On Wednesday, December 4, 2002, at 06:17 PM, Peter Fairbrother wrote:
"Money" is too broad a term, encompassing bullion, giant stones, coins, chop marks, scrip, IOUs, checks (of several kinds), warehouse receipts, markers, seashells, wire transfers, SWIFT orders, diamonds, bonds (of several kinds), casino chips, promissory notes, etc.OK, suppose we've got a bank that issues bearer "money".
If a Swiss bank, the pre-eunuch form, took in other forms of money and gave one a number or a passbook, this would be the bank issuing "bearer "money"".
Why do you think this? What matters is only the expectation/Bayesian probability that an instrument (the money thing) will be "redeemed" (converted into bullion, dollars, francs, wire transfers, etc.Who owns the bank? It should be owned by bearer shares, of course.
The beauty of an anonymous system is that users may "ping" the system, knowing that the bank/issuer do not know if the pinger is Alice, or Tony Soprano, or Slobodan Milosevich.
Issue about "who owns the bank" are unimportant, and distracting.
Why? Did holders of Swiss bank accounts ask for, much less get, such records of the highly-secretive Gnomes of Zurich? Of course not.
Can any clever person here devise such a protocol?
I'd guess that all the Bank's finances should be available to anyone who
asks. That should include an accounting of all the "money" issued. And not
be reliant on one computer to keep the records.
Money works when and only when there is some expectation attached that it will be convertible into something else, with that something else often being other forms of money but also things like goods and services.
(who's drunk now, but will be sober tomorrow, and may regret posting this
then...)
Nearly all forms of money are more like IOUs than any other single description. With British money it is the Bank of England (so I hear, but maybe it has changed to some sort of U.K. reference) that says "Anyone who presents this IOU for 10 pounds will be given either another IOU for the same amount or will be, sometimes, given gold or silver." Because this IOU is believed, in a Bayesian and Dempster-Shafer sense, other people will accept this IOU in settlement, with minimal discounting.
A "marker" for a person of flaky repute--or the bonds of Enron or United Airlines--may be heavily discounted based on expectations of their worth to others or of the probability for ultimate redemption.
Now people have known these things for millennia. Only in recent centuries has the notion that governments alone can issue money become seated in the popular consciousness. And only recently has the notion that all money transfers, bank accounts, and other such dealings should somehow involve an identity credential, one also issued by governments.
Swiss banks could take in and dispense from accounts without any identity credentials (the passwords and equivalents to signatures and chop marks) because of this basic point about Bayesian probability. Swiss banks were not trustworthy because they let customers examine their vaults, their computers (!), or who their owners were.
If IOUs are subject to wider fluctuations in expected future value than formally-issued currency, gold is subject to narrower fluctuations (at least short term). This is not because of some magical properties that gold has, not because it is "real" money, but because of the obvious ontological properties of Element #79 and its resistance to duplication, oxidation, and spoofing.
This is why ideas about E-gold are so silly. What matters is the expectation that the issuer will not vanish or claim the account never existed, not whether some gold bars are sitting on his Gorilla racks someplace (he claims, and maybe even has photos to "prove").
And so on. I could discuss every form of "money" listed up above and how it is more closely tied to "expected future value" than to anything about customer identity, bank records, "oversight," or managment by Big Brother.
Money is about expectation. Nothing more, nothing less.
--Tim May
"They played all kinds of games, kept the House in session all night, and it was a very complicated bill. Maybe a handful of staffers actually read it, but the bill definitely was not available to members before the vote." --Rep. Ron Paul, TX, on how few Congresscritters saw the USA-PATRIOT Bill before voting overwhelmingly to impose a police state
