[p2p-research] The Case for Energy As P2P Currency

[marc fawzi]

Hi Stan,

Thank you for the background on the existing, so-called "free market"
economy.

However, the way we have the economy now is completely bananas!

We've started from scratch with a new economic model, and we went through
the following:

1. Let's make money smarter by adding metadata to each transaction (which
requires verifiable transparency on the part of the producers.. think of the
list of ingredients on packaged foods as one example, and in case of
manufactured goods they should contain a list of ingredients as well as a
list of by products and any environmental waste... this is what Obama can do
to help)

2. Let's replace interest with peer credits, so we can have a model that
enables "the more you share the more you have"

2. Let's make money = potential energy. The problem was that per the
thermodyanmic model of the economy, actual energy is what would be
transferred between the nodes of an economy, not potential energy, yet
actual energy has an absolute value so what happens to the concept of price
of energy?

3. Looking at the thermoeconomic model (first considered in the 60s), I
realized that it can be used quite nicely with the peer credits concept
(which is enabled by a P2P trading client + search engine) to enable the
heterodox combination of an absolute-value currency for an actual
(non-hybridized) thermoeconomy with the "wealth building through sharing"
idea behind peer credits. So now we have currency that doesn't depreciate or
appreciate while having the ability and incentive (both social and
capitalistic) to build wealth.

It's a combination of many ideas that seem to gel.

So that's what I'm pushing for, and the next challenge is to roll out a game
that is addictive in both the yin and yang aspects and that stimulate people
to think different about money and the economy.

The model in its latest evolution can be found at:
http://p2pfoundation.net/P2P_Social_Currency_Model


Thanks again for the feedback/background.

Marc




On Mon, Dec 29, 2008 at 9:50 PM, Stan Rhodes <stanleyrhodes at gmail.com>wrote:

> On Mon, Dec 29, 2008 at 3:36 PM, marc fawzi <marc.fawzi at gmail.com> wrote:
> > The
> > issue not discussed in current P2P theory is how do we assure the flow of
> > energy through all nodes of the economy in such a way that we get maximum
> > "globally sustainable" productivity from every node. The thesis in this
> > model is simple: in order for nodes to have maximum "globally
> sustainable"
> > productivity they must give and take in equal amount, i.e near unity for
> > exchange ratio (i.e. exchange of products, services and assets for
> energy,
> > which in our reactor example means providing the maintenance service,
> which
> > costs energy, and getting paid back in a tokenized form of universally
> > utilitarian energy, e.g. electricity.) If a given node gives more than it
> > takes in energy then it stops to function eventually (see:
> Thermoeconomics:
> > Laws of Thermodynamics: Implications) If a given node gives less than it
> > takes in energy then it is taking this extra energy from some other node,
> > and that's because energy is conserved, i.e. if a given node takes more
> than
> > it gives then it's ultimately taking from another node, not from some
> > cost-free fountain of energy (see: Thermoeconomics: Laws of
> Thermodynamics:
> > Definitions)
>
> Marc,
>
> The different perspectives on "peer production" (Bauwens, Benkler,
> Shirky), which generally do not include the exchange of goods and
> services, aka the realm of markets.  I say "generally" because I think
> there's a lot of fuzziness.
>
> In the body of economic theory, the flow of energy through "nodes" of
> agents in the economy is built into the cost in some way.  Where
> theories place it--and what they term it--varies (e.g. cost of
> production, full-cost pricing, etc).  As a basic example, food, which
> usually exists because of some energy input from the sun into some
> substance here on Earth, powers human labor.  Food can also be
> combusted to generate mechanical labor, which could also be used to
> generate electricity. Where ever we look in human living, there are
> supplies (products/substances that have energy in the cost) and
> demands.
>
> The free market, in theory, is the closest we've come to solving the
> supply and demand issue: under the right conditions the market tends
> toward pareto optimality or better; exchange chases market equilibrium
> (I assume that's what you mean by "unity").  However, as Yogi Berra
> says, "In theory, there is no difference between theory and practice.
> But, in practice, there is."  It turns out that there are classes of
> markets that humans find market equilibrium in easily and naturally
> (even with imperfect information!), and ones they do not: they're not
> so good at asset markets, such as the stock market.  This opens an
> area of continuing debate between theory and reality, which is huge,
> and outside this email.
>
> The problems of information asymmetries and
> externalities--essentially, the absences of pieces of information that
> are needed for good decision-making--are present in the modern day
> economy, just as they are present in your proposal.  These factors
> make sustainability hard.  However, it's no easier in either your
> proposal or the modern day economy.  You've essentially found that, no
> matter how you shuffle the backing of the units of exchange, the same
> problems pop right back up.  If you don't see that as a big problem
> yet, you eventually will.
>
> A common solution is calling for "regulation."  However, this doesn't
> solve the problem, it just gives it a name and puts in into the hands
> of an authority.  Each component piece of regulation--with the overall
> goal of resource management, as identified by people such as Elinor
> Ostrom, and others in the field of common pool resources--has a
> practical cost.  A quick list (from Ostrom, via Wikipedia, edited a
> little):
> # Clearly defined boundaries
> # Congruence between appropriation and provision rules and local conditions
> # Collective-choice arrangements allowing for the participation of
> most of the appropriators in the decision-making process
> # Effective monitoring by monitors who are part of, or accountable to,
> the appropriators
> # Graduated sanctions for appropriators who do not respect rules
> # Conflict-resolution mechanisms
> # Recognition of the rights of agents to organize
>
> You've touched on the sustainability problem in your subsection on
> "Anti-Dumping and Anti-Monopoly Caps for Energy Production," but not
> covered the real costs of management--the hard problems--as mentioned
> above.  They are not insurmountable, but they are more mountain than
> molehill.
>
> Some % of the population will be probing for ways to game any system,
> but the advantages of a free market system--depending on the class of
> market--is that people close in on equilibrium by interacting as
> humans normally do.  They don't realize they are reaching equilibrium,
> but they are.  Vernon Smith, in particular, has contributed to a rich
> body of literature exploring this in experiments.  Smith was also
> consulted for energy markets in New Zealand and Australia, too, so you
> might find his perspective on electric power markets useful.
>
> The point of my original critique was to question some of your
> proposal's basic assumptions, leading to further exploration of
> concepts you might feel you'd already covered sufficiently.  In short,
> I'm again suggesting that you are rediscovering economic problems
> discussed in depth in the body of economic thought, but not
> recognizing that they are the same because the language is different
> (even between schools of thought within economics!).  I say this from
> my own personal experience in building a unified understanding of
> these and related issues, which was (and is) often frustrating,
> sometimes humbling, frequently exhausting, and always fascinating.
>
> In closing, I would like to bring up this question:
> What is the problem we wish to solve when we try to construct a
> rational economic order?  For your consideration, Hayek's exploration
> of this question: http://www.econlib.org/library/Essays/hykKnw1.html
>
> -- Stan
>
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