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Comment by jnbiche | Hacker News Reader

"We must recognize then that money is a pure abstraction."

Yes, this is a fact that people in the Bitcoin, and recently, Dogecoin communities have come to realize. I think this realization is a gift that cryptocurrencies could bring to the general population. There's nothing magical about a US Dollar. It's a unit of account, nothing more.

If you really want to fall down the rabbit hole, then learn about the (original) concept of Ryan Fugger's Ripple. The recent Ripple company does implement the Ripple idea of allowing individuals and communities create and trade their own units of account, but is presently emphasizing other features of their system. But you can absolutely use all the (well-done) Ripple software in the manner that Ryan Fugger originally imagined:

http://en.wikipedia.org/wiki/Ripple_(payment_protocol)

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wrong. bitcoin has a smart contract system in it. its not just a unit of account. ripple is about as good as eGold. actually Watts had tremendous foresight when he says here: " And one of the reasons that our technology is impeded and prevented from feeding the world properly is the failure of one of our networks. It's an information network and it's called money" here we are, and now money is a network.

You should be more specific when negating things. I don't parse anything that jnbiche said as an incorrect assumption.

Ripple provides a market exchange methodology, among other things. Bitcoin can't do that natively due to the lack of looping in its scripts.

Also, check out Ethereum. If they pull it off, it'll twist your noodle with the possibilities.

You've probably checked out colored coins and counterparty, too. They both already have working implementations of secondary markets on top of the Bitcoin blockchain. Colored coins has two GUIs, and counterparty has a command line client with a simplified GUI, and more GUIs on the way.

Both of these projects are very alpha, so anyone checking them out should only use money you can afford to lose until they're out of beta (and the devs of both projects are pretty responsible about this, I believe).

I'm a little skeptical of Ethereum. It's notoriously difficult to build sandboxed virtual systems for browsers, much less for payment/asset exchange systems. And the money they raised with no working prototype is somewhat obscene (I think the typical HN start-up would have a conniption fit if they learned how much they raised, and still maintained ownership). But it is an incredibly cool idea. We'll see.

What did I say that is wrong?

Oh, and Ripple is very different from eGold since it's peer-to-peer and open source. Most importantly, Ripple allows payments to "ripple" through people until they reach the end target. All this is very different from eGold, a centralized, closed-source payment processor.

Ripple themselves doesn't hold any currency except for the base XRP (Ripple) unit of account, which they require for opening an account, transactions, and various other actions.

I agree that RippleLabs has poorly distributed this XRP they created as their system's base currency. This has left them open to accusations of scam(not really) and greed(totally), which is too bad given the incredible technology Ripple offers. RippleLabs has also done a pretty poor job marketing their increasingly advanced technology.

In the end, Ripple can happily co-exist with Bitcoin, and offers solutions to many of the problems Bitcoin will soon face (such as transaction load). But I don't see this happening unless the cryptocurrency community decides to approach Ripple with an open mind, and unless RippleLabs puts down the arrogance and actively communicate with the community.

Signed,

A dedicated Bitcoiner since winter 2010/2011

Can you summarize here what the original concept was and how it differs from the current implementation? I couldn't really understand that from just the wikipedia page.

The original concept of Ripple was simple: you and your friends float your own "currencies". But who will accept your currency outside your small circle of friends?

Well, the ripple concept comes from the system's ability to "ripple" payments across networks of different asset holders, at rates set by the users and/or exchange markets that the system permits.

It's pretty amazing to see how well it works in real life.

https://classic.ripplepay.com/about/ https://ripple.com/

I'm rather unconvinced that the cryptocurrency folks (or at least large numbers of those who're following the movement) have grasped Alan Watts' meaning in that "money is pure abstraction".

Rather, what Watts is saying (as I understand it) is that money itself is a derivative of real wealth, it's the abstraction of wealth. It's a tokenization of wealth, but it isn't wealth in and of itself. What it is, principally, is an exchange mechanism, one which also, over short terms, tends to be reasonably consistent in value.

The crypto currencies suffer from the challenge that in order to be accepted, they've got to be acceptable. For national currencies, this is accomplished largely in taxes and petroleum transactions (both very significant aspects of the present financial system). Probably also reserve currency status, though I won't pretend to fully understand that.

This is my interpretation of Alan Watt's concept of abstraction of wealth. You can't eat money, it's just paper or coins with no inherent value in and of itself. More than that it's also a unit of measurement, which is an itself an abstraction.

The leaning I've been having is that money is a signalling mechanism. Bankers like to say they're the heart of the economy. I prefer to think of them as the pituitary gland. Money is somewhere between ion-exchange signalling and hormones. You can use it to get what you want, but it's not the thing you want in and of itself. Accumulations get out of whack, people become insensitive to it, or there's not enough of it, and things break down. But it's not of and by itself what drives the economy, and money (or hormones) without real resources still lead to failure.

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