XAURUM EXPLAINED

Introduction

Bitcoin’s invention is most commonly compared to the time of the

American Gold Rush; this analogy is misleading. The analogy

equates bitcoin to gold, this is problematic because it forms the

view that bitcoins are something closer to gold than fiat

currencies, and furthers the confusion between natural and

artificial scarcity. An analogy more suitable for reflection and

analysis a comparison of cryptocurrencies with early coinage, its

invention in Lydia and its adoption by the Greek poleis around

600 BCE. The times of Greek adoption of coinage were an

important factor of civilization, as Athens was sustained on the

silver slave-mines, used mainly for coinage. Reflection of historic

functions of money used in contexts long since decayed through

the ages informs us on their potential improvement and helps us

avoid its regressions. The past is not completely gone, it is

partially preserved, modified in present conditions, the functions

of money are such remnants of history present in the world today

and when we exclude historic analysis from the analysis of its

present use, we make the mistake of confusing its current use for

progress, and miss its regressive moments. The classical

definition of money determines four functions; money is a store

of value, a medium of exchange, a measure of value, and a

standard of value, yet this functions of money are merely the

functions of its use, that neglect an important aspect of money

creation, that became an evident issue, with the private money

creation of cryptocurrencies.

A short history of money and its functions

Value in general is an aesthetic idea, analogous to beauty, yet

used for different purposes. The specific cases of use of the idea

of value, moral-value and use-value, and consequently exchangevalue,

share this essential character. Not only is the idea of

beauty, or the beauty of the artefacts in exchange always tightly

interwoven with exchange-value throughout known history, it is

essentially the same type of idea, one of actual harmony or

empirical reciprocity. Idea of value in general is composed of

abstraction from some empirical idea reflected with the criterion

of identity, its ground is therefore empirical and its essence pure.

We consider value as a general idea of a standard of human

practice, and consequently as the determination of its potential

practice, and the use-value as the idea of value applied to an

object. An object has a use value, if it is potentially useful for

potential human practice.

A semiotic theory of value

Use-value is not the basis of exchange-value, but its ground. Usevalue

is the mark of possession in general, yet when something is

considered without cost it can’t be considered a possession, even

if it is undoubtedly useful. Potential use of something requires

one to possess it, on the condition that its possession is less

costly than it is to acquire or create the possession. This

consideration is based on actual cost as perceived by the subject,

and is only approximately measured by exchange-value. Without

a consideration of cost, a thing is not a possession, but a mere

natural thing, that can enter exchange only through mediation of

property relations. They are retrospectively considered as usevalue,

because they are given an exchange-value, yet differ from

possession essentially and historically. Land and water are such

examples, that can’t and did not enter exchange until after

property rather than possession started to determine

exchangevalue. The obverse also holds, to transform a natural

thing into a possession or property, it must be given a potential

use. For possession, because it is an actual empirical relationship,

a cost is necessary, for property, because its mode is

representation, it is not. This use can be actual or potential and

should not be reduced to consumption, it is its character of

potentiality, that differentiates it from its origin in labour, scarcity

or cost and it is because of it, that it is not fully determined with

it. Potential use with an idea of cost makes a thing a possession,

yet this is not sufficient for exchange-value. When possessions

are exchanged directly, there is no exchange-value, no standard

of this particular practice, that could determine this

intersubjective interaction. Only with mediation can exchangevalue

gain its autonomy as a specific type of value, as a

specialized semiotics that determines the potentiality of practice.

This process of specialization is a continuum that requires

increasingly complex objectification to progress. It is the semiotic

character of exchange-value and its mediating force between the

general semiotics of cultural values that is a necessary part of

historic analysis of production, as the transformations of practice

are essentially ideal and objective, regardless of their

implementation in things and relations. There is no dialectics

between use-value and exchange-value as ideas, because they

are the same idea, the potentiality of an object for potential

practice, and no dialectics of their use as applied to each other,

because there is no fully determinant relation. However, because

use value as a general idea relates the idea to particularity

without mediation. With exchange-value the bonds of actuality

are broken. The idea of exchange-value is one of relationship

between property and possession, grounded in the relationship

between potential and actual possession. The peculiarity of this

mode of value is evident, when we relate it to use-value as its

ground. Use value is the potentiality of an object for potential

practice, and as its particular mode, exchange value is the

potentiality of a potential object for potential practice. Because it

determines practice not with an object, but with a potential

object, the object must be replaced with property relations, and

because property relations depend on the general idea of value

and its implementation in a given society, it therefore relates the

particular practice to its generality. Exchange-value includes the

relative measure of cost of the object, yet even in primitive

societies, this is not a better more adequate measure of cost, it is

a desubjectivisation of this measure, by objectification and

therefore a more durable measure. By relating between property

and possession, exchange-value rises things to the domain of the

concept, and mere causality to the mode of representation, this

of course is not an event, but a gradual process far from

completion. Exchange-value is therefore a particular mode of

use-value, that as its special mode encompasses its totality as its

content, this inclusion is particular and empirical and depends on

the context of the exchange. This does not mean that exchangevalue

determines every aspect of the human practice, but rather

that potentiality of human practice partially determines

exchange-value, and is expressed in it. Because of its

indetermination, it can determine itself, the more human practice

is itself determined with exchange-value, the more exchangevalue

can be determined with exchange-value. Determination of

potentiality of practice with exchange-value produces a surplus

when made actual, yet because it can be actualized either as

additional exchange-value (profit) or additional use-value

(productivity), this surplus is indeterminate. When use-value of

an object is used to produce exchange-value, there is no

determinate relationship, no direct adequate relationship

between cost and profit, because there is no relation between the

use-value of a particular thing to the exchange-value it occasions.

This particular relation is determined by practical adequation of

the thing to its extrinsic purpose, productivity. The relation of

profit to productivity is necessary for growth of productivity and

the growth of productivity for progress. In negative terms, the

decrease in loss of exchange-value should be related to the

decrease of loss in use-value, risk of losing money to the risk of

losing productivity. This relationship is far from necessary initself,

but necessary to some degree for a society to function,

when this relationship is dissolved and the relationship between

profit and productivity is lost. Exchange-value is the idea that

encompasses the space between possession and property, and

had arguably first entered the world in gift economies of primitive

societies. When a society receives a gift, it is confronted with the

possession of something that is not its property. A gift is at the

same time a thing to possess and an obligation to repay it with

another - debt. Spirits of another tribe haunt the society

possessing the gift, until it is repaid. To reverse Feuerbach’s

thesis on alienation; it is not that human essence is alienated and

objectified in religion, but rather the objectified from of alienation

is given a human essence - it is spiritualized. This spiritualization

is coincidental, this objectification had to be represented, yet

could not be represented adequately as humanity’s knowledge of

the world was still inadequate both in its mode and

representation. Property used as a distinct idea from possession

is first used as spiritualized, yet its essential character of

knowledge is preserved through history. Religion as a mode of

knowledge plays the role of organizing societies as the original

mode of lawfulness, based on divine reciprocity and law. Property

is actual only when possession can become non-actual, when its

actuality is not merely negated, but transformed into potentiality.

Yet with progress, additional risk, uncertainty or entropy is

created that requires mitigation. Systemic entropy is the way

systems are open to their environment, not only does entropy

endanger the internal distribution of exchange value, as the

element within a system, it endangers the system as a whole,

and therefore the use-value of exchange value, and the use-value

affected by it. The two dangers are the result of a single

mechanism of increasing entropy of practice; for both exchange

and production externalities multiply. When externalities can be

accounted for and included in the system, they incur growth,

when not, their decay.

Possession, property, debt, money

It is only by the virtual shadowy double of possession, debt, that

property, becomes actual as property, and can therefore be used

as property, not mere possession. This use implies property

relations and their codification as law and consequently produces

antagonisms with the spiritualized codifications of ‘natural’ or

divine law. The antagonism is a driving force of human progress,

the complexification of human interaction, creation of new types

of interaction and new types of practice facilitated by tool use

sometimes occasion a better form. A new thing means a new use,

and a new use a new type of human interaction. By using

property instead of possession, human interaction can rise in

complexity, that changes the world it inhabits. This mechanism of

intra-societal gift exchange, we can speculate, works as a

selection of societies with potential for cooperation; when a

society returns the favour, it demonstrates that it understands

reciprocity, and therefore shows itself as possessing the

conditions for cooperation. Reciprocity can only be tested when

there is a difference between possession and property, this

reciprocity is the standard of value necessary for exchange value,

that can’t arise from barter, where things are directly exchanged,

but requires the form of exchange, where the process of

exchanging is given a durable form, that can either be completed

or not. Risk of non-reciprocity is used to export the greater risk of

noncooperation; particular reciprocity is used to secure a more

general reciprocity. The particular reciprocity became the special

standard of exchange value, the general reciprocity one of value

in general, that was at first spiritualized as divine. Because

general concepts are more abstract they elude the imagination of

men, so from dawn of civilization, the more concrete tools and

concepts of exchange value are used as their allegories, and

obverse because the particular order of reciprocity is incomplete,

it is supplemented with the divine order. Barter can be viewed as

the solution to mitigate the risk of non-reciprocity, once the risk

of non-cooperation is no longer a threat. Proto-money is therefore

a semiotic tool, an object used for mediating between property

and possession, that creates a specialized thing one can possess.

Specialization is a specialization of use, that cannot be complete,

because it includes its exterior, human practice in general and

therefore both use-value and value in general. The difference

between intrinsic and extrinsic money is one of degree, both for

the general concept of money, in its historic development, and

for the particular case. We can construct two ideal abstract types

of money that do not exist, but serve as the representations of

the extremes of the spectrum of intrinsic and extrinsic money.

Pure intrinsic money, as pure commodity money, where its

exchange value is perfectly identical to its use value, and pure

extrinsic money, as pure token money, where the function of

exchange value is completely identical to its use value, meaning

that its only use is its use as exchange value. When a money is

pure commodity money, there is no difference between the value

of something used as a commodity, the value of its cost of

production, and the value of it used as a currency, and therefore

no change of value in its use as money. This is practically not the

case, as commodity money is affected by demurrage, a loss of

material and value through use, or the cost of its use, and

because it could only be made into money by the cost of its

creation. When something is created as money the immediate

identity between exchange value and its cost is lost, by the

addition of its own use-value and its own exchange-value –

money is not a pure medium of exchange. The difference is either

negative, that produces undervalued money, or positive that

produces overvalued money, in regard to the commodity out of

which it is made. True money is therefore no longer a mere thing

that emerges from a practice of exchange, but rather a relative

formalization of this practice into a system where the money

serves as a transmitter. The monetary system includes money as

the relationship between possession and property, and is used in

a formalized context of laws and regulation. The system includes

its exterior as cost and as debt, and therefore actual and

potential cost, because debt carries with it the uncertainty of

cost. Because the element can’t represent the whole in the same

way, that it represented some part of practice as proto-money, it

merely expresses it and obscures the costs of money creation.

The more difference between the cost and nominal value, the

more obscure the cost of money. The independence of nominal

value through history is the independence of property, and the

independence of property depends on the complexity of laws.

Because money is used as a measure of value, by obscuring its

relationship with cost, the relationship of all economic interaction

to cost is obscured. This practical problem, was to be solved by

the market, yet in this regard, markets are inefficient, they can at

best produce a Nash equilibrium, where risk is the lowest in the

given context, yet cannot relate the order of representation to

the order of things. The greater the obscurity of costs of

production, the more obscure the relation of the system to its

exterior, and therefore the lesser efficiency in the system’s

regulation of this relation. Civilization emerged with

domestication of plants and animals and their use for human

purposes that produced a surplus of use-value. The centralized

warehouses were likely to function as combination of different

social functions, as storage, security, banks and temples. The

obsession of early cultures with the connection of the world of

men and the world of gods was perhaps not a mere fantasy, but

the mark of the knowledge of two distinct orders of reciprocity, or

rather the insufficiency of particular actual reciprocity. What the

actual exchange lacks must be imagined, not to lessen one’s

suffering and pacify oneself with the injustice of the world, but to

sustain the actual exchange itself. The representation of debt,

seals signifying what the granary owes to a person, were likely

already used for trade as true money. Symbolic tools for

counting, keeping ledgers etc. predate written language, yet

accounting remained isolated knowledge, part of the mysteries of

the priests. Inter-societal exchange done by individual traders

used commodity proto-money, obsidian and precious metal such

as gold and silver, while intra-societal exchange used more

durable food such as grain and barley. Grain became the medium

of exchange, yet because grain has to be weighed to determine

its quantity, it was not suitable as a standard of measure of

exchange-value, for this function domesticated animals like oxen

and cows were used (one can quickly spot, that a third of a cow is

missing), so the nominal value was determined in terms of oxen,

and paid in grain or metal. The functions of money were separate

in proto-money and money, the standard used for unit of

account, was not combined with medium of exchange and store

of value, the functions are separated in practice because not all

could reliably substitute weighing with counting, the main event

facilitating this substitution is the invention, adoption and

development of coinage.

Invention of Coinage

The Lydian Lions, coined by the Lydian King Alyattes are arguably

the first coins, they differ from proto-money such as shells, axes,

metal, cattle, obsidian, wives etc. by the distinguishing mark of

authority that gives them unity of a standard. While proto-money

can function as money, it is not created as money, but rather

becomes one through practice and is therefore limited to that

particular practice. Coins are of course not the first money, that is

perhaps as old as representation of counting, yet it nonetheless

represents an important historic event, that sheds light on

important aspects of functions of money and a milestone in the

unification of the different functions of money. There is evidence

to suggest Lydians were not the inventors of coinage, but are

merely considered as such by most classical authors because of

the proximity to the time and place of its Greek proliferation. It is

this proliferation and its conditions that tells us more about

money than immediate innovations of coinage. Lydian Lions were

coined as electrum, an artificial mixture similar to the natural

alloy of gold and silver from the river Pactolus, and were debased

with copper, providing the Lydian king with the profit of money

creation - seigniorage. It is likely that Lydian king Alyattes

invented coins to tax the ongoing bullion trade, by enforcing the

exclusive acceptance of the bullions with his mark for official

purposes therefore collecting seigniorage, or perhaps to lessen

the cost of the sacrifices made to gods. His son Croesus,

reformed the coinage into a bimetallic system of relatively pure

gold and silver coins, that became more usable for other

purposes, because of a monopoly over the mines of gold, he fixed

the ratio between them in a way that extracted seigniorage by

overvaluing gold, and did not have to debase the coins

themselves. A monopoly over gold supply was necessary for this,

along with a strong government that could guarantee the use of

overvalued money, the innovation of coinage considered in this

way, seems more like an innovation of the use of seigniorage as

tax, not as immediate replacement of counting over weighing

already done partially by other forms of money. Seigniorage

differs from normal taxation in important ways, it preserves the

exchange-value of intra-societal exchange by enforcing the

nominal value, and increases the exchange-value of the

government, the loss is only the relative loss of individual in intersocietal

exchange, mostly affecting the periphery of empires. It is

also a tax much easier to collect, value doesn’t have to be

collected from each and every individual, only its official use

must be enforced, as an added benefit, people are of course

happier to pay taxes with overvalued money. While early

warehouses/banks could perhaps collect seigniorage on issuing

their tokens, this seigniorage had to be repaid, with coinage, debt

was free. By this exclusion of determination of debt, coinage

seigniorage could benefit as-if without cost, increasing the power

of the whole, by sacrificing only the individuals when interacting

for their own interests – this is the innovation that benefited the

Greek.

Adoption of Coinage

Coinage did not represent an immediate benefit for trade, as the

already existent trade tools served better for economic

transactions between individuals. The distinguishing mark of true

coins is the mark of authority that provides the coins with the

uniform type, this is the function of measure of value that creates

for it a common type and serves as a unit of account and the

standard of measure. It creates a guarantee that something is

money, not merely by making it recognizable and easy to

authenticate and fungible, but ensures its practical use as

money, by enforcing its use for official purposes. The creation of

money as money, produces a formalization of money, and

transforms money from a thing used as money, to a system

where money is an element of economic exchange with artificial

scarcity grounded on seigniorage. It is therefore more interesting

for theory to look at the benefits of coinage from the perspective

of this shift from money as a thing to money as a system, and

focus on the official purposes and seigniorage, than their classical

functions that are a question of their practical implementation.

The Greek adoption was facilitated not only by economic use, but

mostly by the particularities of the Greek relationship between

exchange-value and value in general. The antagonisms between

divine law and economic exchange were plaguing the aristocratic

Athens. After Theseus unified Attica under Athens, the nobility

had the right of property, they owned the lands that could not be

sold or purchased and required farmers to pay rent in feudalistic

system. The common people of Athens were losing their

autonomy by becoming debt-slaves - when they were incapable

of paying their debt, they were enslaved by their creditor. This

kind of society lacked unity of interests, and produced

widespread civil unrest. Draco was appointed to deal with it

severely, when he failed, Solon reformed the society, by

cancelling debts, making deb-slavery illegal and including

common people into politics. He transformed political

participation from one based on blood, to one based on wealth,

and made political functionaries at least partially responsible for

their action. The divine law, on which property was founded, was

slowly falling into the domain of men, not only had debtslavery

ended, a new unity of politics was born, and nobility became

subjected to law. Athenian economy prospered as a result of

reforms and new interest for wealth. After being ruled by a

benevolent tyrant Peisistratos, and his malevolent son Hippias,

Cleisthenes reformed Athens based on isonomia, equality before

the law, that resulted in the first democracy. Around the same

time Athens coined its coins, and ushered a new era of exchange.

Before this time, aristocrats had no need for coinage, as their

land-ownership provided them with sufficient income from debtslaves,

and there was rivalry amongst the noble houses, the

common people on the other hand, had no interest in using

money with additional transaction costs, flowing into the pockets

of the aristocrats. With the inclusion of all free men into politics,

the public treasury became a common interest of Athenians, and

their participation in politics was paid for with money; this

enabled even the poor to attend and enjoy leisure time. An

additional use of coinage was the representation of the value of

land, that had become property governed by civil law, when the

feudal relationship between land and aristocracy was broken. All

would-be tyrants were exiled and their land sold. The ground of

democracy of Athens was cemented by the use of silver coinage,

as the mark of the new form of social contract that practically

served as a redistribution of wealth on the grounds of equality.

Silver coinage was both symbolic and useful, yet before it could

become useful, it was necessary for intra-societal slavery to be

abolished. A society where the interests of the its people were

united was required, to employ a tool that benefited them as a

whole, and exploited foreigners and slaves. Coinage benefited

both Athenians and other trade because of the low seigniorage

on pure Athenian owls as the first successful system of coinage.

Athens, of course did not have to capture much of seigniorage as

difference between cost and nominal value, because the mere

use of silver benefited them more, much like with gold of

Croesus, it was the relatively costless monopoly of slave-mines of

silver that produced the profit of coinage and benefited all free

men.

The rise and fall of Empires

The Romans reused the ideas of the Greek, continued with

development of law, and used the Lydian bimetallism for their

coinage, the use of seigniorage for military payment, and its

function for exchange-value surplus recycling was essential for

the function of the empire. Soldiers were paid in money and paid

taxes, to sustain the growing empire. This could only be done

because of the earlier republic had established a common

interest of the people as the public commonwealth, that has

persisted through the imperial change. Seigniorage is of course

not the driving force of history, however there is some evidence

to suggest, that the collapse of Rome was partially affected by

the inability of the state to efficiently capture seigniorage, when

the gold and silver reserves were depleted at the end of the time

of Pax Romana. The empire lost its benefits of controlling the

dominating currency of the world, and could no longer sustain

itself. This mode of monetary system, had, in its lesser forms,

survived through medieval times, local lords collected

seigniorage for themselves, spent it on conquest. Renaissance’s

innovation in banking, the double-entry accounting, had to wait

for the industrial revolution to transform production, before the

beginning of capitalism that slowly replaced the feudal order.

Christianity had to abolish slavery in general and the French

revolution, had to abolish feudal bonds, before another systemic

change could occur. Early capitalism of Britain, increased the

uses of use-value of new technology for the production of

surpluses in exchange-value. It revived the commercial practice

of fractional reserve banking, as goldsmiths started to issue

certificates and paid interest on the storage of gold, while they

traded a part of it for profit. This kind of representative money,

was the start of modern fiat, as it slowly shed its connection to

the thing it represented and banking become included in its

creation. The scare of the French Revolution, that had employed

full fiat money to sell the land of aristocrats and failed miserably

as the neighbouring monarchies were counterfeiting it en masse

causing hyperinflation strengthened the resolve of monarchies in

the use of gold species standard. Circulation of gold coin slowly

changed into gold bullion standard, where money represents a

fixed quantity of gold and is exchangeable for it, and the gold

standard, where a currency fixed its exchange ratio to the

currency with bullion or species standard. The gold standard was

abandoned as it potentiated the recession of early 20th century

into the Great Depression, and the fractal reserve system was

slowly abandoned after governments lost their wealth to the

world wars. The modern fiat system is partially determined by

this process of abandonment that provided more and more

seigniorage that provides more control over debt and a greater

efficiency of monetary policy, done with fractional reserve

banking that includes the specific debts of economies into the

process of money creation. With this change, the unified

functions of money were unified with functions of public and

private financial institutions. The system of money is separated

from the order of particular things and takes the general thing,

the economy, as its basis, money creation becomes fully

monetized. This makes seigniorage intrinsic, and with this, the

exchange-value becomes fully monetarized. With this full

monetarization, the cost of liquidity is equal to the risk of loss of

exchange-value, yet without an increase of regulation and

distribution, this risk cannot be correlated with the risk of loss of

productivity. Although today the main tool of seigniorage is the

change of interest rates, it is not used well for its systemic

functions and the inflationary model it uses, presents a

progressive tax on the poorest – prices might be sticky, yet

wages are stickier still. The International Monetary Fund was

founded after the Great Depression as an international safeguard

against the dangers of crises, it had denied the proposal of

Keynes, that would enforce a neutral money as international unit

of account, and instead supported the U.S. extraction of

seigniorage from all the world’s economies, and accelerated the

dominion of its monetary policy. This worked as long as the

systemic functions of seigniorage were used productively, yet the

Great Recession had already shown the cracks in the system.

Because fiat systems are tied to the particular economies, their

use includes private interests of governments, and because they

are unified with the private financial institutions, the private

interests of individuals. When fiat is used as a reserve currency

for another country, it presents a considerable advantage for the

economies of the reserve currencies, and antagonisms of

interests in both. Much like Athens in the times of Theseus, we

already live in a unified world, yet one plagued with intra-andinter

societal debt-bondage, one without equality before law,

without a commonwealth and therefore without a common

interest. Far from being an apolitical form of money, cryptocurrencies

enable enforcement of monetary policy without force,

and therefore ground the potentiality of politics separated from

violence and geography. This is the potential of cryptocurrencies,

the progression past the limitations and particularities

of fiat currencies, necessarily tied to the partial interests of their

countries.

The potential of cryptocurrencies

Current implementations of cryptocurrencies still lack much when

considered for their purpose as money, their improvement

regarding the classical functions is necessary, along with the

progress in implementation of seigniorage for its systemic

purpose. The main achievement of Bitcoin, was to produce a

distributed public ledger, whose integrity can be protected with

means of cryptography and economy alone, its use in finance

could decrease the role of shadow-banking and systemic

corruption. However, because the population of crypto falls into

the intersection of ideological spaces between cypherpunk and

libertarianism, the role of public ledger is seen as inessential.

Since the invention of Bitcoin, most of the effort is directed at

removing the public ledger as the function of public transparency

of economic interaction for the benefit of anonymity. Although

anonymity is a useful tool for the individual trying to resist a

corrupt regime, the abolition of this corruption is the greater

cause. The potential of public ledgers to abolish shadow-banking

is still far 11 removed, as crypto-currencies themselves currently

fall into this exact category, as viewed from traditional regulatory

institutions, and more often than not, rightly so, as the vast

majority of interaction in the space of crypto-currencies is one of

fraud. Blockchains are the first implementation of a distributed

public ledger produced by a synchronous decentralized

consensus, it is because synchronicity can’t be achieved with

cryptography alone, that economic game theory has to be

applied for this purpose. There is a lot of technical innovation still

required to increase the use of cryptography for the functions

that are in current schemes done by economics, however the

function of seigniorage will always be determined by economics.

The essential technical innovation of crypto is the creation of a

public ledger with the ability of codification of property relations,

this will without doubt create new forms of relations between

property and possessions, yet will also have to preserve some of

the old, such as money. Public ledger enables triple-entry

accounting, that in addition to the double-entry accounting, that

accounts for values as debt and credit respectively, separately

accounts for the legitimate change of values. Current

implementations of achieving consensus are done by employing

the function of seigniorage in an inefficient manner, this means

they do not represent an improvement over the implementation

of fiat, but rather implement its lower form into a digital context,

by this they constitute a progression of monetary technology, but

not of money itself. Money is a practical semiotic tool that

determines human practice by relating exchangevalue and usevalue

thorough relating property, as codified law of society, to

possession through debt. It is either productive or unproductive in

relating exchange-use and useexchange, by increasing the

potentiality of objects in human practice, cultivating possessions

into a more adequate form for our purposes or by increasing the

exchange-value of the whole. Because it is a practical semiotic

tool that relates property relations to possession, it creates social

antagonisms and conflicts with the immediate relation between

property, law and subjectivity. These antagonisms multiply

especially when the codification of property relations divides the

interests of a society. These conflicts affect the sphere of values

of societies, the grey spheres of morality, as un-codified values.

Money can only relate property to possession through debt, and

consequently requires a mitigation of the increase of entropy of

this inclusion. Because this inclusion of debt is a function of

money creation, that at the same time produces a surplus of

exchange-value as seigniorage, the latter therefore has a

systemic role in the system, one of mitigation of entropy. In fiat,

where exchange-value is fully monetized, this role is crucial, as

monetization means that seigniorage becomes intrinsic, and

representation stops representing, thus completely abandoning

its relation with costs. Money is a system of the relating of

semiotic content to its environment, the regulation of the world

with the dominion of law, and its consequence the formalization

of useful things to property relations and their regulation. While

this process itself depends on empirical forces, on violence, it can

never attain universality it requires, no common interest of man

in general can be achieved and its role as a general equivalent

will always function as the dominion of particular interests. As

long as its existence depends on a particular force, particular

interests play a determining role, and no common social contract

is possible, no common ground. Cryptographically secured public

ledgers remove this need for violence, and provide us with the

opportunity to base the common grounds on knowledge instead

of power. Seigniorage is the essential property of money as

money, a function that connects it to monetary policy and makes

monetary policy internal to it, by this it relates property relations

to the specific possession of money and determines its value.

With cryptocurrencies, a monetary system is possible without the

use of force, and consequently without an actual government, yet

this lack does not make it apolitical, but rather necessitates a

different form of politics for its adoption and use. The particularity

of interest that fiat includes as its monetary policy is possible,

and because cryptocurrencies only have a minimal economy, it

breeds even more particular interests. Despite this, it has a

potential for universality like no other type of money before it.

What is therefore required, is the development of monetary

policy that would circumvent the reliance of money to economy

and use seigniorage for its systemic function, as a mechanism

that exports entropy and correlates exchange-value to use-value,

using profit of money creation for its productive use. The ideal

money, as we view it, is not a currency with a stable value, but

one with increasing value, that at the same time distributes

exchange-value and distributes the surplus of increased

productivity of use-value. A stable currency only means that the

value increased productivity has not been distributed and is a

structural inefficiency in exchange-value distribution, required for

stability of the system. The task of cryptocurrencies is not only

the development of technology to provide a better use of money,

but also the exploration of the space of monetary policies in

these new conditions, to seek improvement in the systemic use

of seigniorage. This is the main concern of Xaurum, the

unification of the interests of all its users, based on an increasing

commonwealth implemented as a cryptocurrency with dynamic

and distributed elastic seigniorage.

Xaurum

Xaurum is a representative cryptocurrency based on an

increasing amount of gold. It is designed as a store of value first,

and uses distribution of seigniorage to achieve its goal.

Regardless of the technology of its implementation, Xaurum

could be summed up as an economic game with the next

economic agents: the commonwealth, traders, users, money

creators and the foundation. Increase of the commonwealth gold

provides the basis of unity of interests of all economic agents,

this is the main systemic function of seigniorage, its other

functions are used to regulate the particularity of the interests of

economic agents into unity. Because the commonwealth is

composed of physical gold, that provides the guarantee to be

exchanged for xaurum, it requires centralized control over money

creation (coinage) and destruction (melting). For this task a legal

entity Auresco Institute was created, that sustains itself with the

rebate on gold. Certified 999.9 investment gold is bought from

Good Delivery refineries and because its retail prices are

relatively high, Auresco can charge its fee while still providing

lower than retail prices of gold for the commonwealth. Because

xaurum in exchange has a higher market value, than the value of

its gold base, the difference can be used for increasing the

commonwealth and incentivizing coinage. Market value is used to

mitigates counterparty risk, and commonwealth value mitigates

market value risk, to ensure its function as the storage of value

with the addition of surplus. Commonwealth is sustained by

seigniorage, collection of fees of transactions and will seek

additional forms of income through economic activity of Auresco.

3.1 Functions of cryptographic monetary systems

(a) consensus

Consensus is a practical intersubjective agreement for a single

data value. Distributed consensus is currently achieved for

cryptocurrencies in two ways, by proof-of-work and proof-ofstake.

Proof-of-work, requires mining, the process of finding

blocks, bundles of recent transactions, and verifying them by

using computation. Mining blocks, verifies transactions and is

rewarded by collecting transaction fees and seigniorage of money

creation. Proof-of-stake uses the tokens of cryptocurrency as

miners, making them less dependent on electricity, as most of

electricity of proof-of-work is not used for useful computation, but

competition for seigniorage. Proof-of-stake currencies use

quantity of tokens for this competition and unite the interests of

users and miners by making possession of tokens sufficient for

creation of new money.

- centralization of seigniorage / division of interests

The antagonism of proof-of-work and proof-of-stake mechanisms

is one between the security of the blockchains and centralization

of money creation - the security of a blockchain depends on the

distribution of mining/staking, and because mining/staking is

collecting all seigniorage, mining/staking is centralizing. Its

systemic function is limited to creation of consensus, creating

antagonism of interests between money creators (miners/stakers)

and users. Another problem of capturing seigniorage is

potentiated by the increased money velocity of cryptocurrencies,

achieved by making the function of money as medium of

exchange digital and therefore much more efficient. This

increased velocity of money, means a loss of captured

seigniorage to the market, as the demand for new cryptocurrency

is indistinguishable from a general demand for more exchangevalue.

The result is the decrease in price that decreases the

exchange-value of users and increases the exchange-value of

miners in another currency, this is factor is potentiated when real

costs like electricity are relevant.

- commodity loss of seigniorage

In proof-of-work seigniorage is captured through competition, and

therefore partially lost in the form of electricity cost (negative

seigniorage mechanism of difficulty), this loss is prevented in

proof-of-stake, as their cost is trivial (liquidity), yet this solution

has its own problems. The cost of liquidity is equal to risk of

value, and because value is correlated to technical innovation it

is immediately endangered by competition, these problems are

perhaps good short-term initiatives for innovation, yet they

reduce their functionality as money, especially as store of value.

Xaurum bases all its other functions on its function as a storage

of value, and uses the proof-of-stake model, its value is the

combination of intrinsic value of the digital asset and extrinsic

value as a representation of a physical-asset.

- end of seigniorage as the base of artificial scarcity

The other issue of current cryptocurrencies is their two-fold

model, that demands the end point to the new money supply in

order to produce artificial scarcity. This is a consequence of the

halving mechanism used for artificial scarcity, where at a point in

time, production of new money supply is halved. Xaurum bases

its artificial scarcity differently, not on the quantity of new money

supply, but on quantity of gold required for new money supply to

enter circulation.

(b) public ledger

The blockchains combine the function of consensus with the

function of public ledger, they are nonetheless distinct and could

be separated in different cybernetic systems. While consensus is

used to prevent double-spending by linking new transactions to

the history of all transactions, the function of the public ledger is

to represent all transactions and distributions in currency, or

rather to publicly represent objective information in general.

Because the blockchain combines both functions, it requires

synchronicity of the system and the whole of the past must be

included in every full node. The true accomplishment of

cryptocurrencies, despite the dominant sentiment in favour of

anonymity, is the public ledger. This is the practical

intersubjective epistemic field, created by consensus that enables

the epistemic agents to know that they know what they know.

Public ledgers are a practical application of the positive

introspection axiom of epistemic logic: “Knowledge of p implies

knowledge of knowledge of p.” and useful for every instance of

our dependence on objective information, such as property

relations, law and money. The classical functions of money that

are based on representation, that is unit of account, standard of

value, medium of exchange, are easily achieved by public

ledgers. Ledgers elevate exchange to the mode of

representation, however the function of storage of value remains

extrinsic to public ledgers. That is, we can know, the unit of

value, the sender and receiver of value, the type of value, but not

value itself. For this reason, all cryptocurrencies are

representative in the same manner as fiat, or better defined as

expressive as the intrinsic value of consensus determines their

value, and should be considered as digital commodities first, and

money second, as the expression of this value. Expression,

however, is not representation and value itself is left

undetermined. Because of the essential function of the public

ledger, Xaurum will prioritise its functions over others in

implementing its policies.

Xaurum monetary policy

The main purpose of all Xaurum monetary policy is to sustain the

common interest by increasing the commonwealth. The

commonwealth is stored as gold reserves that serve as the basis

of Xaurum's value, the increase of the commonwealth increases

the base value of all Xaurum. This means that the ratio of

Xaurum to gold is increasing with coinage, and the users of

Xaurum are rewarded with an increase of exchange-value, both

as the determined increase of exchange-value in gold and the

indetermined increase of exchange-value of its price. Xaurum's

main innovation is aliquid, the dynamic distributed elastic

seigniorage. Aliquid is used for systemic functions of Xaurum and

is the changing ratio between the seigniorage paid to the

commonwealth in gold and the seigniorage paid to the money

creator in xaurum.

(a) the supply of money

Xaurum's money supply is elastic, coinage of new money supply

is determined by demand. Because coinage of new money pays

part of seigniorage to the money creator, the demand for Xaurum

can be only a cloaked demand for more exchange-value in

general, this would mean that seigniorage would not be captured

and the commonwealth would not increase. To distinguish

between the demand for Xaurum and demand for exchangevalue

in general, some additional regulation of coinage is

necessary. The goal of coinage is sustainability of seigniorage for

the benefit of the commonwealth.

- mining

Xaurum mining is done by mining other cryptocurrencies for

value, exchanging their value for gold, and issuing Xaurum. The

higher the quantity of miners mining, the higher the seigniorage

given to them. More miners mean more market activity and

consequently more volume, this increase of volume should be

proportional to the seigniorage given to sustain the price of

Xaurum. The goal of xaurum mining is to find an easy to use

distributed mining process (that seems likely with storage

mining), to provide a distribution of xaurum for trivial costs to the

miner and non-trivial surplus in xaurum. - minting Minting

requires a masternode, possession of 1000 Xaurum as the proof

and guarantee of the common interest that the Xaurum

commonwealth requires. Because minter possesses 1000

Xaurum, he has the good of the whole in mind, as he profits both

from the increase of the commonwealth and from seigniorage. It

is therefore in his interest to sustain the market price both to

keep profiting from seigniorage and for seigniorage to profit him

directly. Minting is additionally restricted by the last price of

minting, as there was demand for new Xaurum at the former

minting, we can consider that there is no new demand when the

market prices are not higher. Minting also requires a legal entity

to be established, to prevent issues 17 with governments. The

goal of minting is to provide a distribution of xaurum for money,

lowering the costs of large amounts of new coinage.

(b) availability of money

Because the immediate relation with the market would result in a

unsustainable inflation decreasing seigniorage, coinage is

restricted by the determinations of coinage, and artificial scarcity

mechanism of increasing density, that ensures that coinage does

not happen with zero or negative seigniorage to the

commonwealth. Through this mechanisms, Xaurum achieves

money supply inflation.

(c) cost of money

The cost of Xaurum increases as the ratio of gold to Xaurum

increases. With the growth of the commonwealth, each xaurum is

exchangeable for an increasing amount of gold, and to create

new xaurum an increasing amount of gold is required. To

accelerate this process and increase seigniorage the artificial

scarcity mechanism of density is applied as the increase of cost

for coinage. Through this mechanisms, Xaurum achieves price

deflation.

(d) cost of transaction

Every transaction pays a small fee, this fee is excluded from the

money supply, further increasing the ratio of gold to Xaurum.

Xaurum Coinage Xaurum Coinage produces new money supply; it

is organized as a commonwealth where inflation immediately

profits all users by increasing the base value of Xaurum in a

greater proportion than it decreases it by money inflation.

Best and safest option to store your coins are the hardware wallets

Ledger Nano S or Trezor Wallet

At the moment you can buy Xaurum from the following exchanges: HitBTC,

Livecoin, C-CEX and Mercatox