Re: First WEB credits transaction today!

On 6 May 2013 19:13, David Wood <david@3roundstones.com> wrote:

> Hi all,
>
> On May 6, 2013, at 10:07, Melvin Carvalho <melvincarvalho@gmail.com>
> wrote:
>
> On 6 May 2013 15:46, Nathan <nathan@webr3.org> wrote:
>
>> Melvin Carvalho wrote:
>>
>>> On 6 May 2013 15:26, Kingsley Idehen <kidehen@openlinksw.com> wrote:
>>>
>>>   On 5/5/13 5:42 PM, Melvin Carvalho wrote:
>>>>
>>>>     Nathan and I were playing around with the ripple.com interface
>>>> today
>>>> and we discovered that you can use it to issue web based currency based
>>>> on
>>>> your ripple address.
>>>>
>>>>  We succeeded in getting a trust line going got a transaction into the
>>>> ripple ledger at entry 627613.  Since ripple requires a 3 letter ISO we
>>>> decided to use WEB.  Though through the magic of JSON LD I think this
>>>> can
>>>> be converted to a URI.
>>>>
>>>>  So what it means is that any URI can issue WEB credits.  Tie the URI
>>>> to a
>>>> ripple boostrap via
>>>>
>>>>  <> foaf : account <ripple:r38363268...>
>>>>
>>>>  Which is generally an IFP.  Note that the ripple bootstrap is just for
>>>> convenience, you can layer on more trust.
>>>>
>>>>  Then use that account to issue a genesis block for how many credits you
>>>> wish to issue.
>>>>
>>>>  Then record transactions out of band and use ripple to process netting
>>>> as
>>>> necessary.
>>>>
>>>>  You will be the steward of your own credits.  Whether they are worth
>>>> anything or not, will be up to the market!  Enjoy! :)
>>>>
>>>> Wow!
>>>>
>>>> Talk is no longer cheap :-)
>>>>
>>>>
>>> Thanks :)
>>>
>>> The only thing that I havent worked out how to do is to destroy the
>>> account
>>> key after issuing a finite and fixed supply.
>>>
>>> You could use a notary to do this, I suppose.
>>>
>>> But how do you know you can trust the notary?
>>>
>>
>> You don't, and you don't issue a finite number, in fact you don't issue
>> any more than you can afford.
>>
>> You fix the price instead. Such that one WEB is always equal to one USD.
>>
>> Then each person can issue WEB credits backed by them, but they have to
>> be willing to redeem WEB credits backed by others. So I can send Kingsley
>> one WEB credit, and he can redeem it for $1USD with Melvin, because we all
>> trust each other.
>>
>> If you scale this up, then gateways (like bitstamp, mtgox, btce etc) will
>> no doubt trust each other, and trust their users, if a user deposits
>> $100USD with them, then they have 100WEB to spend anywhere which has a
>> trust path.
>>
>> Currencies which change in value are no good, we need one which has a
>> fixed value in order to make money fluid in, out, and over, the web.
>>
>> I think that makes sense.. Melvin?
>>
>
> I think people find a fixed supply reassuring.
>
>
>
> That's an awesome experiment, but I don't think that a fixed supply is
> reassuring.  In fact, economists think the opposite.  Fixed supplies lead
> to deflation.
>
> See, for example, this well-researched article in The Atlantic [1], where
> the author says:
> [[
> In other words, Bitcoin has a massive deflationary bias. Its money supply
> is mostly fixed, but the menu of things it can buy is growing. The same
> amount of money chasing more goods means money will be worth more. Or, put
> another way, prices will fall in Bitcoin terms.
>
> And that's why it's not a currency, and won't be one until it has a
> central bank.
>
> Deflation is toxic for any economy, but particularly for an alternative
> one like Bitcoin. No matter what kind of currency we're talking about,
> deflation causes hoarding -- why buy something today if you can buy it for
> less tomorrow?
> ]]
>

Deflation certainly has demerits.  However, inflation is also not without
it risks, notably from "black swans" which most economists have a hard time
with (hence few saw the 2008 crisis).

However, my motivation is to synthesize deflation, but rather, to have a
money supply that is strongly resistant to gaming by those with the issuing
power.


>
> Regards,
> Dave
> --
> http://about.me/david_wood
>
> [1]
> http://www.theatlantic.com/business/archive/2013/04/bitcoin-is-no-longer-a-currency/274859/
>
>
>
> I thought the market would decide the value of your WEB credits, rather
> than pegging it to the dollar.  You could of course offer a dollar to buy
> back your IOUs in the market place.
>
> Maybe if you wanted to write USD IOUs you would just use USD and people
> would try and work out how much they trusted you to pay it back?
>
>
>>
>> Nathan
>>
>>
>
>