[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
Zero-balance money supply
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. The only problem I see
is the possibility of reneging on negative money. Of course, when
that happens nowadays, we call it bankruptcy. So I guess we deal one
way or another. The banking system would have to constantly take a
percentage of all transfers to pay its costs, one of which is
bankruptcies.
I *think* it would be impossible to inflate or deflate such a currency.
Inflation might occur if people lost faith in it, but it would also
have a negative feedback effect. Inflation increases people's ability
to pay off their negative money, which puts a cap on the amount of
inflation that could occur. As soon as the money inflated a little,
people who could pay off their negative balances would do so at the
newly inflated value.
I also think it would be impossible to run such a currency
anonymously, because a negative balance is essentially a loan, and how
could you loan money to someone who could be anyone? Only if they had
established a reputation with their public key...
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.
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?
-russ <[email protected]> ftp.msen.com:pub/vendor/crynwr/crynwr.wav
Crynwr Software | Crynwr Software sells packet driver support | ask4 PGP key
11 Grant St. | +1 315 268 1925 (9201 FAX) | Quakers do it in the light
Potsdam, NY 13676 | LPF member - ask me about the harm software patents do.