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MyCHIPs Digital Money


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The Argument for Time Money

In order to be robust, a currency should be backed by, and measured according to, a standard, known commodity. This provides the best assurance against the kind programmed inflation and exponential growth inherent in central bank, fractional reserve currencies. Not quite as obvious, it also protects against the kind of programmed deflation inherent in Bitcoin and other fixed-supply models.

Most people recognize, a properly backed currency will retain its intended value much better than an unbacked one. But there is a potential pitfall to this approach.

Once we tie a currency to one particular commodity, there is a natural temptation to try to corner the market on that commodity. In other words, people will want to monopolize the supply of that commodity so they can manipulate the value of the currency. With that control, they can assure a flow of wealth and power to themselves, even if they haven’t earned it.

Stated more simply, if money is backed by gold, only the people who already own gold can issue and control the money. The same can be said of any other commodity we might choose.

Perhaps surprisingly, this even applies to Bitcoin. Once the fixed supply of coins has been mined, those in possession of existing coins are in control of the market price. Everyone else has to buy in at prevailing prices, based on supply and demand. This is why Bitcoin is prone to form a volatile bubble.

Of all the commodities we might choose, human work potential is the only one nearly all people have their own, private supply of. Time based money is the ultimate in fairness and equality.

When money is issued against our own work, we have much more control over our own futures. We can decide if we want to save up for a purchase, or if we want to use credit to buy something now, and then do the work to earn it in the future. This kind of liquidity can not easily be monopolized—at least as long as we resist the urge to reinstate slavery!

To clarify, CHIPs are not based simply on time, but rather the work we do using our time. So in a sense, it is like basing our money on all available commodities at once! Whatever we produce of value, that is what backs our money.

This means individuals can be in control of their own purchasing power. They can decide if and when to issue credit, and how that credit will be used.

Let us now address a benefit of productivity-based money that is a bit more ideological, but still of great value. Historically our money has been measured against other kinds of commodities—most commonly some specified amount of a precious metal, such as gold or silver. More recently, the US Dollar has been allowed to float, being tied only to the general economic condition of the country.

When currency is measured in such an abstract way, it is easy for us to lose track of what it really is. We begin to think of money as being its own thing, rather than an obligation, ultimately to be redeemed by someone’s future labor. It is also easy to lose track of just how valuable our own work is, in relation to each unit of money.

Consider the minimum wage debate. Most people who advocate such regulation, or an increase to an existing minimum wage requirement, do so mostly on the basis of demagoguery, whether they realize it or not. For example, one might assert that a person or a family “can’t survive on just ten dollars an hour.” When using an abstract currency such as dollars, this argument seems very reasonable.

But try changing the words we normally use for money, and instead refer to what that money really is: a debt to be fulfilled by someone’s sweat and toil. The first realization is, it becomes much more difficult to draw such a clear distinction between employer and employee.

True, one trades his actual work, and the other trades only work credits or in other words, other people’s time. But just by changing the language, it is easier to see that time is being traded for time, work for work, and value for value.

Now let’s try making an argument for a minimum wage with the new terminology of time money: “No one should be allowed by law, to trade an hour of his work time for anything less than 3 hours of someone else’s work time.” How is it possible for everyone’s time to be more valuable than everyone else’s?

This helps us understand, the matter of whether a person can “survive” on only one CHIP per hour is not a question of social justice. Rather, it is one of simple economics. How much time does a person spend working for his own survival, and how expensive, in comparison to his own productivity, are the things he needs to purchase from other people?

Another way to phrase the question is: “Can a person with no particular skills, working full time, support himself and the needs of any dependants he may have?” So rather than just trying to somehow elevate the value of everyone’s time over everyone else’s, we can begin to contemplate more authentic solutions to poverty. For example, when and how can civil society best assist those who can not reasonably provide for themselves?

So even the language of CHIPs helps reinforce the intuitive idea that laws and government programs alone can’t solve most social problems. People have to—by using the the commodity that holds ultimate value, our time and effort.

People should be free to engage in voluntary relationships they may choose. As long as the participants are competent, capable and fully informed, perhaps governments should not try to meddle so much in how people choose to exchange their work and time with each other. We should understand, the ultimate value of one’s time is exactly what someone else is willing to trade for it. No more and no less.

If you have not gone to the effort to develop any particular skills, you may be valued by others at only 1 CHIP per hour—maybe less. But by investing in yourself and developing further abilities, in demand by others, you can raise that multiple to anything the market may support. There are no upper, or lower limits.

Finally, we must admit, this notion of a “standard CHIP” is still the biggest hurdle that makes implementing time money much more challenging than say, a gold-backed currency. An ounce of pure gold is pretty much the same anywhere in the world. But it is much more difficult to define what a standard, unskilled hour of work really is.

Still, we will do it.
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