[118299] in Cypherpunks
Re: A question about b-money... (fwd)
daemon@ATHENA.MIT.EDU (Jim Choate)
Fri Sep 24 20:22:59 1999
From: Jim Choate <ravage@einstein.ssz.com>
Message-Id: <199909232243.RAA20794@einstein.ssz.com>
To: cypherpunks@einstein.ssz.com
Date: Thu, 23 Sep 1999 17:43:10 -0500 (CDT)
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Reply-To: Jim Choate <ravage@einstein.ssz.com>
> Date: Thu, 23 Sep 1999 22:39:40 +0100
> From: Adam Back <adam@cypherspace.org>
> Subject: Re: A question about b-money...
> > Jim writes:
> > You want to buy a CD at a online vendor. You burn enough cpu resources to
> > generate a token. You send that token to the CD vendor. At that same time
> > you've got to pay the electric company for the energy that you used to
> > generate the original token,
> you pay your electricity bill with something else: cheque, direct
> debit, credit card etc. That is how you mint b-money.
Which makes it worthless in the real world. If I can't pay my normal bills
and such with it why in the world would I spend the effort and time setting
up a second system THAT WAS NOT CONVERTIBLE to my primary monetary system?
How do I transfer all those resources and time that are expeded in setting
up such a system into the b-money domain? You're saying it can't be done.
How do I justify two seperate and independant value systems?
Why would a CD vendor accept such a payment (for example) if they couldn't
even use it to pay their rent and electric bill (which brings us back to
that inflation loop again)?
> > At that same time you've got to pay the electric company for the
> > energy that you used to generate the original token, meaning yet
> > another token must be burned to pay for the work done to generate
> > the first token. And so ad infinitum.
> Gold similarly costs money to produce, you have the cost of digging it
> up, etc. Gold has some inherent manufactoring value, b-money doesn't.
Yes it does, that's what gives b-money it's value. The cost of wading
through the computation to generate the token in the first place. As I said
in a previous message, b-money is nothing but a measure of W-s's. With gold
the number of W-s equivalents needed to recover x amount of gold is less
than the perceived market value of the gold, this difference is called
profit (at the manufacturing and recovery stage that is). There is no profit
margin in b-money and if there were it would only serve to inflate the value
of the token even more.
Actualy it costs money to *recover* gold, it's produced naturaly and is
limited in quantity (and yes both of those matter in a real working monetary
system that's based on physical parameters).
I give each person along the line either a percentage of the gold that's
recovered or else I give them some sort of script equivalent. How do you do
that with b-money? And why would you use b-money if you need to issue yet
another token for the fractional equivalent of the script? And how do the
fact that I have to expend even more W-s's to split the token effect the
value of the tokens that are resultant? This still doesn't address how I pay
for the W-s's that I expended in the first place to make the token.
> The same argument would apply to gold. Presume for the sake of
> argument that the value of gold was exactly the cost of digging it up.
> If you want to pay for digging gold up by digging gold up clearly you
> will be digging gold up forever.
If the cost of recovering gold was equal to its perceived value it would in
effect be worthless. And no, you will be digging gold up until you run out
of gold (it's finite at several levels). The problem is that with no profit
margin in the recover or manufacturing process your extranious
responsibilities (e.g. buying your daughter that new Barbie doll house) will
cause you to go broke quite quickly.
It's one of the stabalizing factors in a script based government run minting
process, there's no profit and there's also no extranious responsibilities.
b-money lacks both of these characteristics.
____________________________________________________________________
Man is the best computer we can put aboard a spacecraft - and
the only one that can be mass produced with unskilled labor.
Werner von Braun
The Armadillo Group ,::////;::-. James Choate
Austin, Tx /:'///// ``::>/|/ ravage@ssz.com
www.ssz.com .', |||| `/( e\ 512-451-7087
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