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On Sun, Mar 30, 2008 at 08:25:55PM -0700, William Chops Westfield wrote:
> 
> On Mar 30, 2008, at 7:13 PM, Richard Prosser wrote:
> > And there I was, thinking that the US dollar was based on oil
> 
> A currency based on energy would make a certain amount of sense.   
> It's been used in a couple of SF novels/stories, I think.

It does kinda, although, it still suffers from the problem that
improvements in efficiency would have a devaluing effect on everything
else.

Actually, my favorite currency is one based on wasted computing power,
namely hashcash. Simply compute hash collissions between bits of random
data, with the value of the hash being 2**n where n is the bit length.
Utterly impractical of course, the only currency where inflation is tied
to moores law! But the artist in me loves the idea of value being
created by performing worthless actions...

> The problem with based currency on any particular commodity is that  
> it doesn't really make any sense.  With most commodities, the total  
> quantity available is both variable and unknown.  Changes in supply  
> due to new discoveries or methods affect supply in ways that ought to  
> be unrelated to currency, not to mention encouraging bad behavior in  
> the acquisition (eg, the discovery of "the New World.")  And even if  
> the commodity IS fixed in its quantity, there isn't really any reason  
> to suppose that "wealth" should be a zero-sum game.

A bit of inflation reduces hoarding of money as well, while deflation
encourages useless saving when investing would be better.

> Arguably, you want wealth to be based on some sort of labor- 
> equivalence, but you have to get awfully politically incorrect to  
> come out anywhere near what the free market seems to have reached  
> ("why yes, an experienced PIC programmer IS worth 20 to 50 burger  
> flippers.")  Previous efforts along these lines have not worked well.

Pretty much, even the various "Hour" barter currencies tend to
acknowledge that one persons hour isn't always another's.

- -- 
peter[:-1]@petertodd.org http://petertodd.org
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