Ripplepay or villages demos

[dwilliams]

Hello,
Would any of the long-time Ripple mavens be interested in doing
some demonstrations either on Ripplepay or villages? It looks like
there's at least a handful of people who post on here-- enough to get
together at a specified time and simulate some extensions of credit so
people can actually see how the network is supposed to operate. So
maybe scheduling a specified time to meet on irc, and walk clueless
users like me through enough transactions to a) understand the core
dynamics of using the system, and b) see some of the efficiency that
the network ostensibly provides over and above me keeping track of
favors in my own head.

I'm asking this because I just sent an email to someone about Ripple
because I thought it might be a useful tool for them, and was about to
list "zeroing out debts that cancel each other out" as a feature when
I realized a) I've never actually done that myself and b) since posts
on this list mention that Ripple doesn't resolve circular debts, I'm
unable to even imagine a scenario where an otherwise complex debt
could get cancelled out by this software.

Thanks.

[dwilliams]

Great!  Anyone else?

On Friday, June 15, 2012 10:28:11 AM UTC-4, Michael Miller wrote:

I'm not a long-time Ripple maven, but I'd be interested in doing some experiments, sure.

[Black]

Hi everyone.

I had no chance to examine the group's previous conversations in details
so sorry if I violate any obvious agreements or say something stupid.
Please correct me in that case.

I've integrated the simple Ripple case with the ZeroExchange
(zeroexchange.sourceforge.net) collective projects management system.
The key feature of that system is a mechanism for organising of the
collaboration networks with distribution of formalised obligations
between members. Such networks are called the 'contracts'. When
obligation in the contract is fulfilled, the quality of obligation
performance is evaluated and that evaluation affects the reputation of
the performer. Each obligation in the contract can be priced by the
performer, that makes possible to use the mutual offset between the
contract's members. So here is the point of the Ripple integration:
those who invested a less then average value can establish a debt
relations with those who invested greater.
I appeal to the Java programmers in the ripple community (if any) to
join the development. I'm sure that concepts of the collective
contracts and mutual offsets are complementary to each others and have
considerable potential for the development.
Please provide me with your thoughts on this.

Regards,
Dmitry.

[Jorge Timón]

The idea sounds interesting.
But although I use Java, I don't have the time to help right now. And
when I get it, I plan to help with the ripple p2p implementation and
implement my more-than-a-year-old proposal for cash: freicoin.
Sorry, maybe later.

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[Black]

Ok thanks for the answer!

Is there any recommended documents related to the freicoin I could
explore? Just professional interest. And who knows - maybe I'll be able
to contribute some time...

[Jorge Timón]

No. Sorry, for now it's all scattered around various forums,
freicoin's, bitcoin's and a little bit on the mises institute forum
too.
Basically is bitcoin with demurrage. Unlike Gesell's proposal,
freicoin will have a fixed monetary based (bitcoin is really
deflationary through lost wallets).
If you don't know Silvio Gesell's proposal I highly recommend you his main book:

http://www.community-exchange.org/docs/Gesell/en/neo/
http://archive.org/details/TheNaturalEconomicOrder

You can skip the first two parts on land if you want to focus on money.
Feel free to ask me anything about freicoin, bitcoin, Gesell's
freigeld or how I relate his theory on interest with mutual credit
(Ripple, LETS...).
I'm glad you're interested.

--
Jorge Timón

[Black]

Ok thanks for the references.
I've taken a look but my English is not excellent so it's a bit hard for
me to read long texts:)
As far I understood the key point of the Gesell's money is the reducing
of the money value over the time. I agree that it could help to make
economic more healthy, but also I believe that there is an other big
problem. This is the problem of 'atomization' of the modern society. The
workplace is only 'real' socialization environment for many people where
they could act together. Many people spend they lives for absolutely
useless activity just because they receiving a money for that. But in
the same time they cannot make better their living environments or solve
the crime problems in their districts. Instead they delegate these tasks
for the government. But too often such delegation does not bring the
desired results. I live in Russia and I know there are countries exists
where government works better but even in these countries I suppose
people have problems with the delegation of the social tasks to the
governments and other commercial companies.
I think that people rarely use self-organization to to solve their
problems because there are no information environment providing them
with the reliable partners and there are no tools that allow to simplify
organization of the cooperation structures on-the-fly. That why I'm
working on ZeroExchange.
By the way - ZE has already implemented monetary system with the
demurrage. So maybe you could adapt it for your purposes or add a new
money mechanics. It can be easier then write everything from the scratch.
What do you think?

On 06/21/2012 09:26 PM, Jorge Tim�n wrote:
> No. Sorry, for now it's all scattered around various forums,
> freicoin's, bitcoin's and a little bit on the mises institute forum
> too.
> Basically is bitcoin with demurrage. Unlike Gesell's proposal,
> freicoin will have a fixed monetary based (bitcoin is really
> deflationary through lost wallets).
> If you don't know Silvio Gesell's proposal I highly recommend you his main book:
>
> http://www.community-exchange.org/docs/Gesell/en/neo/
> http://archive.org/details/TheNaturalEconomicOrder
>
> You can skip the first two parts on land if you want to focus on money.
> Feel free to ask me anything about freicoin, bitcoin, Gesell's
> freigeld or how I relate his theory on interest with mutual credit
> (Ripple, LETS...).
> I'm glad you're interested.
>
>
> On 6/21/12, Black<_del...@mail.ru> wrote:
>> Ok thanks for the answer!
>>
>> Is there any recommended documents related to the freicoin I could
>> explore? Just professional interest. And who knows - maybe I'll be able
>> to contribute some time...
>>

[Jorge Timón]

I'm not sure I've gotten your point about "atomization of society".
Anyway, it's interesting that ZE has a currency with demurrage.
I'm curious. It is based on mutual credit or is cash?
The monetary base is fixed or elastic? If it is elastic, who controls its issue?

When I implement freicoin I won't start from scratch, I will part from
bitcoin's code. Demurrage is not specially difficult to implement, but
all the cryptography stuff within bitcoin is, so I prefer to reuse
that.

--
Jorge Timón

[Black]

Saying 'atomization' I meant 'lack of abilities to act together in a
complex manner'. There are no 'creative' places where anybody can come,
say 'hey, I want to build a house (create a spaceship, etc...). Who are
with me?' and expect to find confederates.

ZE has both centralized currency and mutual credits subsystems.
Centralized internal currency allows user to take the credit according
its reputation (i.e. maximal credit value for user depends on user's
reputation). When user makes a payment for other user, then the payment
is 'timestamped' and it's effective value is decreased over the time.
The last circumstance affects user's total balance.
The mutual credit subsystem was added later as the complementary way to
allow mutual offset in the collaboration.
Let me know if you need other details.

Concerning the Bitcoin - ah ok see. Do you plan to leave the Bitcoin's
emission mechanism unchanged (and thus not depending on amount of
invested labour or user's reputation)?

[Jorge Timón]

Thank you for the clarification.

The issuance mechanism will be somewhat changed. With freicoin miners
will be rewarded with new money for the service they provide (secure
the network) perpetually. Since money is destroyed through demurrage,
when the quantity created with each block equals the reward for
miners, the total supply will converge to a fixed quantity.
With bitcoin, the reward for miners stops (to limit the supply) and
the security of the network will rely exclusively in transaction fees.
Bitcoin is actually deflationary rather than having a fixed supply
like freicoin, because the lost coins are never recycled.

It seems that you find the issuance mechanism unfair, but miners have
to pay their electricity bills, buy and maintain their hardware, etc.
They're taking risks when entering that open mining market and they
deserve to be compensated.
Anyone can mine if he wants to, but I don't think it's profitable for
most users of the currency.
The non miners get their coins by providing something of value (goods
and services, other monies) to someone who has them.

On 6/23/12, Black <psgre...@gmail.com> wrote:
> Saying 'atomization' I meant 'lack of abilities to act together in a
> complex manner'. There are no 'creative' places where anybody can come,
> say 'hey, I want to build a house (create a spaceship, etc...). Who are
> with me?' and expect to find confederates.
>
> ZE has both centralized currency and mutual credits subsystems.
> Centralized internal currency allows user to take the credit according
> its reputation (i.e. maximal credit value for user depends on user's
> reputation). When user makes a payment for other user, then the payment
> is 'timestamped' and it's effective value is decreased over the time.
> The last circumstance affects user's total balance.
> The mutual credit subsystem was added later as the complementary way to
> allow mutual offset in the collaboration.
> Let me know if you need other details.
>
> Concerning the Bitcoin - ah ok see. Do you plan to leave the Bitcoin's
> emission mechanism unchanged (and thus not depending on amount of
> invested labour or user's reputation)?
>

--
Jorge Timón

[Ryan Fugger]

I like the idea of freicoin, but it seems to me that demurrage, while
a good feature in an established system, may hinder its uptake.
Bitcoin's success seems to be tied to speculators imagining that it
will be transactionally useful in the future, and so they are holding
them until that time. That won't really work for freicoin.

Ryan

[Jorge Timón]

Yes. On the other hand freicoin users will probably be more active
convincing businesses to accept it since they have a compulsion to
spend it. I think that freicoins will be cheaper, but there's no need
for a high price, only people accepting it.
Gresham's law tells us that a person holding bitcoins and freicoins
will always prefer to spend the freicoins first, so it could turn out
that indeed the demurrage represents a competitive advantage for a
medium of exchange (although of course not for a store of value). I
don't think that cash should (or even can) be used as a store of value
in the first place. You have credit (for example, ripple) for that
purpose.
I think the worse barriers it will find at the beginning will be more
ideological than anything else, since most of bitcoiners are austrians
who don't know or like Gesell and gesellians usually want an elastic
supply and give the demurrage fees and the issuance in general to the
state.
But this is all speculation, there's only one way to find out if it
would be competitive.

[Ryan Fugger]

Your reasoning is only valid once there are many freicoins in
circulation. How do you propose to get it to that point, given that
people don't want to hold freicoins, but there is nothing to spend
them on initially?

[Jorge Timón]

I'll buy them for bitcoins at a very low price (to be able to buy it
all if no one else wants them without going bankrupt) and warranty a
minimum price. With merged mining is just an added profit for current
bitcoin miners. Once they have a minimum initial value, you need to
convince people to accept it. Even if the first people who accept them
sell them immediately for bitcoins or fiat, the more people who accept
them, the more useful they are and the more value they have.

[Ryan Fugger]

Yes, that makes sense. I was thinking it would take someone with an
ideological drive to fund their uptake. You might also consider
postponing the start of demurrage until half the coins are issued.

[Jorge Timón]

I think it's better that businesses take the demurrage into account
from the beginning. Exchanges, for example, will need to adapt their
software if they want to include freicoin. It's not like other forks
where you can just clone the btc/nmc exchange software, for example.

[Black Dragon]

If someone pays the electricity bill, he uses classical currency,  it makes bitcoin implicitly depend on that currency. In addition financial opportunities of payers are unequal. It seems that coins miner can make very little personal efforts to mine coins, much less then supplier of real-world good or service. Seems these circumstances will just bring financial power redistribution w/o any social justice.
Also it looks very inefficient to spend energy for coins mining instead of food production, for example...
Are my assumptions correct?

Regards, Dmitry.

[Jorge Timón]

No.

1) There's no reason implicit in bitcoin that impedes the electric co.
to accept bitcoin.

2) You're assuming that mining is super-profitable when this is not
the case. It is a very competitive market and many miners actually
incur in losses.

3) The energy spend is necessary to warranty the security of the
system. Mining gold also expends resources. The current monetary
system is many many times more expensive in concept of central bank
experts and shared signoriage to bankers. The costs of the basic
interest for society (which freicoin is supposed to eliminate) is
tremendous. Every monetary system must have an associated cost. Even
p2p Ripple (which I think will be the cheapest of them all) has costs.
Of course, LETS systems can be cheaper, I was referring only to those
which can scale globally.

--
Jorge Timón

[Black Dragon]

Thanks for the answer.

1. If electric co. accept bitcoin, why wouldn't they just buy a block of supercomputers and mine bitcoins for themselves? They even do not need to provide any electric supply to consumers to receive the money?

2. If bitcoin's market is very competitive, then seems many people waste their resources (including own time) to be a winner? Again, wouldn't it be better  to redirect they efforts to produce the food?

3. Gold's value is also irrational. The value of gold only in minds of people. For me gold is useful only when it is used in the production (of electronics, e.g.). I mean it's just a resource that should be used as any other resource when needed.
Wouldn't it better to use hour-based estimation to value the things?
I know mean that if somebody spend one hour of his life to do the work, and other spend one hour while doing similar work in the same environment, then their efforts will be equal, won't they?

[Jorge Timón]

1) Sure, they could. But that would be entering another market. They
could also build a hotel and rent the rooms, and "save" the
electricity of the hotel.
It seems like you still think that miners aren't providing anything to
society, but they're providing the security that is necessary for the
network.

2) They using resources, not wasting them. You don't say "wouldn't it
be better to waste resources producing food?" It's not us to decide,
is supply and demand. If people demand more food, more food will be
produced.

3) Totally agree about gold. Using gold-money prevents us from using
gold as a commodity.
But still any monetary system have some associated costs. Sure systems
that rely on trust like ripple can be cheaper. But bitcoin is
currently the cheapest system for international trust-less
transactions.
So if it is the cheapest it is not wasteful. The current monetary and
financial structure is far more expensive as a whole and that's why it
is wasteful.

--
Jorge Timón

[Jorge Timón]

https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_of_energy_and_harmful_for_ecology

--
Jorge Timón

[dwilliams]

Bitcoin's initial success is tied to its lowering the cost of selling/buying illegal drugs.

Bitcoin's speculators holding coins until which time they become transactionally useful hinders development in every domain except the ones that are cost prohibitive or impossible without Bitcoin (e.g., drugs, fraud, hacker heists made easy, anonymous donations, pyramid-schemes-that-really-aren't-pyramid-schemes, etc.)

I don't see why Freicoin wouldn't attract the minimum level of that same type of speculator in order to get started.  Wouldn't all those speculators still drooling over Bitcoin's 100000% (or whatever) early rise in value throw some change at Freicoin in the hopes of capturing that same return, however remote?  4-8% off of ridiculous profits still leaves ridiculous profits.

But while either of those systems may or may not turn out to be suitable for untrusted and/or inter-community transactions, the proof-of-work blockchain is surely an enormous waste of resources for intra-community transactions.

I wrote someone the other day about that scene from "It's a Wonderful Life" where George is telling his customers that, "the money's not here... it's in Joe's house, etc."  What if instead of handing out his own money to tide everyone over until the banks reopened, George instead set up a Ripple server and transferred all the account balances into lines of credit?  That is, Joe's mortgage turns into a distribution of credit to all the other customers of the bank, who can then use it at Joe's grocery store to buy food, etc.  After living with that system for awhile, with (presumably) no fees for transactions and debts canceling out when they can, who would go back to making withdrawals of cash for transactions that stay inside the community, even when the bank reopens?

Whatever the faults of the underlying economics of Bitcoin/Freicoin, they at least include within their systems an explicit method of bootstrapping, and I simply don't see that for Ripple outside of the most dire of circumstances where no other alternative exists.  Or am I missing something?

[Jorge Timón]

Yes, some people suggested local chain currencies but I think that is
an stupid idea. The main advantage of chaincoins is that they're
trust-less. If you have trust, use it.

I don't know the film. Anyway, I think Ripple has a lot of diffferent
bootstrapping possibilities, but maybe the p2p protocol is needed for
some of them.

The first thing I thought was...just make all those LETS and time
banks port to Ripple (a LETS can be made inside a Ripple network) and
you have a lot of initial users. Didn't convince any group so far :(

Small businesses and music festivals using it for coupons or ticket
issuance could be another one, mobile payments without relying on the
phone companies, etc

I think that it Ripple was used in a local community as much as some
LETS are, it would grow faster and, more importantly, it would not
have its grow limited!!!

But Ripple didn't appeared in "the money fix" documentary so...
We will get there, I'm optimist.

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[Black Dragon]

I agree that mining bicoins is cheaper then mining the gold, but as I know at the moment very small amount of money backed by gold. I think that if gold even completely disappear by some reason - it will not cause serious damage for the current financial system, won't it?

> They could also build a hotel and rent the rooms, and "save" the
> electricity of the hotel.

If they will rent the rooms, they'll do something useful for the society and that's fine. But if they will only mine the coins, they will not do anything useful.
The problem of the modern economy is excluding the social utility form the consideration. Only money have meaning. Thus everything can be bought and sold - you can buy a murder or buy the populated territory and evict people from there... everything is possible if you have enough money.
The goverment laws are just crutches that do not work generally. Moreover, the you can even rewrite any law if you have enough money.

I believe that economy should have some integrated mechanisms that prevent particular persons from gaining enormous power over other people and stimulate collaboration between people rather then competition.

So my next questions are:
1. Does bitcoin/freicon have such mechanisms (in addition to demurrage)?
2. Will demurrage work if people prefer convert freicoins to something more 'stable' such as gold?
3. Will demurrage work properly if one person will give a loan for interest to other people?

Thanks, Dmitry.

[Jorge Timón]

Well, I'm not going to ask to the first question because it is too complex.
But...You're forgetting that the current system has a high cost, it is
more expensive than the gold standard. Mining gold is cheaper than
managing central banks, banks, "fixing" bank runs, etc.
You're assuming paper-money is free for society, which is not the case.

When you say "miners don't do anything useful", you're comparing the
cost of bitcoin-money to the cost of the current system which you
think is free. Miners are making money possible, and that's a very
valuable service for society.

1)
Both collaboration and competition are good. The problem is not
competition, the problem are economic rents. The problem is that big
companies buy governments.
Interest leads to concentration of power, that's another problem, but
freicoin supposedly prevents that. I recommend you Silvio Gesell's
book if you want to understand the motivations behind freicoin.

2) Gold is cash-money and cash is NOT a store of value. That's a very
common error. Any form of cash could lose most of its value overnight.
Most of the current value of gold comes from the fact that it is money
and competes with other currencies like usd and eur. But even if gold
cannot be printed it could be demonetized, just like silver has been
many times.
I'll cite Gesell to explain my brave claim about the store of value:

"The anomaly of the physical junction of the medium of exchange and
the medium of saving is still more obvious if we suppose that, as in
Joseph's time, a series of fruitful years is followed by a series of
bad ones. During the fruitful years the people would of course be able
to save, that is, to pile up a mountain of paper-money. If during the
following years of scarcity the people wish to utilise this mass of
paper it becomes apparent that there is no supply to balance the
piled-up demand."

If gold stops being money (losses the component of its value that
comes from being money), it would become more save as a store of
value. But there's nothing inherently wrong with hoarding commodities,
that's like an insurance or a bet that they will be more needed in the
future.
The only problem is hoarding the medium of exchange.

3) The interest is nothing but the price of savings. Without
demurrage, it must be always positive or the lender will prefer to
just hoard. With demurrage it is better to loan at zero interest than
to hoard.

Not sure if I have answered properly to all questions.

--
Jorge Timón

[Alex Kotov]

Hello,

As we see nor mutual credit, neither anonymous currency (bitcoin) could be universal solution. I think i happen because we trying to put 2 functions of money (medium of exchange and store of value) in one currency design. What I propose to divide those function in separate accounts: one - "current", for every day use with demurrage and another "saving", without demurrage, as long as demand in credit and saving are in balance. Users can transfer money from one to another with some positive or negative fee - depends from demand in credit and saving.
Also demurrage should not be as detraction of units but redistributions to those who operate their money more efficiently, more socially safer.

Itself, bitcoin does not give much positive in social side. If it is copying gold design - it will have the same destiny: sooner or later some part of users will accumulate biggest part of it and start land it to others who need for using. Of course its value could be used in Ripple as measure of credit between nodes without limitation in quantity. But all advantages of bitcoin would be lost. IMHO it is better to find more fixed (Terra) or more human related measure of value (living wage).

Alex

[Jorge Timón]

I think that although cash should not be store of value, credit can be
both store of value and (with ripple) also a medium of exchange. It's
just that cash has some advantages as a medium of exchange. But gold's
(and bitcoin) "design" flaw is that it tries to be also a store of
value.

Also, as you point out, credit based monies don't need to rely on
existing currencies denominations. Basket definitions in the line of
the Terra (with the advantage that you don't need to actually store
the commodities) or just a given currency adjusted with a given
inflation index or something. 1970's usd or whatever. I believe that
in the future there will be a lot of competing definitions of value
units for credit and people will freely chose between different and
innovative proposals. Just like today there are private indexes for
commodities or stock markets, just tools people can easily create and
use according to their concrete needs.
While the hour is very interesting as an introductory unit and useful
for people that use different national currencies, I don't think it
can be defined formally enough.

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