Relativity In Money

[A.steve]

In my example i was specifically dealing with something like information that is held in a digital form such as words of the alphabet,

If you'd read my earlier post on this thread, you'd realise that I'd argue that you're talking about data and not information.

I'm not sure that questions about duplicating information are even meaningful. If there is a meaning, I strongly suspect, it isn't what you assume.

[BubbleBlower]

sure it is.

the actual information being sent degrades during transmission.

the error correction counters this.

the channel could only be called error proof if the error correction couldn't possibly fail.

unfortunately that just isn't true.

Ok, fair point. But you are being quite precise with language. So I must correct you where you have not been equally precise. The actual information being sent *can* degrade during transmission. If error correction is a probabilistic process, then it is not certain that the information will degrade, in the same way that it is not certain it will be transmitted correctly. While we know that the probability of error free transmission is neither 0 nor 1, we can choose a probability arbitrarily close to 1. So while in a purely technical sense the channel is not error proof, in a more pragmatic sense it is error free.

[A.steve]

That's the exact stuff. At the moment it is a very new research topic, so people are still deciding what it means. I went to a summer school that the Danish guys organised. A 2-minute summary would be as follows: classical cryptographic models are based on worst-case assumptions, that an adversary can be as pathological as possible in breaking a protocol. But in many real world situations every action by the adversary to exploit the protocol has an inherent cost. Can we engineer cryptographic protocols so that the cost for the adversary outweighs any utility in discovering the hidden information?

Quite interesting stuff, but there are few references as yet as it is too new to have resulted in many publications.

Hmmm - that makes it sound less interesting... prior to reading that it seemed off-the-scale-fascinating. I seem to be being very dictatorial about my beliefs today - but I don't see a reason to stop yet... I don't believe that developing 'just good enough' cryptography is a good idea. Conversely, there are a lot of problems that are equivalent to cryptographic protocols, but were not designed as such and are not intended to be secure - but happen to appear so. In this context, a robust theory of cryptographic analysis could be very useful indeed - cryptography is a dual to many other interesting problems.

As a cheeky aside, did your path to Denmark bring you across any good material (at that level) about secure hashes? (Obviously, I'm familiar with the common ones currently in use - I'm thinking more along the lines of establishing how secure hash functions are and how to identify attack vectors for given hash implementations...)

[aliveandkicking]

sure it is.

the actual information being sent degrades during transmission.

the error correction counters this.

the channel could only be called error proof if the error correction couldn't possibly fail.

unfortunately that just isn't true.

You are looking at it incorrectly. Information that degrades is rejected.

For example imagine you are facing a guy who has a big 0 on a board and a big 1 on a board. He puts up a 1 board. And you then put up a 1 board. If the sees your 1 board he takes down his 1 board.

If you put up the 0 board he keeps transmitting his 1.

Even if it a snow storm of in desert heat if he sees your board and knows it is not the other board he puts up the next board.

Such a system purifies the poorly seen signal.

For example at night his 1 board stays there all night until he sees your 1 board in the morning

Edited May 25, 2009 by aliveandkicking

[Injin]

that's why you charge interest on every transaction you do so that ultimately you can frontload and offset the possible losses from death etc.

I understand why it is done, the thinking behind it.

What I am seeking here is to work out whether it actually makes any sense and works.

As it's obvious that charging interest makes repayment less likely I can't quite join up the reason given for charging interest with it's effect.

[BubbleBlower]

Hmmm - that makes it sound less interesting... prior to reading that it seemed off-the-scale-fascinating. I seem to be being very dictatorial about my beliefs today - but I don't see a reason to stop yet... I don't believe that developing 'just good enough' cryptography is a good idea. Conversely, there are a lot of problems that are equivalent to cryptographic protocols, but were not designed as such and are not intended to be secure - but happen to appear so. In this context, a robust theory of cryptographic analysis could be very useful indeed - cryptography is a dual to many other interesting problems.

This falls into low-cost cryptography. So rather than looking at systems that are good enough to secure your bank password, it looks at systems good enough to secure a wifi password. Things that are not mission critical, where we may get a dramatic increase in performance from rational assumptions.

As a cheeky aside, did your path to Denmark bring you across any good material (at that level) about secure hashes? (Obviously, I'm familiar with the common ones currently in use - I'm thinking more along the lines of establishing how secure hash functions are and how to identify attack vectors for given hash implementations...)

Hmmm. Strange time to ask. I don't think there are any secure hash functions at the moment. The SHA3 contest has a certain rush associated with it at the moment because the community believes that the common functions (MD5 and SHA-1) are weak, and will break soon. I haven't seen any good recent results on attacking hash functions, the Herding Attacks were the last thing I saw but that was a couple of years ago. Might be useful for you.

[aliveandkicking]

I understand why it is done, the thinking behind it.

What I am seeking here is to work out whether it actually makes any sense and works.

As it's obvious that charging interest makes repayment less likely I can't quite join up the reason given for charging interest with it's effect.

You seem to have this idea that as borrower you are always equal to me as lender. You are if you keep to your agreement but you are less equal if you default. We had an agreed trade. Because we had a deal i can get people to assist me to recover my property which you are refusing to return to me.

All you can do is get people to assist you in your criminal behaviour where you unilaterally decide to break the agreement.

On balance i can win more than you can because i have what humans call right or integrity or truth on my side in the form of an agreed contract.

You seem to think you can decide the rules of the trade:

1. You think you can demand how repayment is to be made regardless of the contractual terms

2. You seem to think that paying interest gives you more reason to not pay

3. You seem to think that your death means that your relatives need not pay from your wealth that you leave behind

The theme here is that you cant see that you lack power and that a trade is performed by two people where iether person enters into the deal as they wish to but no one can exit as they wish to without consequences to them.

The water example is a classic example.

You have no power at all to force me to trade as you want me to trade so that i am obliged to drink your water supplies to me.

[A.steve]

This falls into low-cost cryptography. So rather than looking at systems that are good enough to secure your bank password, it looks at systems good enough to secure a wifi password. Things that are not mission critical, where we may get a dramatic increase in performance from rational assumptions.

My objection here is that it is desperately cheap to deploy implementation of cryptographic security - there's no point in using something less secure... essentially because certainty about communications avoids shifting the burden of dealing with unexpected data to other components. Frankly, I want better security than my bank employs for online banking to secure my wi-fi. In fact, that's exactly what I have.

Hmmm. Strange time to ask. I don't think there are any secure hash functions at the moment. The SHA3 contest has a certain rush associated with it at the moment because the community believes that the common functions (MD5 and SHA-1) are weak, and will break soon. I haven't seen any good recent results on attacking hash functions, the Herding Attacks were the last thing I saw but that was a couple of years ago. Might be useful for you.

I was aware of that... On one hand, I know all about secure hashes... on another, I know rather less than I'd like. The question I'm asking, essentially, is this: how hard can I lean on a secure hash without it becoming the weak link? How can I establish how hard it would be to go from a hash to reconstruct a short message that created it? Are there features of hash algorithms which suggest that they're more resilient to certain forms of attack than others - for example... in some circumstances it wouldn't matter if the message being hashed could be found using the hash of it - in others, it would be a catastrophe. It feels like the sort of thing there should be a good definitive reference work about... but I can't find one.

Anyhow - sorry folks - wildly off topic.

Edited May 25, 2009 by A.steve

[Injin]

You seem to have this idea that as borrower you are always equal to me as lender. You are if you keep to your agreement but you are less equal if you default. We had an agreed trade. Because we had a deal i can get people to assist me to recover my property which you are refusing to return to me.

I am self evidently superior to you as borrower.

You have stuff you have no idea what to do with. I want to borrow it to make use of it. You are clueless, I have a plan.

If my plan works out, you get your stuff preserved, going into the future. Without me and my plan, your stuff will decay, it will rot, it will whither and die, leaving you with nothing.

All you can do is get people to assist you in your criminal behaviour where you unilaterally decide to break the agreement.

On balance i can win more than you can because i have what humans call right or integrity or truth on my side in the form of an agreed contract.

You seem to think you can decide the rules of the trade:

1. You think you can demand how repayment is to be made regardless of the contractual terms

I am looking for the general, logical principles. These are superior to all men always, including me. They will apply to me if I loan, just as they will apply to everyone else.

2. You seem to think that paying interest gives you more reason to not pay

Paying interest makes it more difficult for me to repay, when the stated purpose of interest is to preserve wealth this seems bloody odd, don't you think?

3. You seem to think that your death means that your relatives need not pay from your wealth that you leave behind

It does. The only valid agreements are voluntary ones, this includes accidental biological happenstance.

The theme here is that you cant see that you lack power and that a trade is performed by two people where iether person enters into the deal as they wish to but no one can exit as they wish to without consequences to them.

The water example is a classic example.

You have no power at all to force me to trade as you want me to trade so that i am obliged to drink your water supplies to me.

I have power to refuse your trade. We can both go to the water, you are offering me a deal.

Taking it is a choice for free men. This is why I don't think interest can occur in a free market except in some very odd circumstances. First you have to stop me taking my own water, and you also have to stop everyone else on earth making me a deal, by-passing you as irrelevent.

[Mr Nice]

I am self evidently superior to you as borrower.

You have stuff you have no idea what to do with. I want to borrow it to make use of it. You are clueless, I have a plan.

If my plan works out, you get your stuff preserved, going into the future. Without me and my plan, your stuff will decay, it will rot, it will whither and die, leaving you with nothing.

Paying interest makes it more difficult for me to repay, when the stated purpose of interest is to preserve wealth this seems bloody odd, don't you think?

you are usually a lot more precise with your logic.

this is full of assumptions and things that aren't likely true.

if my goal for a thing was preservation, I certainly wouldn't hand it out to be used free of charge.

and in the case of money, the purpose of lending isn't wealth preservation, it's wealth creation.

you expect more out of it than you put into it.

otherwise you are better off sticking it under the mattress, itd be a lot safer.

[aliveandkicking]

I am looking for the general, logical principles.

You need to say less and remember more.

1. You were forcing me to take your water as a trade

2. I am not forcing you to take my water as a trade

3. I suggested water be used rather than Jam to make the trade clearer

4. You said my example was perfect and went on to claim you could force me to drink your water.

5. Go to 1.

[Injin]

you are usually a lot more precise with your logic.

this is full of assumptions and things that aren't likely true.

if my goal for a thing was preservation, I certainly wouldn't hand it out to be used free of charge.

and in the case of money, the purpose of lending isn't wealth preservation, it's wealth creation.

you expect more out of it than you put into it.

otherwise you are better off sticking it under the mattress, itd be a lot safer.

The purpose of charging interest was stated as being an attempt at wealth preservation.

I just followed it through.

[Injin]

You need to say less and remember more.

1. You were forcing me to take your water as a trade

2. I am not forcing you to take my water as a trade

3. I suggested water be used rather than Jam to make the trade clearer

4. You said my example was perfect and went on to claim you could force me to drink your water.

5. Go to 1.

These are market examples - there is no force anywhere in them at all.

[aliveandkicking]

These are market examples - there is no force anywhere in them at all.

I offered water as my goods.

You said you could force me to take your water

Now you are forcing me to believe you did not force me to take your water

Edited May 25, 2009 by aliveandkicking

[Injin]

In the jam example your stupid behaviour made your stupidity very difficult to point out to you

I suggested water to make your stupid behaviour more obvious to you

I offered water as my goods.

You said you could force me to take your water

Now you are forcing me to believe you did not force me to take your water

Quote me.

[Mr Nice]

The purpose of charging interest was stated as being an attempt at wealth preservation.

I just followed it through.

even for preservation it doesn't make sense.

if I want to preserve my car, every time you drive it you are using it up.

letting someone drive it without making a corresponding amount of money for at least repairs and replacement, is the absolute opposite of preservation.

[Injin]

even for preservation it doesn't make sense.

if I want to preserve my car, every time you drive it you are using it up.

letting someone drive it without making a corresponding amount of money for at least repairs and replacement, is the absolute opposite of preservation.

Why money?

The example you gave was of loaning your friend your car. Your friendship thus forming a medium of exchange and your payment being in that.

This example is a good one - and perhaps we can divide our loaned items into different categories. A bucket of fish loaned for a year very definitely has an interest payment built in - the fish would have long since decayed to nothing, so a like for like replacement isn't to be sniffed at, is it?

While loaning your car, the responsibility for it passes to someone else. While they use the car, and this has wear and tear, they are responsible for anything that happens to it, releiving you of a burden.

[A.steve]

This example is a good one - and perhaps we can divide our loaned items into different categories. A bucket of fish loaned for a year very definitely has an interest payment built in - the fish would have long since decayed to nothing, so a like for like replacement isn't to be sniffed at, is it?

If you loaned the fish while they were still alive, and they had fishysex and had lots of little baby fishies - who would own them?

(See, I can be as silly as the rest of you.)

[Injin]

If you loaned the fish while they were still alive, and they had fishysex and had lots of little baby fishies - who would own them?

(See, I can be as silly as the rest of you.)

That woul depend on what was agreed, I would guess.

This does remind me an old legal case where the judge ruled that whoever was willing to step forward to be responsible for any accidents caused by the bull could be the owner....

[aliveandkicking]

Quote me.

Below you are demanding that if i offer water you can give water back tomorrow. The problem being that your water quality is something controlled by you and not me. I dont want your water i dont care who you say is certifying it. If you want my water then you want it because you want my water because it has some quality you are seeking. People buy my water because they like it. They dont have to buy it.

For the purposes of a very simple example i have water you want to buy.

This actually shows the problem perfectly, but not in the way that you think.

If I am getting water today and we can both get water - why on earth would there be any other payment but that of getting water. I get water today, you get it tomorrow.

If you are never going to get water, then I want something worth water to me, according to my own values. if you give me water, then all that's needed for you to be made whole is water. Any "interest" payment for the risk of dirty water or whatever is automatically repaid to you by the action of you getting water to the original standard.

Again and again you demand that i take your water and that i must agree to your demands as to the terms that are acceptable to you.

You then say these are not your demands.

These are market examples - there is no force anywhere in them at all.

For the record earlier i said:

In the case of water i prefer to get my own water sourced by me using my own skills and protected and safeguarded by me. If you want to drink my water that is fine with me if you pay me. But i dont want your water.

There is zero requirement that i trade with you as you demand i trade. It is a trade. It is not democracy or communism or something where you inforce that we be equal. We are not equal. Only i can know if my own water is sourced and safeguarded as i require.

It is nothing personal. I prefer to get my own water but you are welcome to use mine as a trade that suits me. You have no rights to tell me how to trade. You have no power at all in that matter unless you use price or persuasion.

[aliveandkicking]

If you loaned the fish while they were still alive, and they had fishysex and had lots of little baby fishies - who would own them?

(See, I can be as silly as the rest of you.)

Steve you are not helping here

The water trade is as simple as you can get i think. Water can easily be sourced and is desired and will keep reasonably well

Anybody can make jam. Anybody can find gold. Anybody can go fishing. Anybody can source clean good drinking water

The idea here is to focus on a very simple trade and explain why:

1 the trade cannot ordinarily be altered by one party after the trade is agreed.

2. Payment by replacement of the goods is not acceptable as a normal usual method of payment

[Injin]

Below you are demanding that if i offer water you can give water back tomorrow. The problem being that your water quality is something controlled by you and not me. I dont want your water i dont care who you say is certifying it. If you want my water then you want it because you want my water because it has some quality you are seeking. People buy my water because they like it. They dont have to buy it.

I don't demand anything. I point out the fact that you got back exactly what you gave.

Insistence upon facts is not a personal demand - it's reality. It's hardly a personal forced demand for me to ask you to accept that gravity will pull you toward earth - it's simply a statement of fact.

You gave a bucket of clean water, taking on the risk of getting dirty water back. You got clean water back, which must by definition be repaying your risk of getting dirty water.

This is simple truth.

Applies to me just as much as it applies to you. In fact the only way you can justify charging extra is if you actually get dirty water in return.

[aliveandkicking]

I don't demand anything. I point out the fact that you got back exactly what you gave.

Insistence upon facts is not a personal demand - it's reality. It's hardly a personal forced demand for me to ask you to accept that gravity will pull you toward earth - it's simply a statement of fact.

You gave a bucket of clean water, taking on the risk of getting dirty water back. You got clean water back, which must by definition be repaying your risk of getting dirty water.

This is simple truth.

Applies to me just as much as it applies to you. In fact the only way you can justify charging extra is if you actually get dirty water in return.

No matter how many guns you point at my head and no matter how violent you are towards me i dont want your water.

If you want my water i have if for sale.

No matter how many lawyers and scientists and government officials you turn up with paperwork telling me your water is good for me i dont want your water

There was no trade made whereby i risked getting back your dirty water or your clean water

I dont want your water no matter how violent you get

Edited May 25, 2009 by aliveandkicking

[Mr Nice]

Why money?

The example you gave was of loaning your friend your car. Your friendship thus forming a medium of exchange and your payment being in that.

This example is a good one - and perhaps we can divide our loaned items into different categories. A bucket of fish loaned for a year very definitely has an interest payment built in - the fish would have long since decayed to nothing, so a like for like replacement isn't to be sniffed at, is it?

While loaning your car, the responsibility for it passes to someone else. While they use the car, and this has wear and tear, they are responsible for anything that happens to it, releiving you of a burden.

you keep skipping over that you have to receive more on the loan that you gave in order to cover the losses you will eventually entail when someone doesn't repay.

if you want to loan your friend a fish, and accept a fish in return, that's your prerogative.

if you want to start a business lending fish, you need to receive more to stay in business, to even tread water.

as far as the car, how would you suggest making good for the wear and tear on the car BESIDES money or an asset etc?

[Injin]

No matter how many guns you point at my head and no matter how violent you are towards me i dont want your water.

If you want my water i have if for sale.

No matter how many lawyers and scientists and government officials you turn up with paperwork telling me your water is good for me i dont want your water

There was no trade made whereby i risked getting back your dirty water or your clean water

I dont want your water no matter how violent you get

The example being worked through was of a loan of water and what followed after that point.

The loan was the discussion point. You can't look at the example and reject the logical consequences of it by simultaneously accepting and rejecting the example.

If you'd like to look at something else, we can do, no problem.

Edited May 25, 2009 by Injin