[Noisebridge-discuss] Talk at Harvard & associated paper on how to set up virtual currency systems

[David Molnar]

Relevant to the discussion about e-cash. Talk announcement appended,
in case anyone's going to be in Cambridge. (never know).

The talk looks like a merger of at least two papers available on the
author's site here: http://people.seas.harvard.edu/~kash/

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Event Information:

Date        : 12/14/2009
Start Time  : 11:45 PM
End Time    : 01:15 PM

Title       : Monetary Policy for Scrip Systems: Crashes, Altruists,
Hoarders, Sybils and Collusion, Ian Kash, Harvard CRCS
Description : Scrip systems, where users pay for service with an
artificial currency (scrip) created for the system, are an attractive
solution to a variety of problems faced by P2P and distributed
systems. Despite the interest in building scrip systems, relatively
little work has been done to help answer basic design questions. For
example, how much money should there be in the system? What will
happen if some of the users start hoarding money? I present a
game-theoretic model of a scrip system and show that this model has
Nash equilibria where all agents use simple strategies known as
threshold strategies. In fact, the same techniques provide an
efficient method of computing these equilibria as well as the
equilibrium distribution of wealth. I show how these results provide
practical insights into the design of scrip systems. For example,
social welfare is maximized by increasing the money supply up to the
point that the system experiences a “monetary crash,” wh

 ere money is sufficiently devalued that no agent is willing to
perform a service. Hoarders generally decrease social welfare but,
surprisingly, they also promote system stability by helping prevent
monetary crashes. Furthermore, the effects of hoarders can be
mitigated simply by printing more money.

This talk is based on joint work with Eric Friedman and Joe Halpern.
Location    : Maxwell Dworkin 119
URL         :
Phone       :
Calendar    : Center for Research on Computation and Society