tag:blogger.com,1999:blog-6704573462403312459.post8635851083716999653..comments2024-03-29T02:53:03.321-04:00Comments on Moneyness: In praise of anonymous moneyJP Koninghttp://www.blogger.com/profile/02559687323828006535noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-6704573462403312459.post-85658754583268342322016-10-02T07:47:57.258-04:002016-10-02T07:47:57.258-04:00Hi Dave,
The divorce you're talking about--th...Hi Dave,<br /><br />The divorce you're talking about--the separation of the granting of credit from the provision of a payments medium--is a different divorce than the one I'm talking about. I'm talking about the medium of exchange no longer being the unit in which prices are expressed in contracts and by retailers.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-28837524134193480712016-10-02T07:12:19.186-04:002016-10-02T07:12:19.186-04:00Mervyn King proposed the divorce of payments from ...Mervyn King proposed the divorce of payments from credit in his 2010 Bagehot speech. In light of Fishers 100% money trend reflected in Marc Carney's "broad money" implementations of late, the so-called "convenient marriage" is taking up separate residences and that debt "money creation In the modern economy" mint will likely be broken up into so-called mintettes of equity coin in the greatest debt-for-equity swap ever witnessed. The discomfort of monetary system divorce may be tolerable if the citizen's dividend is sufficiently large... albeit volatile. Dave Harrisonhttps://www.blogger.com/profile/02305836762630489696noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-89418976964568085312016-10-01T23:05:12.393-04:002016-10-01T23:05:12.393-04:00Hi Zooko,
"How about we start with Bitcoin v...Hi Zooko,<br /><br />"How about we start with Bitcoin vs. the Venezuelan bolívar? How does your price-stability metric look in that comparison?"<br /><br />Yes, bitcoin certainly comes out looking better against the bolívar. However, the competition for Venezuelan unit of account is being waged between the bolívar and the US dollar, with Bitcoin only a long shot. I admit that it's unsporting to send Bitcoin up against the reigning heavyweight, but it can't be helped; the U.S. dollar is the world's back-up medium of exchange and unit of account.<br /><br />"(I worked on DigiCash Ecash and I'm the founder of https://z.cash .)"<br /><br />Yes, I've been following your work with Zcash and was also aware of your involvement with DigiCash. I hope my explanation of Ecash wasn't too far off! JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-39762935936562198712016-10-01T17:36:45.056-04:002016-10-01T17:36:45.056-04:00Thanks for the link to that paper, which is excel...Thanks for the link to that paper, which is excellent - the author suggest that the electronic currency could be pegged to whatever external variable required just by varying the quantity of electronic currency units held in people's wallets. This is a way simpler and better idea than my suggestion, once you get your head around the idea of the number of units you hold in your wallet varying day-by-day. <br /><br />I agree that with no actual backing an electronic currency would rely on transactional demand for it to maintain any value. If demand to hold it fell then the algorithm would reduce the number of units in circulation. But beyond a certain point if people really didn't want to hold it nothing could prevent its value falling to value no matter what its algorithm did.Rob Rawlingsnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-61684092708625789952016-10-01T14:32:12.456-04:002016-10-01T14:32:12.456-04:00It's unsporting to send little infant Bitcoin ...It's unsporting to send little infant Bitcoin up against the reigning heavyweight champion of the world, and arguably the heaviest heavyweight in all of history, the U.S. Dollar.<br /><br />How about we start with Bitcoin vs. the Venezuelan bolívar? How does your price-stability metric look in that comparison?<br /><br />(I worked on DigiCash Ecash and I'm the founder of https://z.cash .)Anonymoushttps://www.blogger.com/profile/17046522562803939443noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-49568855631137717682016-10-01T13:16:39.312-04:002016-10-01T13:16:39.312-04:00Hi Rob,
"Would it be possible to have a cur...Hi Rob, <br /><br />"Would it be possible to have a currency that was both decentralized and fixed in value ?<br /><br />That's the holy grail, as I said in response to Jason. Maybe something like Maker Dai or bitUSD can get there. <br /><br />I believe Ferdinando Ametrano implemented a version of what you describe, assuming I have understood you properly.<br /><br />http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2425270<br /><br />Nubits implements "parking," or a higher interest rate in order to counteract falling demand.<br /><br />http://jpkoning.blogspot.ca/2016/08/end-of-stablecoin.html<br /><br />I am wary of solutions that don't try to utilize some sort of backing. If the demand for a stablecoin suddenly disappears, a backed stablecoin will retain its peg. However, in the scheme you suggest, if the demand falls to 0, there is nothing that can be done to prevent the price from also falling to 0. JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-35496711907955928532016-10-01T13:05:56.675-04:002016-10-01T13:05:56.675-04:00Hi Jason, thanks for the link, great podcast.
Of...Hi Jason, thanks for the link, great podcast. <br /><br />Of the four approaches, I've written about the second one here, specifically bitUSD, which seems very close to Maker dai:<br /><br />http://jpkoning.blogspot.ca/2015/07/stablecoin.html<br /><br />I'll have to read more about the third option, didn't quite understand what the interviewee was saying.<br /><br />I think that anonymity + stability + decentralization is certainly the holy grail. The biggest challenge that Maker dai and bitUSD face is that the underlying collateral is a highly volatile cryptocoin, and this makes for bad backing. One hopes that more stable assets can eventually be used as collateral. The interviewee touches on this problem in the podcast.<br /><br />One advantage of eCash over Maker dai is that the former can be a full reserve currency, and thus 100% safe. For each $1 in eCash, the bank holds $1 in banknotes. Maker dai can recruit as much collateral as it wants to back its stablecoin, but that collateral can never be actual U.S. banknotes. JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-29089920308951743982016-10-01T10:04:49.235-04:002016-10-01T10:04:49.235-04:00Would it be possible to have a currency that was ...Would it be possible to have a currency that was both decentralized and fixed in value ?<br /><br />I think the the bitcoin algorithm simply pegs the number of new bitcoins that can be mined every year and then it exchange varies with changes in demand to hold it. But in theory couldn't you have a currency identical to bitcoin except its value was fixed to a bundle of goods, or another currency? When the demand to hold it increased the algorithm could make mining less costly and get the supply to increase. When the demand to hold falls then it would be harder - but decreasing the supply by imposing a transaction "tax" would probably work, with the tax being a surplus over the agreed sales price paid by the buyer, which is just destroyed to decrease the quantity in circulation.Rob Rawlingsnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-40182806725558179572016-10-01T02:05:57.536-04:002016-10-01T02:05:57.536-04:00JP, what do you think of current projects to squar...JP, what do you think of current projects to square the anonymity-stability-decentralization triangle? The websites and technical papers of the <a href="https://z.cash/" rel="nofollow">zcash</a> anonymity protocol and the <a href="https://makerdao.github.io/docs/" rel="nofollow">Maker dai</a> stablecoin are surprisingly readable.<br /><br />There's a fascinating discussion of four different approaches to pegging synthetic commodities to the value of real ones on this <a href="https://letstalkbitcoin.com/blog/post/the-ether-review-16-dominic-williams-synthetic-assets" rel="nofollow">Ether Review episode</a> with Dominic Williams. Curious if you think any of the four will work. It's a tough nut to crack.Jason Treithttps://www.blogger.com/profile/18032439392851844044noreply@blogger.com