I'm not a libertarian. They overstate things. I am far more careful as are those I cite and reference. Here we are just noting the trend of the equilibrium in a network of private banks. They CAN'T over supply their currencies versus their reserve holdings, because in a dog eat dog environment they will give their competitors the ability to mount a bank run on them. There is the whole game theory fleshed out by Selgin, and its math...but its quite simple...

it means that there is a long run equilibrium for inter-relational currency/reserve ratios between competing exchanges. I only want the result of THAT truth. The rest you talk about can be true or whatever it doesn't affect what proceeds in my argument.

That is what everyone was saying imo. They were still able to to outmaneuver the state. what you need is true state run/controlled and then Bitcoin has no more purpose, or very little purpose.
Thanks for the insights on FTX.

Thanks.
So Ideal Money is an algorithm that mimics the regulatory effects of gold pre Bretton Woods?
Yeah, "very difficult" in the sense that the U$D would kill us if we tried, figuratively speaking, maybe, idk.

Gold has some advantages that it provides for global stability considerations. And ya as long as we understand its a theoretical consideration of the ideal basis. gold has disadvantages as well, but as we highlight advantages and disadvantages we being to paint a theoretical optimal/ideal



These considerations are interesting when you consider bitcoin, and if you don't really know much about bitcoin especially technically, i urge you to learn about it first from these two lines that nash notes about gold:

The idea is you can peg to the cost of things, because the price is a reasonable reflection of the cost, of course but depending on what you choose. You have to consider the geopolitics EFFECTS on the commodities you choose, whether its one commodity or a basket. And thus you have to consider that some nations will favor certain commodities that other nations won't etc.

The value transferred vs weight is effectively an observation on the cost to transact. In my theory the cost to settle with gold raised during the wars to a point where the global economy fragmented.
So while people are asking 'what is the best crypto currency that can be designed.' Nash is ahead of the game asking what could be the optimal basis for our global currencies. And he's defining the vector of the idealness of that basis, and deriving an equilibrium out of the implication it exists.

And thats the genius. Because you ask, 'why and how the **** would he know to do that?'

Why is he assuming his theoretical basis exists such that he can formalize an equilibrium based on it?

Gold worked well less because of it's market value but rather the human labor required to extract it remains relatively stable. Same for other commodities. Are you familiar with the Labor Theory of Value?

Imho pretty much why u need commodities in the value of currency to ensure a minimum stability in its value for labor aka preservation of purchasing power (control over inflation).

Yes, and we can synthesize with the subjective theory of value:
https://en.wikipedia.org/wiki/Subjec...heory_of_value
If we believe that prices of commodities trend towards their cost of production. We don't need to choose between theories to hold that as true. Its another useful approach to understanding the technical aspects of bitcoin, but through economic philosophy, because we can point out that bitcoins and blocks are created out of proof-of-work. Which isn't really perfectly comparable to human labor (at least not immedietly in theory)

Satoshi explained bitcoin, and more specifically the 'difficulty adjustment algorithm' which determines the supply rate, like this:

I think here you are referring to the idea of a currency backed by a commodity. I'm not sure if it is intuitive to you that 'pegging' to the price of a commodity means the same thing that you are pointing to.

Its important to understand they are the same thing. We should argue about it some if we don't see this.

The vector you are pointing at, we want to formalize and begin to paint the optimization of it.

I think you meant to speak to this...
The bolded isn't the reasoning it was chosen or optimal in the sense you mean to point to. Its just a favorable aspect that there can be a cost to transport versus the value transported.

For Nash's proposal it would seem we are looking for a basis, or commodity or commodities, that have stable costs of production. Gold has historically had this... but even gold could have technological based production/supply shocks.

Not back by a commodity but by a basket of commodities to lower volatility (which bitcoin can’t do by itself) and to give alternative to an economy on how to deal with an imbalance through different means due to the composite of the said currency .

I would have no objection to include bitcoin into that said basket .
Actually i think its imperative to include bitcoin based on very restrictive supply it possess and can’t be influenced by any foreigns method (politics or superpower country for example).

Btw I’m not saying it should be backed only by a basket of commodities , just the necessity to include a basket in it for the reasons already stated previously about the protection of purchasing power by the labour.

Right. Bitcoin isn't ideal money in this sense (its limited by its inelasticity to serve growing economies by the mainstream views of economics). But we are considering it rather as its suitability as a BASIS for what would be ideal money still served by central banks perhaps.

What Satoshi explained about bitcoin is that the DAA, or the difficulty adjustment algorithm, adjusts the supply rate in approximate relation to the cost to produce the average bitcoin/block. Thats what it is. Thats the crux or the genius.

But bitcoiners don't understand it this way. They don't understand why there is another reason that is important and useful. And they don't know where satoshi got this from.

I agree but we can go further and redefine "cost of production" from a quantity of dollars to a quantity of labor all the way down the supply chain. So if it takes you 1 hour of labor to pick a bushel of apples, the value of a bushel of apples = 1 labor hour, which once picked now becomes the wealth/capital metric, eg, if you picked 100 bushels, you are also worth 100 hours of (stored) labor.

The above works for a toy model of the economy but if we only use average apples picked per hour, that would basically hide all the inefficiencies we hoped to get rid of. So we'd need to add in a qualitative dimension to labor along with the quantitative. That qualitative aspect of labor is what we see as the wage gap.

What I'm wondering is if detailed employment data by itself could show where all those inefficient labor hours are coming from.

I think this is where we cut out the complexity. We don't need an objective metric or metric of human labor etc. We are asking 'what is the optimal basis for a currency supply?' and we come out understanding we want something that is apolitical between nations. We don't end up needing something perfect in the way you allude to, but rather something that can reasonably satisfy.

In this, the search for an ideal implementation for a basis is too strong. We can consider the ideal theoretically, and consider that the implementation might not be perfectly ideal and rather if a lesser implementation might be enough for the intended goal (the inter-relational stability of major currencies).

What bitcoin does is every two weeks it reviews its average supply rate (or rather block rate) and then makes a prediction on what the net computational labor should be set at in order to compensate for the deviation from the target rate (and the target rates parameters have some loose restrictions as far as the design would go).

This nullifies the impacts of technological and energy based cost to produce improvements. We want to understand in what direction that is perfect and yet how its only approximately so. And here its not human labor its considering/and regulating, but a digital metaphor of it.

edit: I hope the nuance came across, we aren't trying to price labor but we don't mean to invalidate the labor theory of value. Its just that its partially relevant.

Another relevant consideration that was brought up but we can highlight as we understand the 'quest':

The significance that is bestowed on any of the commodities that are chosen as part of a basis for a new monetary order. That if gold were the single choice then there would be geopolitical considerations for nations that had a lot of that resource ready to produce/mine. And conversely nations themselves would want to argue for their favored choices depending on advantages or disadvantages they have over the production of such commodities.

We can consider the effects of the same on bitcoin if it were chosen...it has no geographical basis for extraction. (this would be another angle to understand bitcoin from that is not from the technical approach as we can explore whether or not the nature of its mining does or does not nullify the point in the above quote)

Bitcoin's value comes from the overall demand of those who use it as a form of payment and how much value that particular method of payment earns over the status quo of payments. That extra benefit it serves is basically its value - at least in terms of its dollar value per bitcoin on the market.

The mining of either really doesn't play as an important of a role as folks think - especially with gold as a chunk of its value is a social construction.

In consideration of certain commodities for a singular global basis for what would be like a target for inflation gold's cost to produce versus its demand make its a very good candidate. We are basically pointing to the problem of supply shocks of our specially chosen commodities:

What you are pointing to (although true!) is not our consideration for our 'basis'. We want to consider things that have stable and reliable supplies when their demand is tested etc. Gold has a good feature in this regard:

Bitcoin has an algorithm, that optimizes this vector. The vector is very hard to describe to people, but its getting easier to see. A bitcoiner doesn't know why a commodity that optimizes this vetor would be useful, but we see it from the nashian viewpoint. Thats the vector we are understanding is optimal for a currency peg.

The added value that bitcoin incurs for example from its transactional usefulness and its speculative nature...are there...but not the reason its optimal, they aren't negatives in this regard either.

tldr; Bitcoin has an algorithm that adjusts its cost to produce in order to govern its supply rate. This makes it an optimal basis for Nash's proposal.

Its obvious that the thing we choose needs to be ultra 'secure' against supply shocks that happen because of its special nature. But when Nash explained this, it was 1995 and no one knew why he was approaching such a problem,

Nowadays you have fake intellectuals, saying that Nash's theoretical journey to highlight the ideal is stupid. But it allows us to point to bitcoin and say THAT THING, ITS PERFECT. It's imperfections don't matter, its got all the qualities for Nashs proposal to make it a perfect fit even if its not an ideal money itself.



These frauds say 'there you have it, Nash lived in a fantasy world, Satoshi was the brilliant one.

But Satoshi isn't a real person. Satoshi provided an implementation that is the optimal basis to Nash's proposal.

Question: How can a global reference point be established for Nash's Ideal Money using labor hours with a qualitative component, and what are the implications when viewed through the lens of Say's Law?

AI: Establishing a global reference point for Ideal Money based on labor hours with a qualitative component aligns with Say's Law by recognizing that the intrinsic worth of labor underpins the currency's value. This approach encourages efficient economic exchange, balances currency supply and demand, and harmonizes a diversity of global economic activities. By accommodating variations in the quality of labor, the system not only facilitates transactions but also promotes economic efficiency on a global scale.

Ask the AI what is the comparable unit between human labor and computer labor.

And why would u trust more an AI respond to a human respond about human labor ?

I just meant to compare human labor with computational labor but maybe I was thinking in the wrong direction...

Bitcoin adjusts the total computational labor necessary to produce successive blocks at a certain rate averaged with a basic process control algorithm. It creates an apolitical and predictable metric. But it doesn't address or solve the concept of stable/objective value. The quest of Nash's Ideal Money is for the thing or things, price or prices, that we can globally choose to peg all the major currencies to, and the considerations of the effects of bestowing such a role on specially chosen commodities.

That thing/things then inherits the ideal qualities, I THINK, that John21 alludes to (because we globally agree to it etc.). The money supply of bitcoin, doesn't expand with our production/labor. We would still have centrally banked currencies that do so. But curiously money supplies that are perfectly managed in that regard, will have perfect exchange stability with bitcoin...

that would mean conversely if you pegged to bitcoin your supply to production ratio would be implicitly optimized.