A good currency? None has been invented yet. Currencies become accepted when they are tied to something tangible. Then they are corrupted and inflated out of existence, to be replaced by a new currency with finite amount.
The finite tangible currency becomes adopted rapidly, but then becomes a constraint on economic growth. The 'cross of gold' is an example. Then, the currency becomes inflated and the cycle repeats.
Fractional reserve has the potential to solve many of these issues, but would require rock solid central banking accounting to something tangible. And probably finite, or at least easily quantifiable.
Bitcoin is finite, so pricing things in Bitcoin, creates a 'cross of Bitcoin'. Also, due to its electronic nature, and for the above reasons, Bitcoin requires alternative currencies.
Thursday, December 25, 2014
Saturday, October 25, 2014
The 1st global exchange is open for business!
I have opened discussions with the SEC of the United States. Since my initial offer is in Thai Baht, likely discussions with the Thai SEC will be required. I have also introduced this to the Bank of England.
Please see attached screenshot or visit http://cryptograffiti.info for live updates.
Sunday, October 19, 2014
An event-based public ledger
While Bitcoin's "blockchain" is a step in the direction of a public ledger, it only works with Bitcoin and does not show the other side of the transaction. There are companies who are attaching data to the "blockchain" to try and create a public ledger for all transactions, however, the design of the "blockchain" was for Bitcoin and not as a generalized public ledger.
The solution below WAS designed as a general public ledger. It will support any transaction in any currency and any form of value. It was designed in late 2007.
The "smart-contract" format described will create an event-based public ledger. Please note: the "blockchain" has two main functions: 1. verify integrity of the data so it can't be modified, 2. propagate that data across different databases.
The solution below WAS designed as a general public ledger. It will support any transaction in any currency and any form of value. It was designed in late 2007.
The "smart-contract" format described will create an event-based public ledger. Please note: the "blockchain" has two main functions: 1. verify integrity of the data so it can't be modified, 2. propagate that data across different databases.
Friday, July 25, 2014
Smart Contracts - the format
Any contract. Any monetary transaction. Works with any language. The format is simple and understandable. Works for finance. Works for legal. Works for IT.
The above is what I term a "transaction stack".
While it works to store past transactions, open transactions provide an exchange, so it works for stock exchanges, currency exchanges, or grocery store transactions.
One table with 5 columns:
Transaction ID
Commerce ID - person/entity identifier
Item Type - initiating value, terms, value, delivery, notice, status
Description - quantity and value OR terms OR status/notice messages
Time Stamp
One table with 5 columns:
Transaction ID
Item Type - initiating value, terms, value, delivery, notice, status
Description - quantity and value OR terms OR status/notice messages
Time Stamp
Example - Selling 100 IBM for a final price of 4900 USD:
Initiating a transaction, 100 IBM, myCommerceID
Terms, 5000 USD, myCommerceID
Corresponding Value, 4900 USD, hisCommerceID
Accepted, contract, myCommerceID
Delivered, 100 IBM, myCommerceID
Delivered, 4900 USD, hisCommerceID
Completed, completed, myCommerceID
Completed, completed, hisCommerceID
Example - Buying 100 IBM for a final price of 5100 USD:
Initiating a transaction, 5000 USD, myCommerceID
Terms, 100 IBM, myCommerceID
Corresponding Value, 100 IBM, hisCommerceID
Modification, 5100 USD, hisCommerceID
Accepted, contract, myCommerceID
[deliveries on both sides of the contract]
1. Note the identical structure for both the Bid and Ask. Everything is a commodity.
2. In-process transactions create a market place for goods and services.
3. The standard format allows other companies to participate.
The above is what I term a "transaction stack".
Friday, July 18, 2014
A public list of transactions (open and completed)
In a standard format, with a Commerce ID for privacy (what some call a "smart contract").
It works with all currencies and barter too.
Example:
1. Make an offer to purchase.
2. Describe terms.
3. Receive a counter-offer.
4. Agreement (contract)
5. Deliver on each side.
6. Completed.
Time-stamps at each stage.
Block-chaining the list of transactions is one solution to prevent faked results.
Below describes the details of this. It solves the idea of "money".
It works with all currencies and barter too.
Example:
1. Make an offer to purchase.
2. Describe terms.
3. Receive a counter-offer.
4. Agreement (contract)
5. Deliver on each side.
6. Completed.
Time-stamps at each stage.
Block-chaining the list of transactions is one solution to prevent faked results.
Below describes the details of this. It solves the idea of "money".
Tuesday, July 15, 2014
The System, as it works today.
How many new bonds did the Fed purchase today? 30 years to repay. How many infants born today?
Get to work little debt-slaves. Mommy and Daddy spent it.
300,000,000 debt-slaves vs. the Federal Reserve. Class-action lawsuit.
All Americans are plaintiffs. Including you!
Get to work little debt-slaves. Mommy and Daddy spent it.
300,000,000 debt-slaves vs. the Federal Reserve. Class-action lawsuit.
All Americans are plaintiffs. Including you!
Friday, July 11, 2014
300,000,000 Debt-slaves vs. the Federal Reserve
A class-action lawsuit appears possible. Fraud is alleged and I think can be clearly proven. Based on my analysis, I think a conservative ruling would be to force the Fed to only lend what they have with a monetary judgement of $100-500 billion. As the numbers are large, I suggest a 1% contingency to the lawyer so $1-5 billion. Each American would receive around $1,000. Forcing the Fed to only lend what they have would place enormous pressure on Congress to balance their budget.
Basic argument
When the Federal Reserve Act was written, there was collateral. That collateral was confiscated in 1933 domestically, and 1971 internationally.
Under basic contract law, a contract can be declared null and void if there is insufficient consideration conveyed. So, if the Fed is purchasing $100,000 T-bonds for essentially creating digits in an account or writing a check, the Fed is not conveying consideration. While the Treasury receives something of value, the Fed does not take risk or convey anything that would be considered valuable from their perspective. Therefore, the T-bond contract can be declared null and void under contract law. (Legislation cannot supersede basic contract law.)
Background
Open market operations have two separate parts. 1. Is the initial bond purchase from the treasury. That is a purchase with no risk with a marginal cost of zero. 2. Is sitting on the bid and ask to adjust interest rates via buying and selling existing bonds in their portfolio.
I am referring to part one above. That is the origin of the creation or manufacture of money. Government spends it through various contracts. It does not get into the hands of the population until many have marked up the cost. It is an ineffective distribution mechanism. I also submit that it is illegal lending to the government and the fed assumes no risk.
History
Treasury bonds were designed in the mid-1860s during the Civil War. Bankers on both sides of the pond exchanged a series of letters. They were trying to figure out how to keep the population (white and black) as slaves without them knowing they were slaves. Thus, they invented T-bonds. It took them 50 years to get it through Congress with the Federal Reserve and income tax system installed in 1913. Why 50 years? Because many people at that time understood money and gold, so it was difficult to push through. See the 1890s and The Yellow Brick Road and the Cross of Gold. Subsequent generations carried through on the bankers' slavery system. (FYI, I have been unable to locate copies of those letters on the internet recently. I read them about 8-10 years ago.)
Basic argument
When the Federal Reserve Act was written, there was collateral. That collateral was confiscated in 1933 domestically, and 1971 internationally.
Under basic contract law, a contract can be declared null and void if there is insufficient consideration conveyed. So, if the Fed is purchasing $100,000 T-bonds for essentially creating digits in an account or writing a check, the Fed is not conveying consideration. While the Treasury receives something of value, the Fed does not take risk or convey anything that would be considered valuable from their perspective. Therefore, the T-bond contract can be declared null and void under contract law. (Legislation cannot supersede basic contract law.)
Background
Open market operations have two separate parts. 1. Is the initial bond purchase from the treasury. That is a purchase with no risk with a marginal cost of zero. 2. Is sitting on the bid and ask to adjust interest rates via buying and selling existing bonds in their portfolio.
I am referring to part one above. That is the origin of the creation or manufacture of money. Government spends it through various contracts. It does not get into the hands of the population until many have marked up the cost. It is an ineffective distribution mechanism. I also submit that it is illegal lending to the government and the fed assumes no risk.
History
Treasury bonds were designed in the mid-1860s during the Civil War. Bankers on both sides of the pond exchanged a series of letters. They were trying to figure out how to keep the population (white and black) as slaves without them knowing they were slaves. Thus, they invented T-bonds. It took them 50 years to get it through Congress with the Federal Reserve and income tax system installed in 1913. Why 50 years? Because many people at that time understood money and gold, so it was difficult to push through. See the 1890s and The Yellow Brick Road and the Cross of Gold. Subsequent generations carried through on the bankers' slavery system. (FYI, I have been unable to locate copies of those letters on the internet recently. I read them about 8-10 years ago.)
Tuesday, July 8, 2014
Visions of the future
Lawrence Summers wrote a good article in the WSJ about lack of jobs due to automation.
Currency is a product manufactured by the central banks. Due to centralization of the distribution system (eg. Wall Street and Washington DC), 90% of the population does not receive sufficient product (currency). People are forced to work to purchase that product. That requires jobs.
If, for example, taxi drivers are replaced by robots, taxi drivers will not have a way to purchase that currency. Without currency, taxi drivers will be begging on the street.
Many wealthy do not see this as a concern, but it is. If people do not have a way to purchase currency to purchase food, they will steal the currency from the wealthy. Identity theft and other tactics.
Also. Another concern is if a robot taxi driver picks you up and a hacker decides to drive the car off a ravine, who would ever know?
I reverse-engineered the idea of money and arrived at the solution to all of the above problems (described below).
Currency is a product manufactured by the central banks. Due to centralization of the distribution system (eg. Wall Street and Washington DC), 90% of the population does not receive sufficient product (currency). People are forced to work to purchase that product. That requires jobs.
If, for example, taxi drivers are replaced by robots, taxi drivers will not have a way to purchase that currency. Without currency, taxi drivers will be begging on the street.
Many wealthy do not see this as a concern, but it is. If people do not have a way to purchase currency to purchase food, they will steal the currency from the wealthy. Identity theft and other tactics.
Also. Another concern is if a robot taxi driver picks you up and a hacker decides to drive the car off a ravine, who would ever know?
I reverse-engineered the idea of money and arrived at the solution to all of the above problems (described below).
Monday, July 7, 2014
Bitcoin 2.0?
In my opinion, Bitcoin 2.0 will not be a currency. It will be a "block chain" of all electronic transactions regardless of what was conveyed. This requires a standard format. I thought that format through and there is really only one result. Promise Language describes it.
Wednesday, July 2, 2014
How does one gain trust without an authority?
Commerce between anonymous people is possible with a P2P database and open source.
A public record of one's previous transactions is reputation.
This is exchange software and payment processing software: a marketplace to sell any good or service including currencies and stocks. It provides reputation, but does much more than that. Anything of value can be traded freely. Value-added services can be provided by new and existing companies. It works with today's companies and allows new ones to thrive.
A public record of one's previous transactions is reputation.
This is exchange software and payment processing software: a marketplace to sell any good or service including currencies and stocks. It provides reputation, but does much more than that. Anything of value can be traded freely. Value-added services can be provided by new and existing companies. It works with today's companies and allows new ones to thrive.
What is a Commerce ID™?
A Commerce ID™ uniquely identifies an individual or entity for the purposes of conducting commerce or monetary transactions.
The Commerce ID™ can be used once for a single transaction or re-used in multiple transactions. It can be publicly associated with identifying information or kept private.
It allows accountability with total privacy, even if the record of transactions is public (eg. a P2P/peer-to-peer database).
An example of a Commerce ID™ would be a GUID (Globally Unique Identifier) that would be generated by the individual or entity. That ID might be associated with a name or email or other identifying information.
The Commerce ID™ can be used once for a single transaction or re-used in multiple transactions. It can be publicly associated with identifying information or kept private.
It allows accountability with total privacy, even if the record of transactions is public (eg. a P2P/peer-to-peer database).
An example of a Commerce ID™ would be a GUID (Globally Unique Identifier) that would be generated by the individual or entity. That ID might be associated with a name or email or other identifying information.
Monday, June 30, 2014
Alternative Currencies
All currencies have pluses and minuses. There is no holy grail of a perfect currency.
So the answer is to allow efficient translation between currencies. This requires a standard language to create that efficiency.
It allows the individual to hold all their wealth in any form (eg. gold, land, wheat, rice, USD, Yen, Euro, Bitcoin, etc.), and have it "translated" electronically when conducting a transaction.
I term this "wealth translation".
Example:
A Visa card that debits your Bitcoin when you purchase something at the grocery store. The grocery store receives currency of their choice, Visa debits your Bitcoin. A "wealth translator" takes a small fee on the transaction.
See below for the working prototype. An exchange software that works for any transaction (grocery store to central bank).
So the answer is to allow efficient translation between currencies. This requires a standard language to create that efficiency.
It allows the individual to hold all their wealth in any form (eg. gold, land, wheat, rice, USD, Yen, Euro, Bitcoin, etc.), and have it "translated" electronically when conducting a transaction.
I term this "wealth translation".
Example:
A Visa card that debits your Bitcoin when you purchase something at the grocery store. The grocery store receives currency of their choice, Visa debits your Bitcoin. A "wealth translator" takes a small fee on the transaction.
See below for the working prototype. An exchange software that works for any transaction (grocery store to central bank).
Sunday, June 29, 2014
Since I am currently physically in Thailand...
I will talk from the Thai baht perspective.
There are 3 forms of baht: gold, digital, and physical. Each has a different value.
Once upon a time, the physical correlated to physical gold. That is no longer the case, largely due to the digital abundance. Fractional-reserve.
Can the physical currency return to physical gold valuation? Baht to baht? Yes, I think it is possible, however, it would require a wind down of digital currency mostly in financial instruments. This is simply moving money from one form to another. Existing wealth remains while pulling society out of poverty. It also allows opportunities to build wealth.
There are 3 forms of baht: gold, digital, and physical. Each has a different value.
Once upon a time, the physical correlated to physical gold. That is no longer the case, largely due to the digital abundance. Fractional-reserve.
Can the physical currency return to physical gold valuation? Baht to baht? Yes, I think it is possible, however, it would require a wind down of digital currency mostly in financial instruments. This is simply moving money from one form to another. Existing wealth remains while pulling society out of poverty. It also allows opportunities to build wealth.
Saturday, June 21, 2014
The Federal Reserve and Fiscal Responsibility
When the Fed creates money to purchase bonds, the Treasury spends it. Where does that newly created money get spent? Government contracts.
Since the Fed is legally responsible for managing the economy and it is officially considered part of government, fixing that journal entry is possible: an accounting rule or legislation to ensure the Fed cannot create money to lend to the Treasury.
The above would not immediately balance the budget, but would place the Fed on the side of fiscal responsibility.
Since the Fed is legally responsible for managing the economy and it is officially considered part of government, fixing that journal entry is possible: an accounting rule or legislation to ensure the Fed cannot create money to lend to the Treasury.
The above would not immediately balance the budget, but would place the Fed on the side of fiscal responsibility.
Monday, June 16, 2014
Fractional-reserve credit vs Bond purchases
It should be stated: fractional-reserve credit is not the problem. Bond purchasing with created money is the problem. That is illegal lending by the Fed to the Treasury.
Friday, May 30, 2014
Currency creation and economic growth
Most central banks today create currency at the time of bond purchase. Since bonds have interest attached, that means every unit of currency has a debt repayment obligation. To simply use a unit of currency contains an interest fee. That is what I term the "perpetual fee".
Historically, most central banks created currency to represent gold or silver. That limits economic growth some describe as the "cross of gold" and is one of the reasons for its discontinuance.
The solution is to decouple bond purchase from currency creation. Fractional reserve is the interest-based creation of currency that is responsive to economic growth. It is not a perpetual fee because the loan is paid back to the commercial lending institution that issued the loan. While, in theory, bonds are also paid back, this is not usually the case due to political issues. It forces the central bank into a difficult position. The central bank cannot force repayment to remove that perpetual fee.
So, if currency creation cannot be tied to either gold or bonds, what can it be tied to? It is my recommendation to look at the productive output of the country and peg the amount of currency to that number. If recalculated monthly, the economy has room to grow with adequate currency supply. Fractional-reserve lending can handle the minor fluctuations intra-month.
A common language of monetary transactions removes the friction and clarifies issues such as described above. The efficiency allows what I term "wealth translation" to perform the money supply contraction/expansion without the need for direct manipulation. The system described below is also a common interface that will work with any payment system on earth.
Historically, most central banks created currency to represent gold or silver. That limits economic growth some describe as the "cross of gold" and is one of the reasons for its discontinuance.
The solution is to decouple bond purchase from currency creation. Fractional reserve is the interest-based creation of currency that is responsive to economic growth. It is not a perpetual fee because the loan is paid back to the commercial lending institution that issued the loan. While, in theory, bonds are also paid back, this is not usually the case due to political issues. It forces the central bank into a difficult position. The central bank cannot force repayment to remove that perpetual fee.
So, if currency creation cannot be tied to either gold or bonds, what can it be tied to? It is my recommendation to look at the productive output of the country and peg the amount of currency to that number. If recalculated monthly, the economy has room to grow with adequate currency supply. Fractional-reserve lending can handle the minor fluctuations intra-month.
A common language of monetary transactions removes the friction and clarifies issues such as described above. The efficiency allows what I term "wealth translation" to perform the money supply contraction/expansion without the need for direct manipulation. The system described below is also a common interface that will work with any payment system on earth.
The problem with money today
Money is not necessarily currency.
Money is a promise to deliver value, although it might have value unto itself.
The description of value is not money.
Two major problems with today's monetary systems:
1. language differences create misinterpretations of value. Also, sometimes a value transfer has cultural implications that are not explicitly described. Language differences exist between countries and between vocations. Accountants, finance, legal, bankers, computer, and business people might use the same words, but none really understand the unintentional mis-communications.
2. language and cultural differences allow a few to deliberately create ambiguity to leverage a theft that is difficult to detect.
A common language to describe transactions eliminates the mis-communications, whether deliberate or not.
Money is a promise to deliver value, although it might have value unto itself.
The description of value is not money.
Two major problems with today's monetary systems:
1. language differences create misinterpretations of value. Also, sometimes a value transfer has cultural implications that are not explicitly described. Language differences exist between countries and between vocations. Accountants, finance, legal, bankers, computer, and business people might use the same words, but none really understand the unintentional mis-communications.
2. language and cultural differences allow a few to deliberately create ambiguity to leverage a theft that is difficult to detect.
A common language to describe transactions eliminates the mis-communications, whether deliberate or not.
Sunday, May 25, 2014
Bond/currency relationship today (Debt-based currencies)
All existing currencies are said to be debt-based. Originally, the USD was backed by gold/silver. That gold was stolen behind the scenes. So today, there is an accounting problem at the point of creation that derives from the theft. A common language does not entirely prevent theft, but does provide accountability in the future, while also providing alternatives to money supply constraints via wealth translation.
Bonds were not originally the creation of paper USD without value. Bonds were a debt, based on collateral (gold). The USD was a receipt for such. When the gold was stolen, the Fed defaulted on that receipt in 1933 (domestically), then in 1971 (internationally). Since then, dollars are created at the time of bond purchase with only legal limitations set on their creation.
Bonds were not originally the creation of paper USD without value. Bonds were a debt, based on collateral (gold). The USD was a receipt for such. When the gold was stolen, the Fed defaulted on that receipt in 1933 (domestically), then in 1971 (internationally). Since then, dollars are created at the time of bond purchase with only legal limitations set on their creation.
Interest
Interest is a measurement of assigning value to risk. Time-based. All transactions have a time component which, today, is rolled up into the bond/currency relationship. That creates a perpetual fee. Promise Language describes that time component while also removing the ambiguity in value descriptions that are complicated by multiple languages and intentional obfuscation.
The New Approach to Freedom - 1949
"When the people of the world have a common monetary language, completely freed from every government, it will so facilitate and stabilize exchange that peace and prosperity will ensue even without world government.
A union of peoples rather than a union of political governments is what the world needs."
E.C. Riegel, monetary theorist
Distributed transactions
A common language/protocol creates efficiency to allow distributing all components of a transaction. Trust is distributed. Value translation is distributed. Every transaction is composed of a value translation and a temporarily trusted 3rd party to assure the value is transferred.
A common language allows barter and allows currency transactions. The language also describes Time. All transactions take time, so the current reporting of transactions in a receipt does not accurately describe the transaction and how long it took for each side to deliver on their end of the bargain. Finance-types should understand that.
A common language allows individual choice in every transaction. One of the derivatives of a common language is a common peer-to-peer marketplace/exchange described below.
A common language allows barter and allows currency transactions. The language also describes Time. All transactions take time, so the current reporting of transactions in a receipt does not accurately describe the transaction and how long it took for each side to deliver on their end of the bargain. Finance-types should understand that.
A common language allows individual choice in every transaction. One of the derivatives of a common language is a common peer-to-peer marketplace/exchange described below.
Sunday, May 11, 2014
Looking for investment capital
Working prototype is complete. See below.
It is a free exchange software, however, does much more than that.
Value-added services to assure agreements are met. As well as what I term "wealth/value translation".
All transactions are searchable. Privacy can be kept.
It works with all existing systems/businesses on earth.
It is a free exchange software, however, does much more than that.
Value-added services to assure agreements are met. As well as what I term "wealth/value translation".
All transactions are searchable. Privacy can be kept.
It works with all existing systems/businesses on earth.
Screenshot of the working prototype
This works for exchange software (EG. NYSE, Amex, Nasdaq, CBOT) as well as functions as a free E-Bay or Craigslist-type sale software.
Anonymous users (or not).
Accountability.
Reputation.
Full audit trail (will satisfy law and finance).
Anonymous users (or not).
Accountability.
Reputation.
Full audit trail (will satisfy law and finance).
Rough draft of the exchange software (works for anything)
//selling IBM
TransactionItem item = Transaction.Sell("100 IBM", "myCommerceID");
TransactionItem terms = Transaction.Terms(item.TransactionID, "5000 USD", "myCommerceID");
item = Transaction.CorrespondingValue(item.TransactionID, "4900 USD", "hisCommerceID");
item.Accepted(); //becomes a contract here
TransactionItem deliverStock = Transaction.Delivered(item.TransactionID, "100 IBM", "myCommerceID");
TransactionItem deliverCash = Transaction.Delivered(item.TransactionID, "4900 USD", "hisCommerceID");
Transaction.Completed(item.TransactionID, "complete", "myCommerceID");
Transaction.Completed(item.TransactionID, "complete", "hisCommerceID");
//buying IBM
TransactionItem item2 = Transaction.Sell("5000 USD", "myCommerceID");
TransactionItem terms2 = Transaction.Terms(item2.TransactionID, "100 IBM", "myCommerceID");
item2 = Transaction.CorrespondingValue(item2.TransactionID, "100 IBM", "hisCommerceID");
item2 = Transaction.Modify(item2.TransactionID, "5100 USD", "hisCommerceID");
item2.Accepted();
Database:
1 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Initiating Value 100 IBM 2014-05-11 15:23:50.493 NULL
2 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Terms 5000 USD 2014-05-11 15:23:53.813 NULL
3 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Value 4900 USD 2014-05-11 15:23:53.833 2014-05-11 15:23:53.847
4 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Delivery 100 IBM 2014-05-11 15:23:53.853 NULL
5 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Delivery 4900 USD 2014-05-11 15:23:53.860 NULL
6 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Completed complete 2014-05-11 15:23:53.867 2014-05-11 15:23:53.867
7 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Completed complete 2014-05-11 15:23:53.873 2014-05-11 15:23:53.873
8 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 myCommerceID Initiating Value 5000 USD 2014-05-11 15:23:53.880 NULL
9 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 myCommerceID Terms 100 IBM 2014-05-11 15:23:53.883 NULL
10 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 hisCommerceID Value 100 IBM 2014-05-11 15:23:53.887 NULL
11 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 hisCommerceID Modification 5100 USD 2014-05-11 15:23:53.893 2014-05-11 15:23:53.900
TransactionItem item = Transaction.Sell("100 IBM", "myCommerceID");
TransactionItem terms = Transaction.Terms(item.TransactionID, "5000 USD", "myCommerceID");
item = Transaction.CorrespondingValue(item.TransactionID, "4900 USD", "hisCommerceID");
item.Accepted(); //becomes a contract here
TransactionItem deliverStock = Transaction.Delivered(item.TransactionID, "100 IBM", "myCommerceID");
TransactionItem deliverCash = Transaction.Delivered(item.TransactionID, "4900 USD", "hisCommerceID");
Transaction.Completed(item.TransactionID, "complete", "myCommerceID");
Transaction.Completed(item.TransactionID, "complete", "hisCommerceID");
//buying IBM
TransactionItem item2 = Transaction.Sell("5000 USD", "myCommerceID");
TransactionItem terms2 = Transaction.Terms(item2.TransactionID, "100 IBM", "myCommerceID");
item2 = Transaction.CorrespondingValue(item2.TransactionID, "100 IBM", "hisCommerceID");
item2 = Transaction.Modify(item2.TransactionID, "5100 USD", "hisCommerceID");
item2.Accepted();
Database:
1 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Initiating Value 100 IBM 2014-05-11 15:23:50.493 NULL
2 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Terms 5000 USD 2014-05-11 15:23:53.813 NULL
3 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Value 4900 USD 2014-05-11 15:23:53.833 2014-05-11 15:23:53.847
4 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Delivery 100 IBM 2014-05-11 15:23:53.853 NULL
5 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Delivery 4900 USD 2014-05-11 15:23:53.860 NULL
6 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Completed complete 2014-05-11 15:23:53.867 2014-05-11 15:23:53.867
7 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Completed complete 2014-05-11 15:23:53.873 2014-05-11 15:23:53.873
8 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 myCommerceID Initiating Value 5000 USD 2014-05-11 15:23:53.880 NULL
9 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 myCommerceID Terms 100 IBM 2014-05-11 15:23:53.883 NULL
10 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 hisCommerceID Value 100 IBM 2014-05-11 15:23:53.887 NULL
11 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 hisCommerceID Modification 5100 USD 2014-05-11 15:23:53.893 2014-05-11 15:23:53.900
Saturday, March 22, 2014
Imagine you are running a stock exchange using the Promise Language specification
Initiating Promise: 100 IBM
Notice - accept: 5000 USD
Initiating Promise: 5000 USD
Notice - accept: 100 IBM
Note the structure is identical for both the Bid and the Ask. Effectively this means everything is a commodity.
"Notice" messages become part of the contract. Terms and late payments can be specified. Clearing companies as well.
Notice - accept: 5000 USD
Initiating Promise: 5000 USD
Notice - accept: 100 IBM
Note the structure is identical for both the Bid and the Ask. Effectively this means everything is a commodity.
"Notice" messages become part of the contract. Terms and late payments can be specified. Clearing companies as well.
Monday, March 17, 2014
The Origin of Money
Once upon a time, some guy had an orange and you wanted it. So you offered to trade a banana for his orange. But your banana was way back at your hut. So you picked up a seashell or something and handed it to him in exchange for his orange. You promised to go get your banana and deliver it later. That is the origin of money. The seashell was a symbol that represented a contract to deliver a banana.
Alternatively, both people could have yelled out to the surrounding village that you owed that person a banana. Then you didn't need the seashell. Everyone knew you owed that person a banana. Then you go back to your hut the next day and get the banana. Then you yell out to the village that you paid back the banana. Let's hope that banana did not go bad overnight.
Would it be possible to have a computer store these transactions so the villagers wouldn't have to remember?
Sunday, March 16, 2014
Closing out the transaction and EDI format
See below for the context, but two more EDI messages might be a good idea:
"Completed" to show that both sides delivered on their promises and all was acceptable.
"Closed" with a something in the description field to describe transactions that were voided or otherwise rectified if disputed.
The solution to money
Promise Language is a standard way to yell to the global village who owes what. If placed into a peer-to-peer database, all promises would be tracked. Open promises and delivered promises. I was thinking today how to design that database:
One entry for the Initiating Promise: my Id, his Id, "1 banana", 12/21/2003 12:15:34
One entry for the Promise: his Id, my Id, "1 orange", 12/21/2003 12:15:45
One entry for the Delivery: his Id, my Id, "1 orange", 12/21/2003 12:15:48
One entry for the final Delivery: my Id, his Id, "1 banana", 12/22/2003 8:23:32
That's it.
Now. That shows you made good on your promise. That's your rep. Now you can go anywhere in the world with the Promise App that shows your history of promises.
It's free. No transaction fees. Works with any currency on earth.
Promise table
Type of entry (Initiating promise, promise, notification)
Id (GUID for that promise or a GUID corresponding to the person)
Description (describes what was promised)
TimeStamp
So.. it would work like this:
[transaction]
[promise]
1 banana
[endpromise]
[promise]
1 orange
[endpromise]
[endtransaction]
One entry for the Initiating Promise: my Id, his Id, "1 banana", 12/21/2003 12:15:34
One entry for the Promise: his Id, my Id, "1 orange", 12/21/2003 12:15:45
One entry for the Delivery: his Id, my Id, "1 orange", 12/21/2003 12:15:48
One entry for the final Delivery: my Id, his Id, "1 banana", 12/22/2003 8:23:32
That's it.
Now. That shows you made good on your promise. That's your rep. Now you can go anywhere in the world with the Promise App that shows your history of promises.
It's free. No transaction fees. Works with any currency on earth.
Friday, March 14, 2014
Does this solve monetary science?
The root of money is a "promise to deliver value".
Money is a human construct.
Money originally was a form of bookkeeping to see who delivered on their promises (or who had outstanding undelivered promises). Sea shells worked in some locales.
Until recently, paper money was a receipt for gold or silver stored on one's behalf. That promise was reneged upon in 1933 (domestically) and 1971 (internationally). So today, paper money is a "note" with nothing of value behind it.
Where does the value derive? Contracts are denominated in dollars. Rent, salary, mortgage, contracts at the grocery store, etc. are all contracts denominated in dollars. That is where the value derives.
In small communities, money was a temporary placeholder for one's promises to deliver value. However, today, the world cannot track who delivers.
That is what "Promise Language" does. It is a standard format to describe transactions. The results can be stored on paper or in a computer so you know who delivers on their promises.
Theoretically, wealth translators replace the need for currencies. However, that is an expensive process, so currencies will always likely remain due to their economies of scale in reducing transaction costs.
What is money?
Anything of value that is agreed upon by both parties in a transaction.
Money is a human construct.
Money originally was a form of bookkeeping to see who delivered on their promises (or who had outstanding undelivered promises). Sea shells worked in some locales.
Until recently, paper money was a receipt for gold or silver stored on one's behalf. That promise was reneged upon in 1933 (domestically) and 1971 (internationally). So today, paper money is a "note" with nothing of value behind it.
Where does the value derive? Contracts are denominated in dollars. Rent, salary, mortgage, contracts at the grocery store, etc. are all contracts denominated in dollars. That is where the value derives.
In small communities, money was a temporary placeholder for one's promises to deliver value. However, today, the world cannot track who delivers.
That is what "Promise Language" does. It is a standard format to describe transactions. The results can be stored on paper or in a computer so you know who delivers on their promises.
Theoretically, wealth translators replace the need for currencies. However, that is an expensive process, so currencies will always likely remain due to their economies of scale in reducing transaction costs.
What is money?
Anything of value that is agreed upon by both parties in a transaction.
Tuesday, March 11, 2014
Promise Language basics
This is an EDI format/specification/standard/protocol for monetary transactions. It is free.
Some terminology:
Wealth Storage - a vault or a bank.
Wealth Translation - currency exchange is an example.
Promise Assurance - credit card issuer or an underwriter are examples.
Promise Reporting - credit report agencies are examples.
Only living beings can make promises.
Officers of corporations make promises on behalf of the corporation they work for. Officers take responsibility for delivery on their promises.
Simple format:
[transaction]
[promise]
1 pallet of 100 bills USD
[endpromise]
[promise]
1 million Euros
[endpromise]
[endtransaction]
Further details can easily be placed into that format. Who. When. Time stamps. Etc.
Legal can see that it conforms to what they term a legal contract.
Finance can assign risk and time to delivery.
IT can accurately represent it in a computer.
It fixes the world's economy.
It fixes the world's financial system.
Some terminology:
Wealth Storage - a vault or a bank.
Wealth Translation - currency exchange is an example.
Promise Assurance - credit card issuer or an underwriter are examples.
Promise Reporting - credit report agencies are examples.
Only living beings can make promises.
Officers of corporations make promises on behalf of the corporation they work for. Officers take responsibility for delivery on their promises.
Simple format:
[transaction]
[promise]
1 pallet of 100 bills USD
[endpromise]
[promise]
1 million Euros
[endpromise]
[endtransaction]
Further details can easily be placed into that format. Who. When. Time stamps. Etc.
Legal can see that it conforms to what they term a legal contract.
Finance can assign risk and time to delivery.
IT can accurately represent it in a computer.
It fixes the world's economy.
It fixes the world's financial system.
Thursday, March 6, 2014
Preventing a perpetual fee (for being born)
An EDI format for monetary transactions prevents a perpetual fee. EDI formats are free.
Bitcoin uses an algorithm designed by the NSA. Is there a back door on that algorithm? I do not know. However, knowing the people involved, I suspect there is. While Bitcoin (and other digital currencies) reduce the fees, it is not perfect. So, how to prevent a perpetual fee?
All transactions can be described as:
Two people.
Promise.
Promise.
Deliver.
Deliver.
End transaction.
Time stamps on each stage clarify risk and accountability.
That is "Promise Language" - a simple EDI format to describe all transactions, regardless of currency. For free.
Bitcoin uses an algorithm designed by the NSA. Is there a back door on that algorithm? I do not know. However, knowing the people involved, I suspect there is. While Bitcoin (and other digital currencies) reduce the fees, it is not perfect. So, how to prevent a perpetual fee?
All transactions can be described as:
Two people.
Promise.
Promise.
Deliver.
Deliver.
End transaction.
Time stamps on each stage clarify risk and accountability.
That is "Promise Language" - a simple EDI format to describe all transactions, regardless of currency. For free.
Tuesday, March 4, 2014
An EDI format and a fill-in form that is a legal contract
Promise.
Promise.
Deliver.
Deliver.
End transaction.
The above creates efficiency in electronic transactions by providing a standard format. It also disobviates the need for a lawyer in every transaction.
Lawyers don't understand money or finance, however, draw up the contracts that define the interactions. Reading through the legalese is difficult due to lack of a standard format: Promise Language solves that.
Sometimes lawyers create a contract that finance people call a "derivative". The contract is unnecessary and creates confusion that loses responsibility and accountability. This is due to the lawyer's non-understanding of money and finance.
Promise.
Deliver.
Deliver.
End transaction.
The above creates efficiency in electronic transactions by providing a standard format. It also disobviates the need for a lawyer in every transaction.
Lawyers don't understand money or finance, however, draw up the contracts that define the interactions. Reading through the legalese is difficult due to lack of a standard format: Promise Language solves that.
Sometimes lawyers create a contract that finance people call a "derivative". The contract is unnecessary and creates confusion that loses responsibility and accountability. This is due to the lawyer's non-understanding of money and finance.
Sunday, March 2, 2014
Potential issues with Bitcoin
Metaphorically (and digitally) speaking, are there 3 Bitcoins?
Was Bitcoin started on the 0 bit or the 1 bit? Is there a switch/flapper?
A similar applies to the algorithm. Is there a periodicity that is predictable and controllable?
I have not looked into these issues, however, are enough cause of concern to research... if I were planning a large investment.
Was Bitcoin started on the 0 bit or the 1 bit? Is there a switch/flapper?
A similar applies to the algorithm. Is there a periodicity that is predictable and controllable?
I have not looked into these issues, however, are enough cause of concern to research... if I were planning a large investment.
Transactions without a lawyer, a banker, or a gun.
Two people.
One promise.
Another promise.
First delivers.
Second delivers.
End transaction.
Time stamps at each stage allow risk and responsibility to be defined.
Promise Language, a banking protocol, fixes the central banks' problems.
One promise.
Another promise.
First delivers.
Second delivers.
End transaction.
Time stamps at each stage allow risk and responsibility to be defined.
Promise Language, a banking protocol, fixes the central banks' problems.
Thursday, February 27, 2014
Complex transactions require precise terminology
Imagine you are part of a drug deal or a gun deal. Tensions are high, heavily armed security on both sides. Most deals don't end in gunfire due to a deliberate desire to rip off the other party, gunfights occur due to miscommunication. What was promised? What was delivered?
In central banking transactions, language differences exist between countries. Expectations. Assurances.
Treaties and trust funds. Undelivered promises. Partially delivered promises. Promises deliberately ripped off.
The above is why a common language to describe complex transactions in a structured way is needed.
In central banking transactions, language differences exist between countries. Expectations. Assurances.
Treaties and trust funds. Undelivered promises. Partially delivered promises. Promises deliberately ripped off.
The above is why a common language to describe complex transactions in a structured way is needed.
Tuesday, February 25, 2014
Federal Reserve and other central banks in a world of Promise Language and Bitcoin
Promise Language and Bitcoin do not define price. They allow value to be translated efficiently.
Currencies stabilize price. Salaries and rents and mortgages do not change on a daily basis.
In other words, things are priced in USD not in Bitcoin or Promise Language. That is one reason why Bitcoin and Promise Language work so well to settle internationally.
Interestingly Second Market is patterning an exchange based on existing gold. Price fixing with derivatives. Second Market is bringing an antiquated structure to Bitcoin. While it appears well hooked up and will gain liquidity, I have mixed feelings on that exchange.
Gold failed because of storage issues AND price fixing via derivatives settled in dollars. Second Market appears to be setting up the exact same system. Price fixing twice a day is not necessary for any reason other than to create derivatives to set the price. Is Second Market's CEO aware of this problem or is he simply cut and pasting gold structure and creating a company?
In other words, things are priced in USD not in Bitcoin or Promise Language. That is one reason why Bitcoin and Promise Language work so well to settle internationally.
Interestingly Second Market is patterning an exchange based on existing gold. Price fixing with derivatives. Second Market is bringing an antiquated structure to Bitcoin. While it appears well hooked up and will gain liquidity, I have mixed feelings on that exchange.
Gold failed because of storage issues AND price fixing via derivatives settled in dollars. Second Market appears to be setting up the exact same system. Price fixing twice a day is not necessary for any reason other than to create derivatives to set the price. Is Second Market's CEO aware of this problem or is he simply cut and pasting gold structure and creating a company?
Saturday, February 22, 2014
Bitcoin's role as part of central bank reserves
Central banks require a clearing settlement device among currencies. Gold has served that function historically, however, has issues. Namely: dollar-settled derivatives, requires a vault, and is difficult to transport.
Bitcoin solves these problems.
It is my suggestion that some focus and energy be placed in communicating the advantages of Bitcoin to the various central banks around the world. This requires trading desks and exchanges to provide liquidity. The German central bank comes to mind.
Friday, February 21, 2014
A common language to communicate value
Imagine going to Japan and not knowing a word of Japanese. Your goal is to buy some salmon sushi. With some pantomiming and lots of gesturing I think most people would figure out how to convey the value that is desired along with the amount of currency required, however, without a common language it would not be the most efficient transaction in the world.
Promise Language is that common language. Human readable. Simple. Computer readable as well.
Promise Language is that common language. Human readable. Simple. Computer readable as well.
Tuesday, February 11, 2014
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