Re: "Bitcoin--the means of payment--not bitcoin the currency, for which I see no future"

RE: as for the idea of "value-in-exchange" benchmark, I recently
chatted with a lawyer about this. Very interesting...

In my view, the "value-in-exchange" benchmark concept is the elephant
in the "money theme" room that only a few have been talking about,
although some recent news has drawn more attention to the pachyderm:
http://www.bloomberg.com/news/2014-02-04/ten-banks-in-fx-trading-probe-have-handed-evidence-to-u-k-fca.html

It's much more apparent now that what seemed like just a truism, is
instead just a construct:
http://www.wmcompany.com/pdfs/026808.pdf

Are the input data sources to the WM Reuters Spot Rate readily
available?  Is there a straightforward way for an autonomous analyst
to download the input time series data to re-assess whether the
published rate is valid? Suppose, for example, there were a minor bug
in the WM Reuters software used to compute the rate. We all know that
routinely-maintained software does experience a bug now and then. Is
there any way for an autonomous analyst to download the WM Reuters
spot rate software to step it through a de-bugger to re-assess whether
the published rate last month was valid based on the validated input
data?

It's a wonder that, given this "value-in-exchange" benchmark is so
crucial to everything, the answers are not "of course" and "of
course".

RE: Do you see this being decided upon by a group of exchanges? Or a
centralized regulatory group, say the Bitcoin Foundation (even though
that may be an insufficient example)?

In my view, the choice in "value-in-exchange" benchmark is Hamlet's
to-be-or-not-to-be question. FWIW (excuse the pun) Bitcoin's
mathematical and systems design elegance was rendered nothing but a
side attraction to the minute-by-minute value-in-exchange gong show
for speculators. Just imagine, however, if the value of 1BTC had been
defined in relation to one of:
(a) one trillionth of total global market capitalization
http://www.themoneytrap.com/2013/04/the-new-global-monetary-standard/
or
(b) one standard "basket" of goods and services
http://www.worldeconomics.com/WorldPriceIndex/WPI.efp
or
(c) one standard "basket" of primary exchange-traded commodities
http://www.qc-econ-bba.org/seminarpapers/leanne_figss.pdf
or
(d) an index constructed from independently­-verifiable biophysical
indicators of ecosystem integrity and resource availability
http://www.projectmanagementhotel.com/attachments/6038/ERindex_2page_24jan2014bPDF.pdf
 (my free/libre/open source project, and the focus of my current
doctoral dissertation at U Quebec)

RE: And as far as cryptocurrency users working outside any trusted
third party, such as an exchange, would you be able to keep these
people following the benchmark?

Well, this business could be dealt with as an "exchange rate" between
currencies, but the lawyer you mentioned will tell you that capital
controls laws and international trade laws have a thing or two to say
about who gets to determine exchange rates.

I prefer to stay out of that.

Instead, keeping things in the realm of contract law simplifies the
matter enormously. When a vendor's determining at what price to sell a
good or service, there are three attributes of their price to specify:
https://www.w3.org/community/webpayments/wiki/Choice_in_the_basic_attributes_of_pricing

The vendor can defer the value-in-exchange benchmark to an external
party such as WM Reuters or a BTC exchange, such places dominated by
speculators. Or they can link their posted price to some trusted
index: one they create on their own, or one that is supplied by a
trusted external party. Ignore "the exchange rate" as somebody else's
index. Cover their risk with a better index built right into their
price structure.

RE: Will a capped cryptocurrency actually act in a deflationary way,
with the fact that these are so divisible?

Another issue, but by the way, BTC's never been capped if it can both
increase in value by, say 1000, and be divided into 1000 parts.

Joseph Potvin

On Thu, Mar 6, 2014 at 9:44 PM, Reutzel, Bailey
<bailey.reutzel@sourcemedia.com> wrote:
> I cannot wait to read this whitepaper!
>
> As for the idea of "value-in-exchange" benchmark, I recently chatted with a
> lawyer about this. Very interesting... Do you see this being decided upon by
> a group of exchanges? Or a centralized regulatory group, say the Bitcoin
> Foundation (even though that may be an insufficient example)?
> And as far as cryptocurrency users working outside any trusted third party,
> such as an exchange, would you be able to keep these people following the
> benchmark?
>
> I'll pose another question to chat about, hopefully this seems something of
> interest, will a capped cryptocurrency actually act in a deflationary way,
> with the fact that these are so divisible?
> ________________________________
> From: Joel Dietz [jd@evr.gr]
> Sent: Thursday, March 06, 2014 8:05 PM
> To: Joseph Potvin
> Cc: Web Payments CG
> Subject: Re: "Bitcoin--the means of payment--not bitcoin the currency, for
> which I see no future"
>
> We've been discussing actively how to implement this via a cryptocurrency in
> the Ethereum econoimcs group. I suspect some whitepapers will be
> forthcoming.
>
>
> Joel Dietz
> Founder and CEO
> Evergreen | evr.gr | @fractastical |
> http://www.youtube.com/watch?v=8xGdTV_UMOg&hd=1
>
>
> On Mon, Mar 3, 2014 at 1:19 PM, Joseph Potvin <jpotvin@opman.ca> wrote:
>>
>> Interesting comments from retired IMF AsstDir, and current consultant
>> to various central banks: http://wcoats.wordpress.com/about/
>>
>> My view:  Agreed that it's not useful as a "unit of account"; that it
>> is useful as an operational component in various "media-of-exchange",
>> and to this end I propose that what it needs is a viable
>> "value-in-exchange benchmark" (which each P2P pair may choose).
>>
>> Joseph
>>
>> ---------- Forwarded message ----------
>> From: Dr. Warren L Coats Jr. <Wcoats@aol.com>
>> Date: Mon, Mar 3, 2014 at 4:03 PM
>> Subject: Bitcoin's Mt. Gox
>> To: "Warren L Coats Jr." <WCoats@aol.com>
>>
>>
>> Dear friends,
>>
>> Bitcoin continues to be a hot topic:
>> http://wcoats.wordpress.com/2014/03/03/the-future-of-bitcoin-exchanges/
>>
>> Best wishes,
>>
>> Warren Coats
>> http://wcoats.spaces.live.com
>> http://works.bepress.com/warren_coats/
>>
>
>
> "This communication is intended solely for the addressee and is confidential
> and not for third party unauthorized distribution"

Received on Friday, 7 March 2014 09:55:16 UTC