wizardwatson
Member
- Joined
- Jun 15, 2007
- Messages
- 8,080
WizardWatson's Money Idea
SYNOPSIS/INFO/DISCLAIMER: This post is about 4 pages long in Word. It’s about starting an alternative grass roots currency system, which I’ve posted before, but now I’m done with my work/research in that area ( in my opinion anyway ) so it’s kind of new info. It’s also a call to action, as I’m looking for anyone who’s interested to help me (details within). And please, please, please ask questions if nothing else. My short term goal is merely to educated a sufficient number of people about this idea. I have no money or personal interest in this thing other than to see it exist. Feel free to PM request email/gtalk info from me if you’d like to chat about the concept.
Background.
What truly motivated me to get involved on RPF was something I have been working on since before 2007. That being, a grass roots solution to the problem of how to set up, run, and maintain a local and yet decentralized monetary system. Although, at the time I hadn’t really finished the job, I knew if I got to the point where I had something workable to act upon, in my opinion, the liberty movement would be the most fertile ( and geographically dispersed ) ground to get the idea implemented.
Some of you may have seen ( and can still see via search ) a lot of what I’ve written about this subject on RPF and other places I’ve posted over the last couple years. But until late July, I hadn’t really achieved a state of clarity so to speak on what exactly the system I envisioned would look like and how it would function ( quite necessary if you ever hope to implement it!! lol ). So in speaking and trying to gain interest for my ideas before I really had a grasp on it, there was a lot of frustration in me, and a lot of inability to answer clearly questions people were posing. I felt the answer was intuitively there, but could not articulate it.
So where are you at now?
Right now I am in a position where I believe the basics of the idea can be explained simply enough ( ie regular English, not math or any other kind of jargon ) but some of the technological pieces necessary for extremely large and connected systems, do require a bit of knowledge in computer programming and graph theory to understand to such a degree where the listener could build the same type of system from the ground up.
Now, many at this point will say ( I know, as I’ve explained to many up to this point ), “Well write a book”, “Write a white paper”, “Build a website”, “Write a system design document”, etc. These are all fine and necessary things, but it is still early in the game and there are some problems:
First problem is me. I didn’t come to understand this system by being an expert programmer, an expert writer, an expert software designer, an expert speaker, or expert anything else. I was only focusing on one problem space for a very long time, and using, in a sense, whatever tools I needed to to get the job done. I’d like to think the process has made me the jack of many fields of study, but really it just meant a whole lot of reading ( and forgetting ). So while I feel I know which direction to go, I am not under any delusion that I can do this thing by myself. There’s software already written ( by programmers more skilled than myself ) that would serve as a good base for this new system with only minor tweaking. There’s people much better than me at raising money and marketing. Consequently, it is in the ‘marketing’ of this concept where we come to the other and perhaps biggest problem.
Who is the market for such a thing? Well, the market for a product like this is everyone. Why, because everyone benefits from a monetary system that doesn’t destroy its participants ( I will go into specific benefits in another section below ). Given the universal appeal of a system like this it becomes necessary to have a kind of universal ‘communication’ or explanation of what it actually is. As many on this forum know, that in itself is a huge problem, as many times we can’t even explain to many people how the current system works in enough detail to explain what is wrong with it.
So the gist of where I’m at, I believe is this: I can explain the system through simple discourse and references to other people’s works, but until we have a cadre, or inner circle of people that understand it and are willing to get behind the idea, we have little hope of going to the next step which includes financing not only the building of the system, but developing a more universal communication that the majority of people understand and accept.
It should be clear, this system being a possible vehicle for economic change, that even if the system were completely built, you will need likely thousands of participants in a sufficiently populated area merely to prototype the system. Problems like how to market the system organically within the current system is a problem that is perhaps futile to ‘plan’ at this stage, though we should always to open to any strategic considerations in this regard.
So this document then is basically an attempt to provide an overview of how the system would work, and very briefly touch on benefits of it, as I am assuming that the readers of this forum at least understand the basics of what plagues our current economy in the way of defunct monetary systems.
Important Prerequisite: The decentralized payment transfer mechanism
In order to understand the system in question, you have to understand the system it is based on. The groundwork for a decentralized payment resolution computer program was done by Ryan Fugger and is known as the “Ripple Payment Protocol”. You can find many internet reference links to his work in the wikipedia entry for “Ripple Monetary System”.
I encourage anyone reading this document to also familiarize themselves with Ryan’s work, as this system is based on his system. The primary difference being that Ryan conceived of connecting the social graph by extending credit lines to your friends, whereas I conceive of connecting the social graph through intermediary asset pool agents.
The most important point to gather from his work though is simply that it allows one user to pay another user that they are not directly connected to in a social graph, without there being a common intermediary to all users.
What are the basics of the system?
In a sentence, the system would be designed to offer an alternative to all monetary systems currently in design. Primarily though, it was conceived of as a solution to the problems created or ignored by the Federal Reserve system of the United States.
To the end user, the cheapest implementation of the system, might simply be a digital currency where you use a cell-phone or the internet to transfer funds. You would choose what currency or commodity you wanted to display your balance in ( it will always be relatively the same for everyone, you won’t be able to price arbitrage in this way ). These balances and numbers though are not the real part, they are only algorithmically generated based on the asset-backed system that runs under the hood. The part most users will never see or worry about ideally.
Under the Hood
Describing how the system actually works under the hood involves a few steps:
First a group of interested individuals will set up various commodity/asset pools. Preferably, these asset pools would be either stable in the price sense, or would always rise ( land, precious metals, energy units, average man hours, etc. ). Members would randomly belong to a certain number of pools, say 7 or 8 ( randomly from system perspective, likely will be ‘most local’ pools, or preference of land vs. precious metals, etc). What percentage each member has of each pool represents how much “money” they have. There would be local legal research that went into determining exactly how this “asset pool” would be structured, and although I have done quite a bit of research in this area, it’s out of the scope of this document.
Second step is that each member must set conversion rates of their choosing between all of the commodities that they own. So each user might have separate rates for conversion between gold and silver for instance. There is incentive for the user to use good judgement as the principle is that you are willing to transfer or exchange any monetary commodity pool for another, and you don’t want to undervalue anything you own.
Before discussing the third step it is helpful to visualize the graph that we would have in a real world scenario. Essentially, all the members are connected to asset pools, which in turn are connected to members, and on, and on. Users have designated a conversion rate between all of their asset pools ( this is necessary for step three to operate ).
The third step is now to calculate a ‘best fit’ conversion rate for all commodities on the system. The purpose being to establish an equilibrium ‘money’ price, in a similar spirited though technically divergent manner of a Walrasian call market. Think of it as the end result of everyone arguing about what the conversion rate of Smith’s apples and Jones’ oranges is. But remember it’s conversion rates ‘per’ asset pool, not for any specific commodity like ‘1 ounce of gold = x’.
Step four is to actually transact with one another by making payment transfers, or by getting additional users to join ( buy into commodity pools, see step 1 ). Payment transfers are accomplished via the Ripple Payment transfer mechanism. The algorithm performed in step 3 makes all paths from node x to node y equivalent. The significance of this is primary to my work ( as opposed to ‘others’ ) in this area but is outside the scope of this post.
What is the benefit of such a system?
The primary benefit of such a system, I believe would be self-control. An Amish community could use this system to interact without submitting to an outside system. A country could use this to interact with other countries without being destabilized by a centralized currency system. Inflation/Deflation could be stabilized, which conservatively saps 7% of all wealth per year. Small communities could use this instead of the FRN system in order to keep rivers of liquidity from destroying their local economies or turning them into strip malls.
What are the requirements of setting up such a system?
There are two main requirements: Software and asset pools. Software is already half built ( in my opinion ). Asset pools are readily available but this has to be grass roots research oriented as all asset pools should be localized for legal and strategic reasons.
How long would setting it up take if we had the software?
Don’t know but I could see people using this to transact within weeks or months of the software being ready based on my experience in the software industry. RipplePay.com has currently I think over 1000 members but no ones really using it at the moment ( as its kind of half-done as I said ).
What is your basic strategy?
Economics has always been central for me. Jobs, money, taxes, banks, credit, etc. I learned early that all economics is connected to local monetary systems. So I set out to first devise a monetary system that doesn’t rely on the current one and doesn’t have so many of its problems. We can’t put our money somewhere where world governments can steal it via some kind of policy they enact. After we have a real “bank” to store our treasure, then we can start focusing on getting the tax gorilla off our back, and other strategies people are more familiar with.
What are your short term goals?
The first steps are that we need Q&A on this topic as a viable strategy. And as I said in the intro, we need a cadre of maybe 15 or 20 souls who understand and believe in this strategy as viable who are willing to help implement it and learn it. I don’t want mindless followers, I want people who are interested in the concept to follow that interest, and if it appeals to them, to help.
What are your medium term goals?
We need to get this software finished and in open source. Ryan’s work needs to be completed ( if not by him then by someone for money ), in my opinion and we need to organize funding for that, and we need to organize legal groups for all 50 states in regards to how to set up these asset pools.
What are your long term goals?
To have communities that are immune to the disastrous effects of unnatural monetary systems.
Is this it?
No there are plenty of links and details I haven’t gone into, but I would rather that be hashed out in Q& A as I never know where the readers mind goes to and what part they are getting stuck on. And as I said, I can’t just write a book. I want to use RPF, as my main discussion ground and will perhaps reproduce it on my website or something if it becomes too difficult to navigate.
SYNOPSIS/INFO/DISCLAIMER: This post is about 4 pages long in Word. It’s about starting an alternative grass roots currency system, which I’ve posted before, but now I’m done with my work/research in that area ( in my opinion anyway ) so it’s kind of new info. It’s also a call to action, as I’m looking for anyone who’s interested to help me (details within). And please, please, please ask questions if nothing else. My short term goal is merely to educated a sufficient number of people about this idea. I have no money or personal interest in this thing other than to see it exist. Feel free to PM request email/gtalk info from me if you’d like to chat about the concept.
Background.
What truly motivated me to get involved on RPF was something I have been working on since before 2007. That being, a grass roots solution to the problem of how to set up, run, and maintain a local and yet decentralized monetary system. Although, at the time I hadn’t really finished the job, I knew if I got to the point where I had something workable to act upon, in my opinion, the liberty movement would be the most fertile ( and geographically dispersed ) ground to get the idea implemented.
Some of you may have seen ( and can still see via search ) a lot of what I’ve written about this subject on RPF and other places I’ve posted over the last couple years. But until late July, I hadn’t really achieved a state of clarity so to speak on what exactly the system I envisioned would look like and how it would function ( quite necessary if you ever hope to implement it!! lol ). So in speaking and trying to gain interest for my ideas before I really had a grasp on it, there was a lot of frustration in me, and a lot of inability to answer clearly questions people were posing. I felt the answer was intuitively there, but could not articulate it.
So where are you at now?
Right now I am in a position where I believe the basics of the idea can be explained simply enough ( ie regular English, not math or any other kind of jargon ) but some of the technological pieces necessary for extremely large and connected systems, do require a bit of knowledge in computer programming and graph theory to understand to such a degree where the listener could build the same type of system from the ground up.
Now, many at this point will say ( I know, as I’ve explained to many up to this point ), “Well write a book”, “Write a white paper”, “Build a website”, “Write a system design document”, etc. These are all fine and necessary things, but it is still early in the game and there are some problems:
First problem is me. I didn’t come to understand this system by being an expert programmer, an expert writer, an expert software designer, an expert speaker, or expert anything else. I was only focusing on one problem space for a very long time, and using, in a sense, whatever tools I needed to to get the job done. I’d like to think the process has made me the jack of many fields of study, but really it just meant a whole lot of reading ( and forgetting ). So while I feel I know which direction to go, I am not under any delusion that I can do this thing by myself. There’s software already written ( by programmers more skilled than myself ) that would serve as a good base for this new system with only minor tweaking. There’s people much better than me at raising money and marketing. Consequently, it is in the ‘marketing’ of this concept where we come to the other and perhaps biggest problem.
Who is the market for such a thing? Well, the market for a product like this is everyone. Why, because everyone benefits from a monetary system that doesn’t destroy its participants ( I will go into specific benefits in another section below ). Given the universal appeal of a system like this it becomes necessary to have a kind of universal ‘communication’ or explanation of what it actually is. As many on this forum know, that in itself is a huge problem, as many times we can’t even explain to many people how the current system works in enough detail to explain what is wrong with it.
So the gist of where I’m at, I believe is this: I can explain the system through simple discourse and references to other people’s works, but until we have a cadre, or inner circle of people that understand it and are willing to get behind the idea, we have little hope of going to the next step which includes financing not only the building of the system, but developing a more universal communication that the majority of people understand and accept.
It should be clear, this system being a possible vehicle for economic change, that even if the system were completely built, you will need likely thousands of participants in a sufficiently populated area merely to prototype the system. Problems like how to market the system organically within the current system is a problem that is perhaps futile to ‘plan’ at this stage, though we should always to open to any strategic considerations in this regard.
So this document then is basically an attempt to provide an overview of how the system would work, and very briefly touch on benefits of it, as I am assuming that the readers of this forum at least understand the basics of what plagues our current economy in the way of defunct monetary systems.
Important Prerequisite: The decentralized payment transfer mechanism
In order to understand the system in question, you have to understand the system it is based on. The groundwork for a decentralized payment resolution computer program was done by Ryan Fugger and is known as the “Ripple Payment Protocol”. You can find many internet reference links to his work in the wikipedia entry for “Ripple Monetary System”.
I encourage anyone reading this document to also familiarize themselves with Ryan’s work, as this system is based on his system. The primary difference being that Ryan conceived of connecting the social graph by extending credit lines to your friends, whereas I conceive of connecting the social graph through intermediary asset pool agents.
The most important point to gather from his work though is simply that it allows one user to pay another user that they are not directly connected to in a social graph, without there being a common intermediary to all users.
What are the basics of the system?
In a sentence, the system would be designed to offer an alternative to all monetary systems currently in design. Primarily though, it was conceived of as a solution to the problems created or ignored by the Federal Reserve system of the United States.
To the end user, the cheapest implementation of the system, might simply be a digital currency where you use a cell-phone or the internet to transfer funds. You would choose what currency or commodity you wanted to display your balance in ( it will always be relatively the same for everyone, you won’t be able to price arbitrage in this way ). These balances and numbers though are not the real part, they are only algorithmically generated based on the asset-backed system that runs under the hood. The part most users will never see or worry about ideally.
Under the Hood
Describing how the system actually works under the hood involves a few steps:
First a group of interested individuals will set up various commodity/asset pools. Preferably, these asset pools would be either stable in the price sense, or would always rise ( land, precious metals, energy units, average man hours, etc. ). Members would randomly belong to a certain number of pools, say 7 or 8 ( randomly from system perspective, likely will be ‘most local’ pools, or preference of land vs. precious metals, etc). What percentage each member has of each pool represents how much “money” they have. There would be local legal research that went into determining exactly how this “asset pool” would be structured, and although I have done quite a bit of research in this area, it’s out of the scope of this document.
Second step is that each member must set conversion rates of their choosing between all of the commodities that they own. So each user might have separate rates for conversion between gold and silver for instance. There is incentive for the user to use good judgement as the principle is that you are willing to transfer or exchange any monetary commodity pool for another, and you don’t want to undervalue anything you own.
Before discussing the third step it is helpful to visualize the graph that we would have in a real world scenario. Essentially, all the members are connected to asset pools, which in turn are connected to members, and on, and on. Users have designated a conversion rate between all of their asset pools ( this is necessary for step three to operate ).
The third step is now to calculate a ‘best fit’ conversion rate for all commodities on the system. The purpose being to establish an equilibrium ‘money’ price, in a similar spirited though technically divergent manner of a Walrasian call market. Think of it as the end result of everyone arguing about what the conversion rate of Smith’s apples and Jones’ oranges is. But remember it’s conversion rates ‘per’ asset pool, not for any specific commodity like ‘1 ounce of gold = x’.
Step four is to actually transact with one another by making payment transfers, or by getting additional users to join ( buy into commodity pools, see step 1 ). Payment transfers are accomplished via the Ripple Payment transfer mechanism. The algorithm performed in step 3 makes all paths from node x to node y equivalent. The significance of this is primary to my work ( as opposed to ‘others’ ) in this area but is outside the scope of this post.
What is the benefit of such a system?
The primary benefit of such a system, I believe would be self-control. An Amish community could use this system to interact without submitting to an outside system. A country could use this to interact with other countries without being destabilized by a centralized currency system. Inflation/Deflation could be stabilized, which conservatively saps 7% of all wealth per year. Small communities could use this instead of the FRN system in order to keep rivers of liquidity from destroying their local economies or turning them into strip malls.
What are the requirements of setting up such a system?
There are two main requirements: Software and asset pools. Software is already half built ( in my opinion ). Asset pools are readily available but this has to be grass roots research oriented as all asset pools should be localized for legal and strategic reasons.
How long would setting it up take if we had the software?
Don’t know but I could see people using this to transact within weeks or months of the software being ready based on my experience in the software industry. RipplePay.com has currently I think over 1000 members but no ones really using it at the moment ( as its kind of half-done as I said ).
What is your basic strategy?
Economics has always been central for me. Jobs, money, taxes, banks, credit, etc. I learned early that all economics is connected to local monetary systems. So I set out to first devise a monetary system that doesn’t rely on the current one and doesn’t have so many of its problems. We can’t put our money somewhere where world governments can steal it via some kind of policy they enact. After we have a real “bank” to store our treasure, then we can start focusing on getting the tax gorilla off our back, and other strategies people are more familiar with.
What are your short term goals?
The first steps are that we need Q&A on this topic as a viable strategy. And as I said in the intro, we need a cadre of maybe 15 or 20 souls who understand and believe in this strategy as viable who are willing to help implement it and learn it. I don’t want mindless followers, I want people who are interested in the concept to follow that interest, and if it appeals to them, to help.
What are your medium term goals?
We need to get this software finished and in open source. Ryan’s work needs to be completed ( if not by him then by someone for money ), in my opinion and we need to organize funding for that, and we need to organize legal groups for all 50 states in regards to how to set up these asset pools.
What are your long term goals?
To have communities that are immune to the disastrous effects of unnatural monetary systems.
Is this it?
No there are plenty of links and details I haven’t gone into, but I would rather that be hashed out in Q& A as I never know where the readers mind goes to and what part they are getting stuck on. And as I said, I can’t just write a book. I want to use RPF, as my main discussion ground and will perhaps reproduce it on my website or something if it becomes too difficult to navigate.
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