Author Topic: A General Summary for John Nash’s Proposal: Ideal Money  (Read 1227 times)

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J_Smithy

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A General Summary for John Nash’s Proposal: Ideal Money
« on: July 12, 2015, 10:51:08 PM »
Trav tells me to post my thoughts in here and this is at the cusp of my writing and understanding on the subject of bitcoin. A short summary (and the full writing):

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The suggestion here is the ICPI, that John Nash spoke of and wrote of as a possible ideal basis for backing a currency, is truly only a theoretical side street used to abstract a solution he proposed and referred to as 'Ideal Money'."

"A General Summary for John Nash’s Proposal: Ideal Money":

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Since only the markets can properly price commodities, and ideal money functions in relation to an ideal basket of commodities, then only the markets can determine optimal currency supply.

 It stands to reason then, in order to rein in the suppliers of each respective (Keynesian/central bank) currency towards an ideal policy standard, one must simple create a competitive pricing market for the currencies.

 The conclusion outlined in this writing is that the new standard of “ideal-ness” whether solely theoretical or not, isn’t bitcoin per se, but rather a theoretical (or future!) money who’s supply and monetary policies functions in a stable and predictable relation to its’ underlying ICPI.

 This theoretical Ideal has been shown as impossible to reach in design yet effectively and naturally achievable with the implementation of a universally exchangeable money that has a truly competitive predictable and stable nature in the “Nashian” sense (ie bitcoin).

As the man himself said:
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Then the limiting or “asymptotic” result of such an evolutionary trend would be in effect “ideal money” but this as a result achieved without the adoption of anything like an ICPI index as a basis for the standard of value.

Then am able to begin work on a proof that block size consensus for change should not and cannot be reached.
« Last Edit: July 12, 2015, 10:53:08 PM by J_Smithy »

Trenton

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Re: A General Summary for John Nash’s Proposal: Ideal Money
« Reply #1 on: July 20, 2015, 06:30:15 PM »
What is your belief into the block size debate Smithy?

Should we continue to increase it for functionality purposes, or are you alluding to this as a 'slippery slope'?

J_Smithy

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Re: A General Summary for John Nash’s Proposal: Ideal Money
« Reply #2 on: July 23, 2015, 01:10:05 PM »
What is your belief into the block size debate Smithy?

Should we continue to increase it for functionality purposes, or are you alluding to this as a 'slippery slope'?
I suspect that block size is best where it is, which causes it to function like gold rather than a coffee type currency.  I suspect that there can be no consensus for significant change and that "satoshi" envisioned it.

Everyone wants block size to facilitate there own individual want, but money is that peculiar thing that's purpose is to facilitate a kind of cooperative gain.

I've been writing a ton trying to put together an argument that change is impossible because to many people have incentive to disagree, but it's quite a big "proof" to show.

All in all, and especially if Szabo is satoshi or part of "satoshi", I suspect the scientific way is too say, "We don't know what everyone will choose, we know what is ideal but the future is not determined" :)

J_Smithy

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Re: A General Summary for John Nash’s Proposal: Ideal Money
« Reply #3 on: July 23, 2015, 01:26:05 PM »
https://www.reddit.com/r/Bitcoin/comments/3dyvs9/block_size_debate_is_insignificant_and_a_red/

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I do think much of the debate is truly just peoples throwing out "attacks" on consensus and that much of the intelligent elite really just want to test the social cohesion. What seems obvious to me is the more significant the proposed change, and the more consensus there is for that change, the less stability bitcoin has. And I would like to suggest stability (of a special kind) is exactly what bitcoins' utility is and should be.

There are a plethora of peoples here, mostly probably new to bitcoin, as I was and still am, who want bitcoin to be their own personal money. Alas this is not its intended primary use, nor should it be. Please allow me to explain why.

Money is a social tool, its favorable purpose is to facilitate trade so that both parties might make favorable gain. It is necessary for a society to flourish. If one was alone, money could have no use. What I mean to say is that the utility of an optimal money is about the group, not the individuals wishes.

How many peoples here, have a very strong opinion on what bitcoin should be, but have not deeply inquired into what ideal money is!? Isn't this the real question here? What is ideal money, for society, NOT for yourself!

Everyone is not thinking, but simply answering the question in terms of their own want to purchase "coffee". But there is a real world out there, that already exists with extensive and convoluted banking systems. Whole nations and international coalitions.

Your coffee money doesn't even come close to addressing reality. Not even close.

The question of how do I want bitcoin to work is the selfish unintelligent viewpoint. And it doesn't even serve the self. Money is a very special thing, it is a very peculiar question to ask how can I design a money so that is serves "me", because the purpose of money is to aid the individual by facilitating THE GROUP!

Reducing bitcoin to something we make massive changes to in order to suit the ignorant individual is an incredibly small and short sighted vision for bitcoin. One could make a new currency every second to do that and one would wonder why your favorite coffee shop wouldn't make their own currency (hint they have!).

Bitcoin's greatest utility is stability. Something the collective mass can psychologically rely on in the same why they THINK they can rely on gold.

This subject has already been written about extensively, well into the future: http://sites.stat.psu.edu/~babu/nash/money.pdf

I don't take people serious who haven't at least read the argument proposed. If you don't know the lecture "Ideal Money" I don't think you should be debating block size.

Travis Patron

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Re: A General Summary for John Nash’s Proposal: Ideal Money
« Reply #4 on: August 22, 2015, 01:15:32 PM »
I agree that the concept of ideal money is the carrot stick which can lead us to a better functioning society. As far as social cohesion goes, money is the social mechanism which acts to solve problems. This is why I am so very much about government intervention in this social mechanism, for if they "whack down" what appears to be a problem, another one springs right up in response. Government intervention may solve a problem in the short run, but in doing so, they only create a future, exacerbated problem.

One of the reasons I am such an advocate of bitcoin as a money system is it eliminates this ability for government intervention to create new problems. On top of the economic principles of bitcoin (limited supply, disinflation, industrial consumption index of hashing power, backed by time-bound algorithms which are magnitudes more intelligent than human judgement) I think it will develop into a form of money as close to Nash's Ideal as we have ever seen.