[notahacker]

> If your account is zero, you're not paying any tax, and the account grows quicker.

So the best strategy for any individual to maximise their accumulation in your currency (or in practice, minimise their losses) is to refuse to accept payments into their account, insisting on receiving payments in other currencies instead.

As everyone is incentivised to refuse your currency and nobody is incentivised or required to accept it, your currency can't actually be spent.

[imtringued]

Except that isn't how trade or currencies work. This is overly simplistic.

You want a currency that people want to both spend and earn. If you have a deflating currency then people would rather earn it than spend it, if you have an inflating currency then people would rather spend it than earn it.

You might now argue that the rate of inflation or deflation should be set by the market to find the optimal money tax that balances willingness to spend and receive money.

But here is the thing. If the rate of the national currency is suboptimal people will try to find substitutes. If the central bank tightens the money supply too much and unemployment is too high, then people will also accept this alternate currency because they are going to spend most of it anyway, they won't be paying much tax to begin with.

Also, from what I have seen the fees people are willing to pay on credit cards are quite ridiculous compared to the -5% demurrage of the chiemgauer. The Chiemgauer circulates 3.5 times faster than the euro so the effective fee is something like 1.25% which is less than credit card fees. Unless you are filthy rich and keep all your savings as liquid money instead of lending it out the fee is basically irrelevant.

Once you take into account that lending at 0% interest is possible then from a macroeconomic perspective the system is cheaper for the average participant and if we assume economical stability promises become true then even the wealthy with who insist on holding money will benefit because banks are less likely to need a bailout and there is no inflation.

So the problem isn't that people will refuse to accept it, the question is how do you get it started in the first place. How do you convince a critical mass of people to adopt it?

[notahacker]

> Except that isn't how trade or currencies work. This is overly simplistic.

Well no, the way that trade and currencies work is that currencies are made legal tender and backed by mountains of debt and taxes repayable in that currency and as a result are extremely widely accepted, rather than being arbitrarily issued tokens redeemable for nothing with the added disadvantage of demurrage.

But we're not talking about currency, we're talking about tokens that Neal issues to anyone that wants them, and why anyone would want to trade their time or goods for them instead of currency which is much easier to spend and actually possible to hold onto. (You can't just imagine that it has better price stability than the local currency or that it is fungible; these are functions of people having incentives to trade goods or time for them) If my point that this incentive doesn't exist is "overly simplistic" and the incentives instead all point in the opposite direction, it's odd that you don't have a simple answer to the question of how to convince a critical mass of people to overcome this problem.

Local currencies like the now defunct Bristol Pound[1] and the little-used Chiemgauer were guaranteed to be easily redeemable for Euros and Sterling respectively at near parity and supported by lots of local marketing so they basically function(ed) as glorified voucher schemes. Cryptocurrencies are hyped to attract exactly the HODLers demurrage is intended to avoid so can be traded to people who think they will be worth more in future (and still most shitcoins fail) . This proposal has none of those upsides, and more conspicuous downsides. And if I want some Metric just for fun, I don't have to start accepting it, I just open an account and 10,000 of them every month for free...

[1]What they plan to do with Bristol Pay might be interesting, especially to Neal

[nealbozeman]

Well said, and fun example with Chiemgauer. Critical mass/tipping point is the issue, so what is the target audience in the beginning?

Ping me if you want some Metrics. [e-mail].