One day Kate has had enough. The barter thing is too tedious. Wild boars have become the most popular meal on the island, and she’s the only who can hunt them. She feels confident enough to tell the rest of the gang that she’s resurrecting the old IslandCoin idea. And she’ll keep track of the balances. She won’t trade anyone boar anymore unless they accept her system. The gang is fed up with this barter thing anyways, so reluctantly they agree.
Another year goes by. Kate calls the shots and everybody has grown to accept her rule as a fact of life. Whenever you want to trade something on the island, you just go to Kate and tell her to update her sheet of balances.
Kate has become the island’s omnipotent central bank.
We ended up with a working system, but nobody except Kate is really thrilled about it. It’s not very efficient and Kate can cause mayhem if she pleases, but nobody knows of any other way.
Suppose another mysterious survivor shows up on the island one day (this happens from time to time on “Lost”). His name is Mr. Nakamoto and he has a great idea for the gang. It’s called decentralized consensus and it’s a nifty method where the entire gang can maintain the balance sheet together. Kate won’t be able to manipulate the numbers anymore.
Well, none of them will.
Even if one of them is out fishing, it can still work out. No need to wait for Kate anymore to be free to handle their business. The gang is happier. If Mr. Nakamoto had appeared in the pilot episode, they wouldn’t have had to waste a year on this damn barter system — or another year living under Kate’s economic dominion.
At a first glance, it seems that Mr. Nakamoto’s idea is just relevant for the island’s monetary system. But this isn’t the case, it’s actually relevant for many areas of life (or business) on the island.
Take advertising, for instance.
Sawyer used some of his firewood to build a big sign in the middle of camp. He thinks it’s a great idea to let Hugo write on it which vegetables are available this week. Kate loves the idea. Whenever she returns from a successful hunt, she wants to display the day’s bounty on the sign so everybody knows to come her way to trade.
An argument ensues. There’s one sign and both Hugo and Kate want to use it. Jack, ever the peace maker, offers a solution. If Hugo and Kate want to use Sawyer’s sign on the same day, they’ll each bid a few coins to pay Sawyer for the pleasure. They’ll bid discretely so the second bidder won’t be able to outbid the first by a tiny amount. Naturally, the highest bidder will get the sign. Sounds like a fair system, but who’s going to go over the discrete offers and choose the highest one? Jack nominates himself. He’ll collect all competing bids and write them on a piece of paper, and by noon will let Sawyer know which sign to display. It’s quite a lot of hassle to do this every morning, so Jack will also take 1 coin as fee for his trouble.
The gang is not loving this system, but nobody has any other idea. Hugo is mostly worried that Kate will take advantage of her womanly charms to get Jack to choose her bids even if they’re lower.
One day, Jack finds a new stash of antibiotics and decides to use the sign to let everybody know about it. The next morning the gang wakes up and sees Jack’s banner displayed on the sign. Kate isn’t very happy that Jack is collecting the discrete bids and submitting his own bids to use the sign at the same time. The whole thing is pretty fishy.