The gold-silver concept of digital money
Critical concepts
The goal of the gold-silver concept of digital money is to preserve the ability of digital societies to come up with unique economic models while still preserving the economic independence of those using those worlds.
Gold stands for the type of money that is under the purview of individuals.
Silver stands for the type of money that is distributed by digital societies.
These two work in tandem to create an economy that is both well regulated and leaves room for innovation.
The ideal
In its most ideal form, all users of Synapse will have access to currency that:
Integrates seamlessly into Synapse and is frictionless in transactions.
Has zero speculative value.
Has a currency which retains its value (gold).
Underlying principles
To be clear, unlike cryptocurrencies, the goal is to ensure that there is little-to-no investment into this currency.
Reasons:
Investable currencies are naturally hoarded and not used as a medium of exchange.
Investable currencies create speculative bubbles.
If the currency is valuable, even banning its trade with other currencies will not suffice and a black market will appear, allowing those rich in the outside world to become rich in the digital world, at the cost of income equality.
It's fine if people store up some Digital Gold, but eventually they'll want to trade it for silver as even gold will lose value slightly over time.
Technology agnostic
This document doesn't specify blockchain or any technology that should be used in Synapse to create this currency. Instead, the teams working on these projects should think through the problem in detail and find whatever appropriate technology to implement.
This movement is not ideologically attached to any particular technology.
Currency concept
Digital Gold basics
Digital Gold is under the purview of individuals.
Every user in Synapse has the ability to use Digital Gold in their day-to-day transactions with others no matter the society.
Digital Gold is held in their Synapse wallet
Digital Gold can be traded with anyone using Synapse at a 10% tax
Digital Gold cannot be moved to other wallets
Digital Gold transactions are final and irreversible
Only a limited amount of Digital Gold can be stored.
Digital Gold is designed to be a backstop that is much too inefficient (10% tax) for daily use.
Unlike cryptocurrency, Digital Gold is designed to:
Be used within Synapse only
Deprecate in value just enough to avoid speculative hoarding (like Bitcoin) or “investment”.
Digital Silver
Digital Silver is under the complete purview of digital societies.
Digital societies can:
Create as much silver as they want
Distribute it as they wish
Tie its distribution to reputation systems.
The key is that Digital Silver can only be used in the society or Accord it was created in. It's functionless outside of the digital society.
The backstop
If inflation goes rampant, if silver distributions are too generous, or their reputation-related requirements are too onerous, people will simply use Digital Gold instead of Digital Silver despite the 10% tax.
Mechanism of trade
Starting a transaction
The item of a cash register can be placed on any table in any space in Synapse, and can be used to trade between two individuals in that space.
Clicking and dragging an offline user to a register will allow you to open up a trade with that individual that will be sent to them once they're online.
Dragging a cash register to any individual on your desktop does the same thing.
Cash registers can be dragged from inventory or equipment to offline users on the right hand panel to start a transaction.
Transaction screen
When a trade has been initiated, a panel shows up showing on the left side what is being offered by the individual who started the transaction and on the right side what is being asked.
This panel is divided into two colors. At the top of the panel is the avatar of each individual in question.
Offer | Request |
|---|---|
Individual avatar | Individual avatar |
Currency or item | Currency or item |
Currency or item | Currency or item |
+ symbol to add more items | + symbol to add more items |
Terms (text dialog box) | Terms (text dialog box) |
Taxes on accept (example 10% sales tax + 10% Gold use tax) | Taxes on accept (example 10% sales tax + 10% Gold use tax) |
Send transaction request » (Resend request option replaces send until accepted). | Agree (“are you sure” dialog box opens). |
People can drag in items like written documents, designed files like a logo, or 3D items like a soccer ball into the “Currency or item” section. They can also drag in physical coins, currency, or a wallet and it will give them the ability to choose how many gold/silver coins they want to send.
Whereas silver cannot be used in registers outside of the society it was minted in, Gold can. However, neither can be exported from the Society.
Dual tax
If a digital society introduces a sales tax, that tax would effect both Gold and Silver equally, raising the transaction ceiling placed on silver.
So if the digital society charges a 10% tax on all transactions, the price of transacting with Digital Gold raises to 20%.
Tax-free trade with societies
Individuals can trade their Digital Gold 10% tax-free for Digital Silver with their digital society further incentivizing the use of Digital Silver while solidifying the value of Digital Gold.
Distribution of Digital Gold
Each month new Digital Gold is printed into existence and distributed to the digital societies which have the most legitimate and reputable transactions based on a complex algorithm which detects legitimate transactions between people in a digital society.
The amount of Digital Gold is designed to scale with the number and size of transactions in each digital society and the amount of tax the society collects.
However, since no system removes Digital Gold from a society's treasury if the number of transactions decline, Digital Gold should always lose some value as citizens move between societies.
Following the money
Once a digital society increases its transaction count and gets Digital Gold in return, it will likely spend this Digital Gold in exchange for goods and services within its own economy. This would cause inflation in their society if the number of goods and services in that society were not increasing at the same rate as the Digital Gold distributed to the society.
Maintaining balance
How does one ensure the amount of Digital Gold is in tandem with the goods and services?
Digital Gold will have an discoverable value based on the goods and services it buys throughout different economies. Likely measurable through a basket of commonly bought goods and services, creating a stable value for gold.
The value of the transactions in question in a society could be tracked in smaller societies based on the gold transacted, and in more significant societies based on the exchange rate between gold and silver, adding silver at a lesser weight to the gold that's transacted in the society.
Tracking vs privacy
In order to prevent wash trading to inflate a society's currency and to earn gold maliciously, signals from each transaction used through the cash registers are sent pseudo-anonymously to a centralized ledger. Each individual is anonymized but has the same UID for at least three months in order to prevent back-and-forth wash trading being seen as legitimate money movements.
Ideally speaking, the access to this ledger would be limited in review to only privileged individuals, like the Digital Senate.
Fraudulent transactions
Attempts to manipulate the distribution of Gold through false transactions can create liabilities for both the digital society in question and their nesting parent or sibling.
(1) It's considered classic fraud and can be reported to the Digital Senate by those societies making reports on the digital society or anyone else.
(2) Citizens are encouraged to report this behavior to the Digital Senate. If the Digital Senate receives three or more such reports, they have the right to get the required information from the digital society to decide which jurisdiction the digital society obtains most of its users from and to create a case in that digital society against the digital society on this question: “Does the digital society in question show clear efforts to manipulate the distribution of Digital Gold?”
A victory in such case will not only cover court costs via the digital society, but can create a demand to the digital society to hand over a reasonable sum to the Digital Senate for redistribution to all other effected societies.
The Digital Senate has full authority to demand documents and a process of discovery to determine the answer to the question.
A nesting parent or peer is liable for 20% of whatever is demanded of the digital society in question.