Bitcoin vs Mutliple Coins

Here is the interesting and relevant links/article. I may be missing some but I think you will find this relevant.

You’ll like to read this I think: http://unenumerated.blogspot.ca/2008/03/logical-emergence-of-money-from-barter.html

Szabo explains that it is sufficiently high mental transaction costs that causes the need (natural evolution) of a single currency standard:

Once one commodity starts to be favored, the optimal strategy is to move to that currency. So we have shown that sufficiently high mental transaction costs are sufficient to cause the emergence of a currency standard, even in the absence of storage and transport costs.

He gives greater detail and relevant explanation but here is the key point:

…with sufficiently low mental transaction costs and sufficiently unpredictable exchange rates, it pays to hang on to multiple currencies, and a world of multiple currencies is the equilibrium

Interestingly:

At the extreme of zero mental transaction costs, zero storage costs, and zero transport costs, we have a pure barter market, with no need for money at all.

The finale comes here when explains the birth of his market translator. The market translator is a technology beyond ethereum:

After good proxy measures have been developed, one must obtain or estimate user preferences in terms of these measures. Obtaining preferences directly from the user has to be done in with traditional value granularites, otherwise mental transaction costs dominate. Alternatively, further proxy measures can be made that estimate user economic preferences from their normal input behavior. These are then compiled into automated nanotransactions with the market translator.

So there is good reasoning behind the different societal advances that necessitate either a single currency standard or multiple currencies being relevant.

There real machine is the market translator: http://szabo.best.vwh.net/scarce.html

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s