The “Intrinsic Value” of “Effective Rake”

“…the mere act of voluntary trade increases total wealth in society, where wealth is understood to refer to an individual’s subjective valuation of all of his possessions.”

Today’s global poker network might not be readily comparable to Nick Szabo’s extension of Metcalf’s Law:

Metcalfe’s Law states that a value of a network is proportional to the square of the number of its nodes. In an area where good soils, mines, and forests are randomly distributed, the number of nodes valuable to an industrial economy is proportional to the area encompassed.

However if we assume a global internet landscape of Ideal Poker and the general goal is to facilitate the “probabilistic” exchange of chips from the less efficient players to the more efficient players, then the value of the Ideal Poker network becomes comparable to Nick Szabo’s formalization of Adam Smith’s works:

The number of such nodes that can be economically accessed is an inverse square of the cost per mile of transportation. Combine this with Metcalfe’s Law and we reach a dramatic but solid mathematical conclusion: the potential value of a land transportation network is the inverse fourth power of the cost of that transportation. A reduction in transportation costs in a trade network by a factor of two increases the potential value of that network by a factor of sixteen. While a power of exactly 4.0 will usually be too high, due to redundancies, this does show how the cost of transportation can have a radical nonlinear impact on the value of the trade networks it enables.

The networks’ value, is the value  that Ideal (and therefore Moral) Poker brings to our society and how Ideal and how Moral the poker network is. The “transportation” cost in the trade network then becomes the “effective rake” (ie site profits per “transaction”).

So the potential value of an Ideal Poker network is the inverse fourth power of the “effective rake”.

This outlines an intrinsic value for a  “Poker Coin


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