Talk:Respect currency

Proposition for pratical implementation of respect currency

The respect currency can be composed of two parts: the respect part and the digital currency part which is exchangeable for real money.

Problems with single component respect currency

The respect currency cannot be realized solely in terms of the digital currency because it does not fulfill two of the requirements of the respect currency given below.

1. "Once given, respect currency should gradually diminish in time, so that the respect should be gained constantly"
   • This can lead to uncontrollable inflation if there is just a digital currency part in respect currency. Respect theory works equally well if the players want to collect more buying power without diminisihing the value of the currency. However, in this case the 'respect' component is washed out of the concept of respect currency. Real respect is something that needs to be renewed from time to time.
2. "Highly respected people should be able to show more respect (i.e., their respect is valued more by the society)"
   • In terms of money, does this requirement read 'rich people can dole out more money' or 'rich people's money is worth more than poor people's money'? If there would be a separate respect component in the respect currency, it could be expected that the words of a respected elder weigh more heavily than those of a new kid in the block.

Digital currency component of respect currency: Bitcoin

Bitcoin is virtual currency. Bitcoin could represent the digital currency component of respect currency. Bitcoin is superior to the normal currencies for the following reasons:

1. It does not suffer from inflation as normal currencies do (inflation can be controlled and is predictable as what comes to reserves)
2. Central banks can not control the generation of the currency
3. Banks are not needed in transactions
4. Bitcoins are fully exchangeable for real money and products
5. Bitcoins are virtual, which means that operating the virtual money system is cheap
6. Bitcoins cannot be traced or forged
7. Bitcoins can be split into smaller and smaller 'pieces'

Bitcoins can be acquired by 'mining', in exchange for goods, services and real money. At the moment, in the creation phase of the crypto currency bitcoins can be simply earned by dedicating servers to the p2p-network. In the future the reward will be based more on traffice control resources.

Risks with Bitcoins

Possible problems (see also EFF article):

• Powerful server providers collect more bitcoins in their reserves (this is balanced to some extent by randomization of the distribution process and by diminishing the reward over time)
• At present, small size of bitcoin market can lead to large fluctuations in demand prices (free market philosophy)
• if popularity is gained, direct intervention attempt of traditional banking institutions

Even if these risks are real, no harm is done if the bitcoins are not taken out of the virtual system. They can still be used as prototype of respect currency, whose transaction mechanism for real currency has already been established and therefore collecting them as a bonus on top of real salary, for example, would be a motivating factor for many knowledge workers (even if the amounts would be small), because it could be done completely independently of the bureaucrats of government institutions.

Respect component of the respect currency: Onor

• This component satisfies the properties of the respect currency not taken care of by the digital currency component. The reward system of Opasnet could function as follows

1. Opasnet user can earn respect currency by recommendation (automated or user initiated). Automated recommendations are activated when a certain standardized task has been performed (creating a new page with content, publishing a paper, winning Noble price etc.). User initiated reward can be a thumbs up apprecitation signal from a reader of a web page or grading of the web page. In this case (similarly to Facebook) it is known who the recommending person is ("user A likes this page") and personalized weight can be given to the recommendation to satisfy the principle 'respected person's respect is more valuable than less respected person's respect'.
2. The respect part of the respect currency can be defined to decay in time, for example according to the formula given on the main page. When a person accumulates respect currency, over time the respect part may vanish completely leaving only the digital money part which is exchangeable for real currency all the time.
3. The problem is that the respect part has an infinite reservoir whereas the digital currency part is limited for example to a small amount of bitcoins, say fifty units (obtained from the market as a reward for letting the p2p network to use some server power, for example). If one demands that with every honor there must be a transfer of some fraction of a bitcoin, then we must evaluate how many onors can be delivered in the Opasnet system (approximately) over its lifetime. There is now problem splitting the bitcoin into arbitrarily small units. For example, it is probable that no more than 10 Noble prices will be obtained by Opasnet users. All other honors are at least 2 orders of magnitude smaller (for arguments sake). Valuing one Noble price worth 1 bitcoin, a reserve of 20 bitcoins would take us quite far to the future. If one runs out of bitcoins, and it would be too difficult to get more of them, one could redefing the onor vs. bitcoin ratio so that the remaining reservoir would still suffice. In fact, one could...TBC

Game plan

• dedicate a few servers for p2p and earn a few bitcoins.
• device an automated onor distribution system with predefined reward 'quantization'
• invent a relationship between onor and bitcoin
• Start distributing fractions of two-component respect currency to Opasnet users