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Re: modeling wallets

From: Joseph Potvin <jpotvin@opman.ca>
Date: Sun, 17 May 2015 08:12:58 -0400
Message-ID: <CAKcXiSppTaAY9Vr543MaMQ_1YR+EYSrGzwUxEAn7rNG0BmAAkg@mail.gmail.com>
To: Web Payments <public-webpayments@w3.org>
RE: "FinCEN and Department of Justice Settle Anti-Money Laundering Charges
Against Crypto-Currency Company Ripple Labs"

Below for reference I forward two of my messages to this list from 18
November, 2013 and 4 June 2014, below. In particular:

18 November, 2013: "Why permit the holding of XRPs at all? In the grand
scheme of things, what's the value added from their persistence?"

4 June 2014: "BTC is token-based. XRP is token-based. I came to the
conclusion that the only legitimate "value" of 1 BTC is zero. BTC is merely
the message-bearing token, it's not an instantiation of "the value"."

I suggest that if RippleLabs had treated XRP as a zero-value transitory
token with no persistence, it would not have violated the law that it has
now been found to violate. And yet it would have been able to support the
algorithmic functions that Ripple requires.

Joseph Potvin
Operations Manager | Gestionnaire des opérations
The Opman Company | La compagnie Opman
jpotvin@opman.ca
Mobile: 819-593-5983



---------- Forwarded message ----------
From: Joseph Potvin <jpotvin@opman.ca>
Date: Mon, Nov 18, 2013 at 2:42 PM
Subject: Re: Ripple
To: Evan Schwartz <evan@ripple.com>
Cc: Web Payments CG <public-webpayments@w3.org>, Melvin Carvalho <
melvincarvalho@gmail.com>


RE: Ripple Labs isn't playing a hoarding game but

I don't have any opinion on that at this point, but some people think it
is: http://ripplescam.org/  (Sorry if posting that link seems aggressive.
That's not my intent. It's out there and shows up in searches, so I'm just
being forthcoming.)

RE: "The value of 1 XRP matters to currency traders, Ripple Labs, and
anyone else holding XRP as an asset. "

That seems entirely unnecessary to me, and a "bug" in the current business
architecture of Ripple. Why permit the holding of XRPs at all? In the grand
scheme of things, what's the value added from their persistence? I still
advocate for 1 XRP = 1 banana, compared with the XRP's current design. (To
see where I'm actually coming from, see:
http://www.bengrahaminvesting.ca/Outreach/2009_Symposium.htm and
http://www.theglobeandmail.com/globe-investor/investment-ideas/commodities-as-a-global-currency/article1346127/
...although even more I prefer an "Earth Reserve" base, which I and some
colleagues are working on.)  Meanwhile the private consortium aspect of The
Fed is hardly something to be replicated -- the more successful Ripple
becomes, the more suspicion and "divergent" interests it will attract. It
fear it would become the monetary instantiation of The Peter Principle.

In any case, the value of a BTC or an XRP is nothing more than brand
loyalty, what the accountants call the value of "goodwill", since any
number of parallel currencies just like them can be created.

Joseph Potvin

---------- Forwarded message ----------
From: Joseph Potvin <jpotvin@opman.ca>
Date: Wed, Jun 4, 2014 at 5:45 AM
Subject: Re: P2P Payment technologies & info (WAS Re: Is payment
"timeliness" addressed in our work yet?)
To: Web Payments CG <public-webpayments@w3.org>


Dave,

For further reflection, see work by Geoffrey Ingham, since it matters
"what" we're speaking about sending around when discussing a payments
system.
http://ca.wiley.com/WileyCDA/WileyTitle/productCd-074560997X,subjectCd-EC06.html
http://cas.umkc.edu/econ/economics/faculty/wray/601wray/Ingham_ontology%20of%20Money.pdf
http://www.twill.info/the-ontology-of-money/
http://www.palgraveconnect.com/pc/doifinder/10.1057/9781137302953.0007
Sample chapter http://www.palgrave.com/PDFs/9781137302946.pdf (The book was
edited by my former thesis supervisor Geoff Harcourt. After the Paris
workshop in April I travelled over to Cambridge UK to discuss some of the
issues of payment with Ingham.

The link I provided in another thread to an UNCITRAL document is well worth
reading, to consider the significance of registry-based versus token-based
ways of sending around the quantified entitlements and obligations that
Ingham speaks of:
http://www.uncitral.org/pdf/english/workinggroups/wg_4/wp_119_e.pdf

For example, ACH (Automated Clearing House) is registry-based. BTC is
token-based. XRP is token-based.

I came to the conclusion that the only legitimate "value" of 1 BTC is zero.
BTC is merely the message-bearing token, it's not an instantiation of "the
value". It's limited supply is meaningless. For this reason I agree with
the determination of courts in Finland, China and elsewhere that BTC is a
digital commodity, a sort of electronic vehicle to transport information
about the quantified entitlements and obligations that Ingham speaks of. A
unit of BTC is therefore properly worth no more than the scanned image of a
paper cheque. That scanned image is worth zero, and cannot be logically
conflated with the value being exchanged.

Some consider these matters "too academic". My response is that if what we
were talking about was the development of standard specifications for
international shipping containers, it would not be "too academic" to
determine whether these containers had to be suitable to ship things like
fresh tomatoes as well as steel bars.  It matters just as much what this
"web payments" system is supposed to be shipping around.

-- 
Joseph Potvin
Operations Manager | Gestionnaire des opérations
The Opman Company | La compagnie Opman
jpotvin@opman.ca
Mobile: 819-593-5983



On Sun, May 17, 2015 at 7:36 AM, Timothy Holborn <timothy.holborn@gmail.com>
wrote:

>
> http://www.paymentlawadvisor.com/2015/05/12/fincen-and-department-of-justice-settle-anti-money-laundering-charges-against-crypto-currency-company-ripple-labs/
>
> No real different in my world... Perhaps important for operators / users
> though...
> On Sun, 17 May 2015 at 9:18 pm, Melvin Carvalho <melvincarvalho@gmail.com>
> wrote:
>
>> On 17 May 2015 at 12:49, Joseph Potvin <jpotvin@opman.ca> wrote:
>>
>>> RE: "Galbraith ... says it's not important in the grand scheme of
>>> things"
>>>
>>
>> That part was the comment from the regulator.  The bit in quotes was
>> galbraith.
>>
>> By all means we could spend time trying to nail down a definition of
>> money.  However, I've seen such discussions in the past, go on for 100s of
>> hours and not make progress, so bear in mind that it may not be the most
>> productive use of time.
>>
>> By using URIs to name things, it tends to be less restrictive.  Anything
>> that can be named can be modeled.  They are just variable names.
>>
>>
>>>
>>> But we're not discussing the "grand scheme of things" here. We're
>>> discussing technical informatics specifications.
>>>
>>> In the grand scheme of things, when the technical informatics specifications
>>> in the domain of money & payment inherit deep architecture flaws (such as
>>> ontological confusion) then the critical systems put in place inevitably
>>> need to be sustained here and there with ad hoc work-arounds. Since 2007
>>> we've all been witness to quite a few ad hoc work-arounds which have no
>>> internal system logic, but which are driven by the need to prevent the
>>> global money & payment "kernel" from crashing.
>>>
>>> Joseph Potvin
>>> Operations Manager | Gestionnaire des opérations
>>> The Opman Company | La compagnie Opman
>>> jpotvin@opman.ca
>>> Mobile: 819-593-5983
>>>
>>> On Sun, May 17, 2015 at 6:03 AM, Melvin Carvalho <
>>> melvincarvalho@gmail.com> wrote:
>>>
>>>>
>>>>
>>>> On 17 May 2015 at 04:50, Joseph Potvin <jpotvin@opman.ca> wrote:
>>>>
>>>>> You're going to need to point to a general definition of "money" if
>>>>> you want to arrive at a general definition of a class of thing which
>>>>> receives, contains and dispatches it.
>>>>>
>>>>> But let me ask: Do you consider "money" to be an entity, or a
>>>>> relationship?
>>>>>
>>>>
>>>> I've spoken to regulators about this.  One that I trust pointed me to
>>>> Galbraith:
>>>>
>>>> Galbraith doesn't really give a hard definition because he says it's
>>>> not important in the grand scheme of things... "The reader should proceed
>>>> in these pages in the knowledge that money is nothing more or less
>>>> than what he or she always thought it was - what is commonly offered
>>>> or received for the purchase or sale of goods, services or other things."
>>>>
>>>>
>>>>>
>>>>> In the context of IT architecture, the class Wallet is not a container
>>>>> "of" money. It's a container of information "about" money. This is because
>>>>> the class Money is not an entity, it's a relationship. That's a rather
>>>>> critical difference to anyone's wallet ER diagram, certainly.
>>>>> (See: "Money is a Social Relation
>>>>> http://www.jstor.org/discover/10.2307/29769872?uid=3739448&uid=2&uid=3737720&uid=4&sid=21106849248993
>>>>> )
>>>>>
>>>>> Money (the relation) might be stored with a tangible, say like gold.
>>>>> Aside from looking nice, gold serves as a sort of solid metal "wallet".
>>>>> Money (the relation) might otherwise be stored with a tangible like Bitcoin
>>>>> -- most will be surprised that I call it a tangible, but the simple fact is
>>>>> that it requires tangible human effort, computing resources and electrical
>>>>> energy to "mine" and then to manage those units. People may say "gold is
>>>>> money" or "bitcoin is money" but that's just colloquial loose language. A
>>>>> quanity of Gold, or a Bitcoin, are entities. The connection with various
>>>>> useful things you can exchange for a certain amount of gold or of Bitcoin
>>>>> express the relationship. That relationship can stay the exactly same while
>>>>> the entity varies.
>>>>>
>>>>> Joseph Potvin
>>>>> Operations Manager | Gestionnaire des opérations
>>>>> The Opman Company | La compagnie Opman
>>>>> jpotvin@opman.ca
>>>>> Mobile: 819-593-5983
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> On Sat, May 16, 2015 at 8:58 PM, Manu Sporny <
>>>>> msporny@digitalbazaar.com> wrote:
>>>>>
>>>>>> On 05/16/2015 08:17 AM, Melvin Carvalho wrote:
>>>>>> > "A wallet is a container of money"
>>>>>>
>>>>>> The Web Payments IG started out talking about "digital wallets" and
>>>>>> quickly moved away from the idea since a "digital wallet" can hold
>>>>>> many
>>>>>> other things as Tim and Jorge point out.
>>>>>>
>>>>>> There seems to be some sort of consensus around the concept of an
>>>>>> 'account' and a 'ledger'. Those terms aren't as accessible to most
>>>>>> people was 'wallet', but it may be the right way to model these sorts
>>>>>> of
>>>>>> things.
>>>>>>
>>>>>> <Alice> <com:account> <Alice:#account1>
>>>>>> <Alice:#account1> <com:currency> "USD".
>>>>>> <Alice:#account1> <rdfs:label> "Party Money".
>>>>>> <Alice:#account1> <com:ledger> <Alice:#ledger1>
>>>>>>
>>>>>> -- manu
>>>>>>
>>>>>> --
>>>>>> Manu Sporny (skype: msporny, twitter: manusporny, G+: +Manu Sporny)
>>>>>> Founder/CEO - Digital Bazaar, Inc.
>>>>>> blog: The Marathonic Dawn of Web Payments
>>>>>> http://manu.sporny.org/2014/dawn-of-web-payments/
>>>>>>
>>>>>>
>>>>>
>>>>>
>>>>> --
>>>>>
>>>>> <819-593-5983>
>>>>>
>>>>
>>>>
>>>
>>>
>>> --
>>>
>>>


-- 

<819-593-5983>
Received on Sunday, 17 May 2015 12:13:54 UTC

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