Friday, March 19, 2010

Promise Language in real life

PL can be implemented at a small local bank as easily as a central bank. It instantly assures trust among participants while reducing transaction costs. Existing companies that adopt the specification would change how they do business in very small ways that lead to a globally trusted system.

Four categories of companies exist within the system.  These companies already exist, the labels are a way to describe them in the public PL specification:
- Promise Assurance companies
- Promise Reporters
- Wealth Translators
- Wealth Storage companies

Wealth Translators
If two individuals trade different forms of wealth, these companies handle the exchange. For example, if you stored your wealth in a vault in gold or silver, USD could be sent to the merchant instantly, behind the scenes. Simply present your Mastercard or Visa, etc., your gold is reduced, the Wealth Translator takes a small fee, and USD is delivered to the merchant.

Promise Assurance companies
Two types of Assurance companies:
1. Mastercard, Visa, Discover, American Express allow instant trust between strangers
2. companies to accept risk on larger Promises (eg. Lloyds of London or other underwriters)

Promise Reporters
The data belongs to the individual, and the Promise Reporter ensures integrity of that data. Data is only released to others at the discretion of the individual. Current companies like Experian, Transunion, Equifax can easily reorganize along these lines.

Wealth Storage companies
Vaults holding something of value (Euros, USD, gold, silver, diamonds, etc.) on the individual's behalf.

Description of Promise Language (PL)

Similar to HTML or XML, PL (Promise Language) is a simple framework describing promises that can be read by humans and processed by computers.  For example:

<promise>
 <promissor>
  (person's name)
 </promissor>
 <promisee>
  (person's name)
 </promissee>
 <value>
  (description of value conveyed)
 </value>
</promise>


A Transaction would comprise two Promises. A Transaction is marked as completed when both Promises are delivered. Simple. Templates for forms of Value (such as electronic gold, paper money, electronic silver, labor/time, etc.) allow for efficient processing by banks and related financial entities. Transaction costs go down. Reporting becomes automated, standardized and simple. Conveying reputation to others for credit purposes becomes easier.

What is Promise Language?

It is a public specification for contracts (promises) between individuals. Promise Language (PL) provides a framework that can be easily read by a computer.  That creates an accountability system which pushes corruption and corrupt currencies out of competition.

Who is making the promise?
Who is the recipient of the promise?
What value is to be conveyed?
Was it conveyed?

A computer system tracking the above promises becomes money. Any value can be conveyed so money becomes obsolete and meaningless. All forms of payment become wealth that is transferred through the conscious action of individuals who wish to transact. Money supply becomes moot. Money supply is only limited by the individuals' desire to transact. If nothing of value is available to one or more of the individuals, time or labor is the value. It is a barter system that works to barter anything (including USD) but will tend towards a stable, commonly accepted form of value such as gold or silver. However, if gold or silver were to be hoarded by large-monied interests, the population can simply choose another form of value such as copper or diamonds or anything else imaginable. What makes for a good, commonly accepted form of value? Something finite and discrete in nature such as a single diamond or a known quantity of gold. For example, the Federal Reserve could tie its currency to ONLY the gold in Fort Knox. That decision is up to the bankers at each central bank. The paper/digits of a central bank could be tied to the rice output on a yearly basis (currency fluctuations would arise from varying output).