[cap-talk] Capability accounting

[Ian G]

Jed Donnelley wrote:

> Hmmm.  I can see how "digital money" might be appropriate to
> deal with the sort of "space bank" accounting (to use Norm's term,
> "paying" for relatively fixed resources), but how do you imagine
> it to deal with more "metered" (again using Norm's term) charges
> such as processing time?  With the typical accounting approach
> (more like a credit card than like the "money" metaphor) resources
> (cash?) are drawn from the account as used by processing.  If
> the account becomes exhausted, the processing stops.  Perhaps
> digital money could be used to replenish such an account, but
> it's a bit difficult for me to imagine how digital money could be
> used to eliminate the need for something like an account
> altogether.  Wouldn't you end up having to make lots of little
> deposits to used services all over the place to deal with such
> "draw"s on what might otherwise be modeled as an account?


Yes, you could use both as appropriate.  There is
no one true money form (although there are lots of
purists who will argue one way or another).

Digital money covers a wide range of ideas.
Tokens could be used, a.k.a. coins, for discrete
amounts.  Account money can be used for measured
accounting charging.

( The difference being between accounting accounts
and account money is that you go the extra distance
and make the money movable between accounts, secure,
and you give it backing of some form. )

Another thing that can be done is to use an interest
bearing token, so that while the token is held by the
resource, it earns for the holder.  When released
(cleaned up) it returns the capital back to the
owner, sans time-use-of-money premium.  One can
slow down or accelerate the rate of interest by
contract and redemption provisions.

Also, bear in mind that the typical charge would not be
on a "CPU processing" basis, that's a more or less old
notion that may harken back to the mainframe days when
CPUs were the bottleneck and that's all there was to
it.

In proper marketing, you charge what you can, and you
align it to events rather than "pure consumption", because
that is more tractable in code.  But you try and simulate
as much as possible consumption because this gets you
closer to what the economists call "consumer surplus".

So the idea of:

    "a new cap requiring a new coin, but you can
    keep using the cap forever."

Is efficient, on paper at least.

Over time, the demand and the supply cross and efficiency
is achieved as you muck around with different charging
experiments.  How this is done is arcane, you probably
recall how Paypal was originally free - but over time
and dozens of migrations, little fees popped up here
and there.  Also, studying the migration of mobile
phone use from "account" basis to "prepaid" basis is
enlightening, as it shows how telcos have slowly been
forced to adopt consumer centric models that deal with
Nick Szabo's mental transaction cost issues.

> Perhaps you can enlighten me on how digital money
> more naturally deals with managing such resource uses.

Managing resources *is* what money does - it is only
what money does - according to some views :)  The
reason we talk about money rather than accounting
is that in the old days, you could have an accounting
program, but you couldn't have a money system.

It wasn't until David Chaum's ideas that this issue
changed in people's minds.

Now you can have both.  And the money system is much
much better, albeit somewhat complicated to learn,
which somewhat inherent in money itself.

( I personally haven't used an accounting system for
about 3-4 years, ever since my company issued its
own money.  Not that I have much to account for,
these days, but I can attest that the difference
between using an internal money and an accounting
system is staggering, if you can get it to work. )

iang