[118437] in Cypherpunks
Re: A question about b-money... (fwd)
daemon@ATHENA.MIT.EDU (Bill Stewart)
Tue Sep 28 02:06:33 1999
Message-Id: <3.0.5.32.19990927223604.009e1780@idiom.com>
Date: Mon, 27 Sep 1999 22:36:04 -0700
To: Adam Back <adam@cypherspace.org>, cypherpunks@cyberpass.net
From: Bill Stewart <bill.stewart@pobox.com>
Cc: ben@algroup.co.uk
In-Reply-To: <199909261526.QAA00520@server.cypherspace.org>
Mime-Version: 1.0
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Reply-To: Bill Stewart <bill.stewart@pobox.com>
At 04:26 PM 09/26/1999 +0100, Adam Back responded to someone.
>I think you are confusing hashcash and Wei's b-money.
>Hashcash inflates because processors get faster.
Jim Choate is right about b-money. It has no intrinsic value.
Actually, it's worse than no value, it's negative value,
because you're taking CPU resources off the market that could be used for
- profit-making activities, such as the
Hypothetical Boeing Distributed Wind-Tunnel Simulator or
Distributed rendering for Star Wars 2: The Death of Jar-Jar
- cool but non-profit-making activities, such as finding
Big Prime Numbers or SETI Space Aliens or cracking NSA's keys, or
- individual CPU-burners like fractal screen savers
Rewarding everybody who generates b-money is like rewarding
farmers for killing their cattle because it keeps milk prices high;
it's economically stupid for you and for them,
and reduces the supply of useful goods in the whole market.
Hashcash is a different case - you're asking people to burn CPU
in return for providing services that you would provide free anyway,
like letting them send you email. (Hmmm.. That's like rewarding farmers for
killing cattle because it cuts down on the amount of bullshit they can send
you,
which basically _is_ what you're trying to accomplish with hashcash :-)
The only case I can see in which b-money makes some sense is
signed b-money generated by one provider (the signer),
where the purpose is to limit the rate of production of b-money tokens
to match the rate of production of some good or service,
so you can have some belief that the service provider isn't
wildly inflating their IOUs for delivery of future stuff.
(Even that's a bit unrealistic most of the time.)
The good or service can be real or fictitious - anonymous bandwidth
or data storage services from an ISP, or online gamers
generating magic abilities or hit points for their characters.
For a money supply, constant growth is almost always not a good thing;
fixed quantities are better, and you can accomplush the same by
generating coins and having a trusted auditor certify how many their are;
only signed coins are any good. I suppose you could use b-money
to limit the rate at which a potentially cheating auditor can sign coins,
but it's usually better to get a more trustworthy auditor :-)
In the computer and computer-provided services business,
there's a little more excuse for an inflating currency,
because the amount of work $X worth of computers can perform
doubles every ~1.5-2 years.so the cost of providing services
could stay near-constant in exponentially-quickly-decreasing-value b-coins,
but it's pretty tough to tune them so the values stay in line.
If you've got one computer, the rate you produce more b-money
grows proportionally to the time you run it, but you can get a faster
model every 6 months and either retire or don't retire the previous one,
and the amount of b-money you have accumulates unless you're spending it.
Is b-money currently worth more than electricity (probably) or
spare computer CPU parts (probably not)?
But it's still a bogus concept, and you could have been using
the compute cycles to do something useful, instead of using
compute cycles to make b-money to buy compute cycles with.
Thanks!
Bill
Bill Stewart, bill.stewart@pobox.com
PGP Fingerprint D454 E202 CBC8 40BF 3C85 B884 0ABE 4639
