Economics Questions

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Clayton — Fri, 16 Sep 2011 01:46:52 GMT

@HH: Thanks for the positive feedback. No, I have not actually participated or worked in a DGC, I prefer to maintain physical possession. I've thought that this idea (embedding POWFs in gold coins/bars or encasing them in POWF sealed containers) might be a technology that the existing gold assaying industry might take an interest in. I don't think I'm the person to drive such a venture but I'm happy to share my ideas on it since any advancement in real monetary technology is a blow against the fiat money system which I loathe and despise. I can imagine a gold assayer performing an assay and then sealing the assayed bar in a container which cannot be opened without damaging the POWF and then taking a series of digital samples of the POWF. With this digital data, the original assayer could provide a measure of assurance that a gold bar is the very one which they assayed at a fraction of the cost of performing a new assay. This could reduce the premium on good delivery bars.

Combined with ultrasonics (which I understand is a relatively new tool in the assay business), gold assaying and certification of good delivery could become significantly less costly. Somebody posted this a while back:

(Please visit the site to view this media)

Clayton -

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Helmuth Hubener — Thu, 15 Sep 2011 21:46:53 GMT

Clayton, that is a fantastic and creative design. Thank you for sharing it. Are you involved in the DGC community?

The essential problem in digital currencies is storing the value in a way that minimizes the risk of seizure, fraud, or other type of loss. Your system addresses that in a very elegant way. Ultimately I'm not sure that as a practical matter and at the current time it would more secure than a centralized system such as Pecunix or GoldMoney, two systems which have weathered the storm and seem relatively secure from raids and seizures due to the jurisdictional arbitrage strategy they've employed. But it's certainly a radical and interesting concept.

With additional brainstorming perhaps we can come up with something that would require less initial capital. Digital Gold Currencies have long been an interest of mine and I even was involved professionally for a while.

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Clayton — Fri, 08 Jul 2011 07:32:13 GMT

Bitcoins are by construction useless. Hashcash - which Bitcoin is simply a modified form of - is useful but has no value in exchange. Useful data are things like software programs, media, anti-spam proof-of-work (Hashcash), encrypted data, and so on. Bitcoins are just proof-of-work for proof-of-work's sake. The work done has no use. Bitcoins have no use as a consumption good. They have no use as a capital good. They are not money.

I designed my own digital currency system back in 2008, before Bitcoin was around. My system doesn't use proof-of-work since it is concerned with proof of backing. The principle of operation after creation of a digital token between my system and Bitcoin is essentially the same though my system minimizes the use of public-key cryptography since I'm paranoid about the breakability of PK cryptography. My system requires extensive auditing of issuing digital reserves to verify that they are, in fact, maintaining full reserves. However, I eventually scrapped the whole idea once I realized that any system that requires the holder of the reserves to be known could be - and would be - raided and shut down. I call this the auditing-versus-anonymity problem.

I've got an idea of how to solve this problem. It's not simple and it's not elegant but I think it would work.

The system consists of two basic ideas. The first is to use a physical one-way function to track physical gold coins/bars. The way this would work is that you actually cast the bar or coin with the POWF embedded into it such that attempting to remove the POWF would result in its destruction. Anyone who has physically held the coin or bar could then take samples from the POWF to verify at any future time that a particular individual is, in fact, holding the coin or bar to which it is attached. The company that does this would be acting as a remote auditor. Using this idea, you could construct a network of anonymous gold reserves so long as the remote auditors were brick-and-mortar institutions that can be sued for fraud.

The second idea is to set up the system so that it is constantly experiencing a "bank run", that is, where anonymous reserve holders are constantly required to satisfy "virtual withdrawals" to other reserve holders. Basically, the network would be constantly remapping the reserves so that 10% of Reserve A's reserves are currently being held by Reserve B and must be physically transported from Reserve B to Reserve A, thereby proving that Reserve B actually had those reserves. I think of this as "cash Tor". The minute a reserve fails to satisfy a virtual withdrawal - or a real withdrawal - it is ostracized from the network and the remote auditor which had vouched for its physical possession of the gold coin/bar in question can be sued for fraud.

Basically, the way it would work is this. Say I want to purchase a gold-coin-backed digital token from JohnnysDigitalGold.com. First, I request the ID of a POWF-embedded gold coin for sale. Once I receive the ID, I independently transmit the ID to the brick-and-mortar remote auditor - say TrustworthyAuditor.com - to verify that JohnnysDigitalGold.com is, in fact, holding that gold piece (which the remote auditor had to, at one time in the past, have physically held). If TrustworthyAuditor.com gives a thumbs-up, then I can be as confident that JohnnysDigitalGold.com is in fact holding a gold piece as I am that the remote auditor is not fraudulent.

The honesty of the auditors themselves is checked by the network. Basically, the core of the network would consist of generating random requests for ID checks to random auditors to detect double-counting and physical loss of coins/bars. Let's say TrustworthyAuditor.com is colluding with JohnnysDigitalGold.com and says that they are holding a particular gold coin when they are, in fact, not holding it. If the coin is being held by someone else in the network, the lie will eventually be detected through random checks and the auditor sued. If the coin has simply been sold out into the regular gold market, then whenever JohnnysDigitalGold.com receives a command from the network to transfer that particular coin, it will be unable to do so. Failure to do so will result in presumption that the gold coin has been stolen. Since JohnnysDigitalGold.com is anonymous, there is no legal recourse. However, this isn't the end of the story since TrustworthyAuditor.com has been saying all this time that JohnnysDigitalGold.com actually had the gold coin when they did not and so TrustworthyAuditor.com can be sued for fraud. Sooner or later, any fraud attempt will be discovered.

Now, there are still some remaining problems. First of all, this network would be capital intensive to bring online. Second, the integrity of the system rests on the ability to sue the auditors in national courts of law and have just outcomes to these lawsuits. Since the system would be explicitly competing with national fiat money systems, it is reasonable to expect that they may intentionally undermine the integrity of the system through unjust rulings in lawsuits against auditors.

Clayton -

Re: Does the Ithaca Hour Disprove the Regression Theorem?

John James — Fri, 08 Jul 2011 05:14:01 GMT

Conza88:
John James:
That's cool, we can use a different example. Would you like to give an argument for the existence of vision correcting-eyeglasses in a society which has genetically and surgically eliminated all vision problems?

Different argument, same flawed principle.

How is it flawed? You mean you don't have one?

John James:
The point is, if your argument for bitcoins being useless hinges on the caveat that there must a "voluntary society (free market in money & the law)", then you haven't made an argument against bitcoins in today's world.
It doesn't hinge on it, it is one of the arguments.

Uh. K. So what are these other arguments that prove bitcoin is useless? (I really hope you don't consider the things numbered off in that post actual valid arguments)

Proposing the state collapses (or the US empire crumbles - or is it your position this is an impossible scenario?), legal tender laws are removed, fed ended etc. the monopoly over money is removed. A freemarket in money commences and in that of law.... what is the use of bitcoin? Why would anyone use it anymore? What would give it value?

Yeah, you want bitcoin defended in a completely hypothetical, voluntary society scenario. We got that. A voluntary society doesn't exist. So, I'm still waiting on your argument that bitcoin is useless in today's non-voluntary society. And yet again, I'm also waiting on these "theoretical considerations" that prove "[bitcoin] is ultimately a doomed experiment". Any time now.

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Caley McKibbin — Fri, 08 Jul 2011 04:03:07 GMT

Ithaca is known for being a reservoir of hippies. When you have that many burnouts that haven't progressed mentally since the 70's it's not surprising that one of the IH "successes" is bringing a "Hometown Money Starter Kit" to a town in Russia to promote syndicalism.

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Conza88 — Fri, 08 Jul 2011 03:55:41 GMT

John James:
So just to be clear...something X would be irrelevant, but only in a certain situation A, but said situation A is not even close to existing...and yet this something X that would be irrelevant only in that situation A "is even more relevant" now, in situation B. Well. I must say you might be due for some intellectual award.

"Not close to existing [a free society] and yet it [ethics] is even more relevant [important] (in bringing in it's existence) today."

John James:
That's cool, we can use a different example. Would you like to give an argument for the existence of vision correcting-eyeglasses in a society which has genetically and surgically eliminated all vision problems?

Different argument, same flawed principle.

John James:
The point is, if your argument for bitcoins being useless hinges on the caveat that there must a "voluntary society (free market in money & the law)", then you haven't made an argument against bitcoins in today's world.

It doesn't hinge on it, it is one of the arguments. Bitcoins only have 'legitimacy' because of the state (legal tender laws prop up said fiat currencies), that of which bitcoin is essentially an extension. It tarnishes any claim it has of being a 'free market money'.

Proposing the state collapses (or the US empire crumbles - or is it your position this is an impossible scenario?), legal tender laws are removed, fed ended etc. the monopoly over money is removed. A freemarket in money commences and in that of law.... what is the use of bitcoin? Why would anyone use it anymore? What would give it value? (leaving aside it's delusional acceptance now).

Lmao at "I haven't got an argument against bitcoin in today's world..." given the fact that the entire argument FOR bitcoin is essentially, OH BUT IT COULD BECOME MONEY YO! PROVE IT WON'T! Oh wait, no mann, it is MONEY right now I'm telling you! Hahah

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Conza88 — Fri, 08 Jul 2011 03:18:50 GMT

Smiling Dave:
Conza,

On another thread, someone argued that in a complex economy, people will want a currency because it makes everything run so smoothly.

Bitcoin has all the features a great currency has, total fungibility, divisibility, scarcity etc.

The only thing it is missing is a demand for it in a non trade context. But so what? The need for a currency is enough in and of itself to be a legitimate demand that bitcoin will satisfy as nothing else can.

Yout thoughts?

It has artificial scarcity. It was fiat'd as currency from the start. They want something to eliminate the double-coincidence of wants. And yet bitcoin is essentially no different from federal reserve notes in the sense that - ie. "This is money!"

ORLY? Says who?

"The need for a currency is enough in and of itself to be a legitimate demand that bitcoin will satisfy as nothing else can."

This does not follow. There have historically been other currencies which worked well. But also that - given a free society, what are the arguments in favour of bitcoin - over other money which has already proven itself?

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Caley McKibbin — Fri, 08 Jul 2011 03:15:56 GMT

The Ithaca Hour, like Bitcoin, is used by a very specific type of person. Reading their website is one big face-palm.

Re: Does the Ithaca Hour Disprove the Regression Theorem?

John James — Fri, 08 Jul 2011 03:12:21 GMT

Conza88:
John James:
When such societies are even close to actually existing, such a list might actually be relevant. It does seem pretty simple. There is no free market society. Just like there is no society without scarcity. So you need a better argument that's all.

Not close to existing and yet it is even more relevant today [ethics].

So just to be clear...something X would be irrelevant, but only in a certain situation A, but said situation A is not even close to existing...and yet this something X that would be irrelevant only in that situation A "is even more relevant" now, in situation B. Well. I must say you might be due for some intellectual award.

A free society is possible, a society without scarcity is not (see above). Your argument is terrible, your dodging disasterous. So again, any arguments for the existence of bitcoin in a freemarket society? Anyone?

That's cool, we can use a different example. Would you like to give an argument for the existence of vision correcting-eyeglasses in a society which has genetically and surgically eliminated all vision problems? The point is, if your argument for bitcoins being useless hinges on the caveat that there must a "voluntary society (free market in money & the law)", then you haven't made an argument against bitcoins in today's world.

If you could do so, I'd love to hear it. I'd also love to hear the "theoretical considerations" that "[bitcoin] is ultimately a doomed experiment". Something I've repeatedly asked for.

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Conza88 — Fri, 08 Jul 2011 02:42:10 GMT

John James:
So the question as to why you would even invoke such an irrelevant useless post from a irrelevant useless thread here in this discussion is answered elsewhere. Gee. That's helpful.

Yeah, in this very thread. So recent I didn't think it necessary to link or quote. Search is your friend.

John James:
I was saying a world of unlimited resources. Perhaps I should have been more clear:

resource (rɪˈzɔːs, -ˈsɔːs)

a source of economic wealth, (mineral, land, labour, time, capital, equipment, personnel, etc)

Any resource. Unlimited. That includes the physiolgical source of your existence in the world. It doesn't have to be indestructible even. Just so long as you have an unlimited supply. That means time as well. In short, a world without scarcity.

OH, you mean like the Garden of Eden? /facepalm

John James:
So again, I'd be interested to hear the 'positives' / 'arguments for' property rights that would still exist if there was an abundant society (unlimited resources and instantaneous production) [if it would make it easier for you to understand, a world without scarcity]. When such societies are even close to actually existing, such a list might actually be relevant.

It does seem pretty simple. There is no free market society. Just like there is no society without scarcity. So you need a better argument that's all.

So again, I'll dumb it down this time (even more so). Yet, some how I know the point will probably be lost in the morass you call your thoughts.

"Alone on his island, Robinson Crusoe can do whatever he pleases. For him, the question concerning rules of orderly human conduct—social cooperation—simply does not arise. Naturally, this question can only arise once a second person, Friday, arrives on the island. Yet even then, the question remains largely irrelevant so long as no scarcity exists. Suppose the island is the Garden of Eden; all external goods are available in superabundance. They are "free goods," just as the air that we breathe is normally a "free" good. Whatever Crusoe does with these goods, his actions have repercussions neither with respect to his own future supply of such goods nor regarding the present or future supply of the same goods for Friday (and vice versa). Hence, it is impossible that there could ever be a conflict between Crusoe and Friday concerning the use of such goods. A conflict is only possible if goods are scarce. Only then will there arise the need to formulate rules that make orderly—conflict-free—social cooperation possible.

In the Garden of Eden only two scarce goods exist: the physical body of a person and its standing room. Crusoe and Friday each have only one body and can stand only at one place at a time. Hence, even in the Garden of Eden conflicts between Crusoe and Friday can arise: Crusoe and Friday cannot occupy the same standing room simultaneously without coming thereby into physical conflict with each other. Accordingly, even in the Garden of Eden rules of orderly social conduct must exist—rules regarding the proper location and movement of human bodies. And outside the Garden of Eden, in the realm of scarcity, there must be rules that regulate not only the use of personal bodies but also of everything scarce so that all possible conflicts can be ruled out. This is the problem of social order." ~ The Ethics and Economics of Private Property, Hoppe

John James:
When such societies are even close to actually existing, such a list might actually be relevant. It does seem pretty simple. There is no free market society. Just like there is no society without scarcity. So you need a better argument that's all.

Not close to existing and yet it is even more relevant today [ethics]. A free society is possible, a society without scarcity is not (see above). Your argument is terrible, your dodging disasterous.

So again, any arguments for the existence of bitcoin in a freemarket society? Anyone?

Re: Does the Ithaca Hour Disprove the Regression Theorem?

z1235 — Fri, 08 Jul 2011 02:33:32 GMT

John James:

Just like there is no society without scarcity.

There would be no life without scarcity, as there would be no action. Any agent residing in a non-scarcity universe -- to the extent that he exists as a separate entity from such universe -- must be completely and perfectly satisfied at his current state, by the definition of non-scarcity. Scarcity (a present state of lesser satisfaction that could be changed into a state of greater satisfaction through action) is a defining precondition for action, hence life.

Re: Does the Ithaca Hour Disprove the Regression Theorem?

John James — Fri, 08 Jul 2011 02:23:19 GMT

Conza88:
Which has already been answered elsewhere.

So the question as to why you would even invoke such an irrelevant useless post from a irrelevant useless thread here in this discussion is answered elsewhere. Gee. That's helpful.

"every person's physical body would still be a scarce resource and thus the need for the establishment of property rules, i.e., rules regarding people's bodies, would exist. One is not used to thinking of one's own body in terms of a scarce good, but in imagining the most ideal situation one could ever hope for, the Garden of Eden, it becomes possible to realize that one's body is indeed the prototype of a scarce good for the use of which property rights, i.e., rights of exclusive ownership, somehow have to be established, in order to avoid clashes."

~ Hoppe, A Theory of Socialism and Capitalism, pp. 8-9. See also Stephan Kinsella & Patrick Tinsley, "Causation and Aggression,"Download PDF Quarterly Journal of Austrian Economics 7, no. 4 (Winter 2004): 111-12 (discussing the use of other humans' bodies as means).

I'm sorry, you were saying?!

I was saying a world of unlimited resources. Perhaps I should have been more clear:

resource (rɪˈzɔːs, -ˈsɔːs)

a source of economic wealth, (mineral, land, labour, time, capital, equipment, personnel, etc)

Any resource. Unlimited. That includes the physiolgical source of your existence in the world. It doesn't have to be indestructible even. Just so long as you have an unlimited supply. That means time as well. In short, a world without scarcity. So again, I'd be interested to hear the 'positives' / 'arguments for' property rights that would still exist if there was an abundant society (unlimited resources and instantaneous production) [if it would make it easier for you to understand, a world without scarcity]. When such societies are even close to actually existing, such a list might actually be relevant.

It does seem pretty simple. There is no free market society. Just like there is no society without scarcity. So you need a better argument that's all.

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Smiling Dave — Fri, 08 Jul 2011 02:17:23 GMT

Conza,

On another thread, someone argued that in a complex economy, people will want a currency because it makes everything run so smoothly.

Bitcoin has all the features a great currency has, total fungibility, divisibility, scarcity etc.

The only thing it is missing is a demand for it in a non trade context. But so what? The need for a currency is enough in and of itself to be a legitimate demand that bitcoin will satisfy as nothing else can.

Yout thoughts?

Re: Does the Ithaca Hour Disprove the Regression Theorem?

Conza88 — Fri, 08 Jul 2011 02:01:41 GMT

"Which again begs the question"

Which has already been answered elsewhere.

"Oh I see. So I'm supposed to be saddled with shitty arguments made by other people because that's all the ammo you have to attack me with. "

Lmao, wth? Delusional. No, it was a question I sought a response to - and an additional argument that you requested.

"I'm sure you would be interested in that. And I'd be interested to hear the 'positives' / 'arguments for' property rights that would still exist if there was an abundant society (unlimited resources and instantaneous production). When such societies are even close to actually existing, such a list might actually be relevant."

"every person's physical body would still be a scarce resource and thus the need for the establishment of property rules, i.e., rules regarding people's bodies, would exist. One is not used to thinking of one's own body in terms of a scarce good, but in imagining the most ideal situation one could ever hope for, the Garden of Eden, it becomes possible to realize that one's body is indeed the prototype of a scarce good for the use of which property rights, i.e., rights of exclusive ownership, somehow have to be established, in order to avoid clashes."

~ Hoppe, A Theory of Socialism and Capitalism, pp. 8-9. See also Stephan Kinsella & Patrick Tinsley, "Causation and Aggression,"Download PDF Quarterly Journal of Austrian Economics 7, no. 4 (Winter 2004): 111-12 (discussing the use of other humans' bodies as means).

I'm sorry, you were saying?! Haha . Yeah, it seems pretty simple - there are no arguments for the existence of bitcoin in a free market society. If anyone wants to take up that question (besides John James) who dismisses it... please let me know aye.

Re: Does the Ithaca Hour Disprove the Regression Theorem?

John James — Fri, 08 Jul 2011 01:50:58 GMT

Conza88:
I still haven't seen any proof it will succeed.

Never made that assertion, ace.

Liar.

Maybe expecting actual proof of such an accusation was assuming too much, thanks to that random link to a page you reminded me I also asked for proof that "no one accepting [bitcoin] as money except people who want them to speculate with them themselves."

John James:

You have yet to present any such considerations. Again, the only arguments I have heard are:...

If I've missed anything please enlighten me. But to be honest if this is the best anyone can come up with, I really don't see how people could be so sure of themselves and still call others "irrational."

Oh I see. You didn't read what the comment was in reply to (or don't understand how the English language works). See, "the only arguments I have heard" implies the subject being the afore mentioned "such considerations" in the previous sentence. "Such considerations" refers to the "theoretical considerations" mentioned in the direct quote that my comment was in reply to...the quote that is directly above the comment...which states that bitcoin "is ultimately a doomed experiment". I'm still waiting on proof of that.

I did. But then I realised the fettish to defend bitcon is more than likely far greater.

I doubt that's even possible.

The origional post was useless in it's arguments against the gold standard. Didn't take much.

Which again begs the question why you would even invoke such an irrelevant useless post from a irrelevant useless thread here in this discussion.

John James:
I never made any statement of the sort.

/facepalm. And who said you did? Seriously, how hard is it to answer a simple question/statement.

Oh I see. So I'm supposed to be saddled with shitty arguments made by other people because that's all the ammo you have to attack me with. Got it.

If you can't answer it, or aren't interested then simply say so. Someone please enlighten me seriously.

Sure I'll enlighten you, again, even though I never made any of the irrelevant arguments you insist on invoking here:

And I'd be interested to hear the 'positives' / 'arguments for' bitcoin - that would still exist, if there was a voluntary society (free market in money & the law) etc.

I'm sure you would be interested in that. And I'd be interested to hear the 'positives' / 'arguments for' property rights that would still exist if there was an abundant society (unlimited resources and instantaneous production). When such societies are even close to actually existing, such a list might actually be relevant.