Saturday, January 7, 2017

Local currencies are tradeable

Under the assumptions, all virtual currencies come with a currency risk profile, to a known precision. Hence, at low transaction costs, they can be equivalently traded.

So, the global tax collector can collect a percentage from any of a number of virtual coins, and convert them or leave them on account. Local currencies are relevant when 60% of the transactions are within the city, and another 25% regional.  Then, just use the local coin, the city can tax in the local coin and trade it for payments with higher authorities.

Then residents themselves can trade the local coin with global taxers directly, getting what ever tax relief needed.  But yhe local can run his accounts to match local transactions, buying tax relief on an ad hoc basis.

Cash, in this model, is universal, it is a secure computation done in the smarty card.  Everything else is accounting for packages shipped and held. This follows all the way down to the neighborhood street, where bicyclers can and do standardize on the basket size.  When a hgroup of yen do this, and the local shopkeepers agree, all we have done is make a make credit card company  based on our personal credit and habit.  It can be cleared at anytime by exchanging tax relief with the merchants.

But, it signals up the chain that there is efficient consumption goods delivered, merchants sink to it, remove inventory volatility.

Consider if pedestrians did this independently everywhere.

All the local currencies would be equivalent, with a shift in units only. They would already be mostly price connected by the simple fact that bikes and pedestrians always use nearly the same basket.  The corner store is almost everywhere at maximum entropy anyway. You can;t do better than a quick bike ride to get milk.  It is almost a clock, most of distribution is tuned to the pedestrian habit when shopping.

From the consumer's viewpoint:
The typical pedestrian goes through life spending red and green, always trying t make amber.  Where is the distinction between LA and SF? The  city hall in each town down loaded the oit, set local tax coin and hit go.  The exact same code, the exact same  pit boss rule, say set by Sacramento, each town coin must be 5%  in bit error variation.  The only concern of the typical pedestrian is to get through inventory collection in amber and hope LA is about as efficient as SF.
I emphasize typical, because we want the gamers in here, trying to run that last mile with efficiency, they run in red when testing..

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