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SEASTEAD CURRENCY

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This topic contains 35 replies, has 18 voices, and was last updated by Profile photo of tusavision tusavision 2 years, 12 months ago.

Viewing 15 posts - 1 through 15 (of 36 total)
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  • #996
    Profile photo of guest
    guest
    Participant

    If one of the seasteads we make becomes fully independent would we still use the American Currency or would the goverment of the Seastead make a new currency

    http://coins.about.com/od/worldcoins/a/sealand_coins.htm

    #6892
    Profile photo of DM8954
    DM8954
    Participant

    I think any currency is only valuable if whomever you’re trying to trade with will accept it. Anyone can make their own currency but it’s only any good if someone agrees that it has value and accepts it as payment. The Sealand money you linked to is really only a souvenir for people who can appreciate the ‘historical significance’ of Sealand or expect that they’ll someday be valuable as collectors items. It’s the same concept as using ‘Beanie Babies’ instead of dollars. If you collect Beanie Babies, you might actually trade something you produced for a few of them.

    Now, if anyone ever decided to make seasteading currency for use in actual trade on a larger scale, I think the most viable option would be to use a valuable commodity, like gold, silver, or platinum. I expect that the only requirement, if such a material were used, would be that a trustworthy (independant) entity be responsible for making sure that every unit of currency had exactly the same mass, and therefore value. You just have to be sure that your coins are worth what you think they’re worth. If every independant seastead in a group of thousands insisted on printing up their own fancy designs, one might easily question weather a coin from “S’tead A” weighed exatly the same as the coin from “S’tead B” or if the suspicious guys from “S’tead Z” might have mixed in some impurities to stretch their buying power. Questions like that are why I’d expect a seperate entity to be involved in making the currency. It doesn’t have to be a an established nation, but it probably can’t be some random guy with a coin mold/press and an oven in his garage.

    I have considered the idea of a currency before, though. I really do prefer low-corrosion precious metals for our purposes. Paper backed by gold can always go fiat further down the road, which isn’t a good thing. I see 2 main problems with using gold and other metals for payment. The first reason is why we went to paper money in the first place. A US dollar bill weighs about a gram (as does an denomination of US paper). A gram of 24K gold is worth about $29.24US at today’s prices. So, if you want to pay the equivalent of a dollar for something, you’ll need to carry around a microscope to handle the transaction. $132,488 would weight about 10 pounds (4.536kg), for comparrison.

    Given my faulty assumption, my second idea is null… but it would have been about finding a way to make the currency float without compromising its value. I would have suggested a hollow sphere of pure gold. If both the size (diameter) and weight were measured to be identical in every 3Dcoin, then it would be known to have the same value. Vending machines, if such a thing would even be practical, or a stand-alone tool for the same purpose could measure the diameter as it rolls in, then weigh it, to verify its value…. but as I said, this makes no sense with gold at over $900 per ounce.

    [Edit: Crap! I just noticed that this whole thread is in the wrong section. Is there a way to have it moved?]

    #6895
    Profile photo of thief
    thief
    Participant

    Very interesting question, and one which I don’t see an answer for. Since my Stead will be communistic to a large degree, currency will only be needed for trade with other Steads, and so gold would be a viable option. Another would be the QUID (Quasi-Universal International Denominator), which is a currency proposed for inter-planetary trade in the future. A bonus of that would be that the coins look wicked!

    DM8954 wrote:

    [Edit: Crap! I just noticed that this whole thread is in the wrong section. Is there a way to have it moved?]

    Yep, but only by a moderator.

    - Nick

    #6897
    Profile photo of i_is_j_smith
    i_is_j_smith
    Participant

    I don’t see why all your gold couldn’t be stored in a secure location and have all everyday transactions done electronically. No need to carry around all those gold chips. You deposit your gold in a sanctioned facility, they calculate it’s worth, and then you get an account linked to a card that you use like a debit card for all transactions. This way you don’t have to carry around chips of gold, and you don’t have to worry about weighing and testing every gold chip that someone hands you.

    The other nice thing about this system is that when you get tired of the seastead life and want to move somewhere else, you just empty your account and they give you all your gold back. You can then take that gold anywhere you want….pretty much any country in the world will accept gold.

    The big problem with using gold (or any other valuable commodity) as a standard for a seastead currency is that the seastead is going to have to store all that stuff. We’re talking about seastead defense in another thread, and many people plan on keeping pirates and raiders at bay by keeping a low profile. Kinda hard to keep a low profile when you have several hundreds of thousands, if not millions, of dollars worth of gold sitting onboard. I don’t see how the seastead citizens would feel comfortable keeping all their gold somewhere else, either.

    #6898
    Profile photo of DM8954
    DM8954
    Participant

    Electronic currency is also a viable option but it has drawbacks of its own. As you mentioned, you’re essentially storing your gold off-site and trading the rights to withdraw a measured portion of it with every transaction. This would make it safe in the sense of physical loss, since it won’t sink to the bottom of the sea if something goes horribly wrong with your ‘stead. However, it then becomes like any other form of digital currency. Protection is getting better but it’s still possible to hack the system or steal the key to the vault (credit card numbers). Digital currency is pretty much the prefered option these days and the safety seems to be getting better. If I recall correctly, something like 90% of US currency is purely digital right now.

    However, seasteading has extra hurdles to solving the equation. First, even though it will be important for telecommuting jobs, communication, and a certain level of comfort and familiarity, we haven’t yet solved the problem of a decent internet connection in the middle of the ocean. There are low-speed, high-cost satellite connections but not everyone with a house on the ocean will be able to afford such a luxury. The early days of ocean trade will probably have to involve something more tangible. It may be gold, straight barter and verbal agreements, or even existing currencies until the internet problem is solved.

    The next hurdle relates to the idea of using ‘foreign’ currency or off-site assets. In the case of digitally trading gold in a land-based bunker somewhere, one might consider the possibility that any nation that wants to put us out of business would merely have to seize the gold you’re trading on. It might be taken by force in a raid or, more likely, “legally” seized by authorization from the UN or some other ruling body. It would be like putting a hold on all of our accounts and they wouldn’t even have to confront us directly. Many here are alredy paranoid about governmental interference of all kinds. Declaring us drug smugglers, pirates, or terrorists and putting us ‘under investigation’ would be an easy way to cut off the money supply before even needing to prove any claims against us. Using the currencies of the US or any other existing nation might be put in the same category by some but, at least for now, even the most fearsome enemies of the US still use US$ on a regular basis in many cases. It might just have to suffice for now. Speculations on the future stability of the US dollar might make some consider another nation’s paper, though, despite the dollar’s current dominance.

    The problem with hoarding money doesn’t go away just because you don’t keep the valuables on board with you. That’s what ransoms are for. If everything is electronic, they’ll demand you wire it to their account, instead of trying to haul it off by the boatload. Keeping a low profile and making for difficult and well-armed target are both good ideas but in the end, the only way to be absolutely sure no one can steal from you is never to own anything of value. That’s not really a viable option, so we’ll have to keep trying.

    #6899
    Profile photo of i_is_j_smith
    i_is_j_smith
    Participant

    I’m all for keeping the gold on the stead. I think storing it off-site is a bad idea, and only mentioned that option as a backup if we are worried about pirates stealin’ our booty.

    #6902
    Profile photo of Eelco
    Eelco
    Participant

    You can always use some widely accepted fiat currency to fall back on, but I hope to do better than that.

    I am all for electronic: low transaction costs are crucially important for any form of ‘cash’. Thats not the same as ‘fiat’ though!

    I am all for 100% goods backed money too. Doesnt need to be a precious metal. It can be any index-traded fund, designed for value stability. It may be but a piece of paper or a number in a computer, but it actually refers to something out there in the real world: a piece of metal, or a tangible investment in agriculture.

    Value is never 100% predictable, but it sure seems better to me than putting the value of my savings; the meaning of any long term contracts i have, purely in the hands of some douchebag central banker whos opinions i never sollicited.

    The main function of money is to enable to plan into the future. If i want a seastead now, but have no money for it, i can make a contract that says im going to pay some sum x over some period of time to some other person, if he pays my seastead now.

    If X is denoted in fiat currency, what exactly you have agreed upon is purely a matter of politics. Double the money supply, and the debtor will be very happy. Halve the money supply, and the creditor will be very happy. In effect, we expect the fiat money supply to constantly inflate, something that is of course corrected for. But depending on the specific pace, what seemed like a fair contract might turn out to be the end of one of the parties involved. In which case, everyone loses.

    Specifying your long term contracts in terms of a broad basket of goods is far more predicatable than any political process will ever be, and far more conductive to stable and fast economic growth, without distortions introduced by speculation on the future behavior of the central bank.

    #6910
    Profile photo of OCEANOPOLIS
    OCEANOPOLIS
    Participant

    Shud be the first rule for all the internal (on the seastead) transactions. No cash, no play. When I said cash I meant new currency cash. We shud call the new currency, the $TEAD. 1 $TEAD= THE PRICE OF 1 PINT OF COLD DRAFT BEER. Whatever price that is in $, euros, pesos,etc, that shud be it! And never change! And all the rest of products, services, etc shud be price according to that.

    The reason for that is very simple and logical. I plan to exchange whatever currency I will have @ the time of the Grand Opening into 1,000.00 $TEADS and stay drunk for the the next month, every day, just to forget of all the problems that we had to go thru to make this thing happen.

    And I dont like to deal w/small change. 1 pint , 1 $TEAD. Cheers!

    #6912
    Profile photo of
    Anonymous

    …no more $TEAD for you!

    Personally I couldn’t care less what people used for money. If currency X works for you, use it.

    And it would be very stupid for any seastead to try to limit trade to certain currencies.

    #6918
    Profile photo of Michael-Hawkins
    Michael-Hawkins
    Participant

    Producing a new paper curnecy seems like a lot of work to me. You’d need to get licenced and recognised internationally as a bank (?), then you need to have the actual notes produced, can be outsourced I suppose …

    I see no reason why we couldn’t use an existing currency, there’s export limitations of course, you can just set sail for steadwaters with $20.000 in cash (or gold, gems or flash chips for that matter) unless you want the government involved.

    Alternatively, you could publish an internal currency baced by goods such as food, alcohol or other drugs.

    Cracked wrote an intersting piece about unusual currencies being used today:

    http://www.cracked.com/article_16709_7-bizarre-things-1-bodily-fluid-people-use-as-money.html

    #6919
    Profile photo of OCEANOPOLIS
    OCEANOPOLIS
    Participant

    that producing a new currency may be a lot of work, (see, Michael, we can agree sometimes) in terms of printing, couterfieting,etc. (if is paper money or coin). Dont need no licence,…from who? and for what? And a bank wont have to be recognized internationally. If the $TEADS are to be used ONLY on the seastead it would be a local thing…(I’m sure somebody will disagree,..) For outside transactions use a business account somewhere (Caymans?) in dollars.

    I was half joking on the cash only thing. Actually its a good ideea beacuse its a money maker and a source of liquid cash.(hard currency, $, euro, yen,swiss). Lets assume the seastead has becomed a sovereign state and has its own currency. If somebody wants to visit the seastead they need a visa. Thats 50 bucks for 6 month @ the border checkpoint. Revenue. They can make reservations in advance for sleeping accompdations and pay w/plastic in watever currency but while aboard theay have to use the $TEAD, cash only. They will be informed about it and advised to bring cash or travelers checks. We will exchange it into $TEADS and charge a 2% transaction fee. More revenue. (1% goes to charity). Plus the seastead will get hard currency. Not using plastic will make us money in the long run since we wont pay transaction fees. The “$TEADS”, as currency, dont have to be material in nature. They can be e-currency of symbolic value,…lets say,…1 $TEAD=3 U.S.$ (as I said, 1 pint of brew). Mr. & Mrs Smith just cleared customs and now they are exchancing US $ 6,000.00 each. At the office they are issued a prepaid credit-identification card w/ their photo on it, name, blood type, known medical conditions, allergies, (if they wish so), good for 2,000.00 $TEADS each. Anything they buy will be charged off that card as debit. That’s it.

    #6922
    Profile photo of Eelco
    Eelco
    Participant

    Michael wrote:

    Producing a new paper curnecy seems like a lot of work to me. You’d need to get licenced and recognised internationally as a bank (?), then you need to have the actual notes produced, can be outsourced I suppose …

    It certainly wouldnt be my first priority. And notes are a thing of the past, in my opinion.

    The important thing is that I wouldnt want to store my wealth in terms of any fiat currency, and i wouldnt want to denote my long term contracts in any fiat currency either. The former is already possible ofcourse: the latter is not, but seasteading would make it so.

    #6924
    Profile photo of
    Anonymous

    So seasteads should create their own currencies, in spite of the fact that there already exists hundreds or thousands of ready to use types of coins, commodities, currencies, money, and various methods of payments?

    What a complete waste of time and resources.

    How about air, for breathing? Should seasteads produce their own “national air” as well? I mean sure, air is already available everywhere, at zero cost, but wouldn’t it be nice with bottled air of the seastead brand? Naturally we would need to ban the breathing of “foreign air”, to up the demand for our “national air”.

    Bastiat’s candlemaker’s petition comes to mind…

    Sarcasm aside, if a seastead requires that visitors apply for visas or similar types of bureaucracy and demand that they only use a particular type of money, then guess what? I’m not going to visit that seastead.

    Seasteads that lose focus on the main objective and start micro-managing their citizens and visitors will fail.

    #6926
    Profile photo of Eelco
    Eelco
    Participant

    Carl wrote:

    So seasteads should create their own currencies, in spite of the fact that there already exists hundreds or thousands of ready to use types of coins, commodities, currencies, money, and various methods of payments?

    What a complete waste of time and resources.

    The only proactive step i plan on taking (and which i would advice everyone else), is not to copy legal tender laws when they set up their legal corner of the ocean. Contracts should not be redeemable in anything other than what has been agreed upon.

    If i sign i long term contract, i want to know what im getting into. Dollars, zimbawean or american, will not do.

    There are indeed plenty of monetary instruments available to those ends. Reinventing those wheels wont be needed.

    That is, in principle. If you do all your transactions through foreign banks, their governments will probably skimming your transactions left, right and center.

    #6927
    Profile photo of horton
    horton
    Participant

    The value of international currencies is based on the perception that:

    1. The currency is”liquid,” i.e. you can purchase (trade for) pretty much anything you want with it. This boils down to the idea that the country has either valuble natural resources, a productive work force that can produce valuable goods, or both. In the case of the US, the fact that Saudi Arabia and China still trade resources and goods for it is probably a big facter in US currency still being liquid.

    2. The currency will not be revoked or diluted by the issuing party.

    3. The issuing entity has the political or military means to enforce currency contracts.

    #2 is a big problem for the US considering how much it’s diluting its own currency by lending to itself at submarket rates. Also, they’re talking about seizing Swiss bank assets, something that could send shockwaves through the international finance markets.

    I think at this point the main reason the US currency hasn’t completely collapsed is because of #3. If the biggest bully on the school yard is somewhat trustworthy, that’s who you’re going to trust to secure your interests. The problem is when that bully rips someone off you get nervous. That’s happening more and more with the US government and its currency.

    Steasteads would almost have to have some sort of contractually convertable currency. You’d want to give currency holders the immediate ability to convert the currency into a fractional interest in underlying assets that the stead has invested in. For instance the stead invests in oil futures, grain contracts, stocks, etc. You need to be able to hone up with those assets when currency holders ask for them. In that sense maybe it’s just one big mutual fund.

    Government seizures would be one of the biggest problems. You’d need to convince currency holders that their currency isn’t going to be seized by foreign governments. It would be interesting to talk to Swiss banks about creating some sort of steading currency that is immune to political seizures. They’re having a dispute with the US government over this right now.

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