Winds of Change: The Case for New Digital Currency
1–10 of 36 posts
Re: Winds of Change: The Case for New Digital Currency
#2If cryptocurrency is like bittorrent for finance, then this proposal is like downloading DRM-encumbered music from a walled garden marketplace. I think I'll pass.
Re: Winds of Change: The Case for New Digital Currency
#3> cryptocurrencies seek to anchor trust in technology. So long as they are transparent.....Still, I am not entirely convinced. Proper regulation of these entities will remain a pillar of trust.
I don't think they understand that the purpose of cryptocurrencies is to remove the need for trust. Trust in the math, not the banker. AKA the economy should be built off the monetary system rather than the monetary system being built off the economy.
Re: Winds of Change: The Case for New Digital Currency
#4> cryptocurrencies seek to anchor trust in technology. So long as they are transparent.....Still, I am not entirely convinced. Proper regulation of these entities will remain a pillar of trust. I don't think they understand that the purpose of cryptocurrencies is to remove the need for trust. Trust in the math, not the banker. AKA the economy should be built off the monetary system rather than the monetary system bei…
You can't remove the need for trust - that need is inherently beyond the reach of math.
If I want to use money to pay for some goods, I need trust that I can get that money back if the goods won't arrive. Math alone can't provide that, it needs something extra, e.g. a trusted escrow service in the case of crypto.
If I want to use money as a store of value, I need trust that the value is going to stay stable and maintain liquidity in the long term. Math alone can't provide that, that trust is inherently social. I also need reasonable trust that the money isn't likely to get stolen - math isn't sufficient for that, and our current experience shows that crypto assets are more vulnerable in practice than e.g. bank deposits, maintaining appropriate "opsec" is tricky and people fail in that too frequently.
And for your other point, the economy existed before a monetary system and currently works off of many monetary systems - however, for a monetary system the only criteria that matters is if it's good for what the economy needs; if some system does not fit these needs, then it won't get used much and is not particularly relevant.
Re: Winds of Change: The Case for New Digital Currency
#5> cryptocurrencies seek to anchor trust in technology. So long as they are transparent.....Still, I am not entirely convinced. Proper regulation of these entities will remain a pillar of trust. I don't think they understand that the purpose of cryptocurrencies is to remove the need for trust. Trust in the math, not the banker. AKA the economy should be built off the monetary system rather than the monetary system bei…
You can't remove the need for trust - that need is inherently beyond the reach of math. If I want to use money to pay for some goods, I need trust that I can get that money back if the goods won't arrive. Math alone can't provide that, it needs something extra, e.g. a trusted escrow service in the case of crypto. If I want to use money as a store of value, I need trust that the value is going to stay stable and maint…
This is the elephant in the room, and the key component of cryptocurrencies which is yet to be solved. Cryptocurrencies can trustlessly manage intangible tokens which were themselves issued on the blockchain. But when you want to interact with real world, tangible assets, blockchains can only manage proxies of the real asset. There has not yet been a trustless way to ensure the link between the tangible asset and the blockchain proxy.
Re: Winds of Change: The Case for New Digital Currency
#6> cryptocurrencies seek to anchor trust in technology. So long as they are transparent.....Still, I am not entirely convinced. Proper regulation of these entities will remain a pillar of trust. I don't think they understand that the purpose of cryptocurrencies is to remove the need for trust. Trust in the math, not the banker. AKA the economy should be built off the monetary system rather than the monetary system bei…
There is still the need for trust... in the implementation of software!
Even if you read the source code carefully and ocmpile the software yourself, you trust the compiler and the operating system to do the right thing.
Re: Winds of Change: The Case for New Digital Currency
#7> This currency could satisfy public policy goals, such as (i) financial inclusion, and (ii) security and consumer protection; and to provide what the private sector cannot: (iii) privacy in payments.
If financial inclusion and privacy in payments were actual public policy goals, cryptocurrencies would be a lot less attractive.
In reality, the real public policy goals are:
1) Financial exclusion: using denial of access to the state run financial system as a political, law enforcement, social control and tax collection tool.
3) "Know your customer" and "anti-money laundering" (AML/KYC) rules that remove privacy in payments to make it easier to use the state run financial system as described in 1). These regulations in practice exclude the the poorer people in society - the people Lagarde like means when she says "financial inclusion" - that can't meet requirements like "proof of address" and can't meet the minimal balance / month fee requirements that have come about from these AML/KYC regs.
Re: Winds of Change: The Case for New Digital Currency
#8> cryptocurrencies seek to anchor trust in technology. So long as they are transparent.....Still, I am not entirely convinced. Proper regulation of these entities will remain a pillar of trust. I don't think they understand that the purpose of cryptocurrencies is to remove the need for trust. Trust in the math, not the banker. AKA the economy should be built off the monetary system rather than the monetary system bei…
> the purpose of cryptocurrencies is to remove the need for trust. Trust in the math, not the banker
By exchanging trust for energy.
Cryptocurrencies are the best example of trust being a tangible thing - it can be quite literally converted to Kilowatt hours. This shows how incredible trust is as an energy use optimization device. We should be finding ways to be able to safely depend more on trust, not less.
Re: Winds of Change: The Case for New Digital Currency
#9> cryptocurrencies seek to anchor trust in technology. So long as they are transparent.....Still, I am not entirely convinced. Proper regulation of these entities will remain a pillar of trust. I don't think they understand that the purpose of cryptocurrencies is to remove the need for trust. Trust in the math, not the banker. AKA the economy should be built off the monetary system rather than the monetary system bei…
You can't remove the need for trust - that need is inherently beyond the reach of math. If I want to use money to pay for some goods, I need trust that I can get that money back if the goods won't arrive. Math alone can't provide that, it needs something extra, e.g. a trusted escrow service in the case of crypto. If I want to use money as a store of value, I need trust that the value is going to stay stable and maint…
Yes, just as internet messaging and videoconferencing have made travel for F2F meetings more important, "trustless" cryptocurrency increases the value of "mathless" trust mechanisms.
Re: Winds of Change: The Case for New Digital Currency
#10> This currency could satisfy public policy goals, such as (i) financial inclusion, and (ii) security and consumer protection; and to provide what the private sector cannot: (iii) privacy in payments. If financial inclusion and privacy in payments were actual public policy goals, cryptocurrencies would be a lot less attractive. In reality, the real public policy goals are: 1) Financial exclusion: using denial of acce…
I don't disagree with your points around the public policy goals of currency, but suggesting that minimal balance / monthly fee requirements come from AML/KYC regulations is quite the stretch. I'd wager those come from greed, pure and simple.
The banks charge those fees because they can. If we got rid of AML/KYC regulations and reduced the banks' costs around regulatory compliance, do you think the banks will pass the savings onto customers or pocket the difference? I know where I'm putting my bet.