May scale of monetary hardness

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J.C. May defined the following scale of monetary hardness. The following is mostly his words, edited to bring them up to date.

Three essays from different periods follow

Observe that say stock brokerages definitely do not accept credit cards or paypal to fund an account. They will only accept instruments that are very hard, such as wire transfers or certified bank checks.

When hard money is required, only money-types with a hardness of about 5 or better will do the job.

On the other hand, if you're purchasing an online subscription, or consumer goods from a large retailer, softer money-types are more acceptable.

When dealing with conversions between different types of money, generally you can only go "downwards" on the May scale.

Thus, for example it is very easy to accept cash-dollars, and handout paypal-dollars in return. But it would be almost impossible to accept credit cards or paypal-dollars,and hand out cash in return.

It is extremely significant that individuals tend to require harder money in their transactions.

Corporations and large bodies can get away with using softer money, as they have more political (in the broad sense) power to affect the outcome of dubious or revoked transactions.

For instance, selling you a car, I could only trust you if you pay me with a hard money. Say, no softer than 5 on the may scale. No-one takes a personal check when selling a car.

A car dealership, though, can trust you with somewhat softer money .. say up to 7/8 on the May scale (they probably would not take credit cards, though).

WalMart can trust you all the way through to 10 when you buy goods at WalMart. (WalMart have more political recourse if a payment repudiates.)

We are entering the age of the "sovereign individual" where individuals will have ever-more power. More and more, individuals will be able to behave in ways previously reserved for large government or corporate entities. More and more, individuals will be able to fulfill functions previously dominated by large government or corporate entities.

For instance, it would have been in inconceivable in 1900 for one individual to, say, set up and operate a stock market. That would be and could only be the work of a large, powerful, social-political-corporate group.

However in 2000, one individual could completely program and operate stock market with a few hours programming and a web site.

Money systems that are higher up on the may scale are more suitable for individuals.

As we move more and more into the age of the "sovereign individual", where individuals will replace many of the functions of corporate/government entities, there will be more and more demand for money systems that are higher-up on the may scale.

The above essay turned out to be optimistic, but a successor to bitcoin may accomplish what e-gold failed to accomplish.

Original (oldest) essay, where Tim May first proposed the May Scale of Monetary Hardness:
This essay was written in the time when e-gold appeared to be successful. E-gold attempted to do what Bitcoin is attempting to, and failed. Bitcoin was inspired in substantial part to fix the problems that killed e-gold. The centralized single-point-of-failure ledgers of e-gold came under attack by the state, by scammers, and by state backed scammers.

>Your question provokes us to focus on a major factor inhibiting the growth
>of e-gold – that there’s no common way now to put money into an account fast
>(as in a matter of minutes instead of hours or more likely, days and weeks).
>An ironic situation, considering that e-gold is destined for greatness as
>the currency of the internet.

It’s worth noting that funding – say – a trading account with your stock broker is just as "difficult" as buying e-gold.

For that matter, funding a new BANK ACCOUNT is just as difficult as buying e-gold.

When you open a stock broking account at etrade or whatever, you certainly cannotget funds there instantly – your options are wire and wait days, bank check or cashier’s check and wait a week or a personal check and wait a couple of weeks.

A stock broking account, like buying e-gold, is a very HARD form of money. Whenever you are trying to buy a very HARD form of money, using a softer form of money.

Here is the "May Scale" of money hardness (comments invited)

	--hard--
	1 street cash, US dollars
	2 street cash, euro currencies, Aus, japan
	3 egold
	4 street cash, other regions
	5 interbank transfers of various sorts (wires etc)
	6 checks
	7 consumer-level electronic account transfers (eg bPay in Australia)
	8 business-account-level retailer transfer
	--soft--
	9 paypal and similar 'new money' entities
	10 credit cards
	--ludicrously soft!--

Now if you're a retailer and you're selling VCRs, sure, you can take poxy money around the May Scale of 8, 9 or 10.

But if you're a "retailer" and what you're selling is money itself – ie, you are selling e-gold, or you are Quick & Reilly – it is EXCEEDINGLY DIFFICULT to accept anything with May Scale > about 5.

(Note that at coconutgold, we simply only accept wires! All the exchange providers for e-gold who accept money on the May Scale of 9 or 10 are very brave, tough, and quite understandably have to charge fairly high premiums to do so!)

Again the point --- it’s no surprise or horror that it is somewhat DIFFICULT to get e-gold, to fund e-gold .... it’s for exactly the same reason that you can’t instantly fund a stock broking account.

Observe that at Bananagold, we TAKE IN #3 and PUT OUT #8 .. so that’s a very 'secure' transaction. The #3 transactions is essentially not reversible, whereas the #8 transaction is a joke, we could reverse it anytime with a short argument on the phone.)

What a surprise! that banks will only accept money that is at the 1 to 4 end of the May Scale, and they are only really happy giving you money on the 6 to 10 end of the May Scale!

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