
The value of energy increases with its abundance (more can be done with more energy) but its price is regulated dynamically with respect to demand (so it does not go up or down…
Clarification:<br />
<br />
<<<br />
the value of energy increases with its abundance (more can be done) but price is controlled so it doesn't go up on its own. This way the extra margin (in value) is converted to higher productivity as energy is converted to work, e.g. powering cars, powering factories, etc<br />
>><br />
<br />
Should read:<br />
<br />
The value of energy increases with its abundance (more can be done with more energy) but its price is regulated dynamically with respect to demand (so it does not go up or down on its own, i.e. no speculative boom and bust) and kept above the threshold below which the financial gain from producing and selling excess energy is less than the cost, i.e. not economically feasible. Unlike gold, the value of ene…tag:p2pfoundation.ning.com,2008-11-20:2003008:Comment:77982008-11-20T21:50:03.000ZEvolving Trendshttp://p2pfoundation.ning.com/profile/EvolvingTrends
Unlike gold, the value of energy increases with its abundance (more can be done) but price is controlled so it doesn't go up on its own. This way the extra margin (in value) is converted to higher productivity as energy is converted to work, e.g. powering cars, powering factories, etc<br />
<br />
If there was too much gold out there the price of gold would fall drastically to pennies but because it has utility in the manufacture of goods etc its price won't go to zero.. like any other regular metal<br />
<br />
With…
Unlike gold, the value of energy increases with its abundance (more can be done) but price is controlled so it doesn't go up on its own. This way the extra margin (in value) is converted to higher productivity as energy is converted to work, e.g. powering cars, powering factories, etc<br />
<br />
If there was too much gold out there the price of gold would fall drastically to pennies but because it has utility in the manufacture of goods etc its price won't go to zero.. like any other regular metal<br />
<br />
With energy it's the same but energy has hugely more utility than gold, so the more energy you have the lower the price (up to a point after which the production of energy becomes economically unfeasible, and that is bound to happen, which is why price needs to be regulated above that threshold but continuously going down as the means of production get cheaper relative to the starting point) AND the more energy you have the more productivity you have in the economy as that energy is convertable into work. Gold can't be converted into work. It can be used as a metal but that's about it. Energy is convertable into work so the more exists of it the more productivity you have.