The "pay it forward approach" to crypto currencies

[Melvin Carvalho]

Crypto currencies are doing quite well, but they have yet to make a meaningful impact on any economy, nor have they achieved much in the way of social good, however there is a tangible excitement about ways that it can modernize the way we live our lives

We live in a world where 10,000 children under the age of five die every day, which can be prevented by simple, affordable interventions ... why do we let this happen?

Turning he question on its head, what interventions do crypto currencies enable us to perform, that could help solve this problem

Well certainly crypto currencies have opened pandora's box in terms of technology being able to create money, let it float, and let it appreciate in value ... something that the alchemists of old (whose number include Aristotle, Newton and Keynes) would have been proud.  Well done Satoshi, now what shall we do with this gift?

The optimal principle should be that we beam new money to the people that need it most, on a relatively uniform basis.  Something of a harder problem, and one with no perfect solution.  But we could make some approximations ... perhaps.

Suppose you were to credit 10,000 new coins to every person on the planet.  Then let it float on the free market (a la bitcoin).  Initially worth zero, the coins would potentially rise in value to become a consensus driven global dividend.  Certainly if it went higher it could do a lot to alleviate many problems for poorer people.

Unfortunately we dont have a huge database of every person on the planet in the public domain, so this strategy is problematic.  However we roughly do have good statistics that most people have a mobile phone, so we could beam coins to every mobile phone.  (technically you can do this using the tel: URI scheme such that you get one phone, one share). 

Phones are now banks, and also have the ability to send money via SMS.

The problem with this approach is that it favours people with multiple phones, who are probably correlated to relatively wealthy people.  Not great, but it's a start.

How about we then do it country by country and beam coins to the poorest countries, say in proportion to GNP per capita.  Perhaps better.

Again, it's possible to systematically game the system, to an extent.  So one way to reduce the risk would be to allocate coins on a lottery basis, where a random number generator selects 'lucky' winners.  The net effect will be generally positive, while preventing major systemic risk. 

Little by little, we can bring people out of poverty using crypto coins and make a better world.

Now, I know what you're thinking.  Money for nothing, that makes no sense.  Why would these coins ever be worth anything.

There is where the "pay it forward" concept comes in.  All coin recipients are encouraged to "pay it forward" ... do good for the sake of good, and allow that karma to flow back to you.  Eventually this can take the form of rebuying the coins that saved your life when you were young, and enabled you to become a successful businessman.

As the value, liquidity, trust, and importantly, social good of the system build.  So it becomes easier for people to maintain societies, for economies to thrive, and for governments to balance their budgets. 

It becomes an ever increasing virtuous circle, that can transform the planet.

I've left out a few gaps and technical details, but I'm sure it's possible to join the dots and incrementally move towards an optimal solution.  I think bitcoin and the internet have paved the way for "pay it forward" crypto currencies. 

And hopefully it can one day become "an idea worth spending".  :)

[Fabio Cecin]

On Wed, Jun 12, 2013 at 2:39 PM, Melvin Carvalho
<melvinc...@gmail.com> wrote:
> Crypto currencies are doing quite well, but they have yet to make a
> meaningful impact on any economy, nor have they achieved much in the way of
> social good, however there is a tangible excitement about ways that it can
> modernize the way we live our lives
>
> We live in a world where 10,000 children under the age of five die every
> day, which can be prevented by simple, affordable interventions ... why do
> we let this happen?

We let this happen because we are drunk with an illusion that "coins"
of whatever nature have a direct connection to physical reality,
instead of being very poor heuristics for social organization.
"Coins," of whatever nature, try to quantify the unquantifiable. If
they had been intently designed, I'd say they were designed to
oversimplify and to allow people to exploit others while claiming they
couldn't really understand what they were doing.

We let this happen because we avoid political discussion and ethical
discussion on our day to day living, and that's because we have no
time or energy left to think after we've done donating 95% of our
blood to maintain the current machinery going.

We let this happen because we will all get to solving these problems,
as soon as we're finished guaranteeing a "financial future" for
ourselves, our bloodlines, our little corporate clubs and our
particular national brand of "civilized culture."

First step to creating a "coin" that will change the world is not the
coin itself, but the education that is required before you're allowed
to come _near_ any one of these things. The education that teaches you
that these are social heuristics and no substitute to grappling with
reality in a more direct way.

Then yeah, crypto (decentralized) coins. Non-scarce ones, so Bitcoin
is out. Self-issued credit, of course. And backed by real things that
are personal, such as some minutes you can spend with whoever holds
your credit at the time. And without any "legal" (i.e.
state-sanctioned violence) consequences whatsoever is violating the
voluntary credit system -- so it ceases to be "money." And so we
achieve a "moneyless" society: not through banning any game that
approaches a token swapping game, but by stopping to take these things
so seriously as to surround them with real physical and psychological
violence and coercion.

It's "pay it forward," except something like "pay" no longer makes any
sense, because there's no such thing as an atomic transaction -- every
one-way transfer is a gift. It doesn't matter to the social context
whether there's reciprocation or not. Reciprocation only matters to
each individual. If exchanges don't exist at the social level, debt
doesn't exist, not as a "legal fact," and can't be taken seriously.
"Finance" makes no sense either, because "finance" means "settlement,"
and there's no longer anything to settle. A gifting culture is the end
of finance and therefore of "money."

...

This documentary is great:

Surviving Progress (2011)

http://www.filmsforaction.org/watch/surviving_progress_2011/

"Conventional economics is a form of brain damage." -- David Suzuki

Fabio

[Melvin Carvalho]

Nearby: http://www.washingtonsblog.com/2013/06/the-crime-of-alleviating-poverty-a-local-community-currency-battles-the-central-bank-of-kenya.html