Saturday, September 22, 2007

lame-ass economics, part 1.

First, a disclaimer: all of this represents purely personal speculations and mental experiments of an SL avatar, which neither claim the correctness of itself nor intend to claim the incorrectness of anything else, and bear no correlation with real life whatsoever - keep this in mind. Additionally - they're going to be rather random and incoherent. If you feel uncomfortable - please stop reading here.

With an attempt to squeeze any monetary system into a fully distributed environment immediately the main question pops up - who and how can print the money. (The fact that it is fairly obvious that in such a system we would most probably talk about fiat money). Obviously since we talk about the fully distributed system, the usual safeguard of the smart folks at government printing the money would not work - there's simply no such entity. So - "anyone can print the money".

There is also a strong tie to another messy area in the distributed virtual world - identity. For now we assume this problem to be "solved".

I would think that one of the best properties of the money - its total "anonymity" is also one of the biggest evils. If each banknote did have a full history if its adventures - the things like money laundering could be easier to detect and address - if we all agree that drug dealing is a "bad" thing, then money that has been once used for this - would become "tainted" and automagically lose its value for anyone who considers the drug dealing to be "bad". Let's put aside for now the process of creation of the specific microeconomies with the same "currency" being only internally used - the money that lost its universal acceptance would cease to exist.

Now, index by the identity, and we have an interesting system which would also take care of the reputation - the person which is engaged into socially unacceptable financial activities would also be a "tainting factor" in itself for the currency.

This "index by identity" is a difficult problem as while it is relatively easy to "trail" the money - just "write on the back of it", tracking "all the notes that were printed by the current individual" is a more challenging task.

However, this is not something impossible - imagine a high-redundancy distributed storage media, which would record every transaction. It is in a sense a one-way street - it is very easy to put something into such a system, but with the reasonable information storage redundancy, it would be very hard to retrieve the information out of it. This kind of media ("distributed data bank", if you like) would also be required.

I don't touch yet the question on how to limit the given individual to become hyper-emitter, but even with the above propositions it sets up some funny playground for mental experiments.


dandellion Kimban said...

I know what you thinking about, but, as last time we talked about money, I cannot get the tail. But.... instead of forcing you to clarify yourself, I'll start my part of obscuring the story.... *giggles*

Tracking the flow of money is very dangerous area. It is a number one threat to resident's freedom. You don't want any service to have a file with all your transactions. That doesn't mean there are no services that have it. We both know there are many of them. But they are still not tracing your cashe. So you can keep your bits of anonimous shopping. But that goes for the meatspace, no coins on the grid.....

But I am going too offtopic... so, I'll wait for the part two and then ask the questions :)

In the meanwhile, I'll shoot another offtopic about dirty money.... Urban legend says that a journalist came into toilets of European Perliament and collected samples from flat areas there.
Then took those to the lab and found out that in the whole building there are two cabins in which he caught no trails of cocaine. So much about things that lose value in the contact with drugs. :p

Dalien said...

dandellion, it's not offtopic at all - like I wrote these ramblings are highly incoherent and do not reflect any reality - they're just mental experiments, and a point for the discussion - so, there's no offtopics :)

I am trying to get the tail myself - which is why I started to write it down:) It seems quite easy in the head, but these "annoying little details" pop up only once it is expressed as words. I don't think I have the answer - but at least I can more clearly formulate the questions - so do not take all this as "official description of the architecture" of anything in any way :)

Also, the playground is neither SL nor opensim specifically - at least at this point - it is an abstract set of independently operating identities or groups of identities (it happens to look similar to a pile of independent sims, but going down to 'earth' there reveals even *more* questions - so first I tried to experiment in an abstract space:)

Tracking - yes it is a danger as soon as there is is a possibility that some animals are more equal as the others, and as soon as it is controlled by someone - which by definition makes that identity more equal than the others.

However, I think it is possible with the truly distributed system to make an "information soup" which is open to all and is very difficult to control or abuse by anyone - if this condition is met, I do not see how it would limit the freedom of operating entities - the only limiter would be the peer pressure - which to me is a scalable way to enforce the ground rules.

After all, "freedom" is something quite relative - you're free to do whatever your society tells is OK to do. Or, let's rephrase - you are free to do anything as soon as you are not *caught* doing something the society thinks is not ok :)

Which further goes to your point about the drugs. Assuming this story is true (which I have the benefit of doubt of - because.)
there is a skew of what we declare the society "should be" and what the society really is. It is the same in the reports of the SL being the ground of rampant trademark infringement or weird sex activities (too lazy to search for references but you know it anyway).

To me those are just the better-visible reflections of what happens IRL. It's the fact that you can teleport from one end to another in a matter of second (if it works that is :) - that exposes this discrepancy between "should be" and "is". But it is exactly the same thing that happens IRL - which is why I consider these abstract thought experiments interesting - maybe we can come up with something useful for RL as well eventually.