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Fwd: [p2p-hackers] p2p/mesh economies: observations/speculations + an attempt to define some useful terms

From: ya knygar <knygar@gmail.com>
Date: Mon, 22 Aug 2011 22:37:21 +0000
Message-ID: <CAJVWO9Z=kRwi29jWczSfshBMfByGQRiqDouXmTWTS693_3W0ew@mail.gmail.com>
To: public-webpayments@w3.org
Cc: discuss@freenetworkfoundation.org
---------- Forwarded message ----------
From: Jon Cox <jcox@experiments.com>
Date: Mon, Aug 22, 2011 at 10:15 PM
Subject: [p2p-hackers] p2p/mesh economies: observations/speculations +
an attempt to	define some useful terms
To: p2p-hackers@lists.zooko.com



 Dear p2p-hackers,

 After thinking about the similarities between the commons issues
 faced by the PaulGardner-Stephen's Serval project & Zooko's Tahoe
 LAFS, I was motivated try (yet again!) to refine my understanding
 of currency systems, barter and money.

 I'd like some help!

 These concepts seem to have direct bearing on problems that arise
 when bootstrapping new users into a p2p/mesh system, trust, credit,
 fairness protocols & so on, yet I lack a standard terminology for
 talking about them in a precise way.

 First, I'd like to share a speculation:

     My guess is that it would be best if Tahoe LAFS computed all
     credits and debits in terms of its native "commodity currencies"
     (this term is defined below) like storage, availability, bandwidth,
     latency, and priority, and then possibly mapped these things
     to other currencies via forward contracts in a fairly pluggable
     manner.

     While Bitcoins might be interesting as one of several possible
     side-channels to establish "credit" for the system's own native
     currencies when dealing with non-boostrapped strangers, or for
     those who would otherwise hit their "debt ceiling", I'm hoping
     that friends could still offer credits for "native" commodities
     denominated as such *directly*, without needing to think about
     a fluctuating 3rd-party / non-native currency abstraction.


 That said, here's my first shot at defining a few terms, along with
 a note to the Serval project that may be of more general interest:


 o  Benefit
       That which produces a net increase
       in some desired state of being.

 o  Intrinsic value
       Non-bartered perceived benefit.

 o  Value
       Optimally bartered perceived benefit.

 o  Money
       The mathematical abstraction of value
       Note: this can be a positive or negative quantity.

 o  Currency
       The concrete manifestation of money.
       Note: currency always has a non-negative value.

       Example: physical dollars & coins.

 o  Pure liability
       Something of negative value that isn't the result
       of owing anybody something.

       Example: an inadequate reputation

 o  Debt
       A liability resulting from owing something of
       positive value to another party.

 o  Pure asset
       Positive value that isn't the result of someone owing you.

       Example: good health.

 o  Credit
       A liability that another party owes to you and recognizes.

 o  Commodity currency
       Some fungible good or service that is easy measurable
       and comparable, transferable and transportable,
       sufficiently divisible and durable, widely bartered
       with known rates of exchange, and derives its value
       from its intrinsic usefulness rather than its role
       as a currency or as an item of speculation predicated
       on the existence of a greater fool.

       Example: cigarettes in a POW camp.


 o  Native commodity currency
       A commodity currency whose production and consumption
       are intrinsic to the economy itself.

       Example:  Carpool rides in a ride-sharing network.


 o  Collectible currency
       Like a commodity currency, except that its value comes
       from the mutual speculation of those who create demand
       for it, rather than its intrinsic worth to any end user.

       Example 1:
          Bitcoin is a perfect example of a collectible currency
          because its intrinsic worth is exactly zero (you can't
          even use them to line the bottom of a bird cage).


       Example 2:
          Gold and silver are best thought of as being somewhere
          between commodity and collectible currencies; however,
          the volatility of silver prices relative to its supply
          and industrial demand shows it's more on the speculation-
          driven "collectible" side if things.


 o  Fiat obligation currency
       Like a collectible currency, except that every unit created
       represents the transfer of value from someone who has actually
       produced a good or service of non-zero intrinsic worth to a
       person or institution that has offered nothing in exchange
       for it but the currency itself.  Crucially, the production
       of fiat obligation currency is restricted by law, and demand
       for it is created by requiring its use.  Hence, every unit
       represents a claim by its producer to simply extract things
       of actual value from those who cannot create the currency
       themselves, and yet are bound to use it by law or necessity.

       Example:
          The deceptively named "Fed", a group of privately owned
          for-profit banks, create legal tender (US dollars) out
          of thin air, then "exchange" them for US Treasury for
          T-bills. The T-bills have real value in that they represent
          fractional ownership of the US government's ability to
          extract goods and services from its own citizens, and from
          the citizens of foreign countries.  To do this at home, it
          puses the IRS, federal marshals, and the legal system.
          Abroad,  it uses military and/or political power to enforce
          its will directly, or it can use intermediaries in its thrall,
          such as the IMF, The World Bank, various resource-rich or
          strategic client governments, and so-called "Coalitions of
          the Willing".  Hence, every dollar represents the assertion
          of a one-sided obligation; they aren't coupons for anything
          of intrinsic value that the Fed used to barter with the
          US Treasury in exchange for a fraction of the tribute our
          government is able to demand.  Instead, they are more like
          souvenirs commemorating an outright confiscation of it that
          has already taken place. The obscene material wealth and
          power held by those happy few who are on the receiving end
          of this arrangement is the direct result of the compulsory
          exchange of intrinsically valuable goods and services for
          inherently valueless slips of paper decorated with stars,
          eagles, and the faces of dead presidents.


 o Fiat commonwealth currency
       Like a fiat obligation currency, except that the value
       extracted in the process of its creation goes to the community's
       own public fund, rather than being siphoned off by a private
       aristocracy.

       Example (I think):
           Treasury-issued "United States Notes".


 -----------------------------------------------------------------
 Here are some comments I made to the Serval project recently.
 I'd love to get some feedback on them.

 Hopefully, the ideas I'm tossing around are of wide enough
 applicability to merit general interest and/or or an
 informed & corrective critique
 -----------------------------------------------------------------


   Serval already has at least three commodities with universal value,
   and native non-speculative demand: bandwidth, latency, and priority.
   Using these in combination with a system of reputation and credit as
   a "commodity currency" makes a lot more sense than dragging in a
   collectible currency.

   Assuming nodes in a Serval mesh are free to associate in different
   virtual communities of reputation (as humans do in real life),
   all a community needs to do is restrict mesh access ("the commons")
   in ways it sees fit to discourage behavior it dislikes, or grant
   special credit for positive actions (eg: donating bandwidth,
   particularly in times of shortage).  It seems as though you could
   even model the policies of Serval "community" as an autonomous
   System (AS) on the Internet, and then go on to think about
   communities honoring each other's credits with bandwidth, latency,
   and priority as parameters like a AS-AS forex.  This would keep every
   community free from central domination by other groups, yet open to
   engage in mutually beneficial data transfers. It seems likely that
   a few huge communities would naturally arise, along with lots of
   little ones. Users might like to have different policies for each
   of them, as different levels of generosity (or blind trust) might be
   appropriate; one might have reputations in personal groups, affinity,
   regional/global, etc.  It seems like the core requirement is the
   ability to assign a policy profile to a group ID, and the ability
   to have more than one.

   If someone with a sufficiently large balance and community reputation
   never gets bumped by somebody who might be free-riding or has no
   reputation, it makes sense to build a positive and credible
   "accounts receivable" bandwidth balance.  Someone could always cheat
   you with a series of bogus IDs, if doing so entails them being
   second-class citizens the entire time, there isn't much incentive.

   I think it's good to place the main focus on first degree contacts,
   as has been done with great success in hawala networks.  The hawala
   system is well known for its efficiency and real-world security, even
   over wide geographical areas lacking any common authority sanctioned
   to use powers of state (such as garnishment) in order to enforce
   contracts. Reputation-based access to the commons can go a long way
   to regulate behavior.   Diamond traders that operate via handshake
   agreements are another nice example of regulation by community
   restriction.  More generally, the principles and practices of
   Islamic banking look like they're worthy of serious study.
   I've only begun to explore this topic, but the prohibition against
   outright interest seems to have generated a fascinating array of
   partnership-oriented contracts and non-leveraged financial
   relationships -- all with a bare minimum of bookkeeping.

   If an adversary's goal is to hunt down all copies of a message and
   destroy it, another consideration emerges:  perservering ignorance.

   Example: Julian Assange has no idea how to reclaim all
            copies of insurance.aes256; therefore, he cannot
            be forced to help anybody else do so either, even
            under the threat of torture.

            Had a recording been made of every person who
            downloaded the file, then thugs could go after
            these people too, even if they number in the
            tens of thousands.  However, what if these
            folks placed the same data on the net in a
            way that couldn't be detected, and was then
            downloaded by yet another set of people
            that's unknown to the first group.

            The same logic applies to the release of the
            key to unlock the encrypted data.  You probably
            want some sort of anonymous quorum where the
            various members don't actually know all the
            other members, but share an ability to look
            at a common "outer envelope" wrapping a sig
            and an inner blob.  The disconnected cliques
            have these blob-bearing coconuts floating
            between them, yet the inner blob part within
            the coconut cannot be cracked solo by any
            one clique;  however portions of the key
            to crack it can be posted publicly by them
            (in any form: wrapped by the group envelope
            or not, steganographically or not, signed
            or not, and so on).




                       Cheers,
                       -Jon
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Received on Monday, 22 August 2011 22:37:49 UTC

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