Self-Redistributing Wealth

2

Comments

  • sjenkinssjenkins Member Posts: 28
    If property is a natural right then every last shred and satoshi of taint is recoverable stolen goods.

    Or is fungibility part of the natural order too?
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    > I like the idea of Elon Musk having enough control over his own money that he can make Tesla and plan to go to Mars;

    But is it neccesary that he is the one that has the money to do that? It would seem to be that if money was spread among people who would understand arguments for/against such projects. Elon Musk could easily convince those people, and maybe they would ask give suggestions back.

    It being funded that way ties the community together better, and allows more access to the process. That said, i do realize you'd have to use stupid arguments to get the general public to put in coin, so it requires people being rich enough relative to the general public to keep things going if the general public isnt convinced.
  • sjenkinssjenkins Member Posts: 28
    edited March 2014
    Taking a more cybernetics/engineering inspired look at the "trickle down" coin:

    In digital audio systems random noise can be deliberately introduced in just the right quantity and place to eliminate quantisation distortion. The noise doesn't *correct* that distortion, it replaces it: Instead of encoding a signal that's systematically distorted by quantisation you encode one that's clean down to (and to an extent through) a known "noise floor".

    Now, by admittedly loose analogy, you could regard wealth as a signal that's being systematically distorted by both historical and ongoing injustice. If the distortion is moving money upwards, maybe randomly trickling it back down doesn't *correct* any specific injustice, but still it replaces a distorted signal with a cleaner one plus some added noise.
  • LukeBurgessLukeBurgess Member Posts: 5
    No matter what technique you may use, those with resources can always make more.
    In this case, the rich people simply create millions of wallets.
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    Exactly. Basically we should be figuring out how to identify people-as-people. Or maybe rather, how do we figure out how well a scheme would work. I mean real-world testing a scheme is 'time costly' because we only have a few communities to try.
  • sjenkinssjenkins Member Posts: 28
    Maybe someone will solve "one person one account", or solve it well enough, its needed for more than just this.

    Or if some part of the process required a human's attention? If it took a human hour to receive a dollar of trickle down at the bottom, those millions of wallets would require some serious hours to make them work.

    Or if the money just resists consolidation so a million $1 accounts can go buy a million bowls of soup but its not so easy to put it all together and buy a super car.
  • Karl_SchroederKarl_Schroeder Member Posts: 37 ✭✭
    edited March 2014
    I'm not getting the sense that we're hitting any conceptual show-stopper walls here; quite the contrary, the problems that are being mentioned seem to be sparking creative solutions rather rapidly. This is a good sign.

    If a coin can be uniquely identified and uncopyable within the system, why not a person? Or are we on a slippery slope to making it impossible for anyone to disappear, or otherwise control their own level of anonymity?

    Perhaps it's not about identifying people-as-people. Maybe it's about following the trajectory of money rather than its location. Loop-backs are to be discouraged, and maybe that's what's built into the currency: an automatic number of hops (transactions) that a coin has to take before returning to a given wallet. OR, a transaction fee that trickles down--in that case, move a million dollars, some small fraction gets dropped back to random low-content wallets, and you own many of those, BUT transferring that money back to your main wallet incurs the same aggregate transaction cost as you hoped to save by creating all those secondary wallets. (This, of course, is called taxation, but it's not the government doing the taxing.) OR, the "individual" or person is really the one doing the transaction, regardless of the number of wallets involved; so a crowd-sourced investment like Pono really has one payer. When a million wallets all engage in a single transaction they're considered a single wallet by the currency itself, and the redistribution system kicks in to divert a tiny amount to a set of random wallets.

    Or not; my point is that there seem to be many potential solutions to the problem.
  • LukeBurgessLukeBurgess Member Posts: 5
    "transferring that money back to your main wallet incurs the same aggregate transaction cost as you hoped to save by creating all those secondary wallets."

    Like a flat tax.
    Same percentage for all, means making multiple accounts will save them nothing.

    @sjenkins?
    I also like the human based mining idea. Maybe we can think of a way to make the Ethereum script request the resolution to a task only a human can solve. Those with more currency can use it to request these tasks be done.
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    edited March 2014
    Good point.(which can also be applied to PoS) Anyway, we need to try to think and calculate through different approaches, and find out how different combinations compare. May also want to try simulations.

    Could proceed doing this to the 'transaction taxation' approach, as a starting point, we know that for taxation on an ammount T(a)+T(b) >= T(a+b) as there is no point in giving incentive to split up transactions. We could call the 'PoS taxation beneficiary' there is some function G(a) and address j gets G(a[j])/Sum{k}G(a[k]) of the total. Now we can assume transaction frequencies on the differing ammounts F(a), and using such assumption, try to estimate how much this trickles down. The only value that is an estimate is F(a), the others can be chosen for best result. Any idea how the frequency of use relates to the amount?
  • LukeBurgessLukeBurgess Member Posts: 5
    "Miners could do something like play Go(the encircling game), then the script can verify the winner. An average human should win ~50% of the time." A computer could never actually play the game with a 50% success against a human as the possibilities for victory are too many for it to keep track of.
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    @LukeBurgess I am not at all familiar with the problem. What makes you think that situation would last given a 10M$/year potential income?

    Afaik the best we can do is T(a)+T(b) = T(a+b), linear, i mean sub-linear only gives incentive to split up transactions. The tax is T(a)=max(anti_dust_spam, c*a) then. For our purposes we ignore the anti dust spam/transaction term.

    Let P=Sum{k}T[k] be the total tax income rate da(t)/dt= PG(a[j])/Sum{k}G(a[k]) If you dont want to promote splitting accounts either G(a+b)>= G(a)+G(b), and we'd quickly realize that is best off linear too, and we got nowhere; everything would be redistributed the exact way it was. I think i actually got it wrong having the fraction of tax aquired be simply a function of the amount. The whole idea was to have tax/transaction costs to be part of the rate you aquire at. The idea is that small people have to move around their money between each other, and big organizations dont.

    da(t,a,T)/dt = PQG(a,T)-T where T is the transacting rate and Q=1/Sum{k}G(a[k],T[k]) assumed constant. For big parties to not do better, we need da(t,c,T)/dt>=da(t,a,q)/dt + da(t,c-a,T-q)/dt from which..

    ..follows G(c,T)>=G(a,q)+G(c-a,T-q) (for any 0<=q<=ta+tb), again for trickle down, equality is the best we can do is equality.

    But then G(c,T)=Constant{a,q}=G(a,q)+G(c-a,T-q) the constancy implies 0=dG(c,T)/da= d1G(a,q)-d1G(c-a,T-q) => d1G(a,q)=d1G(c-a,T-q) but c-a and T-q can be chosen to be anything, so d1G(a,q) is contant over both a,q. By the same process d2G(a,q) is contant over both.

    So then we must have G(a,T) = C + Da + ET there is only the constant left to save it. G(c,T)=G(a,q)+G(c-a,T-q) for T=0,q=0 implies linearity for T=0, so C=0; G(a,T) = Da + ET. But remember, the cost of transacting was linear. Either D>0 and transacting pays to the rich, who dont transact, or D=0 and the this system in-effect does nothing, as the taxes is brought back to exactly the people it came from..

    Based on that, barring i made a mistake, i think this approach is a dead end.
  • DaveHamillDaveHamill Member Posts: 4
    This thread relates to something I have been considering. I appreciate the thought provoking contributions so far. (FreddyFender's at the top of my list.) Although I know we all like what Bitcoin and Altcoins have done, I think the theme of this thread is: Now that the power of the blockchain and its evolutions including Ethereum are evident, perhaps the crypto community should be focusing on designing a currency to include an entire monetary system that rapidly transforms all humankind. Early developers, innovators and miners deserve what they have earned, but at some point they can become the new plutocrats, albeit better ones, while the same masses in the third world are left out because they are just as technologically deficient for the foreseeable future as they have been disconnected from the financial system in the past. So the design of the best currency, which will eventually prevail will involve empowering all to some extent. I studied money systems for years after becoming educated about the shocking flaws in the ones we now live with. I have become an advocate of a theory called binary economics, which is not perfect but has some strong components and proven successes on small scales. There are also several versions of it, but I advocate one that focuses on no mandated redistribution while money creation flows through all. The power of loaning money into existence is evident, but I believe mistakenly accused of being responsible for inflation and the boom-and-bust cycle. I now follow the "real bills doctrine" and the "banking principle" philosophies, which infer that if money is loaned into existence only for productive purposes instead of frivolous consumer spending and speculation, there would be steady, unlimited growth without inflation; and no bust cycle. An important component that contributes to that is the absence of fractional lending. That may sound like a contradiction, but if the new money creation is always backed by a contract such as a mortgage on new rentable space, or a "bill of exchange" funding expansion of a profitable, automated factory; it is not created "out of thin air".

    So if money can be loaned into existence in a good way, who should be the lender? Who should profit on it? Banks? We have all know they're out of control. There is nothing wrong with a financial services business like a local bank making reasonable profit providing a service, perhaps through fees; but the compounding interest model is flawed. Along with fractional lending it has produced gluts of money and power in banking/finance. This of course has lead to buying influence into every institution from government (monetizing government debt, campaign contributions) to academia and media so that some believe that banks have control over nearly everything, exploiting many.

    So if the ideal, unlimited solid growth, non-inflationary system doesn't empower banks, who? Miners? One tenet of binary economics and "capital homesteading" (the proposed legislation to reform "the old money system") is that the productive credit should flow through all citizens who volunteer to participate. Of course the philosophy to date has depended on some centralization; in fact a central bank. The general idea is to reform the Federal Reserve to be citizen-owned and transparent. There would be an institutional formula such as (new productive growth) / (number of citizens), and that dollar amount, currently estimated to be about $7,000 per year would be provided as a credit voucher for individuals to invest in dividend-paying corporations. The capital growth would build in a retirement account, while the annual dividend income could be spent throughout the life of the individual.

    This would eventually bring a general level of wealth to all, without taking anything from the existing rich or the successful innovators or hard workers, who should always be able to earn more and keep it. (There are ways to compensate for morbid capital without taking it away.) Capital homesteading would naturally encourage smaller governments as the need for non-voluntary redistribution declines. That is why I have been selling the proposal as a compromise between liberals and conservatives; it dramatically addresses wealth disparity but focuses on free markets. And let's face it, the purists have historically failed to keep their systems in place. One of these two groups will claim failure and convince the middle to change it.

    But so far very few are listening to this proposal. And as B. Fuller said, "You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete." So I am starting to think that cryptos and the Ethereum protocol offer the way to use these principles to do that. I have not been able to persuade the lifetime-proponents/experts in binary economics of this, so I am seeking minds like yours and possibly Andreas A. who said on LTB that he is heading up the Ethereum anti-poverty committee (possibly called "empowering the other 6 billion"). I have had a few exchanges with others in the bitcoin community, and all have been respectful of my ideas but none seem very interested yet, or have allowed a complete dialogue, with full opportunity for overcoming objections. Shouldn't we be vigorously debating what money system would most likely succeed for all?

    My current idea would use the concept of DAOs, consensus and the blockchain so that new units of a new altcoin would be generated only through productive business growth instead of mining. To empower all voluntarily, it would involve a way for people to gain access to an internet-based system via smartphone app which would require multiple biometric identifiers so that each individual in the world has a unique non-duplicatable profile. Each would gain a credit, perhaps annually, that they invest into the system. (Even Africa has many smartphones, and if this system "took off" charities would work quickly to bring them to all humans.) Perhaps the individual productive credit investors can choose the project requesting funds. There could possibly be dividend-paying pools that small businesses join into, or of course people could choose larger traditional dividend-paying corporations. I don't think this should fund higher-risk ventures like tech startups. There is enough existing wealth to do so. The need for credit to grow proven business ventures is large enough. But there could be a microloan-type component that helps the working poor become business owners.

    It may be necessary for the overall DAO to function as a pseudo-central bank or multiple ones to back the bills of exchange or mortgages. This system can be started as a competing crypto-currency with the usual organization behind it to establish rules. In essence a coin with DAO could be developed for other economic theories, to allow people to utilize the one they believe in. I admit a totally different one may prove to work better, just because of unplanned consequences. But shouldn't this one be tried?
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    Just needing to add to my previous post here: it doesnt quite cover all cases. Still think you cant do better than try compensate, if there is nothing different other than the coin disparity. But one thing to that effect has been mentioned; that the poor transact their coin faster..
  • Karl_SchroederKarl_Schroeder Member Posts: 37 ✭✭
    @DaveHamill That sounds very interesting. Whether it really *is* interesting comes down to how well you present it. So, perhaps paradoxically, I'm going to suggest that it might be more important for you to develop a killer presentation (a prezi or youtube toon) that lays out the way this system would work in a graphically appealing, lego-building-blocks kind of way, than for you to directly engage a set of highly-distracted bitcoin coders all concerned with the success of their own current projects. Not because they wouldn't get it in the end or would be hostile or defend their own turf, but just because we're all drinking from the firehose, in learning terms, at the moment. The mutual bootstrapping effort of educating one another is actually *the* problem (and, hint-hint, may be the best business model for somebody interested in joining the blockchain development fray right now).
  • DaveHamillDaveHamill Member Posts: 4
    @Karl_Schroeder - Thanks, you make a good point.
  • Captain_PicardCaptain_Picard Member Posts: 9
    @Karl_Schroeder "The mutual bootstrapping effort of educating one another is actually *the* problem (and, hint-hint, may be the best business model for somebody interested in joining the blockchain development fray right now)."

    I agree with your quote and this is a very interesting point.

    But how do you fairly monetize an educational endeavor - whether it be Bitcoin, Ethereum, or any other aspect of crypto currency?

    The old idea of students buying books and paying tuition seems, well, old. Yet some of the new styles like UDemy seem too close to free to be lucrative for all but the superstar educator appealing to massively broad topics.

    Good instruction is time consuming and not easy to create (a prezi or a youtube toon, as you mention, take time and skill to produce) and what do you do when your presentations are ready - offer them for free to everyone? Put some ads next to it and pray for clicks? Try for donations? Require payment upfront? Freemium model?

    Surely in this age of cryto, DACs, and micropayments, we can solve this. Maybe (e)books and tuition are still the way to go - just request a minimum donation and go for volume?

    The answer should, in theory, apply to all forms of education. The current system of secondary education (especially college) is broken and a complete waste of resources IMO, yet, no one has really stepped forward with a valid solution for monetizing education in a way that fairly rewards the educator. Thoughts?
  • Karl_SchroederKarl_Schroeder Member Posts: 37 ✭✭
    I think if I had a really good answer to this, I'd already be making pots of money.
  • simons_frsimons_fr Member Posts: 3
    @DaveHamill? , i just answered on an other post, trying to explain a monetary theory not so far from what you explained.
    http://forum.ethereum.org/discussion/comment/3915/#Comment_3915
    It's based on the TRM (Théorie Relative de la Monnaie), a money system where no human has privileges in front of money creation either in time or in space : http://project.openudc.org / http://ucoin.io

    This theory also really need a killer presentation for the 6 billions people we are :). As most of us dont know how money is created and who benefit of that.
    One good solution they use to get funds with is Gittip.com.
  • DonRaulDonRaul Los AngelesMember Posts: 8
    Cosmic accounting. Nature doesn't use dollars or bitcoins.
  • DonRaulDonRaul Los AngelesMember Posts: 8
    Seems to me like our concept of value is going to come into challenge as we discover how wealthy we truly are. Play The World Game.
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    @reignbeau Mining redistributes to the miners, not people. It is at extreme risk of centralizing wealth more, it essentially already does for bitcoin.
  • DaveHamillDaveHamill Member Posts: 4
    @simons_fr OpenUDC is interesting. Thanks.
  • simons_frsimons_fr Member Posts: 3
    @DaveHamill‌ , feel free to ask me more about this project or join the mailing list. You also can look at a project based on the same theory but developped in nodejs : http://ucoin.io. Actual web demo help a lot to understand how is created the universal dividend and how it is calculated in the time : http://ucoin.twiced.fr/
  • cobordismcobordism Member Posts: 6
    I'd like to add a not on the concept of 'coercion' as discussed above.

    There are often situations in which it is not in my interest to do something myself, but it would be in mine (and all of our) interest to do it together. Let me give an example.

    Suppose that the economy is weak and in recession due to a lack of purchasing power and a large segment of society is working in really low wage jobs. If I own a small business, it is not in my interest to raise the wages of my employees because I will loose competitiveness; but perhaps it is in my interest if everyone were forced to do the same - if I suffered no relative disadvantage to my competitors. If in this scenario a law requiring a higher minimum wage were passed it could revive the economy and everyone would benefit.

    I'd like to discuss how these kind of considerations would carry over into the cryptocurrency world.

    This thread started with a question of redistributing and many of you correctly pointed out that yet again we hit the one-person-multiple-wallets problem. I don't see a way to fix that in a decentralised manner.... but the discussion veered into good vs bad actors and stolen laptops and I find that misses the point. Keeping a lid on wealth inequality ("redistribution") is not about punishing the rich, it is about keeping a system balanced so that it does best by society; a system that, left to its own devices, tends toward a very unequal and imbalanced state. It is as if the optimal state of the economy (for society) is not a stable equilibrium and we may indeed find ourselves in a similar situation as I sketched in my toy example - society is better off if the concentration of wealth is reduced but no individual actor has any incentive to take part unless everyone does.

    best,
    c.


    PS I am also reminded of a discussion I was having with a group at Zuccotti Park a few years back. The question was about the role of Government in the economy; specifically the focus was on projects with large positive externalities that are hard/impossible to internalise. In these there is a need for an actor that has not its own narrow financial interests at heart but society’s in general. .. anyway, topic for another thread maybe :)
  • koeppelmannkoeppelmann Member Posts: 51
    sjenkins said:

    Weirdly I was just wondering last night what properties might be desirable in a self-redistributing currency. So far I came up with:

    1. Over time all balances move towards the mean: All below average balances are rising and all above average balances are falling.

    2. Redistribution happens slowly enough that the currency is worth being rich in, and yet quickly enough that the currency is worth being poor in. Maybe the redistribution rate could be set as a (fixed? Votable? Self-tuning?) "half-life" for wealth/poverty such that all balances are approaching the mean but doing so asymptotically.

    3. Currency is never created or destroyed in this process just redistributed.

    4. One person, one balance. Or possibly "one stake, one balance" where the stake is the person or entity's initial buy-in to the currency?.

    (Note this is one night's rambling thoughts, not a fully developed proposal.)

    This is exactly how this system should behave as soon as a stable amount of money is reached: https://forum.ethereum.org/discussion/1598/basic-income-circles-reputation-market-based-approach-to-solve-the-identity-problem-sybil-attacs
  • patconpatcon Member Posts: 16
    Related to the discussion of provably unique identities (which I agree is the main pre-requisite for OP's idea, assuming hacky and fallible approximations won't suffice):
    https://github.com/MrChrisJ/World-Citizenship/issues/22
  • patconpatcon Member Posts: 16
    edited January 2015
    > The mutual bootstrapping effort of educating one another is actually *the* problem (and, hint-hint, may be the best business model for somebody interested in joining the blockchain development fray right now).

    Very good point, @Karl_Schroeder‌... (says the guy currently trying to cull down the billion tabs he has open)
  • malum_canemmalum_canem Member Posts: 3
    Concerning "unique identities". Would an identity not be locked to a reputation system through which the identity would gain value –of all sorts-? If a person was then found to have more than one identity without legitimacy, the value of those identities would decrease, therefore incentivising honesty. I don’t know how all this would work.
  • patconpatcon Member Posts: 16
    edited January 2015
    @Malum_Canem‌ At least the form of ID I'm interested in is not pseudonymous at all, as it's tied to a consistent genetic fingerprinting protocol. (Nevermind that many would insist this is a bad idea -- it will exist imho.) So sharing it would literally risk tarnishing something that will always follow you.

    On the other hand, stealing it would be very enticing, so the system needs to account for recovery from that -- somehow convincing a passport issuer (whose own reputation is at stake) that you deserve the previous one to be black-marked and assigned a new cryptographic ID.

    I imagine it working somewhat like credit scores, where perhaps a slightly shadier passport issuer would take up your case, and your new passport would be less trusted initially, so you now need to earn back reputation in light of that.

    EDIT: Anyhow, this is a tangent. So we should open another issue if we want to discuss further. PM me and I can do that :)
  • KarlSchroederKarlSchroeder Member Posts: 10
    Hi, everybody! I've been away doing stuff (futurist & science fiction related) but neither ethereum nor this thread have been far from my mind. I was invited to the Future of Online Cash conference at UCLA in October, for instance, and left with an interesting perspective on two possible scenarios that I'd like to share--but maybe in another thread.

    I just wanted to say that I'm now working on the novel that will contain ideas about self-redistributing currency. I am leaning towards a Potlatch currency: it does redistribute, much as we've discussed above, and you can't control who the money goes to (it's a random leveling of the pile). However, what makes it a Potlatch currency is that for every coin that's redistributed out of your wallet, a publicly visible, non-transferable reputation coin is created in it. You can also give money into the potlatch to receive reputation back. (There may be an exchange rate depending on the country you're in.) The net result is that we re-introduce the measure of wealth that potlatch economies used: you're considered wealthy not according to what you have, but according to how much you can give away. Reputation, or status, has no monetary value as such since it can't be exchanged, but it is the missing social signifier that arguably money needs. The lack of this signifier is what may cause some to accumulate cash so frantically and hang on to it so desperately even after they have more than they can use. Reputation, status, class, call it what you want; the point is it's more than compensation for loss of your Gwaiicoin (as I'm calling them at the moment). For some, it may become the prize of the entire game.
Sign In or Register to comment.