Topic: Who could be trusted to do governance? - page 3. (Read 3434 times)

You are right that the energy markets are not totally free, but in reality, there IS commodity destruction.  It is not as complete as in the case of a totally free and competitive liquid energy and ASIC market, but there is more waste than if you had to print dollar bills.

The real problem of PoW doesn't come from the fact that there are still large margins taken on the commodities that need to be destroyed, but rather that the coin value at the moment of its PoW creation only has a fractional value of its later value.  The value increase of the coin over time is also a form of seigniorage: people get value for just holding coins.  At what point that is seigniorage, and at what point that is "investment", can be discussed.  I consider that it is not an investment as such, because there's no economic value produced by the investment - well, there is the ultra-small economic value produced by the utility of the crypto currency, which is essentially zilch: almost no consumer good, in the end, has seen the daylight that wouldn't have seen the daylight if crypto currencies didn't exist, and consumer goods/services are the bottom line of economic value of course.


There are two remarks on this.  First of all, holding a seigniorage-obtained fraction of a collectible which grows in market cap over time, gives you a proportional growth in seigniorage, without doing anything.  If you possess 5% of bitcoin when its market cap is 1 million dollars because of seigniorage, and bitcoin goes to 1000 billion, your seigniorage has grown proportionally.  So you DO gain continuous seigniorage by just holding the coins.  That is even the case if you wasted 50 000 dollars to obtain them, that is, if you destroyed entirely the initial seigniorage when you created them.  This is the problem with a "sound money" collectible as a monetary asset.  You could formulate it that its seigniorage properties are not invariant over time.  This is a problem in my opinion.

The second is that value that is transferred (the goal of a currency) shouldn't, of course, be destroyed !  It is coins created that should have their value destroyed, apart from a small competitive margin.  The economic value of a crypto currency is ultimately only worth what it allowed to produce in utility for the end consumer, and that is not much.  This economic value can be distributed over the people that made this happen, took the risk and had the vision, like with any investment.  But the problem with a monetary asset is that it doesn't take its *added economic value* as market cap, but *the whole traded value*.  There is no "economic fairness" in this.

If I have, say, a big machine that can labour land, and you want to labour your land, my machine has economic value to you, because you can grow more food on your land with my machine.   Let us say that the gain in food production ends up being 1000 if you use my machine.  You using my machine is hence worth 1000.  But we have to get my machine to your place.  If I have to hire 20 people to carry it to your place, that would cost us 200, which means that only 800 remains.  Now, if Joe has a truck, and he can transport the machine to your place.  He needs to spend a value of 50 on gas, maintenance and so on for his truck.  You can say that in the end, the economic value of him using the truck is 150, because without the truck, we would end up obtaining 800, and with his truck, we end up obtaining 950 of value.

However, his truck did transport my machine, which was worth 1000 in total.  But the truck voyage itself was only worth 150.

With a monetary asset, however, the existence of the monetary asset, which is the "truck for value", brings in some economic value (like the truck did, about 150), but takes on, as a market cap, the FULL value of what is transported.

The confusion with a monetary asset is between the value it *transports* and the value *creation* of the system itself (the competitive advantage the monetary system brings over other ways of transporting value).   My claim is that, at the moment, the competitive advantage of crypto over, say, fiat, in pure end-consumer value creation is minuscule.  This minuscule value is what could be fairly distributed to the "investors" in crypto - like they would if they had invested in any other stock.  But with crypto (like with any other monetary asset), the value of the asset itself is confused with the value it transports.  It is not because I bought something for 10 000 dollars with bitcoin, that the bitcoin system created me an economic value of 10 000 dollars, it only transported it (like the truck) ; as such, it did bring me some small value because otherwise I would have done it with fiat, but this is a very small amount.

However, the holder of "seigniorage bitcoins" takes the full value that is transported as reward, and not just the value creation by the bitcoin monetary system.   This unfair economic advantage makes that one hugely overinvests in this system.  In other words, the seigniorage-by-holding-coins is a huge market failure, that directs tons and tons of resources towards something that has very little economic consumer value.

The incorrect claim of Byteball creating a wide and fair distribution:

https://medium.com/iconominet/iconomi-acquires-9-766-of-byteball-initial-distribution-free-of-charge-cd9c4a5d49ac#.rkuo958we

I agree with all of this. And part of my experiment, is explaining what I think about various things such as monetary theory and ICOs, etc..

We can't give away for free that which is not free.

When Russia privatized the land after the fall of the Soviet union in Perestroika by giving it away free to people who didn't know how to own/steward/manage private land anymore, the rich bought up all the land, so there was less significant change in the top-down control of the economy than one might have hoped for.

Instead of harvesting high diversity of effort (i.e. true investment) with a viral distribution model, IMO Byteball is creating a low entropy speculation with too much top-down control at the nascent stage where it needs exponential distribution. Thus the probability of failure is much higher, i.e. the antifragility is very low.


You have clearly demonstrated to me by now in our discussions over the past days that you entirely do not understand/appreciate the critical importance of the entropic force and the irreversibility of thermodynamic processes.

Replication is not the same as a diversity of irreversible paths. Replication is low entropy. You have a huge blindspot in this area of conceptualization and it is the source of your incorrect analysis on many issues. Sorry just being frank.


Egalitarianism is the same as infinite entropy (in that everything is equiprobable and simultaneously absolute top-down order) which is the same as non-existence and a static universe.


Nicholas Taleb disagrees.

1. PoW does not destroy (aka "burn") the economic value. Most of it ends up as cash flow to the utility companies, which means more demand for subsidized large infrastructure power projects, given that utilities are price-controlled and regulated (which means the political corruption of privatizing the profits and charging the costs to the public). There is some portion of the value traipsing into to the environment as "waste" heat (i.e. disordered), but there is friction in any system that interfaces with the tangible world, thus it isn't a unique feature of PoW.

2. The problem is not an incipient gain by a group able to hoist a more efficient monetary system on to society, but rather a gain which doesn't naturally diminish exponentially, because otherwise it sells the future to the past which is a reduction of degrees-of-freedom and incompatible with the Second Law of Thermodynamics trend towards increasing entropy. The fiat masters try to unnaturally maintain the right of gain from seigniorage over the long-term being rewarded for being a top-down Coasian cost on society, which is low entropy and this top-down statis is why nation-states collapse over and over again throughout our human history.


Thus there is nothing wrong with the creator obtaining some exponentially diminishing seigniorage. And PoW's great contribution is in the objectively, competitive distribution which runs on auto-pilot and doesn't require ongoing seigniorage (except as pointed out above the seniorage of the government utilities it furthers and also the fact that economies-of-scale centralize it and create an ongoing seigniorage, which is really, really bad and why Bitcoin is in a scalepocalypse political clusterfuck as the power vacuum must be filled). But PoW doesn't actually destroy the value transferred in the process. Destroying all value will be akin to moving to infinite entropy (disorder) which would mean we could not exist.

Btw, what I am attempting to do is design and launch a variant of the root concepts explored by Satoshi's PoW, which I hope ameliorate the aforementioned power vacuum. However, even I will admit to you that my design can be gamed by whoever can convince society that an objective system is not a priority. But at least my design doesn't require that most people need to stop being apathetic (because they only have to make a decision to employ the objectively provably correct automated client/wallet software). It only requires that society has the correct ideological understanding of objectivity. So we must teach. Or alternatively that only those who do have that understanding stay on the well functioning fork of my design. With Satoshi's PoW, we can all have the correct understanding, but it doesn't help us avoid the fact the economics of PoW are naturally centralizing due to asymmetrically higher profits that accrue to those with more hashrate than others (and other forms of economies-of-scale such as cheaper electricity and the fact that @ArticMine's decentralized space heater concept is provably incorrect as I have exhaustively explained in my unpublished white paper).

Following rant is prompted by the usual argument between @ArticMine and myself flaring up again before I slept (just woke up).


Before you read this, please read Surgeons Should Not Look Like Surgeons by Nicholas Taleb, the progenitor of antifragility.

I want to preface this rant with an acknowledgement that Monero comprises an important body of work that advanced our ecosystem's understanding and technology. However, what I found to be so ironic and what has irked me about Monero's community attitude/ideology since the start was this holier than thou religion that (only Monero's variant of) PoW was the Holy Grail which eliminated the evils of seniorage. They voiced superiority over every other project and economic scheme (although I end up agreeing with them about the centralization flaws in other schemes such as Dash's masternodes). And only their anonymity was worthy. Etc.. As it turns out, no system based on Satoshi's PoW avoids centralization long-term. And even the anonymity of Monero appears to me to be incompatible with reporting taxation totals to the authorities, thus afaics (IMO) meaning it can't possibly become mainstream and thus can't become a unit-of-account and thus will always be tied and enslaved to fiat. Monero folks were always telling me I had to work for free and could only get my ROI by having a large amount of capital to invest in XMR (i.e. a big boys club and I ain't in it):

Quote from: iamnotback on February 26, 2017, 01:28:45 PM

The global elite are all in the same club. And we ain't in that club.  <--- PLEASE CLICK AND LISTEN

Underlying implication and attitude was that I had better join them or end up being left behind as a failure (and that they had the larger grouping of smart people and so one guy on his own trying initiate something creative couldn't possibly compete). According to their groupthink, they felt smug to belittle anyone who claims there could be opportunity to go create something great and earn more than the most lucrative year of my career thus far ($350K in 2001). Instead they throw some bones out for the little guys in the form of measly donations. Hey if I just wanted a job earning $50 per hour, I could in theory go earn more than that back in Texas. One of the reasons for working every waking moment on this stuff is not just because it is very challenging and interesting work (and also for the social interaction given I am an extrovert), but also because of the potential financial upside given I am at the tail end of my most productive years. People have opportunity costs. My opportunity cost is that I am age ~52 with negative networth, no retirement, and minanarchist meaning I won't accept government handouts, so I can't just work for free for fun. That doesn't mean anybody owes me anything. We only can earn what we are capable of earning. In this ecosystem, the fact is that others can clone your open source work. There are factors to consider...  Any way for the moment I decided I just want to work on it, and not think about my potential ROI. I will not do an ICO. I am funded for some more months on my basic expenses, so I will just enjoy working on it and see if it can be launched. Then the free market can decide. Note I do want to acknowledge that several guys in Monero's community have been very generous to me. I think I've received on the order of ~15 - 20 BTC in total (at an average BTC price < $500 and I spent it on expenses) in total from those in the Monero community over the past 3 years. So perhaps my ranting above is insolent. I am trying to make a point about the evils of groupthink, not a personal admonition of individuals in that community per se.

Those things are not scams.

the problem is that you undersell yourself. You don't believe your ideas are worth it. But they are. It actually doesn't matter whether your ideas ultimately work out. What matters is that we need many people like you to be creative to push to try things.
Let us take care of whether its a "scam"or not.

We are all involved in the experiment, and we can't predict exactly where it is going, so we need people like you with knowledge and ideas to experiment.
I'd happily put money into an ICO of yours.
I have done very well in crypto because I'm not afraid to take risks and to believe.

You have something to contribute. It doesn''t matter whether it is perfect.  Do it.

And remeber , if something is worth doing it's worth doing badly the first time.

There's nothing wrong for them to sell it, on the contrary.  The more a coin gets traded, the less it is concentrated in the hands of a few.  

You don't need people to "invest" in something.  The only thing you need is a large list of non-identical crypto-identity holders, so that the initial distribution is as large as possible.  If it were possible to have, in one way or another, a public key of every person on earth, that would be the most ideal distribution.  But we don't have such lists of which we know that they aren't manipulated.  As such, the bitcoin address list looks like it is one of the best.  There doesn't even need to be a correspondence between the AMOUNT of bitcoin to an address and the newly distributed coin.  You could give a single coin to every existing address.  Most of them are probably dead.  But that doesn't matter.  What is needed, is a large list of public keys, of which the secret keys are in the hands of as many people as possible.

You don't even need to TELL people immediately.  You can have them discover their holdings way later.  The important point is that whatever is used as public key, cannot be manipulated when the knowledge is out.  It has to be a list "of the past".

The problem with seigniorage is not the LOSS by society (your analysis is correct), but rather the *unmerited gain* of those obtaining seigniorage, and hence the economic power the obtain "for nothing".

It is not so much the fact that it costs you something, it is the nasty effect to see the other guy get rich without production of value.

Seigniorage is on the receiving side, not on the paying side.  That a monetary asset network costs value is OK.  But that this value gets in the hands of some is not OK.  If it is destroyed, then that's OK.  This is what is so brilliant about PoW.

Why did you buy Bitcoin then?



The problem you lament exists because the speculators want to compete with each to buy ICOs early because they are all jealous that they didn't buy Bitcoin at $1. There is no solution to that other than to take all their money from them, and give it to scammers. Because that is what happens to jealous fools.

Whereas, telling me not to creating the Bitcoin Killer advance because you don't want me to get paid what I am worth, is nonsensical. If you could somehow stop me, then I would go work on some other project not in crypto and earn the (up to) $350,000 a year I used to earn before.

First thing you said Shelby was "getting paid"
That is the issue.. morality & altruism etc.

If we are going to play by this everyone needs to be paid to lift a finger game then it's just going to scale up and escalate higher and higher.

Crypto in general started out as a few guys in a basement and now it's million dollar loans for mining farms
..and multi-million dollar ICO's where the "Dev" (i use that term loosely) is paid millions.
But.. it started out with guys doing coding work for nothing in return.
Aside from having the same equal mining opportunity on launch as all the others.

If they "need" to be paid it's going to snow ball.. it always does.
I don't know who to trust for governance off hand but i would trust the guys with hands out the least LOL
I'd be looking more to people who do things with out asking for anything in return.
That may not be an answer but it should help narrow it down a bit i think.  

Hmm, I thought I saw you saying the other day that POW is the only viable solution lol...

It better not be a proof of storage after you have just been telling me my idea in that other thread is no good without giving me the answer to make it work!

Yeah thanks, let's discuss about monetary theory.

The seigniorage is the price we-the-society pay for there being confidence in the currency. For without confidence, money has no value. This is a critical point that most people under appreciate, so it is very important that readers click that link and understand more deeply the linked thread in all its detail.

The ability to get a large community to rally around one thing as money, is essential for money can't exist without confidence that it is a liquid and fairly universal unit-of-exchange.

So he who can create that confidence, gets the seigniorage.


When a developer of a project works very hard to create the confidence, he BURNS his labor which is economically analogous to getting paid and buying mining equipment and paying electricity.

The argued benefit of PoW as a distribution mechanism is that is an OBJECTIVE (i.e. trustless) free market competition and it has unbounded, decentralized participation. So it is really the distribution mechanism of PoW that is its genius, not the BURNING.

Now if someone can design another form of distribution which has the same properties, then he will have a valid alternative to PoW. I am working on such an alternative system of trustless, objective, distribution.


Knowledge acquisition and social networking are competitive. At least in our ecosystem unlike in the nation-state model, no one has a monopoly on this competition.


Agreed. An ongoing (i.e. perpetual "tail reward") PoW-like distribution is much better. But I intend to show that PoW isn't the only way, nor even the best way.


I am.


Byteball did this. The problem is that when you give away coins for free to speculators, they are likely to sell them because they didn't decide to BURN anything (e.g. buy or do effort for it) for it, e.g. Auroracoin.

Also your suggestion only targets a very limited audience of Bitcoin holders.


No, you don't because those who obtained coins had nothing invested.

It is unwise to think that any centralized service or website is free from being pawn in the bigger game.
In the end it is government which controls everything. Do you remember when BFL went down?
Theymos was 'asked' by the authorities to share private messages of everyone involved in this case.
He complied to that request. How could he refuse?

Seigniorage is inevitable when one creates a monetary asset.  It is considered "unfair" and can harm, as such, the monetary belief in the system, but seigniorage will always happen.
With fiat, the seigniorage goes to the government ('s buddies), and people scream "THIEF", but it is just a tax like any other.  With bitcoin, about the smartest anti-seigniorage system was thought of: you BURN it.  Every coin that is created, has WASTED as much value as it was worth (apart from a small and fair "competitive" margin).
But even with bitcoin, there is seigniorage: the first adopters could get their coins at a fraction of the value it has now.  All this "unmerited" value transfer from certain people to other people because of an "unfair advantage" (the monopoly of the state, the knowledge of the devs and their buddies....).

It is inevitable.  The only thing one should obtain, is that this advantage gets "washed out" over time.  Seigniorage is worse with PoS than with PoW for instance, because initial stakes give you the final dominance over the coin distribution.

But why don't you consider a totally different way of distributing your coin ?

Give yourself a fair premine, and make the coin for the rest a *fork of bitcoin*.  So that anyone holding bitcoin at a specific date in the past holds your coins too (and you hold your premine on top of that).  As such, you get immediately a distribution everyone considers now as "fair".  You could even only accept bitcoin that has already moved, say, at least 10 transactions at a day in the past, so that you eliminate Satoshi's stash.  

Bitcoin is a primitive coin, but has one advantage: apart from Satoshi's stash that mostly didn't move, it has a fair distribution that has a certain age.  Why not "fork" off this, and take from bitcoin what it did best, and which can only happen ONCE in history ?

the best regulation about governance, same youre write is USA
USA with SEC and ETF, but if SEC and ETF is nothing want receive payment from client is investigation, nothing receive bribe money,so transaction fee paid to governance is nothing to work, becuase can indicate coruption

I am a developer. I eat rice. I live in the Philippines and $300 monthly rent, $256 child support, etc. I have angel investors for my basic needs.

Open source. Anybody can code on it.


Illegal.

And its competing for a coming ICO graveyard of bankrupted fools.

Yep, The issue here, as you obviously know:

- When the coins are still worthless at the start, and you really need money to pay developers, you have none.
- Once its gone, its gone.

I still think, despite the issues, the first idea I posted is the best long-term (Dash style mining percentage, voting system)

If you wanted to you could bake in a percentage reduction over time, ie, 10% (Dash) goes to the treasury initially, reduced over time till you hit .001% after an amount of time (10 years?)
 and then its sits steady there forever.

Votes on treasury spending should be divided between both miners and wallet holders in a balance that you would know better than me.

I am also coming to the conclusion that is the only way to do it because all other ways appear to be illegal. And that was my original plan in 2014, but was told by everyone that premine was horrible. Yet I've come to realize that every project was premined, even Bitcoin and Monero. There was always some limited number of people who were mining with huge resources at the very start when the difficulty was miniscule.

You know, If we picked the right one (Australian, Norwegian, New Zealand, Denmark, Finland) It probably would be about the safest bet. (to handle the distribution of funds, not to run the development team)

The government.  

Honestly, if there is a "trusted party" to be had, it is the government.  Trump, the United Nations, Putin, the European Union, or some other "trusted entity", no ?

I don't know why one would go through all the crypto hassle to end up with the equivalent of Putin or Trump, with the equivalent of the European Union or the United Nations.  Because that is what will happen if there is "aristocracy", that is to say, "people who are different from others, because they have institutional decision rights which others haven't".

Satoshi knew this and pulled out before people asked him to "rule".