The Official “Time as Money” Synthetic Commodity-Based Money Discussion
Create new systems for human symbiosis that reduce or eliminate poverty, fraud or exploitation.
About this Wave
This is the first wave I’ve ever created and its first goal is to begin a dialog that sparks the interest of everyone interested in attempting a game-changer in financial systems.
What does the ξ represent?
ξ is the currency symbol for “value time” and it defaults to a decimal quantity of hours. These hours are a form of “synthetic commodity” managed by the market with transparent algorithms and transactions. ξ of value created under the same rules are equivalent to other ξ created under the same rules.
ξ40 is “forty hours” of value time—and you could think of it as the equivalent of an American 40-hour work week. “Minimum wage” in ξ is the equivalent amount of wall-clock time. Exclusive skilled labor is typically paid at a ξ-rate greater than wall-lock time. For example, a plumber fixing a sink in a half-hour may charge ξ3 for labor and some other amount for parts as yet undetermined. If you’re earning less ξ than wall-clock time, you’re losing money.
Shared skilled labor is typically paid by a divided amount. A teacher in a class room might work for 1.5-hours with 30 students. What should the teacher be paid? The “minimum” would be ξ0.05 per student, but a skilled and experienced teacher should be paid much more. Since the teacher is a shared resource, the individual rate per student could be ξ0.25 per class, but in the aggregate, the teacher is earning ξ7.5 per 1.5-hour class.
Why not use gold or some other form of commodity like carbon, energy or oil?
In order to “bootstrap” any failed state a universal commodity that everyone has equal claim to was needed. If ξ was based on gold, it would suffer from the universal problem of “auditing the vault”–that is, how do you know your symbolic money is properly allocated according to the “reserves” of the issuing authority? How often would you “audit” the authority? How could you trust the audit? The ξFin solution is to use time as the commodity and use a public transaction stream to document its creation by all of the participants within the market. Money cannot be created invisibly “behind the curtain” and it cannot be created in massive quantities.
How is ξ credit allocated to members?
ξ-credit is allocated individuals according to a simple formula: ξ = ln(unique people). The more people there are, the more ξ there is available per person to initiate trades or buy equity. Credit in the ξFin system is not the same as credit in the legacy financial systems everyone has been using for centuries. To defuse the systemic risk of credit-contraction business cycles, ξ-credit is only limited to each individual and requires no interest payment or return of principal to any other entity. If you use up all of your ξ-credit, you will have to wait for it to “regenerate” back into your account at the same rate everyone else does.
What was the first “thing” purchased with ξ?
The first thing purchased with ξ was a “Moka” espresso pot for ξ1. Since there is no shipping service that accepts ξ yet, the actual cost was ξ1 + shipping, but I just mailed it myself for the fun of it. Some other members of the system bought t-shirts for the “WeAreTheMusicMakers” subreddit.
When does regeneration start?
Regeneration starts when there are enough people in the system to start a diverse interdependent economy. The regeneration formulas replenish credit at a rate dependent on the number of people in the system. With too few people, the ξ made available to the market would be inflationary (too much, too fast). The proposed threshold for regeneration is Dunbar’s number, at about 163 people or the average limit where human relationships begin to break down into “stranger” or “friend” categories in our minds. With 164 people, everyone would see ξ0.196083567 deducted from their used ξ-credit until it reached a zero balance, that is ξ5.099866. The more people there are in a market, the slower the individual rate of regeneration becomes and the change of this rate is intended to be gradual to avoid market shocks. If 20 people join the market bringing it to 184 people, the default ξ-credit available to each person increases to ξ5.214935 and the rate of regeneration decreases to ξ0.191756916. New money is only created if ξ-credit is used by each individual.
Watch This Space: More Concepts To Come
Just writing this wave is a big help in organizing the concepts–if you have any questions, comments or ideas, bring ’em on!