[European Basic Guilder Test] Guilder-Test de base européen

[Folaht]

I’m imagining that at some point the European Commision gets wind of this project and I’m deciding to mimic amateurishly how they would go about it. I’m coining the cryptocoin the ‹ European Basic Guilder ›.

European, as membership is for Eurozone Citizens only.
Basic, because it will provide Basic Income in the form of redistributed tax.
and Guilder because it sounds like Gold, thus worth a lot. (It’s not because I’m Dutch. Trust me, I swear. I would never want to sway the European Commission to name it after my country’s old currency in the case they would want to create a monetary union cryptocoin. And in case you are a Euro Commissioner reading this, thank you for taking your valuable time Sir. )

The benefits of this coin for the European states and Union is that a single cryptocoin can be assigned to, to have it’s taxes be collected in. The benefits of it’s citizens is that they can pay their taxes in cryptocoin.

We will have 5 layers:

1. President of the European CryptoMint (ECM)
2. Top EU officials
3. EU officials
4. EU citizens
5. non-EU citizens

This is going to be the setup ultimately. I’m not sure if this is feasible for this test right now, because what’s more important at the moment is finding people willing to test this.

Recommended setup for Duniter is:

• Olimex Lime2 or Raspberry Pi 3
  • YunoHost.

If I correctly remember how Duniter works, I can just assign a low maxstep and this setup would work.

? Currency name European Basic Guilder Test
? Start computation of a new block if none received since (seconds) 1200
? Universal Dividend %growth 0.000054218
? Universal Dividend period (in seconds) 86400
? First Universal Dividend (UD[0]) amount 100
? Delay between 2 certifications of a same issuer 0
? Maximum stock of valid certifications per member 300000
? Maximum age of a non-written certification 604800
? Certification validity duration 31536000
? Number of valid certifications required to be a member 3
? Maximum age of a non-written identity 604800
? Maximum age of a non-written membership 604800
? Percentage of sentries to be reached to match WoT distance rule 1
? Membership validity duration 31536000
? Number of blocks on which is computed median time 20
? The average time for writing 1 block (wished time) 960
? Frequency, in number of blocks, to wait for changing common difficulty 10
? Weight in percent for previous issuers 0.6666666666666666

Scope

Goal

1. A daily basic income for Eurozone citizens with eID only.
2. A cryptocurrency as a service to pay taxes with for EU citizens.
3. A standard cryptocurrency for European tax collection agencies.

Constraint

1. The cryptocurrency shall not constraint citizens to use other cryptocurrencies.

Currency

Membership via eID .
- DigiD (Netherlands)
- eHerkenning (Belgium)

• 2% inflation a year when there is 0% population growth.
• The president hands out a certificates to officials
  • The officials hand out certificates to themselves
• 100.000(x3) European citizens per official.
• EU citizens can not add newcomers to the Web of Trust.

Since this is a simple currency test, we don’t need to check anyone upon identity for now.

Logo

---

Le guilder. Ce n’est pas un golder. Ce n’est pas un guild’or.

[Galuel]

@Folaht

Basic, because it will provide Basic Income in the form of inflation.

No it provides UBI in the form of redistributed tax, like it is demonstrated in the RTM and clearly demonstated too in the Galilee module. People who realised the Galilee module don’t make this kind of mistakes so.

[idkwptc]

Well, when the derivative of the monetary mass evolution relative to time is proportional to itself, as it is with the RTM (assuming ~ constant lifespan which not a big assumption given historical data), that is called inflation.

That inflation is then redistributed equally between individual in the form of helicopter money called universal dividend.

And yes in a relative frame you could interpret it as a flat tax collected and then again equally redistributed. But you could see it as you want, it is what it is.

As to weather this monetary policy (because it is a policy in the sense of “social choice”) would be more efficient than the BCE’s one at maximizing some social welfare function, that is debatable.

In my opinion, monetary policies are not the biggest issue (when they are not as inegalitarian as the bicoin one for example). Taxation and redistribution are. And a flat tax on individual estate isn’t gonna cut it. Progressive taxation on revenues is needed and implemented in most modern countries (but how progressive, that is debatable as well). And how to allocate the collected amount, well it is a fair part of the state responsibility.

[DenisLaPlume]

@idkwptc

that is called inflation

You are reasoning in a system where the emission of money is centralized. In Libre Currencies, the decentralized creation of money invalidates this idea of inflation by introducing the relative scale.

@idkwptc

That inflation is then redistributed equally between individual

“inflation” is not “redistributed”. Individuals generate Universal Dividends. This is the cause for monetary growth in the absolute scale. It is also the reason for a stable money mass in the relative scale, in which the UD mathematically acts as a flat tax, although it isn’t one in practice. And this has strong implications as I’ll explain later.

@idkwptc

in the form of helicopter money

Again, you are reasoning in terms of “central banks” that distribute money. Shake off these paradigms from your shoulders and think out of the box. The Universal Dividend is generated by sovereign individuals, it is not distributed to slaves of a central banking system. And that makes quite a difference because from there it is the people who make the monetary policy.

@idkwptc

the BCE’s one at maximizing some social welfare function

You’ll have to explain to me how the ECB is currently “maximizing social welfare”… I’m sure other users of this forum are interested as well…

@idkwptc

Progressive taxation on revenues is needed and implemented in most modern countries

It is not implemented in practice, since the states allow tax evasion on a massive scale. So although progressive taxation is indeed needed, it is not implemented. This is actually one of the points of the RTM: avoid “collecting taxes” to redistribute wealth, since this collection can always be evaded in practice. On the other hand, the “erosion” of old currency units due to the constant emission of new units by the whole population cannot be evaded, so the redistribution is simple and effective in practice.

[idkwptc]

You are reasoning in a system where the emission of money is centralized. In Libre Currencies, the decentralized creation of money invalidates this idea of inflation by introducing the relative scale.

“inflation” is not “redistributed”. Individuals generate Universal Dividends. This is the cause for monetary growth in the absolute scale. It is also the reason for a stable money mass in the relative scale, in which the UD mathematically acts as a flat tax, although it isn’t one in practice. And this has strong implications as I’ll explain later.

Again, you are reasoning in terms of “central banks” that distribute money. Shake off these paradigms from your shoulders and think out of the box. The Universal Dividend is generated by sovereign individuals, it is not distributed to slaves of a central banking system. And that makes quite a difference because from there it is the people who make the monetary policy.

You could “interpret” the RTM mechanism in the referential and in the way you want. Yes, in the relative referential there is no inflation, but there is an equivalent “apparent” flat tax. You could imagine the UD as generated by sovereign individuals, but in the relative referential, that amount is (almost by definition) equal to the collected “apparent” tax. You could say this is not redistribution, but interpreting it this way is in my opinion a stance that is at least as valid as your interpretation.

You’ll have to explain to me how the ECB is currently “maximizing social welfare”… I’m sure other users of this forum are interested as well…

First thanks for correcting me on the acronym (I guess we’re all French here ^^). This is definitely a complex topic. How do you define social welfare ? You could defend the point that the role of the commercial banks is to manage debt in a responsible manner (hence the regulation), in order to allocate capital (with some of it created “out of thin air” if it stays within the boundaries fixed by the afore-mentioned regulation). Now is this capital allocated in order to maximize a “social welfare function” ? Let simplify by saying a banks will always seek maximum profit. First what is maximizing profit ? Are you maximizing short-term, long-term, end-of-universe-term ? You could say that if it is profitable, if people are ready to pay for it, then it should have a “high social welfare” value, isn’t it ? Anything is debatable, and it is not clear for me if the well-intended people on this forum are more right than ECB’s executives, bankers, politicians and other “orthodox” economists.

It is not implemented in practice, since the states allow tax evasion on a massive scale. So although progressive taxation is indeed needed, it is not implemented. This is actually one of the points of the RTM: avoid “collecting taxes” to redistribute wealth, since this collection can always be evaded in practice. On the other hand, the “erosion” of old currency units due to the constant emission of new units by the whole population cannot be evaded, so the redistribution is simple and effective in practice.

It would be extremely naive to believe that having the virtual/apparent taxation mechanism “build-in” the monetary system will prevent tax evasion (by the way it is a flat tax not a progressive one, although it applies on assets not revenues). You would have parallel economies, maybe we wouldn’t call them fiscal paradise but they would exist anyway. These financial battles are extremely hard to win (but I would agree that it is absolutely necessary to fight).

edit: typos…

[DenisLaPlume]

Although the DU “acts as a flat tax”, it isn’t one in reality. Just look at the inception of a currency: there is no tax to collect as there is no existing money yet. So the “flat tax” comparison may roughly depict some of the properties of the UD, but it is not the UD.

As for the ECB (and well I’ve studied the subject in English enough to know the acronyms now, it wasn’t that obvious at the start!), if you believe their policies protect you and your own wealth better than a Libre currency, you can go ahead and use their system, nobody forces you or anyone else to use a Libre currency. To sum up my own ideas about it, bankers seek their own interest first, just like politicians. So, out of ignorance, people may very well use their system and believe it is good for them, just like people continue to “elect” their leaders and believe those leaders are defending the people. Well it seems that on that topic, more and more people are waking up these days.

You are right that the only “tax” built in the system is only related to monetary assets. And yes, there is a possibility that some people will try to save their assets by exchanging their money for gold, real estate, other currencies, or anything else. This is why I point out in my book that communities that use libre currencies may come to choosing to abolish land/real estate ownership at some point, but it’s probably too early at this stage of the currency to talk about that. The main point being that the currency itself will not be a speculative one, and will retain its function of helping people to exchange their goods. Let other things be speculative assets. And let people decide if they really want to trade these speculative assets with their own libre money. Again, all this can be only vague hypothesis at this point.

[idkwptc]

Although the DU “acts as a flat tax”, it isn’t one in reality. Just look at the inception of a currency: there is no tax to collect as there is no existing money yet. So the “flat tax” comparison may roughly depict some of the properties of the UD, but it is not the UD.

Again this is an interpretation. Yes, there is no existing money yet, but the emission of new UD will increase quantitatively the monetary mass, relatively “applying” a virtual flat tax over the members of the monetary community.

To sum up my own ideas about it, bankers seek their own interest first, just like politicians.

We all do. I seek my interest, I may have some altruistic interests but these are mine none the less. Also, as an example, I know a small business owner/boss that also is also deputy mayor of his small village. It is quite incredible the kind of work hours he puts in to help the people around him. I may be young and naive but there are people with poeple’s interest at heart. Although you can argue he is not a professional politician, and I can’t name an altruistic banker. ^^

monetary assets

Right, I forgot monetary.

This is why I point out in my book that communities that use libre currencies may come to choosing to abolish land/real estate ownership at some point, but it’s probably too early at this stage of the currency to talk about that. The main point being that the currency itself will not be a speculative one, and will retain its function of helping people to exchange their goods.

I was raised into a (far) left view point. And I would defend a more aggressive and progressive taxation. But I have found people around me not that much interested in the mechanisms of the “globalist capitalism”. Although they do criticize it quite a lot. These mechanisms are extremely well founded and organized. And I very much doubt a system with such inertia could be stopped by a peaceful revolution (nor do I wish a blood bath). I do not think the monetary system is the critical piece, this political power has been removed from the people/states and given to expert, independent organization for a reason (namely because democracy as it is can be bad in some cases). If I had to give my views on how we could improve things, I would say I rather adhere to Piketty analysis. One need a global effort. Aggressive taxation of financial speculation, capital revenues, and legacy assets before it is too late. Communist/Marxist views are (dangerous) fairy tales in my eyes and would need serious adaptations (although I recognize and am very thankful for the work of the communists after WW2 in France and one need to defend the institutions like social security or the pension system).

[cgeek]

@idkwptc

Again this is an interpretation. Yes, there is no existing money yet, but the emission of new UD will increase quantitatively the monetary mass, relatively “applying” a virtual flat tax over the members of the monetary community.

DenisLaPlume gave you an important point: if it was possible to see it only as a tax, what about the very first moment of the currency? Who would you tax to redistribute to others if no units existed at all?

This invalidates the “tax view”, because before taxing you need to create. The libre currency’s topology is a permanent creation, this is its true form. It may look like a taxing system, but it is not. You have some effects with creation that you don’t have with taxes. I just gave one example of such effects.

[Galuel]

@cgeek

You have some effects with creation that you don’t have with taxes. I just gave one example of such effects.

I can add for instance with taxes you can’t tax what is hidden, by definition. Obviously with creation, the system continue to work without taking account of what is hidden and what is not.

All those points can be understood very well and very easily by those who realised the module Galilee.

[idkwptc]

Hello @cgeek, it’s been a while.

DenisLaPlume gave you an important point: if it was possible to see it only as a tax, what about the very first moment of the currency? Who would you tax to redistribute to others if no units existed at all?

You don’t tax, you only create money. So first the first individual receive the initial monetary mass as “gift”, and then the monetary mass will grow with the UD of the individual (if new individuals gets in they will not receive a gift, but only their UD). It is just you can interpret this creation mechanism as a virtual redistributed flat tax in the relative referential. It is only a question of “referential” (or “interpretation”). In the case where there is only one individual, the individual will get taxed and receive all this tax, so he will always own 1 monetary mass. I don’t have trouble understanding the math. What I do discuss in my posts above (and that is much more interesting in my view) is the political usefulness of such approach. TLDR: I’m not convinced.

[idkwptc]

I can add for instance with taxes you can’t tax what is hidden, by definition. Obviously with creation, the system continue to work without taking account of what is hidden and what is not.

What do you mean by hidden ? You mean you cannot hide it like in an asset declaration ? Indeed, I agree. But you can read my exchange with Denis above, we discuss the point of “tax evasion” through real estate or parallel currency in a libre currency.

[Inso]

The problem with tax evasion is that it is less money in the economic zone. The monetary mass is deflating, and when the money is back in the economic zone, it has much more buying power than before. It’s like what happened with greece : the country was in a huge lack of money due to the crisis. When debt-sellers came with fresh debt, they were able to buy everyting the country had (airports, ports…).

Whereas, in a libre currency, the monetary mass cannot deflate. If they evade by buying other currencies, it doesn’t change the amount of money in circulation, and the economic zone can still realize exchanges.

[cgeek]

@idkwptc

So first the first individual receive the initial monetary mass as “gift”

Which mass? You said we can see the system as a tax + redistribution. So how can you have a mass from a tax?

Just explain me, it is easy. For example in Duniter we have:

• t = 0, UD(t) = 10, N = 59, M(t+1) = N*UD(t) = 590 Ğ1
• t = 1, UD(t) = 10, N = 59, M(t+1) = N*UD(t) = 1180 Ğ1
• …

Give me the example with taxes. Then, if your example is consistant, I will accept that we can see libre currency as a tax system.

[DenisLaPlume]

@idkwptc

What I do discuss in my posts above (and that is much more interesting in my view) is the political usefulness of such approach.

Apart from everything that has been discussed so far in this thread, I believe you also underestimate the power of cognitive biases, and this is a very strong political and social point. I speak about them in my book and how the Libre money system is a very powerful solution that also takes them into account.

Humans are hard-wired to hate losing things - anything. Let me take away anything from you, even if it is for good reasons, and your subconscious is already crying “don’t do that to me!”. But if I give you constantly something, even if it is actually detrimental to you and “equivalent to a flat tax”, you won’t be that unhappy, you might actually be quite happy about it, since you “receive” something.

So “flat tax” vs “universal dividend” are radically different messages to your subconscious mind. I hope this can also help you understand the “political and social usefulness” of the Libre currency approach, besides all other technical advantages.
Another social way of seeing it is that “flat tax” is “pointing out the inequalities” (which always triggers jealousy and hate), while the “universal dividend” points out “that we all have the same rights as human beings” (which tends to develop empathy and compassion).

[idkwptc]

I understand the argument the argument. And this was also mentioned in the “pay-as-you-earn” tax (impot a la source) debate in France. But I am not discussing the psychological benefits, but more interested in the technical ones.

[idkwptc]

@cgeek

Which mass? You said we can see the system as a tax + redistribution. So how can you have a mass from a tax?

The first mass cannot be interpreted as a tax. It is only after this first step that we can think of the evolution of the system as tax + redistribution. I am sorry, I currently have some technical difficulties (no mouse) and cannot use libre calc.
Imagine a working implementation of a libre currency where the set of individuals is fixed (no newborn, no death). Lets admit they all possess a various fraction of the total monetary mass (the sum of these fraction is equal to 1). Then imagine again they stopped any monetary exchange. Would you agree their fraction of monetary mass will converge towards the uniform repartition (1/nb_of_individuals) ? Then it is the proof there must exist a “taxing operator” that is smoothing the monetary asset repartition. And the equations tells you this operator can be interpreted by an equally redistributed flat tax in the relative referential.
Sorry I should really provide a graph, I will try to get a mouse tomorrow.

[Galuel]

@idkwptc

Imagine a working implementation of a libre currency where the set of individuals is fixed (no newborn, no death)

If there is eternal life, why using a money ? You don’t need, you live forever… So it’s obviously unnecessary…

[idkwptc]

If there is eternal life, why using a money ? You don’t need, you live forever… So it’s obviously unnecessary…

I disagree. You could enjoy pleasures in your eternity other eternal being wouldn’t have the means to pay for. And don’t be a troll, this is a theoretical model with the use of hypothesis to simplify the dynamic.

[Galuel]

@idkwptc

You could enjoy pleasures in your eternity other eternal being wouldn’t have the means to pay for

In Eternity you have all the time to build a paradise, and then live in it for an eternity, without any need of money.

[cgeek]

@idkwptc

The first mass cannot be interpreted as a tax.

Perfect! We’ve got observation (A).

But indeed, locally, under specific conditions I can see « an equivalence with a tax system » (B).

However, shall we infer the general rule from a local observation? I don’t think so, notably here since observation (A) is inconsistant with (B). So (B) isn’t a general rule here.

We are even able to also define (C) « the money share per member always tend toward 1/c UD », which is not compliant with (B) if the money can be hidden, protected from a tax. Yet, (C) is always observed in a libre currency.

And we could probably find (D), (E), (F), (Ğ) that would be inconsistant with (B). But since we already have 2 counter-examples, let’s just say that a libre currency would be consistant with (B) is wrong.