“Mining” (or better called “Minting“) is the process of creating coins (money in circulation). It shall not be confused with earning money, where no new coins are created, just existing coins are transferred.
The $quid: Useful Investment & Ethical Mining
What valuable to base a crypto currency on? Or what is a worse crime than robbing a bank? What's worse than inventing a crypto currency?
People who defend BitCoins against the “it's a bubble” argument told me they think of this (and of ICOs of other crypto currency projects) as investment into a technology. I doubt that Satoshi Nakamoto will actually sell his coins, so it doesn't quite work, but I'm fine with the idea of investment as such.
I therefore propose a useful speculation object for humans who like the proof of work concept to back a currency (not to back the security of the transactions!) that is in the collection of cowry shells and the mining of gold, or in good rules for fiat money, which are also backed by big, real economies, and the real work that happens there. The common idea between these concepts is that they are valuable, because it is hard work to obtain them. And once you have them, you can exchange them for other goods that are equally hard work, and they retain their value.
But first, I want to explain the name: $quid a combination of the $ symbol (pronounced simply “S” here), and the word quid. Quid is a word for a metal-backed currency, the pound sterling (240 pennies of silver of sterling quality are a imperial pound). But it also is the first word in “quid pro quo”, a very important concept in society, and the foundation why trade actually works. It's about cooperative behavior even when the persons participating are egoists, forced by game theory to be cooperative. But after all, “quid” on its own just means “what?“, a question always valid to ask.
One thing we have in society that lacks a bit quid pro quo is free software development. You give, people take, most of them without giving back. Developers participating in free software development take and give back, and that's why we do it: We all stand on the shoulders of others. Even if you scroll through the licenses of a proprietary OS like iOS, you see an amazing amount of free software that has been used there. The value of free software is incredible.
So how do you mine $quids? You create useful free software, and then you get the right to issue $quids. It's up to organizations like the Linux Foundation or the GNU project to figure out who qualifies and if the amount of work that allegedly went into the project is plausible, this supervision will avoid fraud; but the market liberals probably would suggest that a bidding system like for ICOs (initial coin offerings) is completely sufficient. You could have a combination of both: Bidding and evaluation plus recommendation from trustworthy organizations. Of course, like BitCoin, the $quid is an experiment, and the number of $quids that can go onto that market depend on the acceptance. If the acceptance is high, many projects will ask for funding, if it's low, few, so the value of the $quid is self-stabilizing.
A bidding system would work like this: n $quids are offered. When you buy m, you also offer a factor x>1. The buyers are sorted by factor, and the highest bidder gets his x*m $quids, paying x*m the price of a nominal $quid, but that deduces just m from the offered n, so more $quids are generated from higher biddings. High bidding thus makes other projects want to be funded through that channel, so it increases the amount of coins quickly. Low bidding makes that funding channel unattractive.
The difference between normal sponsorship and this approach is that while the issuers of $quids get paid for their work, the people who pay can trade the $quid, like investors in corporations can sell stocks. And while the effort of a corporation to develop proprieatary software is ultimately lost to humanity, and the pay-back for the investors is through profits, the effort of free software developers is not lost; it can be shared and it can be used to improve and base upon; so paying them and still having the $quid as currency to trade is a fair deal: Society as a whole got richer through the creation of free software, so increasing the amount of money in circulation is ok. I view free software as infrastructure, and investment in infrastructure pays off for the entire economy. Increasing the amount of liquidity therefore is a good way to finance infrastructure.
Free software is a non-rivalrous good. You can copy it as much as you like, you can change it and fit it to your purpose (supposed it is constructed lean enough, and you have the qualification for doing that), so it's not reasonable to trade it on its own. The whole concept behind copyright to turn knowledge and wisdom into rivalrous goods is a bad idea. To society, they are much more worth when they are non-rivalrous.
So therefore I propose to turn the sponsorship of free software development effort, which is a scarce resource (both the sponsorship itself and the development), and creates knowledge (public infrastructure of the information age), into a tradeable currency, and thereby make this work valuable in a classical free market economy sense — just like your summer's harvest can be traded already in winter by means of a “future”. Instead of financing startups, which are classical economy, the initial $quid offer goes into work for the public.
To take out coins that are no longer good use for circulation, I propose that they can be used as donation receipt to get a tax deduction. Ideally, the free market would then shift the tax deduction to countries with very high taxes and rich people who are very eager to get a tax deduction.
Ah, yes, and penguins eat squids, too.