Proof of Work.

Here is some new grist for the controlled money-creation problem, you know, the one where you want money to be balanced between its scarcity (having value) and its utility (facilitating transactions in a economy.)  If money is too scarce, it deflates and becomes more valuable, however, with lower velocity (used in fewer transactions) restricting commerce.  BitCoin people like to talk about the time-preference of money when they hand-wave about their imagined future of BitCoin deflation-based riches. If money is too common, it inflates and becomes less valuable and velocity increases  (used in more and more transactions) because it takes more money to represent the same value.

I’ve been thinking about the the “proof of work” issue with BitCoin and how it could be translated into “real world” money-creation with ξ. Right now, BitCoin clients (until they fix the problem) must download over 200,000 blocks of transactions before they can even begin to think about creating addresses for payments.   If an actual banker told you that it would take 6 hours to create your account, you’d look at them as if they were asking you to saw off your left-testicle and eat it, if it was the “only” time you needed to do it. You have to be able to initiate yourself in the system instantly. There are other services out there of course that will proxy-create you a BitCoin wallet so this isn’t quite as big a problem as I make it out to be, and everyone beams with logic that “You could just do that!” whenever I bring it up.  So, why not provide a similar service for ξ-creation?

Enter the Attestation Bureau

Clearly, there needs to be a trusted intermediary to certify the “proof of work.” In BitCoin, this is limited by the algorithms composing its computational lottery. In agorism, it is said that conflicts between two parties are to be resolved with insurance, arbitration or protection services. There may be a fourth mechanism here that the market can provide centering around attesting work transacted in units of time (ξ) between two parties.

The seller of labor performs the work for a given amount of ξ, the buyer demonstrates they have enough ξ to purchase it, and the attester certifies that the work was done and paid for. If this creates money, it only does so because the buyer had enough credit to create it.  This is also where things can get hinky. A corrupt attester could attest all kinds of things, creating money in the market in excess of the value created via the work, thus decreasing the value of everyone’s ξ within the system. If there is no one to attest between the buyer and seller, then they can only swap between each other: the seller performs ξ3 of work so the buyer provides an IOU of ξ3 that would have to be worked out in their future.

Detecting Fraud

An Attester who manages transactions for a small town of 50,000 people should only be able to instantly generate about ξ540,000 in transactions [That comes from the calculation ln(50000) × 50000] between all individuals (An unusual event if all individuals participated 100% in only that Attester’s service all at the same time) before the only savings creates new money in the books. By this measurement you can look at an attester’s books and analyze the creation of money and detect fraud easily: they have to provide a unique identity to each party and should be able to demonstrate the flows of new money through their books. Pick any number of random entities on the books and contact them. Are they real people? Do they know who attests for them? Are they happy with their attester? And so on.

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Piracy and IP

I’ve been listening to the first five episodes of Decline to State so far and I’m impressed at everyone’s handling of hard questions and enthusiasm. Their discussion on IP or No IP (IP as in Intellectual Property) has set a light off in my mind about the issue triggered by this definition of reputation by comparing it to prices:

Just like a price is the aggregate monetary value judgment of a thing by market actors, reputation is the aggregate nonmonetary value judgment of a person by market actors. Of course, the amount of (resp.) money / reputation that a single individual is willing to pay for / ascribe a thing / person, varies from person to person. When one isn’t willing to pay the market price for a thing, he says “it’s too expensive” (for me). When one isn’t willing to believe the average reputation of a person, he says “he is overrated” (in my judgment).

Reputation should also be extended beyond just belief, for if you value the reputation of a person, you should desire to provide evidence of your aggregate monetary value judgments (a really obtuse way of saying “BUY THEIR STUFF”) with the hope that the money gets to the correct person. If you’re spending $10 for a digital download of an artist’s latest album, you’re doing so either because it’s convenient to you or you wish that artist to receive some benefit for their work and reputation.  

Piracy wrt Known and Unknown Reputations

Is piracy an aggression upon reputation and a violation of the non-aggression principle?
It depends.

There’s If you’re giving away someone’s work because of their reputation, you’re either hurting them if they’re relatively known or helping them if they’re relatively unknown.  There is no defined boundary between the two states, except for the action of the owner of the reputation: if the reputation’s owner indicates that they are happy with the amount of reputation they have earned from the market, the market should stop piracy and honor their request. [I know, fat-chance from the poor starving student, but you highly successful an-caps who pirate should be feeling  guilty and open up your wallets…]  If the owner accepts affordable prices and makes their works available where the market desires, based on their reputation, they’ll collect significant monetary value and the market is happy—remember the Summer Steam Sale?

Should Intellectual Property Exist?

Before this I hadn’t really thought of my view of whether or not IP should exist and have decided this:

IP doesn’t exist because it was an invention of the State and “improved” upon by corporations like Disney who persistently lobby the State for ever longer extensions of copyright duration.  These corporations of course then attempt to use the State to collect on this fiction.

But there is a market of reputation and an implicit contract to support reputation monetarily whenever and wherever you benefit from it.  If you downloaded a song and never enjoyed it to begin with and deleted it, you’re happier that you didn’t monetarily lose. If you’ve listened to it 30 times a year, perhaps you better brace yourself for the next paragraph…

Sort your pirated music library by “times played”, group by artist, and spend some of your hard earned money.

Dealing With Your Personal Guilt

If you benefited from piracy, you incurred an anonymous debt to the performer and the performer had better opened a digital tip-jar (BitCoin, LiteCoin, PayPal, doesn’t matter how…) to collect your debts, no questions asked.  Maybe you only have $100 to spend a year, so proportionally allocate it based on your benefits. If Artist-A received 20% of your attention and Artist-B received 80% of your attention, send $20 to Artist-A and $80 to Artist-B.  Each artist at least receives something for your reputation of them.

For those performers who don’t have any methods of receiving “tips,” well, you’re missing out on a lot of lost income driven by piracy, a real SUATMM failure when someone just wants to play your music on the devices they prefer. If you benefited from piracy and can’t increase the artist’s monetary income, you should by all means at least try to increase their reputation: write recommendations, reviews, and so on—but not by more P I R A C Y. That would be silly.

For your listening list consideration: Bad Quaker

This podcast stands out with a 5-day a week, hourly show, if anything Ben Stone is prolific. If anything, Ben Stone is the Anti-Alex Jones and he provides an uplifting and positive message about agorism/anarchism/insert-label-here. Bad Quaker has a huge focus on the zero-aggression principle and anarcho-capitalism, which of course is going to make anarcho-socialists [which seems like an oxymoron in light of the zero-aggression principle] a little upset.  Ben digs out some amazing history, theory and thought about the State that ranks him up there with Daniel Quinn in my eyes—I’ve certainly have learned a lot from Ben Stone since I’ve started listening.

Get your favorite podcatcher on down to Bad Quaker. I think you will enjoy it.

Just Read: “Alongside Night” by J. Neil Schulman

Different.  Agorism is something that really has a specific meaning, and it takes some rounds to understand. A lot of ξ ideas fall neatly into it and away from gold, which of course is the classic idea [but flawed] of what makes, money, money.  For those of you who’ve never heard of this book, the blurb would be:

The American economy is in freefall. Markets are crashing. Inflation is soaring. Bankruptcies, foreclosures and unemployment are up, and even defense contracts are going overseas. Foreigners are buying up everything in America at firesale prices while gloating over the fall of a once great nation. Homeless people and gangs own the streets. Smugglers use the latest technology to operate bold enterprises that the government is powerless to stop, even with totalitarian spying on private communications. Anyone declared a terrorist by the administration is being sent to a secret federal prison where constitutional rights don’t exist.

And caught in the middle of it all are the brilliant 17-year-old son of a missing Nobel-prizewinning economist, his best friend from prep school whose uncle was once a guerrilla fighter, and the beautiful but mysterious 17-year-old girl he meets in a secret underground … a girl who carries a pistol with a silencer.

The setting could be next week. But this novel was written three decades ago by a 23-year-old college drop-out who crafted his particular brand of prophecy from combining the techniques of science fiction with projections based on an obscure economic theory.

Building on the prophetic novels of Orwell, Rand, and Heinlein, J. Neil Schulman created in Alongside Night the first of a new generation of libertarian novels, telling the story of the last two weeks of the world’s greatest superpower through the perceptive eyes of a young man caught up in the maelstrom of the final American revolution.

Now of course, this was published in 1979, but written six year prior to that, and before the widespread knowledge of encryption and certainly before the idea that people would even own a computer or have computers do things for them, securely. Today we have Tor networks and Silk Road agoras  selling anything you can imagine and newer, modern hypernets like CJDNS being built as fast as possible, while a government and financial system are working hard to prove they can try for a geometric expansion of the money supply without pissing everyone off [pro tip: Nope.] while concurrently the corporations of mass-culture try to create new laws to entitle themselves to perpetual copyright and invasive destruction of fair-use or communications infrastructures. These are indeed interesting times. So find Alongside Night, read it for its entertainment value, and ponder how a book written over 30 years ago could have gotten so much write (and wrong) about the future.

Predicting futures as always, a fool’s errand. Making futures, that’s a different story.