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Do We Need Central Banks? (2017)

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Re: Do We Need Central Banks? (2017)

#101

Post by Firadeoclus »

dogma1138 wrote: post #12
brian_cloutier wrote: post #9

Earlier quoted context omitted.

There's no fundamental reason why Bitcoin shouldn't also have fractional reserve. I mean, cash also has a fixed supply! (from the Bank's POV) It's not like Chase Bank (or whatever non-central bank) can just print more dollars. If you just sit on your Bitcoin it collects 0% Bitcoin-denominated interest. Maybe you'd prefer to make a loan to a bank and have them pay you interest. For the term of the loan that money isn'…

I didn’t say it should or shouldn’t I said that currently they do not offer any sort of a built-in credit system. And if you do fractional reserve off the blockchain then your crypto isn’t currency but rather closer to say what gold was during the gold standard era. And yes Chase can “print” dollars that’s what the fractional reserve system means for every dollar they store in the central bank they can loan X dollars…

> currently they do not offer any sort of a built-in credit system.

Indeed, but what does credit mean in a trustless system?

Re: Do We Need Central Banks? (2017)

#102

Post by whataretensors »

badminton1 wrote: post #28
TekMol wrote: post #2

It's interesting to think about how the role of central banks might change in the age of crypto currencies. Governments can print Euros and Dollars. But not Bitcoin and Ethereum. Popular theory is that governments have a good grip on currency usage because they can decide which currencies they accept for tax payments. And because they can force merchants to accept certain currencies. It will be interesting to see if…

Bitcoin so far doesn't scale. Not only in terms of transaction fees and processing times... but also at the most basic of levels. What will happen when the blockchain doesn't fit in a median harddrive? The decentralization narrative will go away. Only a few people will have enough storage for the blockchain and you will go back to having to trust someone.

Satoshi's white paper talks about this problem and why it's not an issue. It's only 3 pages.

Re: Do We Need Central Banks? (2017)

#103

Post by emodendroket »

notahacker wrote: post #98
emodendroket wrote: post #93

Earlier quoted context omitted.

Hey, if it were actually an astroturf campaign, who would be in a better position to know than one of the principals?

Extraordinary claims require slightly better evidence than someone darkly hinting that one of the organizations whose policy objectives he helped shape "appears well funded in the country of its founding (the UK), and it seems suggestive that its members have appeared at national and international events and conferences together – and apparently singing from the same hymn sheet – with the Bank of England and the Geor…

I intended the comment as tongue-in-cheek.

Re: Do We Need Central Banks? (2017)

#105

Post by EGreg »

osrec wrote: post #70
a008t wrote: post #66

Earlier quoted context omitted.

That last paragraph sounds suspiciously close to what most governments with a sovereign currency are doing.

Yes, the last paragraph is pretty much the system every country uses. Look at the UK, for example, where the national debt continues to rise - there is no real plan to pay it off - the system is designed in such a way that overall debt issuance must rise in order to service older debt. It's a horribly unstable system, but unfortunately we seem to have embraced it across the world.

Suppose all the sovereign debt defaults and is restructured to be 5% of the original. Who loses?

Mostly the holders of treasuries. Holders of other assets would seem to be fine!

So it seems to me to be like any other default, except on a larger scale. Price the sovereign debt risk into the calculation and diversify into real assets.

Re: Do We Need Central Banks? (2017)

#106

Post by dogma1138 »

brian_cloutier wrote: post #85
dogma1138 wrote: post #76

Earlier quoted context omitted.

Ofc it has to support it you can’t loan more bitcoins than you have unless you use some other tools like say options by even that isn’t straight forward unless you have a clear secondary settlement process. If you want to do fractional reserve in say crypto you need to have a blockchain where the “bank” can print crypto like they do with current currency until then it’s off the books accountign or a ponzy scheme like…

> If you want to do fractional reserve in say crypto you need to have a blockchain where the “bank” can print crypto like they do with current currency until then it’s off the books accountign or a ponzy scheme like MtGox. Okay, I think maybe what we're arguing about is definitions. I'm trying to say, "off the books accounting" is perfectly legitimate fractional reserve. It is not possible to create more on-chain Bit…

That’s not a fractional reserve since that one needs to be in the same unit of account if you are using two units of account that’s not a fractional reserve that is an exchange rate. If you loan less than your total then again it’s not fractional lending it’s simply lending.

Re: Do We Need Central Banks? (2017)

#107

Post by nameless912 »

Ugh. Yes, we need central banks, if for no other reason than that distributed systems are hard. Central banking helps prevent things like double-spends and creating currency out of thin air. Yes, technically cryptocurrencies "solve" the same problem, but at 1000x the energy expenditure and with no guarantee of avoiding a 51% attack by a coordinated network of rogue actors.

It's almost like cryptocurrency zealots don't know shit about system design or something.

Re: Do We Need Central Banks? (2017)

#109

Post by Matticus_Rex »

notahacker wrote: post #81
aaronhoffman wrote: post #72

What free banking might look like http://www.learnliberty.org/videos/what-free-banking-and-why...

What free banking actually looked like: https://www.frbatlanta.org/-/media/documents/filelegacydocs/... TLDR: Banks regularly collapsed and not just because of fraud, but started to collapse less as they got regulated more. The system functioned (for certain values of "functioned"), but shockingly enough the man on the street did not turn out to be better at evaluating a bank's solvency than central banks. They were…

A major problem with the comparison is that many of the regulations on free banking, particularly that against banks operating in multiple regions, greatly limited the ability of banks to absorb regional and concentrated shocks in the economy. If you can only have bank branches in Kansas by law, and Kansas crops have a really awful year, your bank is screwed in a free banking system. Without that artificial limit, free banking is much more robust.

Re: Do We Need Central Banks? (2017)

#110

Post by Symmetry »

TekMol wrote: post #2

It's interesting to think about how the role of central banks might change in the age of crypto currencies. Governments can print Euros and Dollars. But not Bitcoin and Ethereum. Popular theory is that governments have a good grip on currency usage because they can decide which currencies they accept for tax payments. And because they can force merchants to accept certain currencies. It will be interesting to see if…

If you have multiple competing cryptocurrencies that seems pretty equivalent to a system of free banking[1] which, well, worked pretty well in Scotland before the Bank of England took over.

[1]https://en.wikipedia.org/wiki/Free_banking

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