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Balance sheet operations of a cross-border settlement process with the use of XRP

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Posted (edited)

I like the Debitistic concept that economic value (a generally known price) only exists if you need to have something at a certain point in time in order to prevent a penalty.

Thats why I think without (generally known!) taxes (and their due date) you cannot have (generally known) prices - there would be no need for it.

Without taxes won't be even any need for economic activity (as historically proven).

Edited by tar

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Posted (edited)
2 hours ago, tar said:

I like the Debitistic concept that economic value (a generally known price) only exists if you need to have something at a certain point in time in order to prevent a penalty.

Thats why I think without (generally known!) taxes (and their due date) you cannot have (generally known) prices - there would be no need for it.

Without taxes won't be even any need for economic activity (as historically proven).

I think this makes sense within my framework... a back stop for "opportunity cost".. at a specific time, creating urgency, a dead line, and a specific segment of time from which the Opportunity Cost should be measured.

You want to match time segments if you want to compare apples to apples.

Edited by KarmaCoverage

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Posted (edited)
2 hours ago, Wandering_Dog said:

The sooner you abandon the concept of value the better off you will be

If economics as a study does not try to explain how and why value flows, flow... then what is the point?

To me the science is all about better understanding how value flows throughout humanity, so we can try to improve flow rates and wellbeing.

If "value" should be abandoned, what should be adopted? What is the "base unit" of economic activity?

Edited by KarmaCoverage

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10 hours ago, KarmaCoverage said:

If economics as a study does not try to explain how and why value flows, flow... then what is the point?

Many economists study flows exclusively. 

10 hours ago, KarmaCoverage said:

If "value" should be abandoned, what should be adopted? What is the "base unit" of economic activity?

Economics isn't physics. Why should there be such a thing as a "base unit of economic activity?". Why do you need smaller things to sum to larger things in order to feel better about an explanation? Why do you bother with theory at all--is it not better to look at the data we have rather than arm-chair philosophizing? Let value go. And the next time someone starts talking to you about value, think about what it is they are actually trying to say--can it be said better another way without using the word value, and does that change the meaning of their statements?      

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I wanted to make some corrections on this thread from a contractual standpoint but I think there's a deeper issue to address.

The discussion relating to liabilities, IOUs, contracts and agreements, of how (and equally importantly, when) they come into existence and are settled on and off-ledger comprises some difficult topics and the errors are frequent enough through this thread that we should think carefully about making declarative statements of "fact" about some of these principles.

For example, the way liability (in the contractual and legal sense) arises and is apportioned to (yes, to) the ledger and respective parties (counter-parties, Ripple itself (as the developer), the nodes and exchanges) is not intuitive and not yet settled as a matter of law. If it's not settled at law, I don't see how any of us is able to debate in a sensible fashion regarding balance sheet or other accounting operations in a DLT context.

Over the last few months, I've come to the conclusion that DLT presents a series of intellectual challenges for law, politics, finance and accounting that have yet to be raised, let alone solved (in the same way Newtonian physics had to cede ground to, and co-exist with, the Theory of Relativity and quantum mechanics).

 

 

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10 hours ago, Wandering_Dog said:

Many economists study flows exclusively. 

Economics isn't physics.

Why should there be such a thing as a "base unit of economic activity?".

Why do you need smaller things to sum to larger things in order to feel better about an explanation?

Why do you bother with theory at all--is it not better to look at the data we have rather than arm-chair philosophizing?

Let value go. And the next time someone starts talking to you about value, think about what it is they are actually trying to say--can it be said better another way without using the word value, and does that change the meaning of their statements?      

1. This how I see the conceptual framework of Complexity and Networks being applied to Economics. 

2. I think Economics as a study will grow with by embracing some Physics thinking, specifically Complexity. 

What do you think of Cesar Hidalgo?

https://atlas.media.mit.edu/en/

3. If you want to study flows and the network of connections (orderbooks, loans, trustlines, payments, etc) then you need to know what is the base unit which is flowing.

4. I think theories help one gain perspective.  I'm all in favor of academics and data based understandings.

I often use the word "value" to abstract away inferences which accompany other words like, money, price, cost, etc 

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Posted (edited)

@KarmaCoverage

I assume that you are assuming that we all have some utility values lying around or that we create (as Hidalgo mentioned) and then you are studying how they are exchanged and flow through an economic network that you compare with data flowing through a digital network.

First of all, utility values play only a marginaly role in the economy. In fact, you can completely reject the idea that we would exchange utility values. Put it in the files - best of all: in the trash can.

Any "economy value" is a price that is a temporary relation of an asset to the used currency and therefore to governmental taxes. Utility, on the other hand, cannot be nominally measured. It only has an effect on the price (which again: is not measureable) - among many other factors.

The most important factor for price determination is the necessity of its availability at the due date and if something is not needed (anymore) at the due date (because it has been replaced by something else, for example), this will be strongly reflected in its price valuation.

Now, you still could try to measure the flow of assets through the economic network but:

Assets are nominally measured rights, i.e.

  1. property rights that constantly fluctuate in their price valuation and
  2. claims that, although they are nominally fixed, have an uncertainty of their redeemability at their due date

So, how could a flow model consider or even predict their future valuations without either using a very short time frame or making unrealistic assumptions!?

Edited by tar

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Posted (edited)
1 hour ago, tar said:

I assume that you are assuming that we all have some utility values lying around or are that we create (as Hidalgo mentioned) and then you are studying how they are exchanged and flow through an economic network that you compare with data flowing through a digital network.

Yeah pretty much.

I think that utility value creation/destruction is driven by a combination of logical (food water) and emotional (i prefer x over y) factors that originate from the individual agent scale, and accumulate as an "emergent property" at the collective scale.

I see the stock market as a crowdsourced pricing mechanism, an emergent price point from the collective bid/ask orders unfolding over segments of time.

1 hour ago, tar said:

Any "economy value" is a price that is a temporary relation of an asset to the used currency and therefore to governmental taxes. Utility, on the other hand, cannot be nominally measured. It only has an effect on the price (which again: is not measureable) - among many other factors.

"Temporary relation".. the tool used for this function is the Orderbook, which I imagine like a scale, on which you can place 2 denominations of value and garner a ratio (trustline quality can also do this ratio function,  but at a fixed ratio).

I like your point about the 2nd degree utility of paying taxes and that having a hard time frame, which I'd view as a natural and convenient annual time segment basis.

1 hour ago, tar said:

The most important factor for price determination is the necessity of its availability at the due date and if something is not needed (anymore) at the due date (because it has been replaced by something else, for example), this will be strongly reflected in its price valuation.

The most important thing in price determination are the factors and connections that the orderbook (upon which price is determined) has.

The Orderbook is a "connection type", or an edge in a network of value denomination nodes. Trustlines and their quality are also connections or edges.

XRP, as a bridge asset, post synthetic Orderbooks, is a super hub node as a demonstration of value. Making it the most connected and most common denominator. 

The due date is an important factor for identifying which segment of time's value is being discussed or measured or valued. This is why your tax point is key.

1 hour ago, tar said:

Now, you still could try to measure the flow of assets through the economic network but:

Assets are nominally measured rights, i.e.

  1. property rights that constantly fluctuate in their price valuation and
  2. claims that, although they are nominally fixed, have an uncertainty of their redeemability at their due date

So, how could a flow model consider or even predict their future valuations without either using a very short time frame or making unrealistic assumptions!?

I'd argue that they are only "nominally measured" as a convenience for the legal profession. You have to put a number on the contract.

I'd view your two bullet points as 2 different layers in the "hierarchy of money" in the way that that flow focused economist guy you linked me describes. #1 being closer to the top of the pyramid.

I dont think like @Pablo said, that these ideas are fully developed yet. I do think we are observing value flows moving onto new accounting tools, which enable a new level of transparency and observable connections. 

As a result I think we will be better enabled to observe and model out these connections and their characteristics, chief among them would be flow rates and directionality. 

Once we have systems that can do this, and monitor it in real time, then there are formulas that I know exist, but have unfortunately not had a need to go learn, which can be applied to that data set which may be useful as predictive analytics.  I think we are a good 10-15 years away from this actually existing. 

Edited by KarmaCoverage

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Posted (edited)
2 hours ago, KarmaCoverage said:

1. This how I see the conceptual framework of Complexity and Networks being applied to Economics. 

2. I think Economics as a study will grow with by embracing some Physics thinking, specifically Complexity. 

What do you think of Cesar Hidalgo?

https://atlas.media.mit.edu/en/

3. If you want to study flows and the network of connections (orderbooks, loans, trustlines, payments, etc) then you need to know what is the base unit which is flowing.

4. I think theories help one gain perspective.  I'm all in favor of academics and data based understandings.

I often use the word "value" to abstract away inferences which accompany other words like, money, price, cost, etc 

I got about 2 minutes in. If that's your thing, more power to you. I'm not sure I'd agree with humans being "unnatural", considering that an apple computer also comes from a natural process--called humans :sarcastic:. Furthermore, he discusses "selfishness", a trope of Neoclassical econ, which is false. Human beings are demonstrably many things, and the attribute we call "selfish" does not typically arise during behavioural experiments--equity and revenge are the most common behaviours seen in economic experiments. People seek equality and seek to punish what they perceive as "cheating" given some set of actions, outcomes, and payoffs.   

IMO, this guy represents the exact opposite direction economics needs to go. It's just Neoclassical econ on steroids--attempting to confuse people by making it "complicated", and calling it complex. Complex just means non-linear! The equations are non-linear! There are multiple equilibriums and most are unstable! That's it! :wizard:

"crystallizing imagination"? Jesus, someone please shoot me. :wacko3: No offense intended, these things get me riled up, but if its your thing let's not let it prevent us from enjoying beer :drinks:

Edited by Wandering_Dog

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Pressed STOP at 43 seconds.  ("I love asking people what is the difference between a grocery apple and an Apple phone" --- bang, you're dead to me.

(Also hesitated - largely due to hair style/length - for at least 3-4 seconds - before pressing play, in the first place.)

 

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2 hours ago, tar said:

The most important factor for price determination is the necessity of its availability at the due date and if something is not needed (anymore) at the due date (because it has been replaced by something else, for example), this will be strongly reflected in its price valuation.

And this naturally points out the importance of banks, which can create more of a settlement asset from nothing

 

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9 minutes ago, Wandering_Dog said:

And this naturally points out the importance of banks, which can create more of a settlement asset from nothing.

Not nothing - from their and their debtors assets/wealth (collateral). :victory:

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