DASH WILL NEVER BE SUCCESSFUL if it does not solve this Problem

Odraccir

New Member
Jan 23, 2017
3
3
3
22
There is one obstacle that no crypto currency nor any other anarchistic currency has ever overcome.

It is not the usabillity, it is Gresham's law.

"In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will disappear from circulation." - Wikipedia
In simple English: When Dash becomes more valuable over time, but legal money is inflationary (losing value), people will use legal money for exchanging goods and Dash for savings. They will always prefere to give away the money, that "burns it's value" over time.

The only thinkable solution can be one that makes shopping with dash more beneficial than shopping with legal money.

Usabillty won't do the trick here. Because any usabillity advancement can be adopted in legal money based payment services very quickly.

They also have the advancement of beeing widley accepted and people are used to use it. Once we have shifted this, inflationary currencies will lose their positions. Because although on the one hand everybody wants to give away inflationary money, on the other hand no one wants to get it back either.

One idea I have is to use some of the new mined coins to artificially drop prices. If we could pay shop owners some percentage of their sellings (bought with dash) for a little price drop, people might prefere dash instead of the legal money. Shop owners might prefere Dash because it will attract new customers, too.

If the lower prices together with the time preference beat the 'deflationary loss of giving dash away', people might prefere Dash. This could be a potential solution. It would only need to be applied until enough people and shops got used to use Dash.

I'm not sure wether this could work or not. But but what are your thoughts on Gresham's law? How will we solve this problem?
 
  • Like
Reactions: bhkien

stan.distortion

Well-known Member
Oct 30, 2014
959
585
163
Turn Dash into a really bad kind of money? Joking ;) Gresham's law isn't a hard and fast rule, some even claim it's a complete fallacy and while I'm not sure I'd go that far their are certainly exceptions. Taxation for example, you could have the worst money in the world but it will keep working if it's demanded for taxes (some say this has already happened). All things being equal bad money may well drive out good so finding a niche and making it our own may be one possible way of tipping the balance in Dashes favour and incentiveisation may be another route, simple being cheaper than any alternative. That one might be a tough call though, crypto as a whole has a great chance against the legacy systems but within crypto the odds are relatively even.
 
  • Like
Reactions: slamdunk

halso

Active Member
Apr 27, 2016
439
237
113
Sydney, Australia
The core team has a lot of focus on peer to peer payments and a decentralised market place at the moment. I believe there are plans for some sort of rewards scheme in the future for spending dash.

But future dapps do not stop at buying goods on a dectralised store. Think of any service you consume that involves the exchange of value. There could be a future dapp for that (hopefully using the dash platform).

Think loans, insurance, stock exchanges, etc, etc. All of these dapps could be facilitated via some future iteration of dash evolution.
 
  • Like
Reactions: slamdunk

TroyDASH

Well-known Member
Jul 31, 2015
1,254
797
183
Paging @toknormal

The last couple of days we have been discussing this very same line of thought in the slack channel. You might be a little overexcited about it with the all caps topic and everything though. I am interested to hear what the community and our devs think about Dash trying to be both a store of value and a payment system at the same time, if there is a vision for how that can work together.
 
  • Like
Reactions: stan.distortion

stan.distortion

Well-known Member
Oct 30, 2014
959
585
163
Paging @toknormal

The last couple of days we have been discussing this very same line of thought in the slack channel. You might be a little overexcited about it with the all caps topic and everything though. I am interested to hear what the community and our devs think about Dash trying to be both a store of value and a payment system at the same time, if there is a vision for how that can work together.
Sounds interesting, maybe I should get around to joining the Slack. The conclusion I came to with that one is it's simply not possible, it's an inherent flaw of money but the concept of money is so heavily ingrained in our thinking that it could take a few generations to outgrow it completely. In that case the "gold works" way of thinking is as good as any other for the present at least. Loads more on that but I don't want to derail the thread... money, relic of the age of poor communications, move on from it and Gresham's law doesn't apply.
 

GrandMasterDash

Grizzled Member
Masternode Owner/Operator
Jul 12, 2015
3,424
1,459
1,183
There is one obstacle that no crypto currency nor any other anarchistic currency has ever overcome.

It is not the usabillity, it is Gresham's law.

"In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will disappear from circulation." - Wikipedia
In simple English: When Dash becomes more valuable over time, but legal money is inflationary (losing value), people will use legal money for exchanging goods and Dash for savings. They will always prefere to give away the money, that "burns it's value" over time.

The only thinkable solution can be one that makes shopping with dash more beneficial than shopping with legal money.

Usabillty won't do the trick here. Because any usabillity advancement can be adopted in legal money based payment services very quickly.

They also have the advancement of beeing widley accepted and people are used to use it. Once we have shifted this, inflationary currencies will lose their positions. Because although on the one hand everybody wants to give away inflationary money, on the other hand no one wants to get it back either.

One idea I have is to use some of the new mined coins to artificially drop prices. If we could pay shop owners some percentage of their sellings (bought with dash) for a little price drop, people might prefere dash instead of the legal money. Shop owners might prefere Dash because it will attract new customers, too.

If the lower prices together with the time preference beat the 'deflationary loss of giving dash away', people might prefere Dash. This could be a potential solution. It would only need to be applied until enough people and shops got used to use Dash.

I'm not sure wether this could work or not. But but what are your thoughts on Gresham's law? How will we solve this problem?
I agree with you a little, however...

Inflation is a form of tax and I think you're right to say that people try to get rid of money that is losing value. With this in mind, I think it would be helpful if a crypto had both a slight inflationary element and an automatic and verifiable local government tax for every transaction (including transactions to self). I don't know, but perhaps the inflation level could be pegged to the tax rate somehow. For both inflation and tax, there would need to be some sort of end-user voting to keep confidence in the coin, so maybe some variant of Proof-of-Stake.

But regardless, dash's usability is woefully flawed; it relies on a dated "username" experience... who the hell wants another battle over usernames? (I have previously offered solutions that omit usernames entirely). Having said that, they have come up with a decentralised API and that offers great opportunity for much better wallets... but only if the key functions can be carried out without usernames. This decentralised API opens the door to wallets that are far better than the official ones. For a start, "the wallet" should not take centre stage... instead it should be tied into the back-end of expense management apps, chat apps like Signal, car driving wallets (automatic toll payments etc). Only then will people see the benefit of usability.

But even then, dash - and currently all other cryptos - have not pooled the key ingredients to a universally mass adopted crypto. You can't just say usability or inflation. When public chain crypto finally goes mainstream, dash will not be there because it has already rejected one of the key ingredients; end-user privacy by default.
 
  • Like
Reactions: geolibertarian

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,876
1,866
1,283
I don't know if I can express myself well enough, however my feeling is that the market will take care of all of this. Imagine you are a merchant who has decided to accept both Fiat and Dash. You would much rather have Dash but people would prefer to buy with Fiat even so they do own dash at this point in the theoretical future. So how much more would you like to have Dash? I Believe In The End Merchants will give deep discounts for using Dash that goes beyond the current trading price. And I think this will really happen naturally if Dash in Dave becomes a great currency. So a consumer will be faced with using Fiat and paying more or using Dash and paying less. Sure right now this is not the situation, however when Dash becomes widely used which I do believe it will be, I fully believe the market will balance things out and that slowly cryptocurrencies but especially Dash because of its unique useful features will win. Of course toknormal will disagree because frankly I think he's too smart and has been in economics a long time which may Prejudice his view, but then again I am no economist and he is my mentor the I respectfully disagree and realize I could be wrong.
 

TroyDASH

Well-known Member
Jul 31, 2015
1,254
797
183
I don't know if I can express myself well enough, however my feeling is that the market will take care of all of this. Imagine you are a merchant who has decided to accept both Fiat and Dash. You would much rather have Dash but people would prefer to buy with Fiat even so they do own dash at this point in the theoretical future. So how much more would you like to have Dash? I Believe In The End Merchants will give deep discounts for using Dash that goes beyond the current trading price. And I think this will really happen naturally if Dash in Dave becomes a great currency. So a consumer will be faced with using Fiat and paying more or using Dash and paying less. Sure right now this is not the situation, however when Dash becomes widely used which I do believe it will be, I fully believe the market will balance things out and that slowly cryptocurrencies but especially Dash because of its unique useful features will win. Of course toknormal will disagree because frankly I think he's too smart and has been in economics a long time which may Prejudice his view, but then again I am no economist and he is my mentor the I respectfully disagree and realize I could be wrong.
If a merchant were to offer a discount for using dash, wouldnt they prefer to have you pay more in fiat and then just turn around and buy dash with the fiat on the open market? They would end up with more dash that way than if you paid in dash with a discount.
 

Odraccir

New Member
Jan 23, 2017
3
3
3
22
I don't know if I can express myself well enough, however my feeling is that the market will take care of all of this. Imagine you are a merchant who has decided to accept both Fiat and Dash. You would much rather have Dash but people would prefer to buy with Fiat even so they do own dash at this point in the theoretical future. So how much more would you like to have Dash? I Believe In The End Merchants will give deep discounts for using Dash that goes beyond the current trading price. And I think this will really happen naturally if Dash in Dave becomes a great currency. So a consumer will be faced with using Fiat and paying more or using Dash and paying less. Sure right now this is not the situation, however when Dash becomes widely used which I do believe it will be, I fully believe the market will balance things out and that slowly cryptocurrencies but especially Dash because of its unique useful features will win. Of course toknormal will disagree because frankly I think he's too smart and has been in economics a long time which may Prejudice his view, but then again I am no economist and he is my mentor the I respectfully disagree and realize I could be wrong.
This is exactly what I meant. At some point the market will solve it on its own. For that to happen Dash already needs to be a widely used currency.

Merchants act on the demand of customers. If there is no demand for using Dash (because everyone uses it as a storage of value) not that many merchants will accept Dash.

So the question is: How do you create a demand/benefit of using Dash instead of only storing it.
 

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,876
1,866
1,283
If a merchant were to offer a discount for using dash, wouldnt they prefer to have you pay more in fiat and then just turn around and buy dash with the fiat on the open market? They would end up with more dash that way than if you paid in dash with a discount.
OK, what if instead, the merchant charged a surcharge for using Fiat? That might be more like it?
 

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,876
1,866
1,283
This is exactly what I meant. At some point the market will solve it on its own. For that to happen Dash already needs to be a widely used currency.

Merchants act on the demand of customers. If there is no demand for using Dash (because everyone uses it as a storage of value) not that many merchants will accept Dash.

So the question is: How do you create a demand/benefit of using Dash instead of only storing it.
I think it will take time, but the fact that cryptocurrencies take away the risk of charge-backs is already a great incentive for like minded merchants to start offering Dash. Again, your argument is the deflationary arguments. Why would people use a deflationary currency? And the answer is because they need something, and that's the currency they have to trade with. They have that currency because it keeps the real value stored in it from being devalued via inflation, so they stop using/holding fiat. But they still HAVE to spend, for housing, food, clothing, etc... Eventually, I will keep all my funds in Dash, and only transfer to fiat if I absolutely have to. When that happens, I'd rather spend my Dash directly than constantly have to convert to fiat. So yes, I will and already do, spend my Dash for bills I must pay.

What would be good to know is how many merchants that accepted Bitcoin at one point in time, have given up, and how many continue to offer products for Bitcoin. This would be a very interesting statistic. In the end, we are gaining merchants willing to try this, usually because they're sold on the idea. And I think they'll be the leader of the cycle eventually. More merchants will accept Dash and that will open the public's eyes to the service, and they will start buying Dash to spend due to discounts (non-sur charge, whichever way you want to look at it) and the cycle will continue. And it will work because everyone has to pay for something, and if you don't want to expose yourself to fiat risk, you put it all in crypto, and only withdraw to fiat if you absolutely have to.

I really think this will work.

The thing I can't wrap my head around is loans. I think the loaning industry might continue to use fiat, or another token will be created and backed by Dash/other crypto. The only problem with this is that I really don't understand how that works yet. I can see this easily working in the future when the price of cryptos has settled down, but there may never be a point where the price settles against fiat. Crypto can be lost, never to be used again, causing more deflation. There is a huge world to adopt Dash, and it will take many years for it to happen. As long as it's still being adopted, the price will continue to rise against fiat because of supply and demand. So loans... they're a weird proposition.... :)
 
  • Like
Reactions: lynx

stan.distortion

Well-known Member
Oct 30, 2014
959
585
163
This is exactly what I meant. At some point the market will solve it on its own. For that to happen Dash already needs to be a widely used currency.

Merchants act on the demand of customers. If there is no demand for using Dash (because everyone uses it as a storage of value) not that many merchants will accept Dash.

So the question is: How do you create a demand/benefit of using Dash instead of only storing it.
The problem isn't the store of value aspect, that's what give it scarcity at this stage, it's the path between fiat and Dash. That's assuming you're not planning on everyone switching to making purchases using Dash all of a sudden. Who knows, might happen but there's a big market right there in the middle ripe for the picking and that's banking services. Works for me, a crypto loaded debit card does all I want and my bank account has been gathering dust for the past 6 months... well, dust and heaps of made up debt from near-extortionate fees but the fiat-Dash path isn't an easy one. It won't be a winner for long though, that path is getting upgraded to a highway and third party services could make it available to any crypto at rates much more difficult to compete with than today but it's a possibility that should also give orders of magnitude better price stability and potentially earn users a profit from whatever instability there is in the bargain.
 
Last edited:

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,876
1,866
1,283
Sorry for being off topic, but:

"Give us back our servers, or we’ll take your fax machine." That's so funny, where is it from?
 

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,876
1,866
1,283
I agree with you a little, however...

Inflation is a form of tax and I think you're right to say that people try to get rid of money that is losing value. With this in mind, I think it would be helpful if a crypto had both a slight inflationary element and an automatic and verifiable local government tax for every transaction (including transactions to self). I don't know, but perhaps the inflation level could be pegged to the tax rate somehow. For both inflation and tax, there would need to be some sort of end-user voting to keep confidence in the coin, so maybe some variant of Proof-of-Stake.

But regardless, dash's usability is woefully flawed; it relies on a dated "username" experience... who the hell wants another battle over usernames? (I have previously offered solutions that omit usernames entirely). Having said that, they have come up with a decentralised API and that offers great opportunity for much better wallets... but only if the key functions can be carried out without usernames. This decentralised API opens the door to wallets that are far better than the official ones. For a start, "the wallet" should not take centre stage... instead it should be tied into the back-end of expense management apps, chat apps like Signal, car driving wallets (automatic toll payments etc). Only then will people see the benefit of usability.

But even then, dash - and currently all other cryptos - have not pooled the key ingredients to a universally mass adopted crypto. You can't just say usability or inflation. When public chain crypto finally goes mainstream, dash will not be there because it has already rejected one of the key ingredients; end-user privacy by default.
two questions :)

1. What would be a better (remember it has to be very easy to use) "log in" than name and password? I haven't seen what you've written before?
2. Why does privacy have to be by default? I mean, in a way, that's just a wallet setting and we could switch it on by default. But because there is a small fee for using mixing, it was decided that it would be more appropriate to make the user choose to mix so they don't feel like we are charging them for a service they don't need/want.

The fee is needed for ddos attacks. If this were changed, which it might be, mixing would have to be ddos resistant. I can see this happening if mixing is somehow triggered via the network and not just something someone could trick or force the network to do. So, this could still happen. It's just going to take more effort and that's outside of current goals (so will have to be after Evolution is completed) We already are biting off a ton of work, so many great ideas are waiting on the sidelines for attention.
 
  • Like
Reactions: GNULinuxGuy

GrandMasterDash

Grizzled Member
Masternode Owner/Operator
Jul 12, 2015
3,424
1,459
1,183
two questions :)

1. What would be a better (remember it has to be very easy to use) "log in" than name and password? I haven't seen what you've written before?
2. Why does privacy have to be by default? I mean, in a way, that's just a wallet setting and we could switch it on by default. But because there is a small fee for using mixing, it was decided that it would be more appropriate to make the user choose to mix so they don't feel like we are charging them for a service they don't need/want.

The fee is needed for ddos attacks. If this were changed, which it might be, mixing would have to be ddos resistant. I can see this happening if mixing is somehow triggered via the network and not just something someone could trick or force the network to do. So, this could still happen. It's just going to take more effort and that's outside of current goals (so will have to be after Evolution is completed) We already are biting off a ton of work, so many great ideas are waiting on the sidelines for attention.
Dash Message and Payment Exchange Without Usernames or Registration

A no registrations solution that deals with authentication around the time of a transaction rather than before or after. It also hopes to deal with phishing attacks.

1. Person A calls Person B by telephone (mobile or voip, it's not important). Both parties have a dash app running in the background.

2. When Person A initiates the call, their dash app registers with the MN network and it says, "My telephone number is XXX and I'm calling YYY".

3. Every time Person B receives a call, their dash app also registers with the MN network and says, "I am YYY and I've just received a call from XXX".

4. The MN network has now established a two way channel of communication that is open for a maximum of two hours, or until either party hangs up.

5. Both parties can now exchange messages and payments via the MN network.

6. Only Person A (the initiator) can send money to Person B, thus stemming phishing attacks.

7. Only Person B (the receiver) can send files / invoices to Person A, thus limiting malware from Person A.

NOTES:

1. The phone numbers are arbitrary; a company with a switchboard number would simply announces that number to the MN network.

2. When Person B receives a call, the dash app would display how many live connections Person A is making. Thus, Person B might be able to determine if it really is a call centre.

3. To stem spamming, a micro-micro transaction would be paid by Person A (the initiator) when Person B answers the call.

4. It is possible that Person B sends fake documents / invoices to Person A. However, it was Person A that initiated the call, so the onus is on Person A to do their due diligence.

5. The existing methods of using dash would remain as an option (QR codes, usernames etc).
 

GrandMasterDash

Grizzled Member
Masternode Owner/Operator
Jul 12, 2015
3,424
1,459
1,183
two questions :)

1. What would be a better (remember it has to be very easy to use) "log in" than name and password? I haven't seen what you've written before?
2. Why does privacy have to be by default? I mean, in a way, that's just a wallet setting and we could switch it on by default. But because there is a small fee for using mixing, it was decided that it would be more appropriate to make the user choose to mix so they don't feel like we are charging them for a service they don't need/want.

The fee is needed for ddos attacks. If this were changed, which it might be, mixing would have to be ddos resistant. I can see this happening if mixing is somehow triggered via the network and not just something someone could trick or force the network to do. So, this could still happen. It's just going to take more effort and that's outside of current goals (so will have to be after Evolution is completed) We already are biting off a ton of work, so many great ideas are waiting on the sidelines for attention.
Also see https://www.dash.org/forum/threads/solution-how-to-pay-dash-over-the-phone.10149/

Additionally, even if usernames are used, we should probably try our best to eliminate passwords.
See getclef.com or search "Clef login"
... or hardware authenticators such as yubikey which can be specifically customised to dash
 

GrandMasterDash

Grizzled Member
Masternode Owner/Operator
Jul 12, 2015
3,424
1,459
1,183
two questions :)

1. What would be a better (remember it has to be very easy to use) "log in" than name and password? I haven't seen what you've written before?
2. Why does privacy have to be by default? I mean, in a way, that's just a wallet setting and we could switch it on by default. But because there is a small fee for using mixing, it was decided that it would be more appropriate to make the user choose to mix so they don't feel like we are charging them for a service they don't need/want.

The fee is needed for ddos attacks. If this were changed, which it might be, mixing would have to be ddos resistant. I can see this happening if mixing is somehow triggered via the network and not just something someone could trick or force the network to do. So, this could still happen. It's just going to take more effort and that's outside of current goals (so will have to be after Evolution is completed) We already are biting off a ton of work, so many great ideas are waiting on the sidelines for attention.
I don't particularly want to get into the whole privacy vs transparency debate again, it's already been extensively covered elsewhere. Suffice to say that as a merchant, I can't enforce the receiving of mixed coins.. if I am receiving tainted coins, I have to hope I can pass them on to others, or I have to return them and engage the customer again, thus consuming time or requiring a third party to check my received coins. In short, Private Send is only good for the sender and does nothing to protect the receiver.. a wallet solution is therefore not a great solution.
 

GNULinuxGuy

Member
Jul 22, 2014
115
71
78
Dash Address
XjkXfrYTSvdYe4738DtNVX5XfUz7qU9HnY
Suffice to say that as a merchant, I can't enforce the receiving of mixed coins.. if I am receiving tainted coins, I have to hope I can pass them on to others, or I have to return them and engage the customer again, thus consuming time or requiring a third party to check my received coins.
I understand the desire to be able to enforce the receiving of mixed coins, but I don't agree this is a significant issue. One doesn't have to hope they can pass them on to others, they can either choose to mix them at that time or return them.

A lot of your commentary as of late seems alarmist and/or ridiculous to me. My ratings on your posts are my legitimate view. Your ratings on my posts today are clearly just an attack on me. Pretty sad.
 
  • Like
Reactions: ceti and TroyDASH

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,876
1,866
1,283
Actually, can't you do something with the API to only accept denominated coins? That would force private send coins?
Dash Message and Payment Exchange Without Usernames or Registration

A no registrations solution that deals with authentication around the time of a transaction rather than before or after. It also hopes to deal with phishing attacks.

1. Person A calls Person B by telephone (mobile or voip, it's not important). Both parties have a dash app running in the background.

2. When Person A initiates the call, their dash app registers with the MN network and it says, "My telephone number is XXX and I'm calling YYY".

3. Every time Person B receives a call, their dash app also registers with the MN network and says, "I am YYY and I've just received a call from XXX".

4. The MN network has now established a two way channel of communication that is open for a maximum of two hours, or until either party hangs up.

5. Both parties can now exchange messages and payments via the MN network.

6. Only Person A (the initiator) can send money to Person B, thus stemming phishing attacks.

7. Only Person B (the receiver) can send files / invoices to Person A, thus limiting malware from Person A.

NOTES:

1. The phone numbers are arbitrary; a company with a switchboard number would simply announces that number to the MN network.

2. When Person B receives a call, the dash app would display how many live connections Person A is making. Thus, Person B might be able to determine if it really is a call centre.

3. To stem spamming, a micro-micro transaction would be paid by Person A (the initiator) when Person B answers the call.

4. It is possible that Person B sends fake documents / invoices to Person A. However, it was Person A that initiated the call, so the onus is on Person A to do their due diligence.

5. The existing methods of using dash would remain as an option (QR codes, usernames etc).

I've been thinking on this, and it just doesn't seem like any of what Dash wants to build, to be like Paypal, could be built on such a system. How do you see your account information off any device. This seems like a very complex and extra secure direct 1 time payment - not something that can handle subscriptions, etc... I mean, I can see something like this being built as a different wallet that people could use if they want to and are technical and feel they need the extra security, but only a small subset of technocrats would use it, IMHO. But I don't see any reason why it couldn't be done?

At this point in time, I would rather all resources possible go toward getting Evolution to work for the "regular folks".
 

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,876
1,866
1,283
I don't particularly want to get into the whole privacy vs transparency debate again, it's already been extensively covered elsewhere. Suffice to say that as a merchant, I can't enforce the receiving of mixed coins.. if I am receiving tainted coins, I have to hope I can pass them on to others, or I have to return them and engage the customer again, thus consuming time or requiring a third party to check my received coins. In short, Private Send is only good for the sender and does nothing to protect the receiver.. a wallet solution is therefore not a great solution.
I would think that it would be pretty easy, in my limited knowledge of programming, to enforce receiving only denominated amounts. That would almost certainly always be from mixed funds?? Also, I don't see where this would be an issue for anyone except exchanges. Normal merchants selling goods are not required to know where the cash they receive is coming from, I don't see why this burden would suddenly be placed on them.
 

stan.distortion

Well-known Member
Oct 30, 2014
959
585
163
If a merchant wishes all his incoming transactions to be anonymous then said merchant would be wise to follow the guidance laid down at the dawn of crypto and use a different receiving address for every transaction.
 

TanteStefana

Grizzled Member
Foundation Member
Mar 9, 2014
2,876
1,866
1,283
I want to add that in Hayek's paper "choice in currency", gresham's law is only applicable if the currencies have a prescribed rate of exchange. If there is a free market system dictating the exchange rate good money will always win.

As an example, Hayek talks about how in the times of great inflation between the wars, people use cigarettes and other items as money even so there were great consequences for getting caught. So why would Dash catch on? Because it lives in a free-market system and it is good money.
 
  • Like
Reactions: IronVape

GrandMasterDash

Grizzled Member
Masternode Owner/Operator
Jul 12, 2015
3,424
1,459
1,183
I understand the desire to be able to enforce the receiving of mixed coins, but I don't agree this is a significant issue. One doesn't have to hope they can pass them on to others, they can either choose to mix them at that time or return them.

A lot of your commentary as of late seems alarmist and/or ridiculous to me. My ratings on your posts are my legitimate view. Your ratings on my posts today are clearly just an attack on me. Pretty sad.
If you keep marking me as trolling, I'll keep returning the favour.
 

GrandMasterDash

Grizzled Member
Masternode Owner/Operator
Jul 12, 2015
3,424
1,459
1,183
I've been thinking on this, and it just doesn't seem like any of what Dash wants to build, to be like Paypal, could be built on such a system. How do you see your account information off any device. This seems like a very complex and extra secure direct 1 time payment - not something that can handle subscriptions, etc... I mean, I can see something like this being built as a different wallet that people could use if they want to and are technical and feel they need the extra security, but only a small subset of technocrats would use it, IMHO. But I don't see any reason why it couldn't be done?

At this point in time, I would rather all resources possible go toward getting Evolution to work for the "regular folks".
From an end-users perspective it's far simpler than anything that Evolution is doing. If I didn't list those steps, I'd get lots of replies saying "it won't work, what if...".. but in reality it's super easy for the user, everything is automatic.. you just make a call and offer to send money to them... no need to ask for account numbers or read out credit card numbers etc.
 
T

toknormal

Guest
There's only 1 way to address Grasham's law - hold whatever you like and denominate payments in the 'government currency'.

The thing about Gresham's law is it doesn't really compare 2 forms of money. More realistically it's comparing a fixed supply, commodity based money with an arbitrary inflationary unit with which to denominate prices.

So, lets say we live on an Island. You have bundles of grain and I have shells. We start an economy where we grow stuff, build stuff, work labour hours etc. Since there are so many different "things" to measure the price of, we invent a new unit of measure out of thin air - lets call it the 'Gresham'. We start off by establishing an exchange rate between your grain and my shells and the Gresham. Say we agree that a bundle of grain has ALWAYS to be 20 Greshams and a shell has ALWAYS to be 5 Greshams. We also agree to measure our labour hours in Greshams = 2 Gr per hour.

At the start of proceedings, there are:

10 bundles of grain = 200 Gr
50 Shells = 250 Gr
0 Labour hours worked = 0 Gr

So our micro economy is worth 450 Greshams.

We now work for a few weeks, at the end of which we have:

20 Bundles of grain = 400 Gr
100 Shells = 500 Gr
50 Labour hours = 100 Gr

So our economy is now worth 1000 Greshams.

Over on a big Oak tree, we chalk up the number of Gr in the economy as well as what's owed to each other in labour. The tree is our "central bank", so by adding new marks to the tree we can say that our central bank is "printing new money" to keep track of economic growth.

What do we notice about this ? A few significant things:

[1] - a bail of grain still costs 20 Gr even though the Gresham 'money supply' has inflated
[2] - we now additionally have 100 Gr of credit money in the ecnonomy (the 50 Labour hours) of which 20 Gr are yours and 30 Gr are mine
[3] - prices are stable if measured in Gr but decreasing if measured in either corn bundles or shells (thats by design)

Now, I decide to buy a bundle of grain from you and you buy two shells from me with your credit money. (It's actually "flow money", that represents "proof of labour" ! LoL ;) ). From that point on, all our trades are denominated in 'Greshams', even if our respective stores of value are still bundles or grain & shells.

********** MORAL OF THE STORY *********
It's not whether or not the money is "in circulation" thats important, it's how you denominate the trade. In fact the more an asset stays OUT of circulation the better it will perform as a store of value.

The way to get the best of both worlds is to hold the asset in a deflationary currency and spend it in trades that are denominated in the inflationary currency. So say I had all my money in a Dash wallet. In 2015 I buy a PC Monitor costing $500 which at that time is 25 Dash. I "point" my wallet at amazon.com and fire $500 at it (not 25 Dash). The wallet deducts whatever Dash that corresponds to and flips it through shapeshift or something into $ denominated trade.

Then 4 years later I want to replace the monitor. Monitor still costs $500 so I point my wallet at amazon.com once again and fire $500 at it. This time shapeshift (which supports fiat currencies by this time) only deducts 15 Dash from my savings but still lets me buy a $500 monitor.

Thats how you decouple deflationary and inflationary currencies so that all parties benefit:

1. You benefit from holding your savings in a deflationary asset that accrues value as the economy grows
2. amazon benefits from not having to re-price their goods every month or pander to all kinds of cryptocurrencies begging to be "accepted"
3. Dell benefit from being able to budget and sell in a stable currency to minimise any adverse impact of their 'time to market'

As for making "deflationary currencies" stable - forget it. The whole point of them is that they are NOT stable, otherwise they would never be able to store any value against the prevailing trade-denomination currency ($USD. EUR, £GBP etc).
 
Last edited by a moderator:
  • Like
Reactions: stan.distortion

ashmoran

Member
Jan 19, 2016
71
78
58
There is one obstacle that no crypto currency nor any other anarchistic currency has ever overcome.

It is not the usabillity, it is Gresham's law.

"In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will disappear from circulation." - Wikipedia
In simple English: When Dash becomes more valuable over time, but legal money is inflationary (losing value), people will use legal money for exchanging goods and Dash for savings. They will always prefere to give away the money, that "burns it's value" over time..

I'm not sure wether this could work or not. But but what are your thoughts on Gresham's law? How will we solve this problem?
To the best of my knowledge, thats not how Gresham's Law works.

I believe Gresham's Law works like this: if 1oz of gold is worth 10oz of silver on the free market, but the government passes a law that 1oz gold = 20oz of silver, gold becomes twice as valuable according to the decreed exchange rate. So people will spend gold for more than it's market value and hoard silver.

Argentina has been held as a counterexample to Gresham's Law because the US dollar continues to circulate despite the local currency being artificially overpriced, so in fact Gresham's Law depends on more than just price fixing.

In the absence of some artificial exchange rate, people are free to trade whatever money and commodities they feel like, and will hold and spend according to their personal preferences (acceptance by merchants, expectation of future value, appetite for risk, and so on). People gravitate to what they consider "good" money, in the sense that they will want to hold and spend whatever is useful to them, and this for many people may be a mixture.
 

camosoul

Grizzled Member
Sep 19, 2014
2,261
1,130
1,183
Gresham's Law makes one unspoken presumption; that value is a fiat declaration.

If Stocks were fungible, you don't think they would be spent directly?

Crypto's value is commodity driven, just like the things it is used to buy and sell.

There is value in non-conversion. If I could spend it without converting it, I damn well would, even if its better money. Why? It makes my better money usable, so I can do a way with the crappy money altogether. Gresham's Law expects me to choose between two when I am forced to use two.

If I am not forced to use two, the bottom falls out. Would you deliberately work for shitty money when you didn't have to? If two cars of equal price tag are available to you, and you can pick one, and aren't forced to own both... Do you pick the shitty on or the good one, knowing the value you'll have to pay is the same?

The dynamic here is that the end user of DASH doesn't have to use fiat anymore, at all, if it us usable. The vendor is and always will be in bed with guv and forced to use guvpaper. The vendor will have to do both. The end user doesn't have to, so it doesn't apply to the end user if the vendor offers the service of direct payment. Why would the vendor defy Gresham's Law? Because the shitty money is shitty in part because using it at all costs him a pound of flesh. If DASH extracts only an ounce of flesh instead of a pound, he's willing to deal with it.

This is the first road on the path to adoption.

Duh.
 
T

toknormal

Guest
If Stocks were fungible, you don't think they would be spent directly?
I don't necessarily think they would.

Consider the fact that everyone - almost universally - has two types of money to hand, an inflationary one and a deflationary one. The reason there's a need for two is that the only attributes of a monetary medium that allow for "wiggle room" when the economy changes size are:

• supply
• value (e.r. purchasing power against goods & services)

(i.e. if you fix one of these, the other will vary).

The thing is, an economy needs both. I think when you say "shitty money" you actually mean the variable supply type. Ok it's "shitty" when you judge it by its ability to store value but it isn't shitty when you judge it by its ability to stabilise prices and there are a load of cases where thats the overriding priority (such as in manufacturing).

In other words, the variable liquidity type is needed for trading and the fixed supply type is needed for storing value. It's the holder's problem to switch between one and the other according to their immediate needs, not the monetary medium's problem.

The fact is you can see this being played out right now. Ask any Dash holder if they'd rather spend their fiat or their Dash down the supermarket. No-one in their right mind is going to swap their Dash for a packet of cornflakes, it's too valuable. Ok I agree that we'd all prefer to *earn* crypto but that isn't spending, it's earning. To earn it someone else has got to spend it and it's hard enough for most people to find a job that pays in an inflationary currency never mind a deflationary one (as long as inflationary currencies exist, which they will because there's a genuine and justified need for them).
 
Last edited by a moderator: