wallet/docs/manifesto/May_scale_of_monetary_hardness.md

---
lang: en
title: May scale of monetary hardness
---

Long ago, cypherpunks created e-gold, to solve the problem of the seigniorage tax (inflation), and intermediaries blocking, reversing, and confiscating internet transactions.  J. C. May explained the reasons for e-gold.

E-gold was gold remaining in place, while ownership of the gold moved around.  Then, naturally, governments confiscated the gold.

In response to this problem, Satoshi came up with Bitcoin.  So e-gold is no more, but J. C. May's discussion of e-gold is as relevant as ever.

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

```{=html}
<table border="1" cellpadding="6" cellspacing="0" width="95%">
  <tbody>
	<tr>
	  <td colspan="2" style="background-color: #99CC66;
text-align:center;">May Scale of monetary hardness </td>
	</tr>
	<tr>
    <td style="text-align:center;"><b> Hardness</b> </td>
		  <td> <br/>
		  </td>
	</tr>
	<tr>
	  <td colspan="2" style=" text-align:center;">Hard</td>
	</tr>
	<tr>
	  <td class="center"><b>1</b></td>
	  <td>Street cash, US dollars</td>
	</tr>
	<tr>
		<td class="center"><b>2</b></td>
	  <td>Street cash, euro currencies, japan</td>
	</tr>
	<tr>
	  <td class="center"><b>3</b></td>
	  <td>Major crypto currencies, such as Bitcoin and Monaro</td>
	</tr>
	<tr>
	  <td class="center"><b>4</b></td>
	  <td>Street cash, other regions</td>
	</tr>
	<tr>
	  <td class="center"><b>5</b></td>
	  <td>Interbank transfers of various sorts (wires etc),
		  bank checks</td>
	</tr>
	<tr>
	  <td class="center"><b>6</b></td>
	  <td>personal checks</td>
	</tr>
	<tr>
	  <td class="center"><b>7</b>
		</td>
	  <td>Consumer-level electronic account transfers (eg
		  bPay)</td>
	</tr>
	<tr>
	  <td class="center"><b>8</b></td>
	  <td>Business-account-level retail transfer systems</td>
	</tr>
	<tr>
	  <td colspan="2" style=" text-align:center;">Soft</td>
	</tr>
	<tr>
	  <td class="center"><b>9</b></td>
	  <td>Paypal and similar 'new money' entities, beenz</td>
	</tr>
	<tr>
	 <td class="center"><b>10</b></td>
	  <td>Credit cards</td>
	</tr>
  </tbody>
</table>
```

 [Three essays from different periods follow:]{.bigbold} 

<hr>

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.

<hr>
*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.

<hr>
::: myabstract
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!--

It is not meant to be definitive (eg, 6 and 7 could perhaps be
swapped; I left out cash on call at your stock broker, which is
probably around "2", etc) but gives a framework to think in.

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!