[p2p-hackers] p2p/mesh economies: observations/speculations + an attempt to define some useful terms
Jon Cox
jcox at experiments.com
Mon Aug 22 15:15:16 PDT 2011
Dear p2p-hackers,
After thinking about the similarities between the commons issues
faced by the PaulGardner-Stephen's Serval project & Zooko's Tahoe
LAFS, I was motivated try (yet again!) to refine my understanding
of currency systems, barter and money.
I'd like some help!
These concepts seem to have direct bearing on problems that arise
when bootstrapping new users into a p2p/mesh system, trust, credit,
fairness protocols & so on, yet I lack a standard terminology for
talking about them in a precise way.
First, I'd like to share a speculation:
My guess is that it would be best if Tahoe LAFS computed all
credits and debits in terms of its native "commodity currencies"
(this term is defined below) like storage, availability, bandwidth,
latency, and priority, and then possibly mapped these things
to other currencies via forward contracts in a fairly pluggable
manner.
While Bitcoins might be interesting as one of several possible
side-channels to establish "credit" for the system's own native
currencies when dealing with non-boostrapped strangers, or for
those who would otherwise hit their "debt ceiling", I'm hoping
that friends could still offer credits for "native" commodities
denominated as such *directly*, without needing to think about
a fluctuating 3rd-party / non-native currency abstraction.
That said, here's my first shot at defining a few terms, along with
a note to the Serval project that may be of more general interest:
o Benefit
That which produces a net increase
in some desired state of being.
o Intrinsic value
Non-bartered perceived benefit.
o Value
Optimally bartered perceived benefit.
o Money
The mathematical abstraction of value
Note: this can be a positive or negative quantity.
o Currency
The concrete manifestation of money.
Note: currency always has a non-negative value.
Example: physical dollars & coins.
o Pure liability
Something of negative value that isn't the result
of owing anybody something.
Example: an inadequate reputation
o Debt
A liability resulting from owing something of
positive value to another party.
o Pure asset
Positive value that isn't the result of someone owing you.
Example: good health.
o Credit
A liability that another party owes to you and recognizes.
o Commodity currency
Some fungible good or service that is easy measurable
and comparable, transferable and transportable,
sufficiently divisible and durable, widely bartered
with known rates of exchange, and derives its value
from its intrinsic usefulness rather than its role
as a currency or as an item of speculation predicated
on the existence of a greater fool.
Example: cigarettes in a POW camp.
o Native commodity currency
A commodity currency whose production and consumption
are intrinsic to the economy itself.
Example: Carpool rides in a ride-sharing network.
o Collectible currency
Like a commodity currency, except that its value comes
from the mutual speculation of those who create demand
for it, rather than its intrinsic worth to any end user.
Example 1:
Bitcoin is a perfect example of a collectible currency
because its intrinsic worth is exactly zero (you can't
even use them to line the bottom of a bird cage).
Example 2:
Gold and silver are best thought of as being somewhere
between commodity and collectible currencies; however,
the volatility of silver prices relative to its supply
and industrial demand shows it's more on the speculation-
driven "collectible" side if things.
o Fiat obligation currency
Like a collectible currency, except that every unit created
represents the transfer of value from someone who has actually
produced a good or service of non-zero intrinsic worth to a
person or institution that has offered nothing in exchange
for it but the currency itself. Crucially, the production
of fiat obligation currency is restricted by law, and demand
for it is created by requiring its use. Hence, every unit
represents a claim by its producer to simply extract things
of actual value from those who cannot create the currency
themselves, and yet are bound to use it by law or necessity.
Example:
The deceptively named "Fed", a group of privately owned
for-profit banks, create legal tender (US dollars) out
of thin air, then "exchange" them for US Treasury for
T-bills. The T-bills have real value in that they represent
fractional ownership of the US government's ability to
extract goods and services from its own citizens, and from
the citizens of foreign countries. To do this at home, it
puses the IRS, federal marshals, and the legal system.
Abroad, it uses military and/or political power to enforce
its will directly, or it can use intermediaries in its thrall,
such as the IMF, The World Bank, various resource-rich or
strategic client governments, and so-called "Coalitions of
the Willing". Hence, every dollar represents the assertion
of a one-sided obligation; they aren't coupons for anything
of intrinsic value that the Fed used to barter with the
US Treasury in exchange for a fraction of the tribute our
government is able to demand. Instead, they are more like
souvenirs commemorating an outright confiscation of it that
has already taken place. The obscene material wealth and
power held by those happy few who are on the receiving end
of this arrangement is the direct result of the compulsory
exchange of intrinsically valuable goods and services for
inherently valueless slips of paper decorated with stars,
eagles, and the faces of dead presidents.
o Fiat commonwealth currency
Like a fiat obligation currency, except that the value
extracted in the process of its creation goes to the community's
own public fund, rather than being siphoned off by a private
aristocracy.
Example (I think):
Treasury-issued "United States Notes".
-----------------------------------------------------------------
Here are some comments I made to the Serval project recently.
I'd love to get some feedback on them.
Hopefully, the ideas I'm tossing around are of wide enough
applicability to merit general interest and/or or an
informed & corrective critique
-----------------------------------------------------------------
Serval already has at least three commodities with universal value,
and native non-speculative demand: bandwidth, latency, and priority.
Using these in combination with a system of reputation and credit as
a "commodity currency" makes a lot more sense than dragging in a
collectible currency.
Assuming nodes in a Serval mesh are free to associate in different
virtual communities of reputation (as humans do in real life),
all a community needs to do is restrict mesh access ("the commons")
in ways it sees fit to discourage behavior it dislikes, or grant
special credit for positive actions (eg: donating bandwidth,
particularly in times of shortage). It seems as though you could
even model the policies of Serval "community" as an autonomous
System (AS) on the Internet, and then go on to think about
communities honoring each other's credits with bandwidth, latency,
and priority as parameters like a AS-AS forex. This would keep every
community free from central domination by other groups, yet open to
engage in mutually beneficial data transfers. It seems likely that
a few huge communities would naturally arise, along with lots of
little ones. Users might like to have different policies for each
of them, as different levels of generosity (or blind trust) might be
appropriate; one might have reputations in personal groups, affinity,
regional/global, etc. It seems like the core requirement is the
ability to assign a policy profile to a group ID, and the ability
to have more than one.
If someone with a sufficiently large balance and community reputation
never gets bumped by somebody who might be free-riding or has no
reputation, it makes sense to build a positive and credible
"accounts receivable" bandwidth balance. Someone could always cheat
you with a series of bogus IDs, if doing so entails them being
second-class citizens the entire time, there isn't much incentive.
I think it's good to place the main focus on first degree contacts,
as has been done with great success in hawala networks. The hawala
system is well known for its efficiency and real-world security, even
over wide geographical areas lacking any common authority sanctioned
to use powers of state (such as garnishment) in order to enforce
contracts. Reputation-based access to the commons can go a long way
to regulate behavior. Diamond traders that operate via handshake
agreements are another nice example of regulation by community
restriction. More generally, the principles and practices of
Islamic banking look like they're worthy of serious study.
I've only begun to explore this topic, but the prohibition against
outright interest seems to have generated a fascinating array of
partnership-oriented contracts and non-leveraged financial
relationships -- all with a bare minimum of bookkeeping.
If an adversary's goal is to hunt down all copies of a message and
destroy it, another consideration emerges: perservering ignorance.
Example: Julian Assange has no idea how to reclaim all
copies of insurance.aes256; therefore, he cannot
be forced to help anybody else do so either, even
under the threat of torture.
Had a recording been made of every person who
downloaded the file, then thugs could go after
these people too, even if they number in the
tens of thousands. However, what if these
folks placed the same data on the net in a
way that couldn't be detected, and was then
downloaded by yet another set of people
that's unknown to the first group.
The same logic applies to the release of the
key to unlock the encrypted data. You probably
want some sort of anonymous quorum where the
various members don't actually know all the
other members, but share an ability to look
at a common "outer envelope" wrapping a sig
and an inner blob. The disconnected cliques
have these blob-bearing coconuts floating
between them, yet the inner blob part within
the coconut cannot be cracked solo by any
one clique; however portions of the key
to crack it can be posted publicly by them
(in any form: wrapped by the group envelope
or not, steganographically or not, signed
or not, and so on).
Cheers,
-Jon
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