From: nelson@crynwr.com (Russell Nelson)
Date: Mon, 23 May 94 09:08:02 PDT
To: cypherpunks@toad.com
Subject: Re: Zero-balance money supply
In-Reply-To: <199405231243.WAA26469@munagin.ee.mu.OZ.AU>
Message-ID: <m0q5cPy-000IA9C@crynwr>
MIME-Version: 1.0
Content-Type: text/plain


   From: Daniel AMP Carosone <danielce@mullian.ee.mu.OZ.AU>
   Date: Mon, 23 May 1994 22:43:10 +1000

[crypto content: has anyone tried to impart reputation to an anonym? ]

   Russell Nelson writes:
    > I wonder how well a zero-balance money supply would work (having
    > positive and negative money)?  Positive and negative money is created
    > simultaneously by a single transfer of wealth. 

   Some friends of ours tried starting up a regional group of a system
   called LETS, which works on this principle.

Yes, I'm sorry, I should have mentioned LETS by way of crediting them.

   One of the interesting features of such an alternative economy,
   especially when when it operates side-by-side with a traditional one
   where debtors could leave the system, is that there is a strong
   community incentive to prevent anyone building up either too large a
   debt or too great wealth. In both cases such a person becomes a risk
   and a burden. But there is never any problem of someone keeping money
   out of circulation, or being short of small change.

I think that it's more a matter of trust.  If you trust the system to
work well, you can carry a high positive balance (e.g. selling a house
to someone).

   In the LETS system I mentioned above, everyone's current balance and
   trading volume were published in a newsletter. That way, community
   members were encouraged to keep their balances, and those of their
   trading partners, near zero.

Right.  It encourages you to keep your wealth as wealth, and not
wealth receipts.  But then again, inflation encourages that also.  :)

    > Hmmm...  Interesting, then.  You could only effectively work
    > anonymously if you had created a reputation for your anonym.  And that
    > reputation would have to be established in some way *before* anyone
    > would loan you money, otherwise such a loan would end up being a gift.

   This is the same situation as now. However, consider that you don't
   actually *need* anyone to lend you money -- you can make as much as
   you like yourself by contributing to the community, or borrow some
   from the community at any time.

Hmmm, hadn't thought of that (tho it's obvious now that I do).  Yes,
it's community-based, trust-based borrowing.  But also hmmm, it lets
individuals make borrowing decisions for the corporate body.  Not
necessarily such a good thing.

    > One way to establish such a reputation would be to write some free
    > software, or answer Usenet questions, or were otherwise seen to be
    > knowledgable and responsible.  I haven't seen anyone try it yet,
    > though.  Does anyone know of such an attempt?

   Sure.. lots of people are doing those things you mention.. in fact I'm
   sure I've seen you do *all* of them yourself, Russ :)

No, I meant "establish a reputation for an anonym".  But thanks for
the complement (NOT)!.  [sorry, I guess I'm a looser, a looser of bad
jokes.] [ but then again if I was *that* sorry I wouldn't make them in
the first place, eh? ]

-russ <nelson@crynwr.com>      ftp.msen.com:pub/vendor/crynwr/crynwr.wav
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