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MajorTomXRP

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    MajorTomXRP reacted to BobWay in Historical: [GDW] Introducing Goodwill   
    This is an old post from the Ripple forum, captured from Google's cache. I copied it here as part of my answer to this question from @goldstar111.
    EDIT: The original forum is back up. Here is a link to the original version with all links intact. Thanks @mDuo13!
    @Sukrim you are absolutely right, not having the old forum running is a pain in the ass. There are so many broken links in the google cash that I can't fix them all. And it is hard to find this page in the wayback machine at archive.org.
    @JoelKatz @mDuo13 Any chance at getting the forum spun up, so I can at least make a historical (site sucker) copy that is easy to search and link to?
    ----
    by Red » Fri May 31, 2013 3:24 pm 
    [GDW] Introducing Goodwill

    I'm pleased to introduce the first* distributively issued Ripple virtual currency, Goodwill. I am NOT issuing GDW. We all are. Goodwill is a virtual currency based on the Local Exchange Trading System (LETS) model.

    What is LETS?
    The goal of a LETS system is to encourage and facilitate trade between people who don't have a shared currency. LETS currencies are designed purely for facilitating trade. They are NOT a way to store value over long periods. As such, to store accrued GDW over time, you should convert it to another currency (USD, EUR, BTC, etc.) more suitable for that use.

    Why do I want to use GDW?
    Think of Goodwill like a global inter-forum tipping system. You use it to reward others for having delivered something of value to you. Initially this will probably mean rewarding others for posts and articles that you find personally valuable. Beyond that, the reasons you bestow Goodwill on others is purely up to you.

    Isn't Goodwill gameable?
    Yes, it is. Traditionally, LETS systems are used by small communities of people who transact face to face. This makes handling know-your-customer rules trivial. But this is the internet. That makes strong KYC associations a pain-in-the-a** to administer. As such, I'm going to declare simple rules and rely on people to use the system honestly. Please use the system with the knowledge that some people will be d***heads.

    How do I use GDW?
    1) Trust the address rGDWKWni6exeneJdNbEZ3nVX3Rrw5VG1p1 for 100 GDW. Check/enable the "Allow Rippling" option as GDW is a peer-to-peer currency (this option will only effect you when/if you extend another GDW trust line).
    2) Post your Ripple address in this thread. (That is how we will handle KYC.)
    3) rGDWKWni6exeneJdNbEZ3nVX3Rrw5VG1p1 will TRUST YOU for exactly 100 GDW. No more. No less.[edit: The amount of trust is now variable, initially starting small to discourage abuse. --dchapes]
    4) Send GDW to anyone who has joined the Goodwill network. (1-3 above).
    5) NEVER send GDW to rGDWKWni6exeneJdNbEZ3nVX3Rrw5VG1p1. This address always maintains a ZERO GDW balance. It is NOT the issuer of GDW. It is merely a shared bookkeeper for everyone else.

    EDIT: Everyone can check everyone else's INVERSE balance by viewing the Goodwill Bookkeeper in the live network graph. Please note that if Red has a NEGATIVE balance from the perspective of his own account. Then the Bookkeeper has/shows a POSITIVE balance from his perspective. (Positive means Red owes the network).

    EDIT: There's now a GDW balance summary list hidden away as a reply. This shows positive rather than inverse balances and accounts for personal trust lines and aliased/multiple accounts. -dchapes

    [old]I'll cover the 12.5 XRP trust line reserve cost for the first dozen or so people who connect. After that rGDWKWni6exeneJdNbEZ3nVX3Rrw5VG1p1 will need XRP donations to cover new trust line reserves. 

    6) So if possible, please send 12.5 XRP to rGDWKWni6exeneJdNbEZ3nVX3Rrw5VG1p1. 
    [Edit: the trust line reserves are now only 5 XRP each and payment is not required. The Goodwill account has extra XRP from some larger past donations. In fact, if you sent 12.5 XRP or more previously and would like a refund (minus 5 XRP) just ask. Or if you'd like to exit GDW and close your turst lines and would like a full XRP refund, just ask. I don't think the Goodwill account has any other use for the XRP. --dchapes]

    How much is GDW worth?
    LETS systems work best if everyone has a common benchmark to use when deciding how much Goodwill to bestow in a given circumstance. As such, I unilaterally declare that 1 GDW should be perceived as equivalent to 1 USD in value. 

    Doesn't that mean you are giving $100 of credit to every forum member?
    Nope. We are all agreeing to trust each other to use GDW honestly. If we all do then GDW will be perceived as equivalent in value to USD. If we do not. GDW will seen as a mere "token" of appreciation. I make NO CLAIMS that anyone ever will offer to exchange GDW for USD. Your perceived value of GDW is purely up to you.

    Why USD and not EUR, YEN, BTC, XRP, etc? 
    Well, quite frankly I'm a Texan. That makes me handicapped when it comes to currencies other than USD. If some tells me something is worth 12 Euros or 500 Pesos or 65 Yen I generally have to bring up Google to do the conversion. Conversely, every non-American I've ever met on the internet, seems to be able to magically convert between USD and their native currency in their head. So, if you fall into that group, take pity on my handicap. 

    Aren't you a single point of failure for GDW?
    Yes, I am. I would like to share the responsibility of administering the Goodwill hub. If you are interested in helping please PM me.

    Edit: dchapes now has shared responsibility and access to the Goodwill account.

    *GDW is probably not really first. But, I want it to be the first distributively issued currency that most Ripple users have actually heard of.
    -----------------------
    NEW ADDITION:

    If you'd like to promote the Goodwill system and announce your participation in it, you could add the following to your forum signature.
    Code: Select all
    Join the Goodwill system.  If you like my posts, show a little Goodwill!
    Make sure you add your personal Ripple address and forum nickname.
     
    Jarunik wrote:What happens if someone reaches 100 GDW given away without receiving any?
    I think he can not send any more out through the Goodwill Bookkeeper. Right?
    The same thing should happen if you receive 100 GDW. Does it?

    How fortuitous! I was looking for an excuse to write a post explaining the LETS philosophy.

    The real value of a LETS system is not the ability to see other's Goodwill "Balance". In fact, in a LETS type system it is normal for the core members (peers) of a community to keep ZERO balances. What peers take from the community is offset by what they give back to the community.

    The real value is in being able to see another party's transaction history and "trading volume" before you personally decide to interact with them. In a pre-technology world, it was a way of making the "common wisdom" of a community known to newcomers. Peers learn who fellow peers are through a long risky trial and error experience. Barnum may be a drunk who never repays his debts. Experienced community members know this. Newcomers do not. That's why Barnum thinks "there's as sucker born every minute."

    It is conceivable that someone receives his/her 100 GDW limit without having received anything of value from the community worth rewarding. It becomes incumbent on this person to decide on something of value he wishes to receive that is worth rewarding in GDW. That allows other peers of the community to "clear" their debts to him.

    Likewise, you can hit your -100 GDW limit for two reasons. 1) your feel you are taking "value" from the community but the community feels you are giving nothing of "value" back. or 2) you are being over generous in your GDW compensation (compared to community standards). The limit (plus transparency of transactions) encourages a community of peers to reach a common consensus on how to evaluate different goods/services/contributions.

    So, if everyone acts as proper peers. Hitting the limits normally won't happen. If it does clearing the debt is easy by swapping cash or something else of value between honest trading partners.

    If people leach or leave the system taking positive or negative balances. That can stay on the record forever. The bookkeeper can look at the transaction log and issue offsetting transactions to clear an honest party's loss or inability to repay.

    Like I said on BitCoinTalk, a LETS system is money for hippies without money! You have to plan for... well... flexibility!  But it sure feels good to receive GDW! It feels even better to pass it on to others who deserve it! So call me a hippie!
    Last edited by Red on Sat Jun 01, 2013 3:29 pm, edited 6 times in total.
    Join the Goodwill system. If you like my posts, show a little Goodwill!
    Red
     
    Posts: 582
    Joined: Sat Apr 27, 2013 11:54 pm
     
  2. Like
    MajorTomXRP got a reaction from whitefanng in Answer chat: Wen Moon?   
    Hi Bob, so is this mechanism in action- has it been deployed yet? We are not seeing any pressure to the upside in action.
    If not what are they waiting on? Is there some threshold that needs to be met for full Xrapid deployment?
  3. Like
    MajorTomXRP got a reaction from eromyr in Answer chat: Wen Moon?   
    Hi Bob, so is this mechanism in action- has it been deployed yet? We are not seeing any pressure to the upside in action.
    If not what are they waiting on? Is there some threshold that needs to be met for full Xrapid deployment?
  4. Like
    MajorTomXRP got a reaction from Pete650 in Answer chat: Wen Moon?   
    Hi Bob, so is this mechanism in action- has it been deployed yet? We are not seeing any pressure to the upside in action.
    If not what are they waiting on? Is there some threshold that needs to be met for full Xrapid deployment?
  5. Like
    MajorTomXRP got a reaction from XRPboi in Answer chat: Wen Moon?   
    Hi Bob, so is this mechanism in action- has it been deployed yet? We are not seeing any pressure to the upside in action.
    If not what are they waiting on? Is there some threshold that needs to be met for full Xrapid deployment?
  6. Like
    MajorTomXRP got a reaction from ClosedMyEyes in Answer chat: Wen Moon?   
    Hi Bob, so is this mechanism in action- has it been deployed yet? We are not seeing any pressure to the upside in action.
    If not what are they waiting on? Is there some threshold that needs to be met for full Xrapid deployment?
  7. Like
    MajorTomXRP got a reaction from Tako in Answer chat: Wen Moon?   
    Hi Bob, so is this mechanism in action- has it been deployed yet? We are not seeing any pressure to the upside in action.
    If not what are they waiting on? Is there some threshold that needs to be met for full Xrapid deployment?
  8. Like
    MajorTomXRP got a reaction from CSChris in Answer chat: Wen Moon?   
    Hi Bob, so is this mechanism in action- has it been deployed yet? We are not seeing any pressure to the upside in action.
    If not what are they waiting on? Is there some threshold that needs to be met for full Xrapid deployment?
  9. Like
    MajorTomXRP got a reaction from ColonelWhite in Answer chat: Wen Moon?   
    Hi Bob, so is this mechanism in action- has it been deployed yet? We are not seeing any pressure to the upside in action.
    If not what are they waiting on? Is there some threshold that needs to be met for full Xrapid deployment?
  10. Thanks
    MajorTomXRP reacted to BobWay in Answer: Wen Moon?   
    So loaning XRP or deferred purchase or probably several other analogous process like this might work (at least temporarily), they all suffer from some annoying characteristics. I'm going to call them "outside proposals" because I heard proposals like these from non-Ripplers all the time.
    Most seems to (or in many outside proposals do) require favoritism on Ripple's part. Many outside proposals attempt to enforce price stability rather than assuring the narrow spreads necessary to reduce bridge payment transaction cost. Many outside proposals attempt to subsidize the proposer's risk. Most outside proposals I heard tended to be potentially very inefficient in their deployment of Ripple's XRP. 1. Perceived or real favoritism invites vicious criticism from the non favored individual. Paraphrasing you above, "Why to they get "free" XRP to start a profitable market making business but I don't?" This is likely followed by and endless parade of comparison complaints like, "Those guys got piles of XRP from Ripple and look how badly they did at (...). Personally, those sort of proposals from outsiders annoyed me as well, so I was alway quick to push back on them. But it took a really long time before I could propose a non-biased mechanism that served the necessary goals. Some forex market have what are called "specialists". These are market makers that special preference within the trading engine in exchange for guarantee liquidity. Of course that annoys the non-specialists there as well.
    2. Nobody wants price stability. Think ideas like large buy and sell "walls" with a narrow spread. XRP's price must be able to increase as its necessity in supporting bridge payments increases. But at any given instant, what is the right price that narrow spreads should be based upon? Well of course no one knows.
    3. I've heard proposals that went, "I'll make narrow spreads and if I make money doing it, I get to keep the profit. But if the market volatility moves against us and we lose money, Ripple should cover our losses (by selling or giving XRP). These were especially annoying to me.
    4. If you subsidize the wrong price in any market anywhere in the world, you invite arbitrage. It doesn't matter how high a buy or sell wall you put up. If you put it at the wrong price someone absolutely WILL take all your money. Subsidizing arbitragers is equivalent to giving away free XRP to random strangers.
    ----
    The mechanism that we patented:
    Is completely non-biased. It doesn't care which trader facilitated a payment. It works without enforcing or attempting to enforce price stability. Each market follows standard supply/demand dynamics. It only subsidizes risk on the trader supplied funds that actually facilitate bridge payments. Is scrupulously efficient in deploying XRP. This is what prevents it from putting a downward pressure on price.
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