My model says that I would have a certain number of Digital Dollars on record at some virtually centralized single data source. They are mine by the fact that they are associated with me by my unique system user identity Name. I own those Digital Dollars with my name associated with them. I can receive ownership of Digital Dollars from anyone having their name on a Digital Dollar and initiating action to change the name of ownership from their name to my name.
Looks like writing a check or using a debit card. An instrument that has both the payer's and payees name on it and authorization by me to make a change in the ownership of a total money amount. The system then takes that total amount and "explodes" it out to change the name of ownership on every single unit Digital Dollar with my name associated with it to the new owner's name on the Digital Dollar.
Plain and simple. In the old days of dollar bills, a serialized dollar would change hands. Possession determined by whose hand or pocket it is in. The dollar physically moved from place to place as the key characteristic of ownership. Hand to hand. Then banks started keeping track of the movement of money from account to account. Accounts being conceptual hands. In the Digital Dollar model the Digital Dollar unit only has to change the name of the owner associated with it. Owners change, the Digital Dollar stays in one place.
An owner's view of how much money they own is focused on the total sum balance as expressed by an account that belongs to them. The total is their cash working fund.
Simple as long as a conceptual thing called credit, otherwise known as" Other People's Money" OPM is not yet a part of the model. But it must be part of the model. That is where simple starts to get somewhat more complex. The model says that all M2 money is serialized Digital Dollars in a debt free money system with mandatory association relationship to some owner entailing rights to change name to another owner known as spending. Or: Not change ownership over any period of time the owner may wish which is known as saving. Few people save loaned money for long. Does not pay. Neither does saving your own debt free money pay much depending on how much it may gain or lose value over the time it is saved.
Money might be a store of value but M2 money is more important as a medium of exchange. Often an exchange into a better form store of value the store being "near money" paper with varying degrees of conceptually associated value or real things with intrinsic value. M2 money was meant to move. It could be designed so that a large portion of its total universe does not move, it is a store of value, it it retains the same value over time. That is called stable money and an increased propensity to hold on to it rather than spend it. A further increase in propensity to hold it if it pays an actual rate of return to hold it.
Credit (OPM) or unearned money spends exactly like the earned money we received in payment for whatever good or service we have to trade for it. In the debt money system all money came into being as unearned until it was given future time value by a promise to earn it over time so that it could be paid back. All of our money is an unearned (as of now) revolving fund promise to pay back the loan. (All our money is debt money, there would be no money if all debts were paid, all money would go back to the nothing it came from).
The current money system is in essence Computational Trinitarianism discussed in a prior post. However that is getting far afield, but related to what I started out to do with this post subject.
My intention was to use myself as the mouse in my Digital Dollar model to see how I would run through the maze. Right off the bat there is a problem. I operate out of a margin account on my stock account. My spending is all out of that margin account with a credit card. I am operating from a debt money revolving account. I have a substantial amount of money in stocks, the margin account is small but nevertheless it seemed mor profitable operate out of it because I made a decision that it would pay more than operating out of an asset balance of uninvested cash.
While I could easily run the Digital Dollar maze using myself and my relationship to my digital dollars, my dollars are debt based and spend as well as my earned dollars. I can't go down the path of spending out of margin to illustrate how my model would work although that is essential for validation of the model as a practical real world application idea.
It seems like it would have been easier so I will have to think about this.
No comments:
Post a Comment