Proposed alternative to blockchain based central bank issued fiat

I would like to propose a competing vision to central bank issuance of fiat on the BSV blockchain.

Rather than have central banks control the currency supply, why not have a market-driven supply? Rather than let retail banks create new units of currency in the names of individuals based on their credit scores, why not let individuals create new units of currency themselves and let other individuals decide if they want to accept it based on a publicly available reputation score maintained on the BSV blockchain?

What I am proposing is in accord with the decentralization of power and is superior to the existing system or the proposed central bank driven model presented at the coingeek conference by James in my opinion.

This proposed system seeks to remedy three rather large flaws with the existing central bank managed USD system.

First is the lack of an explicitly defined base unit of measure since the ending of the Breton-woods agreement by Nixon in 1971. Since the ending of that agreement the dollar has been undefinable in objective terms, you can not say what a dollar is, which is a big problem for units of measure. They require objective definitions in order to be common reference points.

Second is the problem of indirect issuance of units of measure, having banks issue new currency in the name of the borrower creates excessive cost and burden. How inefficient would it be to go to central authority every time you wanted to quantify length? Then imagine you are charged 3 percent of all the length you quantify by that centralized authority. Under that circumstance over time, the central authority and those close to it would acquire complete control over length.

Finally, it seeks to restore the link between new currency creation and value production. Under the current system of capital allocation, the link is between the ability to repay in dollars, not in objective value creation to society. This creates a situation where insiders game the system, pumping asset classes to make their own bets come true, using funds to repay loans in dollars and getting greater access to capital without value creation to society.

Capital needs to be allocated based on objective value creation for society not on the ability to extract value from society.

My proposal:
Individuals will use a UI in order to issue tokens themselves. Those tokens will have an objective definition/standard. My preferred standard is a joule of work, but others would be acceptable. It will be a condition of using the system that you agree to the definition of the base unit of measure and that the base unit is to remain a constant and can not be redefined. Whatever is chosen as the standard must have enough potential supply to quantify all potential value creation while remaining a constant. Units of measure must have abundance models. Using scarcity models for units of measure creates undesirable circumstances. Imagine having to stop building your home due to a scarcity of inches, it is equally absurd for trade to be halted due to a scarcity of units of measure for value.

To this point, we have a self-issued token with a socially objective base unit of measure that can not be changed. Now we need a method of verifying the validity of those self-issued tokens. We need a scale to double check measurements with. When it comes to measurements, trust but verify is very much in play. The way that we verify the legitimacy and regulate the supply of units of measure for value is through personal reputation in the form of credit scores.

I suggest a p2p BSV blockchain based reputation keeper where users can set their own limits on thresholds for acceptance of joule token.

Example- I will only accept self-issued joule token from users with the equivalent of a 700 credit score, but I would also be willing to accept self-issued tokens from users with a 600-699 credit score equivalent for 3% off face value, etc.

So now that we have a self-issued unit for the measure of value with an objective base unit of measure and a scale we can put it on to check its validity, we now need to create a mechanism to link it to real-world value production. I suggest the system allow issuers to pledge what they would be willing to redeem their self-issued tokens for. Adding this mechanism ensures that those who are creating the greatest amount of value for others will receive the greatest access to capital and will help to prevent the allocation of capital based on illegitimate extractive gains. Simply because you were able to con someone out of their currency should not entitle you to greater access to capital.

In summary, I am proposing a self-issued token with a socially objective standard with a p2p reputation keeper to verify its authenticity and regulate its supply and the ability to pledge what goods and services you would be willing to redeem your self issued tokens for.

Fiat tokens issued by central banks only really make sense as an intermediate step, or for specific government related purposes. Right now they make sense because bitcoin value is too unstable. So they provide stable value with a secure means of exchange.

After bitcoin grows to a certain threshold, through usage in fiat tokens and other things, it will have a more stable value than any government based currency, because it will be worldwide. It will then be the best choice for money in most scenarios.

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That is not the question though. Bitcoin at scale will make good money ( A unit for the measure of value that contains socially objective value) once a commodity value is established. What I am interested in is what will make good currency ( a unit for the measure of value that contains no socially objective value). It is likely that people may use BSV in the future as money to store value, (because BSV contains socially objective value in that it allows its holders to make entries in the world first non-centrality controlled public ledger), but what I am interested in is not what people choose to use to store value but what they will choose to transmit value.

The idea that people will go back to using commodity-based money to transmit value in significant amounts will not materialize. People simply are not going back to commodity money after using currency. For the same reason, people will not go back to using other units of measure that contain the properties they are meant to represent. We are no more likely to go back to using inchworms than we are to go back to using gold. It has been proven that units of measure should not contain the properties they are meant to represent. Inches contain no length, pounds contain no weight, hours contain no time and currency should contain no value.

Besides, there is a lot of competition within units of measure for value that contain value, including gold, food, oil. btu’s of heat. Some people may choose to preserve value with BSV over the alternatives, but for me, I would rather save value in something that is not dependent on the internet or the power grid. Most of the reasons to preserve value involve rainy day scenarios where luxury items may not be available.

I would like to talk more. If you are interested, my points can not be refuted so people ban.

Sure. This is a much better place to discuss things more in depth.

So I think my main question is why won’t people use money, by your definition? Especially if the alternative requires more trust, centralization, and is less reliable.

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Good question and good attitude!
I just sold all my BSV which was significant…
People will use money for saving, because money has value so is good for preserving value, in the BSV system BSV could become money and some people would choose to save it, not a lot though because there are other forms of money that are better at preserving value and will be more liquid under more circumstances.
They will choose to use currency rather than money for spending though. Money is not good for spending and it limits trade because it has real value. People are much more cautious about spending it and it requires a lot of extras. Like security, armed guards and armored trucks, bank vaults etc. It is much harder to transact with actual value. Using money has a lot of risks that currency does not have. If you have cash in your wallet and you lose it, it is gone you are screwed, but if you use currency and you lose your wallet its no big deal. You just cancel your cards and that is that. If someones steals your money your are shit out of luck, but if someone steals currency the issuer can just invalidate the transaction. Another big problem with money is that it is scarce because it has value which limits trade. You literally dont have enough of it to facilitate trade. It would be like building a house and running out of inches.

Its simple really currency is more useful and safer.

:point_up: sorry I didn’t tag you on that reply

I think a major problem with money as a “store of value” is that if you have very much, then there is almost always a better place you could have it invested. Invest in a reliable company, real estate, something that will give you a return. Money is only good for short term store of value, basically just between transactions. When I get paid, I almost immediately move everything, except for what I need to pay bills, into better stores of value (investments). At scale BSV will have a stable value and be more effective at transferring value than storing it.

The problem with currency is that there is a central party in control of it. You can never have a worldwide “currency”, because the entire world will never all trust one centralized party. This limitation will always make BSV more convenient, more widely used, and more stable than any “currency”.

I don’t believe “currency” will have any less risk. There are many levels of safety that can be built on top of BSV. You only need to expose your spending wallet. It can be insured and protected by “banks” just like any currency. “Currency” will in fact have more risk because the central point of control will be a big target and will be much more vulnerable than the BSV network.

I believe a basic property of a limited supply of money is that the value can grow if there is more demand for it. So you will never be able to “not have enough”. As when the demand increases, so will the value, and it will balance.

“At scale BSV will have a stable value and be more effective at transferring value than storing it.”

But it wont get to scale if there is not a viable unit of account on BSV. BSV is a value transfer network and before you can transfer value you MUST quantify that value. You will not be able to quantify value in BSV so you can not price in BSV so you can not have markets based off BSV. The network REQUIRES that currency get issued on it before it can scale.
My point that that even after it scales and it was possible to price goods in BSV and people understand what that price means (how much value is being asked for what.) people still wont use BSV to base markets off of, because it will NEVER be as stable of a unit of account than currency. Money is not good for measuring value, because it has value. Currency is good for measuring value because it DOES NOT contain value. Units of measure that do not contain the property they are meant to represent are BETTER.
I know you want people to use a unit of measure for value that has value, but they are not going to do it. You are trying to give the customer what YOU think they should want, not what THEY actually want.

We need fiat tokens while BSV is still growing. After it matures, it will be the definition of stable unit of account because it will be bigger and more used than anything else, including any one currency.

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No it wont even if it does become that large it wont be as stable as currency, but I agree the system REQUIRES currency and that currency NEEDS to be better than facebooks libra before people will choose to use it. If commodities could be stable gold would be a rock and its not oil would be as stable as steel and it is not, BSV will never be used more than cotton and it is not stable either. No commodity no matter how utilized will EVER be as stable as currency. A commodity basket standard would make an excellent standard that would be WAY more stable than libra.

Not sure why you are not being tagged? I do it the same way every time. sometime it tags others time is does not. If it on my end sorry about that.

Are you ready to face facts yet? I NEED to talk to CSW, I NEED to talk to calvin ayre, I NEED to talk to jimmy wen, all I am saying is you are out of a job if this problems is not fixed and FAST. I AM an expert and have studied this shit for 8 years! I can go up against a Harvard professor and hold my own. I have done analysis on EVERY stable coin project to date and KNEW none where viable, but libra is viable. This was not put together by facebook. It was put together by the IMF, the World Bank, the bank of international settlements, this is the SDR in sheeps clothing, this is centralized global currency that is warned about in the bible, from the big boys who actually know what they are doing.
Get me on the phone with someone!

you know that stuff that you cant do anything with but spend? that stuff that has no value but represents value, people really like that stuff maybe we should give them that stuff instead of the stuff we think they should want instead, why dont we try giving people what they want i think it could really work.