Re: <nettime> Bankers on ecstasy (but is the party over?)

[Morlock Elloi <morlockelloi@gmail.com>]

There is an interesting essay on LRB:

http://www.lrb.co.uk/v38/n08/john-lanchester/when-bitcoin-grows-up

which is worth reading in its entirety.

One part

''' Yap has no metal. There’s nothing to make into coins. What the 
Yapese do instead is sail 250 miles to an island called Palau, where 
there’s a particular kind of limestone not available on their home 
island. They quarry the limestone, and then shape it into circular 
wheel-like forms with a hole in the middle, called fei. Some of these 
fei stones are absolutely huge, fully 12 feet across. Then they sail the 
fei back to Yap, where they’re used as money.

The great advantage of the fei being made from this particular stone is 
that they’re impossible to counterfeit, because there’s none of the 
limestone on Yap. The fei are rare and difficult to get by definition, 
so they hold their value well. You can’t fake a fei. Just as you have to 
work to get money in a developed economy – so the money constitutes a 
record of labour – the fei are an unfakeable record of the labour that 
went into their creation. In addition, the big ones have the advantage 
that they’re impossible to steal. By the same token, though, they’re 
impossible to move, so what happens is that if you want to spend some of 
the money, you just agree that somebody else now owns the coin. A coin 
sitting outside somebody’s house can be transferred backwards and 
forwards as part of a series of transactions, and all that actually 
happens is that people change their minds about who now owns it. 
Everyone agrees that the money has been transferred. The real money 
isn’t the fei, but the idea of who owns the fei. The register of 
ownership, held in the community memory, is the money. '''


is a good illustration how 'work' (as in Proof of Work) has evolved from 
human engagement to machine engagement.

Yap required certain number of man-days.

One Bitcoin requires, give or take, 4000 kWh. The man-hours used in 
electricity production are rather low, as it's mostly rent-seeking 
business. It is conceivable that at some point BTC creation will require 
practically zero man-hours.

The amusing question is what happens when humans are out of the both 
loops - money creation and contract enforcement.

Of course, not all humans will be out of the loop. The chosen few and 
tech elites around them (AKA 'core developers') will stay there and reap 
the benefits. The current contest is about who gets to stay in the loop, 
and the driving hope is that the unwashed masses will submit to it.



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