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Author: ChainlessCoder

content/posts/Hypersyn.md

@@ -17,7 +17,7 @@ This is the landing page for the Hypersyn blog series. To read the whole Hypersy
 
 ## Abstract
 
-The Hypersyn protocol is a new type of permissionless and peer-to-peer payment network that is based on the concept of mutual credit and mutual arbitrage. Unlike blockchain-based systems, Hypersyn does not rely on any consensus algorithm. It does not require a distributed ledger to store the history of events nor a set of validators. Hypersyn does not have a system-imposed hard-cap on the number of transactions per second that it can perform, and can therefore easily scale up or down depending on network usage. Unlike in other payment systems, money in Hypersyn does not get transferred from person $A$ to person $B$ in the conventional sense. Instead of transferring a token between each other, peers in Hypersyn change the exchange value of their credit (i.e. their purchasing power) within the network. Just as in centrally-issued fiat systems, money in Hypersyn is treated as freely tradable debt, which inherently requires trust. But unlike centrally-issued fiat systems, money issuance in Hypersyn is not controlled by an authority, but is instead created on the spot as mutual credit. In blockchain-based systems and even in centrally-issued fiat systems, money is treated as a scarce commodity. In the Hypersyn protocol on the other hand, money supply within the system is elastic in nature. Because of these fundamental differences in assumptions, the Hypersyn protocol does not aim to compete with, or substitute blockchain-based systems. Instead, Hypersyn should be viewed as a tool that aims to offer a qualitative change in the way we exchange. It has the potential to increase the autonomy and self-organization that people can have, by enabling people to become both the creditors and debtors of their own "money" through mutual credit.
+The Hypersyn protocol is a new type of permissionless and peer-to-peer payment network that is based on the concept of mutual credit and mutual arbitrage. Unlike blockchain-based systems, Hypersyn does not rely on any consensus algorithm. It does not require a distributed ledger to store the history of events nor a set of validators. Hypersyn does not have a system-imposed hard-cap on the number of transactions per second that it can perform, and can therefore easily scale up or down depending on network usage. Unlike in other payment systems, money in Hypersyn does not get transferred from person **A** to person **B** in the conventional sense. Instead of transferring a token between each other, peers in Hypersyn change the exchange value of their credit (i.e. their purchasing power) within the network. Just as in centrally-issued fiat systems, money in Hypersyn is treated as freely tradable debt, which inherently requires trust. But unlike centrally-issued fiat systems, money issuance in Hypersyn is not controlled by an authority, but is instead created on the spot as mutual credit. In blockchain-based systems and even in centrally-issued fiat systems, money is treated as a scarce commodity. In the Hypersyn protocol on the other hand, money supply within the system is elastic in nature. Because of these fundamental differences in assumptions, the Hypersyn protocol does not aim to compete with, or substitute blockchain-based systems. Instead, Hypersyn should be viewed as a tool that aims to offer a qualitative change in the way we exchange. It has the potential to increase the autonomy and self-organization that people can have, by enabling people to become both the creditors and debtors of their own "money" through mutual credit.
 
 ## [Money & Mutual Credit](https://chainlesscoder.com/posts/money-mutual-credit/)
 

content/posts/Money_and_mutual_credit.md

@@ -21,7 +21,7 @@ The capacity of a social system is intertwined with the limitations of its monet
 
 ## Money & Mutual Credit
 
-In medieval Europe, "split tally sticks" were used by local businesses as temper proof recording devices to create self-issued credit (or government-issued credit) in exchange for commodities and services. The split tally sticks were made out of wood and had no intrinsic value. They simply encoded the amount of debt an entity owed. The information got encoded by carving horizontal lines onto the stick and then splitting the stick down its length in halve. One half (known as the "foil") would be kept by the debtor. The other half (known as the "stock") was kept by the creditor. To prove that the amount was not tempered with, all one had to do, was to align the two halves together to check the engravings. If entity $Y$ had a tally stock containing the information "$X$ owes 100 gold coins to $Y$", as long as $X$ was considered trustworthy, the tally stock itself was worth 100 gold coins and could be traded freely with other entities. *The tally stock, that is the debt, became money*. This is why we can refer to money as debt that is freely tradable.  
+In medieval Europe, "split tally sticks" were used by local businesses as temper proof recording devices to create self-issued credit (or government-issued credit) in exchange for commodities and services. The split tally sticks were made out of wood and had no intrinsic value. They simply encoded the amount of debt an entity owed. The information got encoded by carving horizontal lines onto the stick and then splitting the stick down its length in halve. One half (known as the "foil") would be kept by the debtor. The other half (known as the "stock") was kept by the creditor. To prove that the amount was not tempered with, all one had to do, was to align the two halves together to check the engravings. If entity **Y** had a tally stock containing the information "**X** owes 100 gold coins to **Y**", as long as **X** was considered trustworthy, the tally stock itself was worth 100 gold coins and could be traded freely with other entities. *The tally stock, that is the debt, became money*. This is why we can refer to money as debt that is freely tradable.  
 
 Other regions of the world had also periods when self-issued credit was used. In China for example, between the 1870s until the 1940, businesses would frequently issue their own money (also known as bamboo tally, or bamboo money), as emergency money. The money, which essentially was self-issued credit, did not only insulate local businesses from the economic decline of a weakened government, but enabled the economic self organization of local communities. Local trade was still possible, even if the state's currency failed. Historically however, self-issued credit was rarely issued as tangible money. Tally sticks are rather the exception than the norm. Instead of minting money in the form of coins or tallies, many societies simply recorded transactional events as credit in a ledger directly.
 
@@ -37,7 +37,7 @@ Credit clearing systems are often also referred to as *mutual credit* systems. M
 
 Unlike what many textbooks claim, it was not centrally-issued fiat that historically solved the coincidence of wants problem, but mutual credit. Coincidence of wants is an economic phenomenon in which two (or more) parties perform an exchange mechanism of assets between themselves, without the use of any money (also known as bartering). Because of the improbability of wants however (one party might simply not have a product, or service that the other party wants, or needs), bartering between parties often appears infeasible. Credit as an innovation solved for the coincidence of wants problem, by adding a temporal dimension to the bartering process. Instead of exchanging one product for another, individuals were able to exchange one product for credit, which could then be cleared out at a given future time. Credit is therefore a time-delayed multiagent bartering system, with a mutually agreed upon denominator and redemption mechanism. Mutual credit, not centrally-issued fiat, was for the longest time the default monetary system in the world.
 
-There is however a catch in mutual credit systems. For a party $X$ to be able to spend another party's ($Y$) debt with party $Z$, $Z$ has to believe that $Y$ is trustworthy and that their debt will eventually be repaid. Money, or debt, therefore inherently requires *trust*. And this is where things become tricky. Game theoretically speaking, trust can only exist between players that play "repeated games" (i.e. that interact more than once with one another). Trustworthiness therefore decays the larger the network size of players becomes. Due to what is most likely a biological constraint (there is an upper cap of long-lasting connections that a player can form), the more players get added to the social graph, the more likely one-time games become between players. In other words, the more one-time games happen, the less likely it gets for $Z$ to trust that another player's credit can get eventually cleared out. Trust erodes with network size. Mutual credit, as it appeared historically, was fundamentally not scalable.
+There is however a catch in mutual credit systems. For a party **X** to be able to spend another party's (**Y**) debt with party **Z**, **Z** has to believe that **Y** is trustworthy and that their debt will eventually be repaid. Money, or debt, therefore inherently requires *trust*. And this is where things become tricky. Game theoretically speaking, trust can only exist between players that play "repeated games" (i.e. that interact more than once with one another). Trustworthiness therefore decays the larger the network size of players becomes. Due to what is most likely a biological constraint (there is an upper cap of long-lasting connections that a player can form), the more players get added to the social graph, the more likely one-time games become between players. In other words, the more one-time games happen, the less likely it gets for **Z** to trust that another player's credit can get eventually cleared out. Trust erodes with network size. Mutual credit, as it appeared historically, was fundamentally not scalable.
 
 As a technology, mutual credit worked in smaller collectives and communities, but once the network size of a society surpassed a certain threshold, individuals were incentivized to adopt centrally-issued money. By paying with money that was centrally-issued, players (especially those players that were part of the same state) were able to trade the state's money with other players, without having to trust the other player. This greatly simplified things for individuals, but also gave the ruling class unprecedented power.
 

docs/posts/hypersyn-a-peer-to-peer-system-for-mutual-credit/index.html

@@ -103,7 +103,7 @@ <h1 class="title">Hypersyn: A Peer-to-Peer System for Mutual Credit</h1>
     <div class="content">
       <p>This is the landing page for the Hypersyn blog series. To read the whole Hypersyn blog series in PDF form with included references, visit <a href="https://arxiv.org/pdf/2206.04049.pdf" target="_blank" rel="noopener">arxiv</a>.</p>
 <hr>
-<h2 id="abstract">Abstract <a href="#abstract" class="anchor">🔗</a></h2><p>The Hypersyn protocol is a new type of permissionless and peer-to-peer payment network that is based on the concept of mutual credit and mutual arbitrage. Unlike blockchain-based systems, Hypersyn does not rely on any consensus algorithm. It does not require a distributed ledger to store the history of events nor a set of validators. Hypersyn does not have a system-imposed hard-cap on the number of transactions per second that it can perform, and can therefore easily scale up or down depending on network usage. Unlike in other payment systems, money in Hypersyn does not get transferred from person $A$ to person $B$ in the conventional sense. Instead of transferring a token between each other, peers in Hypersyn change the exchange value of their credit (i.e. their purchasing power) within the network. Just as in centrally-issued fiat systems, money in Hypersyn is treated as freely tradable debt, which inherently requires trust. But unlike centrally-issued fiat systems, money issuance in Hypersyn is not controlled by an authority, but is instead created on the spot as mutual credit. In blockchain-based systems and even in centrally-issued fiat systems, money is treated as a scarce commodity. In the Hypersyn protocol on the other hand, money supply within the system is elastic in nature. Because of these fundamental differences in assumptions, the Hypersyn protocol does not aim to compete with, or substitute blockchain-based systems. Instead, Hypersyn should be viewed as a tool that aims to offer a qualitative change in the way we exchange. It has the potential to increase the autonomy and self-organization that people can have, by enabling people to become both the creditors and debtors of their own &ldquo;money&rdquo; through mutual credit.</p>
+<h2 id="abstract">Abstract <a href="#abstract" class="anchor">🔗</a></h2><p>The Hypersyn protocol is a new type of permissionless and peer-to-peer payment network that is based on the concept of mutual credit and mutual arbitrage. Unlike blockchain-based systems, Hypersyn does not rely on any consensus algorithm. It does not require a distributed ledger to store the history of events nor a set of validators. Hypersyn does not have a system-imposed hard-cap on the number of transactions per second that it can perform, and can therefore easily scale up or down depending on network usage. Unlike in other payment systems, money in Hypersyn does not get transferred from person <strong>A</strong> to person <strong>B</strong> in the conventional sense. Instead of transferring a token between each other, peers in Hypersyn change the exchange value of their credit (i.e. their purchasing power) within the network. Just as in centrally-issued fiat systems, money in Hypersyn is treated as freely tradable debt, which inherently requires trust. But unlike centrally-issued fiat systems, money issuance in Hypersyn is not controlled by an authority, but is instead created on the spot as mutual credit. In blockchain-based systems and even in centrally-issued fiat systems, money is treated as a scarce commodity. In the Hypersyn protocol on the other hand, money supply within the system is elastic in nature. Because of these fundamental differences in assumptions, the Hypersyn protocol does not aim to compete with, or substitute blockchain-based systems. Instead, Hypersyn should be viewed as a tool that aims to offer a qualitative change in the way we exchange. It has the potential to increase the autonomy and self-organization that people can have, by enabling people to become both the creditors and debtors of their own &ldquo;money&rdquo; through mutual credit.</p>
 <h2 id="money--mutual-credithttpschainlesscodercompostsmoney-mutual-credit"><a href="https://chainlesscoder.com/posts/money-mutual-credit/" target="_blank" rel="noopener">Money &amp; Mutual Credit</a> <a href="#money--mutual-credithttpschainlesscodercompostsmoney-mutual-credit" class="anchor">🔗</a></h2><h2 id="demystifying-sparse-merkle-treeshttpschainlesscodercompostsdemystifying-sparse-merkle-trees"><a href="https://chainlesscoder.com/posts/demystifying-sparse-merkle-trees" target="_blank" rel="noopener">Demystifying Sparse Merkle Trees</a> <a href="#demystifying-sparse-merkle-treeshttpschainlesscodercompostsdemystifying-sparse-merkle-trees" class="anchor">🔗</a></h2><h2 id="hypersyn---mechanism-overviewhttpschainlesscodercompostshypersyn-mechanism-overview"><a href="https://chainlesscoder.com/posts/hypersyn-mechanism-overview" target="_blank" rel="noopener">Hypersyn - Mechanism Overview</a> <a href="#hypersyn---mechanism-overviewhttpschainlesscodercompostshypersyn-mechanism-overview" class="anchor">🔗</a></h2>
     </div>