Fall2009/Course Project/Economy Simulator/Federal Reserve
From OpenSourceSoftwarePractice
Stub page of the federal reserve.
Contents |
Group Members
Startings
Security
We'll know a lot more once we see how this 'software' begins to shape up. Let's assume that we have files representing currency. One easy way would be to have a file, with the contents of (amount of money, other stuff). The big problem we face:
- Copying the file should not duplicate your money.
Ideas below. Feel free of course, to add your own - it is a wiki afterall.
Idea 1
Files contain:
| Amount | The amount of money the file represents |
|---|---|
| Serial number | A serial number for this "bill" |
| Owner | Who owns this bill? |
| Hash | A cryptographic hash of the previous three. |
The catch is this: we need a networked server to handle transfers between people, and to allow people to verify that money is valid. (That a (serial number,owner) tuple is legit.) Basically, two requests to a internet service of some sort:
- Transfer this serial from this owner to this other owner.
- would need some sort of authorization?
- Does this serial number belong to this person?
Currency Code?
ISO 4217 is an international standard defining currency codes for currencies. USD for United States dollar is probably one you already know. For grins & giggles, we could choose one. XAU (the code for gold) comes to mind.
Alternative suggestions
Checks
Use checks and avoid cash. Everything is done between two people by check. A check is merely a document specifying an id (set by writer of the check), a timestamp, the person to whom the check is written, and the time. The check-writer will create and sign this standardized, parseable check. The person receiving can verify that it was signed by that individual. The banks can verify signatures as well.
Then all that is needed is to coordinate exchanges between banks. This would be an alternative to handling currency in which changes must be validated using an external server. Any entity wishing to start a bank could do so without needing to be fully trusted with the money verification. Banks would be responsible for tracking balances as they are in real life, and audits could reveal manufactured cash.
How much Money to Put in the Market
We will have to chose a certain amount of money to put in circulation. This could be an arbitrary number but needs to be close to the order of magnitude of the GDP.
From http://www.frbsf.org/education/activities/drecon/2004/0404.html
As of March 2004, about $667 billion in currency was in the hands of the public, both foreign and domestic.
This is about 1/50 of GDP.
Curious fact: about 60 percent of the outstanding U.S. currency was held overseas
About Counterfits
http://www.frbsf.org/education/activities/drecon/2004/0404.html
Counterfeit currency? With all of that currency in circulation, the U.S. Secret Service works very hard to protect the reputation of our currency. In fact, when the Secret Service was founded on July 5, 1865, its primary task was to minimize the counterfeiting problem; at that time, about one-third to one-half of the nation’s currency was counterfeit. As a testament to the Secret Service’s efforts, in fiscal year 2001, the U.S. Treasury estimated that less then .01 percent of approximately $600 billion in U.S. currency in circulation was counterfeit! (See page 50.)
