[118327] in Cypherpunks
Re: A question about b-money... (fwd)
daemon@ATHENA.MIT.EDU (Anonymous)
Fri Sep 24 23:07:04 1999
Date: Sat, 25 Sep 1999 04:48:12 +0200 (CEST)
Message-Id: <199909250248.EAA09774@mail.replay.com>
From: Anonymous <nobody@replay.com>
To: cypherpunks@cyberpass.net
Reply-To: Anonymous <nobody@replay.com>
Keep in mind that the cycle-burning is only used in b-money to add to the
money supply. Normally this is not how you would get b-money. You would
get it in exactly the way you get money today: you would earn it, and
other people would give it to you.
In a mature b-money system, there is very little cycle burning going on
and the money supply is stable. The system is set up so that if you need
more money, you have a choice of going out and earning it in the market,
or burning cycles. Either way you get the same amount of new money.
It is not true, as someone suggested, that burning cycles costs you as
much b-money as you will make for them. You are credited with the cost
of the burned cycles, but this is probably greater than the cost of the
electricity. The value of a certain amount of computer time is generally
greater than the cost of the electricity used to provide that computer
time. Hence you do make a "profit" in burning cycles to make b-money.
However that profit is balanced by the loss associated with what you
could have done with those cycles otherwise. You could have used them
yourself, you could have rented them out. Those activities would also
have brought you a profit (an economic profit if you rented them, perhaps
an emotional profit if you had enjoyed those cycles by playing a game or
surfing the net). Similar considerations arise in other profit-making
activities; you must forego alternative uses of those resources which
generate the profits.
During a transitional period, you might pay for your electricity with
ordinary dollars while generating b-money by burning cycles. This does
not represent a losing proposition, nor is it inflationary.
As stated, the cost of the electricity is less than the value of the
cycles. But even if this were not so, it would still be a reasonable
exchange. At the end, you have paid $X in electricity and have X in
b-money to buy your CD. You end up paying $X to the electricity company
and receiving a CD in the mail, so you have in effect paid $X for the CD.
There is no loss and the books balance.
