Thank you.  We are always happy to answer any questions you might have.

Chairman, Federal Reserve of WIP

At the Federal Reserve of WIP (name change pending) we are performing evaluation of the basis for online currency systems.  In line with requests, we are working on rolling out parts of the system that are much higher-throughput than up through today.  (And for the moment WIP transfers have been left pending.)  We would like to get it right.

We have some indicator metrics that can be used to evaluate Bitcoin as well as our currency and any other.

Firstly, for background, the price metric is interesting, but not the single largest indicator of the success of any currency.  If the price of something in very short supply temporarily hits astronomical heights due to shortage (only), this price would not indicate any level of "success".  For example, if some perishable goods begin being sold at very high prices during a hurricane, this would not indicate that it has become "successful".  So this example shows that price alone is not an indication of success.

Another example would be securities bubbles in which a security temporarily trades at very large multiples of certain fundamental figures.  You mention Venture Capitalists.  An example of a stock that has gone down very significantly since IPO is Zynga - http://finance.yahoo.com/q?s=ZNGA

Its price and volume of trading were high, following which it lost the majority of its trading value.

Our evaluation of Bitcoin focuses primarily on its competitive outlook as a global Internet currency over the next 10 years.  In this sense, certain fundamental aspects of the currency become more important than any metrics that can be tracked without analysis.

I am happy to answer follow-up questions if you have any.

Chairman, Federal Reserve of WIP

This is extremely tragic news.  All holders and users of bitcoin are subject to the exact same rules of society that anyone else is, and criminal actions must be addressed with very strong consequences.


Chairman, Federal Reserve of WIP

Dear Bitcoin Community,

User monsterer has suggested I share in this thread a letter I wrote to him regarding his question above.  I have agreed to do so and include it below as others may find it helpful.  This is private correspondence from me, does not reflect formal Federal Reserve of WIP (name change pending this year) policy, and is in several places informal or forward-looking.  It was simply meant to help monsterer with some of his questions expressed above.   In particular, the comparison with bitcoin is of a generic nature and should not be taken literally or too formally, but rather suggest some areas for thinking or research by himself.  It does not fall under formal Federal Reserve of WIP (name change pending) communications, but reflects some of my personal thoughts.

With that said, it may be helpful to those of you who are wondering about the purpose of this thread.  Later, I may also be replying to this thread with some of my own ideas on this subject.

Please note that Call for Brief Papers on Bearer Instruments is outside of the core offering of WIP and is a research area only.  The letter below is informal guidance to him or others.

Best regards:

Chairman, Federal Reserve of WIP (name change pending this year.)


My letter to monsterer:

Assuming that this is the same person (which I do not have direct confirmation of), I would like to lend my full support to Meni Rosenfeld based on his tireless and selfless voluntary contributions on another forum.  Assuming he is the same person, I have full faith in his sound judgment, selfless service and dedication to higher ideals.

In an online world that is frequently nasty, he has been consistently sane and reasonable, and a pleasure to interact with.

If I learn that this is not the same person I will update this note.

Best regards:

Chairman, Federal Reserve of WIP (name change pending this year), writing personally.

Dear Bitcoin community,

The Federal Reserve of WIP (undergoing a name change this year) operates a new, centralized, fiat coin (WIP) that is inflationary, expansionist, and takes cues from macroeconomics and in-game inflationary economies.  You may see my other posts for an overview.  We are currently developing the centralized software that will allow direct trading, but for the moment maintain a manually updated and published public ledger.  At the current stage it is forbidden to trade WIP for transactions having a direct monetary value.  (Such as for fiat or other crypto currency.)  In addition, the FRWIP reserves all rights over the entire WIP economy at present.  Despite these very strong restrictions, we are already experiencing high interest, already have an independent commercial bank in our central banking system, and have interesting announcements pending.  There are currently 105 WIP in existence.

Currently, we are seeking brief, innovative papers on the general subject of "bearer instruments" or any physical item that can be associated with possession of WIP.  (In the bitcoin world, Casascius coins were an approximation of this property.)

There are severe technical limitations on the idea of any bearer instrument (i.e. copy, counterfeiting) and yet most real-world fiat currency exists in exactly that form.

As WIP takes many cues from real-world currency, we are enlisting your help via this Call for Brief Papers on the subject of Bearer Instruments.

You may write on any subject related to the creation or operation of bearer instruments by the Federal Reserve of WIP (name change pending), with a suggested paper length of 2 pages and a recommended limit of no more than 9 pages.  Briefer papers will be reviewed with higher priority.  We are also happy to give feedback on draft outlines, should you have basic ideas that require some thought to fully describe.

There is no payment associated with acceptance of your paper.  A discretionary stipend in WIP, which has no trading value, may be considered in the case of exceptional short papers.  In addition, your contribution will be honored and mentioned by the Federal Reserve of WIP (name change pending).

Thank you for your attention, and we look forward to receiving submissions or any questions.

I will be giving some of my own thoughts in a follow-up to this post.

Best regards:

Chairman, Federal Reserve of WIP (name change pending.)

They are not free.  In order to acquire WIP, you must receive them from someone who possesses them, or take out a loan from the CBIP or another bank.  You can also apply to be a lending institution in the WIP central banking system.

Chairman, FRWIP

jonald_fyookball does not possess any WIP.  In addition, it is prohibited to sell WIP for specific dollar or other currency amounts at the moment.

Chairman, FRWIP

I would suggest that one of the distinguishing characteristics of cash is that it is highly liquid.  This has two senses.  Firstly, the amount of time and effort that it takes to complete a transaction, and second, the extent to which finding a "buyer" for the transaction is possible at all.

Regarding the first point: if you hold paper banknotes, this is one of the most liquid examples of value that exists.  There really is no waiting to have them transferred or accepted, assuming it's an accepted currency in the area.  You can do it in person in seconds, any time, day or night, with anyone (who accepts that currency and denomination, which would be most people in an area in which it is in use), and with no loss in value.

In this sense (traditional) bank accounts are inherently less cashlike than printed bank notes, if only slightly, because it takes some time to make a transfer, your bank card itself is not going to be accepted by just anyone (only some merchants), and it is inherently less liquid.  Where bitcoin is interesting is that in some ways it is more liquid than cash, specifically, over the Internet.  It is faster to make a transfer across the world 'instantly' via bitcoins, than by somehow trying to get the paper banknotes across the world, and much faster than completing a wire transfer (which may also be reversed).  On the other hand, when dealing with someone in person, it takes longer to receive a bitcoin transaction and confirmations than to physically be handed banknotes and make any required change, though the difference is not much.  So in terms of the speed of a transaction by someone who accepts both banknotes and bitcoins, bitcoin is slightly less cashlike.

There is a second factor to liquidity, however: not everyone accepts bitcoin for everything, so it is less liquid due to acceptance.  To get value back out of bitcoins you have just received, you need to find a specific "buyer."  To get value back out of U.S. dollars you just received, you can immediately spend them anywhere, assuming you're in an area that uses U.S. dollars, with no loss of value.  It's perfectly liquid.  In this sense, of course, Euros are less cashlike in the United States than they are in Europe, and dollars are less cashlike in Europe than they are in America.  That is somewhat of a silly distinction - to say that dollars are more so cash in America than they are in Europe.  But it does make sense to sometimes think about it this way.

And, surprisingly, we must conclude that bitcoins are more cashlike over the Internet than $100 bills are.

Chairman of the Federal Reserve of WIP

The Federal Reserve of WIP will not hold Nxt as a reserve currency (without further comment.)  We do, however, intend to hold BTC as a reserve currency.

Best regards:

Chairman of the Federal Reserve of WIP

Dear odolvlobo,

The WIP economy is based on a public ledger that is centrally controlled by the Federal Reserve of WIP.  We explicitly reserve the right to take any action, up to and including rewriting the history of transactions retroactively.  (This is part of the reason that during introducing we are pegging WIP to transactions with a nominal price of $0.)

So here are example things that we can do as part of enforcement:

- We can penalize accounts by saying they will be locked out of the Public Ledger for a specific amount of time.

- We can require evidence be submitted.  For example, we would like to make ponzi schemes illegal in the WIP economy.  As such, where the history of transactions is in line with a Ponzi scheme and without an apparent external source of WIP income for the person running the scheme, we can simply require detailed evidence of actual sources of income.

- If these parties refuse our process, we can simply actively prohibit them from continuing their operations.  We can also reverse existing transactions.

- We can insure WIP, for example the WIP held in the CBIP bank and future banks.  (Similar to the FDIC in the United States.  - "The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the U.S. Congress to maintain stability and public confidence in the nation's financial system by insuring deposits, examining and supervising financial institutions for safety and soundness and consumer protection, and managing receiverships.")

- We already have volunteers committed to making WIP a success.  These volunteers can take many broad actions to ensure the fairness and transparency of the WIP ecosystem.


That said, although several mechanisms for enforcement are quite clear, the question remains: what rules shall be enforced?


To give you a simple example: as Chairman of the Federal Reserve of WIP I have received some WIP as a stipend.  Over the holidays a family member asked for WIP, and I will be giving a small amount (0.1 WIP) to this family member, from my own stipend, and with full disclosure.

Naturally since I am Chairman of the Federal Reserve of WIP I could do things that ran strongly contrary to this separation of interests.  At the moment there are no checks and balances.  I could, for example, treat family members with special privileges.  Or I could siphon off an unreasonable amount of WIP without public accountability.

While I have no intention of doing any of the above, some sort of central oversight and judicial process would certainly go a long way toward keeping WIP honest.  At the moment you have no assurances - and no process in place - except for the unilateral decisions of the Federal Reserve of WIP, which is not subject to any regulation or oversight and can take any action at any time.  While even with these restrictions there is strong interest in WIP, the economy will be even better off once further processes, checks, and balances are in place.

The result, a community-owned currency that has an actual monetary authority capable of easing the money supply and taking other actions to keep WIP at a reasonable level of inflation, with reasonable interest rates, and with high accessability, will be a boon to all its users.  At the moment, other currencies have a 100% APR, if they are available for borrowing at all, for example.

For this reason I do welcome your suggestions on creating some of the above framework.  Perhaps you would like to apply as an independent advisor?  There is no stipend for this position, but your input would be very welcome.

Thanks again for your thoughts, and I do look forward to more of your input.

Wishing you happy holidays:

Chairman of the Federal Reserve of WIP

The number you state, 100,000 employees, is very large.  The entire congressional staff of both the United States Senate and House of Representatives is only about 10,000 employees.  Also, do consider that $200 million has been spent on mining equipment for bitcoin.  If that money had been spent on moderate arbitration stipends for 100,000 volunteers, it would have more than accounted for these stipends.  Bitcoin has an admirable market capitalization of over $4 billion as a currency.  But fiat money supplies such as the USD - which have no online public ledger - have a market cap that is over 3,000x higher.  We hope to show that we can reach some of the usage cases that are inappropriate for the decentralized, irreversible bitcoin system having a fixed or slowly-inflating money supply and no central control.

To do so we do require trust and accountability, and sane policies in the best interests of the WIP ecosystem.  Thank you for sharing your thoughts, Franky.

Best regards:

Chairman of the Federal Reserve of WIP

One of the things that makes Bitcoin's value so volatile - if consistently rising in price - is its very limited supply.  $200 million has been spent on equipment to mine BTC, whereas all BTC in existence (and even that which has been lost) has a value of $4.3 billion at current exchange rates.  (These exchange rates are not very deep, subject to some level of manipulation by holders of BTC, and also do not reflect lost bitcoins.)

This very tight money supply does give bitcoin an edge in retaining value.  However, it is a serious impediment to adoption as a money supply.  In order to be currency, a coin needs to be in high circulation.  It needs to have acceptance and be in usage.  While the bitcoin money supply is as tight as it is, this is very difficult for bitcoin to accomplish.

The Federal Reserve of WIP has a moderately loose target for the ease of the WIP money supply over time.  A moderate level of inflation will spur investment and usage of WIP.  For example, for inflationary reasons, I would greatly prefer to keep my WIP with the CBIP (the first accredited bank in the Federal Reserve of WIP trading system, and independent of the Federal Reserve of WIP), at a moderate interest rate, than to keep it directly on the ledger without any interest rate and lose value directly to inflation.

Secondly, by having a central policy that enables lending of WIP at reasonable interest rates - a central goal of the Federal Reserve of WIP - it can be one of the only coins actually available to borrowers who have some productive usage of them.

In both of the above senses, bitcoin currently fails.  While it is undoubtedly a currency in which the BTC remittance network is denominated, as a practical currency it has a difficult fight for adoption.

This difference will be easier and easier to see as our policies unfold.

We welcome any of your thoughts in the meantime.

Best regards:

Chairman of the Federal Reserve of WIP

In your post, does PoS stand for "Proof of Stake" or http://www.urbandictionary.com/define.php?term=pos ?


Chairman
Federal Reserve of WIP

Hi everyone,

Hope you're enjoying a merry and festive holiday season.

As many of you know the Federal Reserve of WIP launched a centralized, fiat currency a few days ago (based on a centrally controlled public ledger - see my other posts).  In the few business days that have passed since, we have seen a 44.22% day-over-day growth in number of new users, as well as a 100% growth day-over-day in number of coins and their velocity, while the money supply was increased by only 5% since inception.  Please note that WIP is currently pegged to $0 and may only be used in transactions without monetary value, such as favors, gifts, and so forth - so that this strong demand in the face of such restrictions is particularly exciting.  Within days of launch, we also have had our first applicant bank into the Federal Reserve of WIP banking system, which has been approved.  The Commercial Bank of Internet Points, CBIP, is now an official lending institution in the Federal Reserve of WIP system.

The main difference between WIP and other currencies is that the Federal Reserve of WIP retains complete autonomy over the coin and its ecosystem.  This means we can rewrite the public ledger at any time.  It also means that unlike other coins, we are able to enact laws and rules for our ecosystem, reverse fraudulent transactions, and so forth.

In keeping in mind the vast power we exercise over our coin, I was wondering what the community's thoughts were in terms of formal governance?  For example, how should the limits of the Federal Reserve of WIP be set constitutionally, how should there be oversight over its actions?

As Chairman of the Federal Reserve of WIP, I would welcome feedback into the kinds of formal processes that the community believes works.  We have seen companies go from two graduate students to a market cap in the several hundred billion on a policy of "Don't be evil."  We would like to follow in those footsteps.

As an Internet currency, what can we do to be the best, fairest, and most accessible currency on the planet?

We welcome your feedback, and thank you for the fantastic feedback to date.  Don't forget to bank with CBIP, where I will be keeping my own personal money.

Best regards:

Chairman of the Federal Reserve of WIP

Dear Bitcoin community,

The Federal Reserve of WIP, which has announced the WIP centralized coin a few days ago (at parity with $0), and seen a phenomenal quick adoption rate, with the number of holders of WIP increasing an average of 44.22% day-over-day every day since launch - a rate we hope to sustain for several more days to weeks - is seeking a volunteer auditor and an economist.

For the announcement of WIP please see this thread: https://bitcointalk.org/index.php?topic=896826 and please see my other threads for further details.

If you would be interested in the position of either a volunteer external auditor, or a contributing economist, please reply by PM with details of your background and interests.  We hope to share numbers and details with you in the case of an external auditor, and in the case of an economist to discuss upcoming monetary authority policy decisions.

WIP is a totally new kind of centralized fiat Internet points system, with many of the benefits that have allowed real-world fiat money supplies to attain a market cap in the double-digit trillions.  WIP is an Internet currency at parity with $0, however by exercising some of the same central bank actions, we hope to demonstrate the benefits and some of the pitfalls of a centralized fiat currency.

There is a small WIP stipend associated with each position.

We very much look forward to hearing from you, and good luck to applicants.  Do write to us very soon.

Best regards:

Chairman of the Federal Reserve of WIP

Dear Bitcoin Community,

We have a couple of very exciting announcements to make today.  Firstly, we welcome the first commercial bank into the Federal Reserve of WIP banking system, the Commercial Bank of Internet Points (CBIP).  CBIP is a fully independent bank run by user fewcoins.  It is the first bank of WIP coins, and capitalized directly by an interbank loan from the Federal Reserve of WIP.  It is subject to all of our banking regulations now and in the future.

As part of our oversight of the WIP ecosystem, the Federal Reserve of WIP has mandated that CBIP -- and all WIP banks -- maintain a 20% reserve ratio.  This is a historically high reserve ratio that is meant to ensure a stable WIP economy and ecosystem.  Its purpose is to ensure that the CBIP can meet all of its obligations for the foreseeable future.

Although our relationship with the CBIP is at arm's length, the CBIP is a Most Favored Nation in the Federal Reserve of WIP banking system, and an important ally.  If the CBIP is open to private deposits, I hope to deposit my personal WIP coins in an interest-bearing CBIP account.  In addition, the CBIP is your important source for commercial and private loans of WIP.

Please write to the President of the CBIP, fewcoins, directly at: https://bitcointalk.org/index.php?action=profile;u=379923  with your loan and banking requirements.

I want to emphasize the importance of this historical step.  Since its launch a few days ago, the WIP economy has grown 44.22% day over day in terms of number of users, and along with the launch of CBIP, the number of coins that have been in private possession and their velocity have increased by close to 100% per day, with to date only a 5% increase in the money supply.  This makes WIP one of the fastest-growing currencies, and with the launch of its first commercial bank within the first week, perhaps one of fastest seriously adopted currencies.

By being careful stewards over an inflationary and expansionary money supply, we hope to make WIP the most accessible crypto currency in existence.  Certainly, it is the only one that can easily be borrowed from the CBIP at competitive interest rates.  If you have any questions, do feel free to contact fewcoins, the President of CBIP directly.

Finally, I must still emphasize two important areas: firstly, the Federal Reserve of WIP exercises full and sovereign authority over the entire WIP ecosystems, including retroactively.  We can enact any rule we see fit, including over the balances of the Commercial Bank of Internet Points or any other user of WIP, at any time, and for any reason or no reason.  This includes retroactively rewriting the public ledger and history of transactions.  Secondly, we wish to emphasize that at this time WIP may only be used for transactions with a parity price of $0.  i.e. it may not be bought and sold directly in exchange for other currency; suitable transaction consideration could be favors, friendship and social networking, or other transactions with a nominal price of $0.

It is exciting to see the large growth the WIP economy is experiencing despite these present constraints, and we are excited to show the benefits as well as pitfalls of a centralized system over the coming days and weeks.

We welcome all of your questions and comments and thank you for everyone's support and usage.  We are sure WIP will be the most exciting Internet currency in your portfolio over the coming year.

The Federal Reserve of WIP will be closed on 25 December and 26 December, 2014.  From December 24, 2014 to January 5, 2015, there will be only intermittent updates to the public ledger.

Best regards:

Chairman of the Federal Reserve of WIP

https://en.wikipedia.org/wiki/Reserve_requirement


Summary of public ledger updates below:
1.  Transfer of 0.5 WIP to wolf0.
2.  Central Bank loan to Commercial Bank of Internet Points, CBIP, 30 points.
3.  Creation of 5 WIP.


-

* * * * * * * * * * * * * * * * * * * * * * * * *
FEDERAL RESERVE OF WIP PUBLIC LEDGER AT Tuesday, 23 December 2014 5:22:49 p.m. GMT GMT r6

History:
[1] Transaction 54-61-48-63-53-01 Wednesday, 17 December 2014 10:55:54 p.m. GMT, the Federal Reserve of WIP  hereby creates 100 WIP.   Account: 29-27-47-01-34-01   Amount: +100  

[2] Transaction 54-61-48-63-53-02  Wednesday, 17 December 2014 11:54.37 p.m. GMT, TRANSFER from Federal Reserve of WIP account 29-27-47-01-34-01 -> Chairman of the Federal Reserve of WIP account 67-73-78-68-97-01. MEMO: Federal Reserve of WIP Chairman stipend for December 2014. AMOUNT: 0.5 WIP.

[3] Transaction 54-61-48-63-53-03 Thursday, 18 December 2014 2:55:50 p.m. GMT, transfer from Federal Reserve of WIP  29-27-47-01-34-01 ->  29-27-47-01-34-02 (set aside for kingkedi, currently under Federal Reserve of WIP Account).  MEMO: this is being extended to kingkedi at an interest rate of 0.287% for 3 weeks.  Currently held by Federal Reserve of WIP.  AMOUNT: 0.025 WIP

[4] Transaction 54-61-48-63-53-04 Thursday, 18 December 2014 2:56:21 p.m. GMT, transfer from Federal Reserve of WIP ->  29-27-47-01-34-03 (set aside for jonald_fyookball).  MEMO: This is being extended to jonald_fyookball at an interest rate of 5% p.a. for a duration to be confirmed.  Currently held by Federal Reserve of WIP.  AMOUNT: 0.025 WIP

[5] Transaction 54-61-48-63-53-05  Friday, 19 December 2014 10:07:33 a.m GMT  TRANSFER from "Federal Reserve of WIP" account 29-27-47-01-34-01 ->  individual, account 23-36-64-13-66-01  MEMO: Friendship economy.  Amount: 5 WIP

[6] Transaction 54-61-48-63-53-06  Saturday, 20 December 2014 4:43:23 p.m.  GMT TRANSFER from "Federal Reserve of WIP" account 29-27-47-01-34-01 ->  fewcoins, account 31-47-62-09-56-01   MEMO:  WIP adoption alignment and related  Amount: 1 WIP

[7] Transaction 54-61-48-63-53-07 Tuesday, 23 December 2014 5:07:54 p.m. GMT TRANSFER from "Federal Reserve of WIP" account 29-27-47-01-34-01 -> wolf0, account 12-61-85-24-19-01 MEMO: friendship economy and alignment     Amount: 0.5 WIP*

[8] Transaction 54-61-48-63-53-08  Tuesday, 23 December 2014 5:12:28 p.m. GMT  TRANSFER from "Federal Reserve of WIP" account 94-34-74-63-54-01 -> Commercial Bank of Internet Points (CBIP), account 94-34-74-63-54-01   MEMO: Central Bank loan at 5% p.a. as a regulated bank in the Federal Reserve of WIP banking system.*

[9]  Transaction 54-61-48-63-53-09 Tuesday, 23 December 2014 5:21:27 p.m. GMT,  the Federal Reserve of WIP  hereby creates 5 WIP.   Account: 29-27-47-01-34-01   Amount: +5 WIP *

Total WIP in existence: 105 WIP.

--

Statement of Account.

Possessors of WIP:
[1] The Federal Reserve of WIP.  ID:  29-27-47-01-34-01.  Possesses 68 WIP.
  of which:
  29-27-47-01-34-01  -- 67.95 WIP main account
  29-27-47-01-34-02  -- 0.025 WIP reserved for kingkedi
  29-27-47-01-34-03  -- 0.025 WIP reserved for jonald_fyookball

[2] Chairman, Federal Reserve of WIP (personal).  ID: 67-73-78-68-97-01   Possesses 0.5 WIP.

[3] Friendship economy network member,  ID: 23-36-64-13-66-01    Possesses: 5 WIP.

[4] fewcoins, ID: 31-47-62-09-56-01   Possesses: 1 WIP.

[5] wolf, ID: 12-61-85-24-19-01 Possesses: 0.5 WIP.*

[6] [Authorized Bank] Central Bank of Internet Points (CBIP), ID: 31-47-62-09-56-01   Possesses: 30 WIP.*


Repayment obligation:
- debtor CBIP, 31-47-62-09-56-01, owes to creditor Federal Reserve of WIP, 29-27-47-01-34-01,  amount of 30 WIP plus 5% p.a. starting Tuesday, 23 December 2014 5:12:28 p.m. GMT, terms to be be specified and amended in this public ledger retroactively.

- None.

Other paper/scrip: none.

* * * * * * * * * * * * * * * * * * * * * * * * *
[/quote]

Dear Jonald_fyookball,

Regarding 1, it would not be possible for us to say that tomorrow you owe any other currency than 1 WIP, because transactions are pegged to $0 and it would be against everything at the stage of launch of the WIP currency for us to involve other currencies and metrics.  It is simply not in our interests to peg WIP to any other value than a parity of exactly $0, and your example would go against this.  Rather, we are pegging to a currency where actions are similar to actions performed as gifts, acts of friendship, or as favors, rather than having real-world monetary transactions.  This is important for our adoption and means that all users of WIP are (in our opinion) without any risk of any kind at any point.

More broadly, within the context of sovereignty that we have outlined, and of pegging to $0, it is in our interests to be excellent stewards of the currency and demonstrate the fastest-growing and largest currency in an online community.  We believe strongly in a strong sovereign state that is able to enact strict rules, eventually subject to some kind of constitutional oversight.  For example, whereas other crypto currencies have no protection against simple ponzi schemes, the Federal Reserve of WIP is an extremely strong and centralized body that is able to outlaw ponzi schemes very strictly.  We can simply and unilaterally remove WIP from anyone running a ponzi scheme, we can require proof of real (albeit gift) transactions to show that a ponzi scheme is not taking place, and so forth.  Likewise we can bring to the table every rule that has resulted in a stable, safe monetary climate in the real world, all while remaining a risk-free gift economy.

Over time, by retaining immeasurable sovereign power over our currency and community, we believe we will be able to build the strongest, fairest, fastest-growing, best, perhaps even only sovereign online currency.  In fact, in the sense of several analogies with real-world institutions (such as the Fed and ECB), arguably WIP is the only online currency currently in existence.  (With crypto currencies being storage of value more similar to gold than a fiat currency.)  That said, we are committed to pegging to a parity of $0 for the time being.


Regarding your second point: WIP was launched on December 17th two days ago and is already owned by several parties.  We have seen approxiamtely 41.42% growth per day in the number of owners, which is a breakneck speed that we hope to continue for several more days or weeks (after some technical additions) with strong growth continuing thereafter.  Also recall that Account numbers and transaction ID's were just introduced today, and the public ledger is still being updated by hand.  At even a tiny fraction of this growth rate you will have more than enough counterparties to trade WIP freely among.

That said, I understand that you would not like to act as a bank or lending institution until you see more available customers or a gift-based business that can produce WIP in a gift economy.  Therefore, I would propose the following solution to you:

The Federal Reserve of WIP has been considering the idea of selling Treasury Bills on the open market in order to finance its own gift economy.  Although we were going to hold off, the Federal Reserve of WIP would be pleased to extend to you the offer (subject to all the previous mentioned conditions) of a T-Bill with par value of 5 WIP and maturing on January 1st, 2016, for a price today of 3 WIP.  (This is not an open market price but your price today.)  

Separately, we would be pleased to extend you a 3 WIP loan at 5% simple interest starting today and due in full on January 2nd, 2016, i.e. approximately 3.15 WIP will be due (a bit more due to the additional two weeks) will be due in 1 year's time.  As the T-Bill that you hold will have converted the day before at a face value of 5 WIP, this will immediately give you a profit of a bit less than 1.85 WIP.  This is very close to what you have requested, being a "gift".  You are also allowed to sell and trade your T-Bill here with our approval, it will be in your possession subject to the same conditions as WIP that is in your possession.  You do not run any further obligation or risk.

This is a very generous offer from the Federal Reserve of WIP and comes with no risks or downsides for you.  Real-world T-Bills are considered to be essentially free of any risk whatsoever, since they have face values denominated in the actual currency sought and being purchased with.

On the side of the Federal Reserve of WIP, the WIP raised through the sale of the T-Bill will form part of the operating budget of the Federal Reserve of WIP, and be considered its debt.  Although conceptually similar, selling to investors on the open market this way is preferable to printing money directly; for one thing it does not cause hyperinflation, for another it is a stable way to increase the money supply over time.

We reserve the right to withdraw this offer, but for the moment extend it as a risk-free alternative to taking on debt, and tantamount to a gift consisting of the difference between the par value of the note you hold and the total capital plus simple interest rate that you also take on, exactly as you have asked.

We hope you will find this offer fair and reasonable, and hope that you will join us on this exciting journey building a real-world analogy of some of the world's most stable and fastest-growing economies.

We look forward to hearing from you.

Best regards:

Chairman of the Federal Reserve of WIP

Hi,

I thought it may interest this sub-forum to read and discuss a detailed response by the Federal Reserve of WIP (drafted by myself) to a query that was received, namely
Our response is here:

https://bitcointalk.org/index.php?topic=896826.msg9890376#msg9890376

As this has a direct bearing on economic matters both by analogy with the United States and Europe (the Fed and the ECB respectively), and the economy we are building here at the Federal Reserve of WIP, I thought you may enjoy a reference to this posting.

I am curious regarding your thoughts, welcome public policy discussion including regarding the policies of the Federal Reserve of WIP, and look forward to hearing your thoughts and answering any questions.

The Federal Reserve of WIP is also intending to sell its first T-Note soon, which will be an exciting demonstration of the principles in action!

I look forward to hearing and answering any of your questions.  Fire away!

Best regards:

Chairman of the Federal Reserve of WIP

Dear Jonald_fyookball,

Thank you for the question. As you ask a forward-looking question, firstly I would like to emphasize that all of the answers below are provisional and that, in fact, the Federal Reserve of WIP reserves the right to do or change anything at any time without notice. Therefore you may not rely on the information below, except with the understanding that the Federal Bank of WIP may behave or not behave in the ways described below at its sole and sovereign discretion, i.e. as it chooses and sees fit, at any time and for any reason or no reason without any limitations.

With this caveat, the answer is that (if the Federal Reserve of WIP so chooses) you can receive WIP from any possessor of WIP as long as the nominal value of the transaction is $0, i.e. in exchange for favors, friendship, free services, etc, similar to in-game actions in a video game. Anyone who possesses WIP may transfer it to any other account (or individual), simply by writing to the Federal Reserve of WIP (at federalreserveofwip@gmail.com), via PM here, or in this thread to initiate the wire transfer. Transactions are performed manually at the moment, and confirmations are sent out by email as well as being visible in the public ledger posted here. Through these means, you can transfer WIP to any other person, who would be assigned an account number if this recipient does not already possess one.

At the moment, if the Federal Reserve of WIP so chooses, you would have the following means of repaying WIP you have borrowed from the Federal Reserve of WIP:

1) Perform a favor or enter another transaction with a parity price of $0, to a possessor of WIP and in exchange receive WIP. For example, at the moment the owner of the account 23-36-64-13-66-01 possesses 5 WIP. If you are in touch with this person directly, you can simply receive a WIP transfer in exchange for performing some favor with a nominal price of $0. Likewise, as Chairman, I possess 0.5 WIP at present and can transfer part of this to you as well, as part of a transaction with a nominal price of $0.

2) In the future as more and more people possess WIP, which is by its nature inflationary, it will be easier and easier to acquire WIP from someone who wants from you a favor, social media interaction, or other transaction type with a nominal value of $0, including other borrowers, and even if you do not have direct contact with this party initially.  You can, for example, advertise gift services and related non-monetary exchanges in exchange for WIP, or any other transaction with a parity price of $0 and receive WIP from such people.  You can sell things for WIP in the real world in this way, as long as what you are selling has a parity price of $0 such as gift services and favors.

3) For those who choose to borrow WIP from the Federal Reserve of WIP, perhaps one of the easiest and most important ways you can receive additional WIP is by acting as a lending institution to borrowers i.e. treating The Federal Reserve of WIP as a Central Bank and being your own lending institution (bank.)  For example, the Federal Reserve of WIP currently lends at a 5% annual interest rate. But users have requested loans at an interest rate of 15% per 3 weeks (i.e. 86.96% annually.)  In this case, as a lending institution you can perform arbitrage among these rates by simply taking a loan from the Federal Reserve of WIP and lending it out to other users, pocketing the difference in WIP. This is extremely similar to how many banks operate in the real world, and like the real world, you will have to compete with other bank rates (other people doing the exact same thing), as well as take your borrowers’ credit and faithfulness into consideration, or non-monetary-based collateral or contractual promises/obligations.

4) The Federal Reserve of WIP may raise money (WIP) by selling Treasury-Bills (T-Bills) on the open market to raise funds for its own use, i.e. its own gift budget. These would be sold at a discount to the face denomination; for example, a T-Bill maturing in 30 days' time and paying out 5 WIP (its face value, also called par amount) may be sold for 4.5 WIP by the Federal Reserve of WIP for example. In this case, if you have received a low-interest loan from the Federal Reserve of WIP previously, you may simply use the WIP you possess to purchase T-Bills at their discounted value.  Upon maturity of the T-Bills, you will repaid their face value, allowing you to pay back your loan and interest obligation, and pocket any difference. For its part, the Federal Reserve of WIP would sell T-Bills in order to finance its own volunteer budget and gift economy operations, much as governments do in the real world.

5) Therefore another important though smaller source of WIP would be the spending of WIP by the Federal Reserve of WIP itself. In other words, after raising money (WIP) by selling T-Bills to others, if the Federal Reserve of WIP spends this money, you would be in a position to receive it by providing a gift economy service of some kind to the institution which it desires. In this way, you would end up receiving WIP, with which you could then repay your earlier loan. However, it is just as possible to receive WIP from anyone else who possesses it, and the spending by the Federal Reserve of WIP would ordinarily be a small fraction of the WIP economy.

6) Finally, although this is not emphasized, the Federal Reserve of WIP intends to act as the lender of last resort. Assuming that you require WIP liquidity to which you do not have access from any source, cannot raise it from other lending institutions, and cannot produce it through gift economy services, the Federal Reserve of WIP would still be in a position to provide a short-term loan to provide the necessary liquidity. Although this runs the risk of creating systemic indebtedness, at the same time it provides extremely important liquidity that can be used in the real-world gift economy to create real 'in-game' value (albeit pegged to a parity price of $0 and in a gift economy.) In the real world, a sustainable level of systemic indebtedness is not in itself necessarily a bad state of affairs, and the real social value of a growing gift economy can act as a tide that 'raises all ships' and makes everyone better off.  Therefore, this solution is not necessarily a bad solution, should the normal inflationary process and incentives fail to provide the necessary liquidity for loans to be repaid to the Central Bank. (Another word which in this case refers to the Federal Reserve of WIP, based on one of its most important functions.)

I hope that this answers your questions about some of the many sources for WIP repayment. Since WIP is by its nature inflationary, with the potential for additional quantitative easing provided by the Federal Reserve of WIP to further spur private spending and growth in stagnant cases, as well as the normal means through which additional WIP is introduced and spent, you can rest assured that you will have access to a stable and growing monetary supply you can use to finance your virtual, in-game gift activities as well as reasonable levels of borrowing now and in the future, provided you use these to engage in real economic gifting activity that provides benefits to others and incentive to spend WIP on your services while being pegged to a nominal transaction prices of $0.  The caveat is that these services may not extend out of game to real-world transactions of value, nor would this be desirable given that the Federal Reserve of WIP rules with complete sovereign impunity, is not (currently) subject to any legal or constitutional checks and balances or limits of any kind, and can take any and all action it desires at any time and for any reason or no reason, without oversight or transparency.  (Beyond the public ledgers it publishes.)

Within this framework, rest assured that we intend to remain faithful stewards of a working system, and we will do our best to show everyone the way in which it works or fails to work.

Jonald_fyookball, we would be honored to have you as among our first borrowing institutions, so that we can begin to introduce WIP into the world gift economy, and we are sure that you will not have difficulty in making the extremely reasonable interbank interest rate repayments, which are a tiny fraction of that of other currencies.  Without emphasis on this degenerate case, in case you did fall into trouble, we are here to help you work out your liquidity needs from a money supply standpoint and get to building real-world gift value and being able to repay your reasonable loans.  By providing real, albeit pegged to a parity of $0 services to the community, or using WIP in any other way you require from a stable money supply, we are sure you will be in an excellent position to benefit from our low interbank lending rates with which we hope to stimulate the economy.

Some of our members have already been extremely surprised that we provide loan rates at a tiny fraction of other currencies, 0.287% per three weeks versus 15%, 5% per year versus 86.96%.  We consider those interest rates unsustainable for any fast-growing economy, and while the WIP economy is based on gift transactions and favors without a nominal value (pegged to $0), the main difference is that by being based on an inflationary centralized currency, we are sure we can create something of lasting value to everyone with stable prices (pegged to $0), a reasonably easy money supply, good employment and usage of WIP, and reasonable inflation and interest rates, all by close analogy to the real world of central banks and fiat currency.

Thank you very much for your interest.  If you have any further questions, please don't hesitate to ask, either here or privately.

We look forward to hearing more from you or answering any other questions you may have.

Best regards:

Chairman of the Federal Reserve of WIP