Wei Dai's response on b-money's limitations and prospects

Participants: Wei Dai Adam Back

This email predates Bitcoin by a decade, yet identifies the same fundamental challenges — monetary policy and price stability — that Dai would revisit in his 2013 critique of Bitcoin on LessWrong.

From the Cypherpunks mailing list (cypherpunks@cyberpass.net), December 7, 1998:

Subject: Re: Wei Dei’s “b-money” protocol

Wei Dai replied to Adam Back’s discussion of the b-money protocol, addressing concerns about computational resource waste and the practical scope of the proposal:

On government monopoly of force:

“I now tend to think that the government monopoly of force is a net benefit.”

On b-money’s limited scope:

“b-money will at most be a niche currency/contract enforcement mechanism, serving those who don’t want to or can’t use government sponsored ones.”

On open questions for mainstream adoption:

Dai raised questions about what would be needed for broader adoption, including price stability, business cycles, and optimal inflation rates.