Re: XRP & the FinCEN Decision [WAS: modeling wallets]

On 17 May 2015 at 15:51, Joseph Potvin <jpotvin@opman.ca> wrote:

> RE: "an anti spam mechanism"
>
> Understood. But that's a different use case.
>
> XRP has also harnessed as a way to raise funds for R&D.
>
> Giving XRP the job of handling three very different uses cases seems
> (seemed) clever, but that comes with risks.
>

That's a great break down.  IMHO when creating a money system overloading
the uses seems to make it easier to bring to market.

I guess the original stated purpose was as an anti spam technology, hence
of theoretical value.

In the case of XRP the distribution did seem to be problematic.


>
> 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 8:23 AM, Melvin Carvalho <melvincarvalho@gmail.com
> > wrote:
>
>>
>>
>> On 17 May 2015 at 14:12, Joseph Potvin <jpotvin@opman.ca> wrote:
>>
>>> 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.
>>>
>>
>> Not sure if this is still on topic, or it may be better to start a new
>> thread.  But
>>
>> These tokens prevent spamming the network,  Proof of work was originally
>> devised as an anti spam mechanism e.g. for email.  I think spam assassin
>> does use it in this way.
>>
>>
>>>
>>>
>>> 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>
>>>
>>
>>
>
>
> --
>
>