On 15/05/12 02:33 AM, Nico Williams wrote:
On Fri, May 11, 2012 at 6:22 PM, Adam Back<[email protected]> wrote:
([...] A stable mechanism for
value storage would be a rather useful instrument.)
Indeed, it would be, but in the *long*-term no such instrument is
possible *on its own* regardless of how you might construct it. All
value storage media depends on there being people willing to use that
media for value exchange purposes. Given current demographic trends I
think it should be clear that it's difficult to guarantee value stores
regardless of their construction. As with all other currency issues
this is a political problem.
To illustrate this consider a novel [whose title i won't say to avoid
spoiling it, though it's a very old novel now] where there comes a
point at which humans can no longer procreate. Imagine being a member
of the last generation and reaching retirement age with billions of
today's dollars in the bank. But what use would those dollars be?
None. Nor would bitcoins, gold, or even property be any use. This is
an important point regarding Social Security type systems as well.
The number of years of retirement that the world can guarantee people
depends entirely on the number and/or overall productivity of young
people! With total fertility rates plummeting world-wide, life
expectancy continuing to improve, and productivity not improving fast
enough, it stands to reason that retirement ages must be raised.
Borrowing from future generations cannot be done for long if those
generations are predicted to be smaller; eventually it becomes
impossible and defaults and/or inflation must result. At most a gold
standard (or equivalent) can force a default instead of inflation, but
losses (and political pressures to socialize them) cannot be avoided.
The fact that "value" is always in relation to other human beings with
whom you might trade means that the problems of value storage and
exchange media are always political problems, and always will be.
To me this means that value exchange media are always more important
than value storage media. Cryptographic money efforts would be best
focused on value exchange rather than value storage.
(my experience only :)
An exchange of value consists of a contract to exchange ("trade"), two
transfers of value (value for value), a dollap of coordination problems
("settlement"), and dispute resolution services ("failure").
Hence, reliability of exchange is dominated by reliability of transfers.
And, transfers of value are dominated by reliability of basic issues
of value, including storage.
What might be seen as sort of semantic short-cut is that a value system
may be considered reliable if and only if it can participate in an
exchange. If not, then not. That's a sort of "cuts through the crap"
test of value systems.
E.g., you could look at Bitcoin and say it isn't the best for exchange
because it has this indeterminate period where the new collisions are
calculated. Worrisome, or good opportunities for dispute resolution
providers, depending on your perspective.
Dragging this back to crypto - there are good cryptographic aids for
value systems. There isn't much crypto can do for exchanges.
iang
_______________________________________________
cryptography mailing list
[email protected]
http://lists.randombit.net/mailman/listinfo/cryptography
