Dogecoin's inventor looks to the past for insight into the future • Hacker News Board

Re: Dogecoin's inventor looks to the past for insight into the future

#111

Post by UncleEntity » Fri, Jan 12, 2018, 6:24 PM UTC

nerdponx wrote: post #18

meri_dian wrote: post #2

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the…

FWIW, there's a plausible argument to be made that the 2008 crisis was aided (although not fundamentally caused) by excessively loose monetary policy in the mid/early-2000s, followed by sharp tightening. That isn't to say the mortgage industry wasn't propped up on fraud, etc. But it wasn't irrelevant.

Well, Austrian Business Cycle Theory claims that it was indeed fundamentally caused by excessively loose monetary policy.

As to plausibility, I guess that depends on your personal views.

Re: Dogecoin's inventor looks to the past for insight into the future

#112

Post by cornyNetHandle » Fri, Jan 12, 2018, 6:24 PM UTC

ummjackson wrote: post #4

meri_dian wrote: post #2

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the…

(author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to…

What I never understood with the blockchain is the idea that it would change the politics of finance in favour of the little guy.

As far as I can tell, financial institutions are exceedingly well practiced at co-opting new monetary systems, as they have been doing exactly that for a very long time, so I never thought that a new model of ledger was ever going to really faze them.

Re: Dogecoin's inventor looks to the past for insight into the future

#113

Post by peterjlee » Fri, Jan 12, 2018, 6:24 PM UTC

meri_dian wrote: post #2

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the…

It wasn't "The sort of activity which led to the financial crisis" that inspired bitcoin. After the crisis happened the US government funded the massive bailout by printing more money. It turned out to be a "good" decision since it prevented a catastrophic economic failure but it did cause more inflation and some people weren't happy that a government can just print more money on a whim.

So that's how the bitcoin came about to make a currency where there are no central governing body that can just print more whenever it wants.

Re: Dogecoin's inventor looks to the past for insight into the future

#114

Post by Certhas » Fri, Jan 12, 2018, 6:25 PM UTC

trevelyan wrote: post #81

meri_dian wrote: post #2

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the…

> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. It actually would deal with the issue that led to the GFC. Remember --- the problem wasn't that there were fraudulent mortgages -- it is that these mortgages were packaged and repackaged in ways that deliberately obscured the risk involved so that people were buying stuff that had no under…

This seems to me to be naive at best. Risks were obscured due to the mathematical structure of CDOs, not by hiding money transactions.

You could spend all day real time looking at the fact that few of the mortgages in your CDO are failing, and then when they fail systemically, you could watch in real time that a lot of assets that were thought to be pretty robust are not.

Your argument seems to be simply that radically more data would enable better predictors. Whether that is true or not, it's unclear whether bitcoin et.al. could help much with delivering that data. If we agree to a contract that I will pay you 5 bitcoin tomorrow in return for 4.9 bitcoin today, that contract is not publically available on bitcoin. Nor is, the fact that a certain money stream is part of a mortgage.

So unless you force every contract to be public, blockchain technology will not help you that much. And if you force every contract to be public, then you don't need a blockchain.

Re: Dogecoin's inventor looks to the past for insight into the future

#115

Post by semanticist » Fri, Jan 12, 2018, 6:26 PM UTC

otakucode wrote: post #79

ummjackson wrote: post #4

Earlier quoted context omitted.

(author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to…

They did come to exist for a reason: geography. Primarily, they served as a way to deposit money in one physical location and withdraw it at a different one at a different time. In the modern era, more and more of the economy as a whole flows through these institutions who do nothing more than shuffle numbers down a network link - and yet they charge a percentage cut of the transaction. It costs no more to transmit a…

> who would

The financial services regulator in the appropriate country. In the UK that's mostly the FCA, in the US it's apparently the guys listed here: https://en.wikipedia.org/wiki/List_of_financial_regulatory_a...

> (or even could) stop them from raising their rates for payment processing

Using financial services regulation. It's not like they're immune to laws.

Your argument is for more regulation, not a deregulated cryptocurrency.

Re: Dogecoin's inventor looks to the past for insight into the future

#116

Post by frik » Fri, Jan 12, 2018, 6:27 PM UTC

ummjackson wrote: post #4

meri_dian wrote: post #2

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the…

(author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to…

Related to joke DogeCoin: One of the US crypto exchanges "Kraken" went dodo. It has been offline for more than 30 hours without prior notice. Maybe another joke, or MtGox -.-

https://news.ycombinator.com/item?id=16131750

  ***MAINTENANCE ANNOUNCEMENT***

  Kraken is presently offline for maintenance.

  While maintenance is underway, the website and API will 
  not be reachable, and orders will not be able to be 
  placed or canceled.

  The Kraken Team

https://www.kraken.com - a former(?) major US crypto exchange

Re: Dogecoin's inventor looks to the past for insight into the future

#117

Post by joyeuse6701 » Fri, Jan 12, 2018, 6:28 PM UTC

soVeryTired wrote: post #55

wuliwong wrote: post #50

Earlier quoted context omitted.

I disagree, I think that the federal reserve's artificially low interest rates and essentially unlimited supply of money for the banks to loan out at these interest rates were at the heart of the most recent financial crisis in the US. A decentralized currency would certainly mitigate that.

What exactly do you mean by 'artificially low'? All short term rates are just a function of central bank policy. The bank will raise or lower rates in an attempt to control inflation (and any other mandate). 'Abnormal' I'd grant you, but not artificial.

artificial as in not 'natural' and natural as in set by market forces, which a central bank setting a short term rate is not a 'natural' market force.

Re: Dogecoin's inventor looks to the past for insight into the future

#118

Post by deegles » Fri, Jan 12, 2018, 6:28 PM UTC

trevelyan wrote: post #81

meri_dian wrote: post #2

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the…

> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. It actually would deal with the issue that led to the GFC. Remember --- the problem wasn't that there were fraudulent mortgages -- it is that these mortgages were packaged and repackaged in ways that deliberately obscured the risk involved so that people were buying stuff that had no under…

Pricing a CDO is an NP-complete problem, so having them "transparent" on a blockchain does nothing.

https://www.bogleheads.org/forum/viewtopic.php?t=44818

Re: Dogecoin's inventor looks to the past for insight into the future

#119

Post by splintercell » Fri, Jan 12, 2018, 6:28 PM UTC

Certhas wrote: post #109

meri_dian wrote: post #2

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the…

Bitcoin - Because the problem with global finance is too much regulation. It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune. The big institutions failed us exactly by allowing each other to do too much. By not regulating (which is by…

> It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune.

I think you misunderstood what people mean by saying "counter 2008 style stuff".

The aim isn't to prevent 2008 from happening again, but if 2008 were to happen again, then be in a safe situation.

Also you're taking the input from your opponents, but plugging that input into your own model, without realizing that bitcoin proponents do not share your model.

Your model is: "Lack of regulation caused 2008 to happen", but not everybody agrees with that model.

There are multiple models, but the most common model is that central bank inflating the money supply, and manipulating interest rates caused 2003-2007 to happen. 2008 was merely the well desired correction.

Same model applied to today, it means that we are currently in a major bubble and this bubble will pop in the coming years. Alternate financial systems such as bitcoin and smart contracts, are 'customizable' enough (For lack of a better term) that they give people a fighting chance.

1. Capital controls can't be imposed 2. Bank accounts can't be confiscated 3. If regulations have to be bypassed to make trade happen, then they should be more easily bypassed (for instance minimum wage laws).

So when the next crises happens, people are able to flee nations with their capital, their bank accounts will not be able to confiscated, and they will side step any regulation which screws people over. This is the aim of cryptocurrency proponents, irrespective of what is being said.

Re: Dogecoin's inventor looks to the past for insight into the future

#120

Post by Certhas » Fri, Jan 12, 2018, 6:31 PM UTC

whatok wrote: post #92

trevelyan wrote: post #81

Earlier quoted context omitted.

> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. It actually would deal with the issue that led to the GFC. Remember --- the problem wasn't that there were fraudulent mortgages -- it is that these mortgages were packaged and repackaged in ways that deliberately obscured the risk involved so that people were buying stuff that had no under…

Real-time (compared to equities) pricing as you know it does not exist in mortgages and would not be enabled by what you're describing. Transparency in something like this also does not help in the case of massive gaps downward in price which happened with a lot of these instruments and in fact would probably accelerate sell-offs. Transparency of the underlying was not the issue. Anyone investing in this stuff could…

In fact I believe the rating agencies that mis-rated the risk of these CDOs had full access to all this information anyways.