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The Incoming Currency War

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Re: The Incoming Currency War

#7

Post by dalbasal »

So... digitisation certainly has a lot of disruption potential. I would frame it differently though... I also don't think it's the only factor.

First, digitisation has already happened. Most money has been digital for a long time. The full consequences of digitisation just haven't materialised yet. Centralisation of the banking & financial services world, regulation, cascading structure (clearing houses, etc) and general conservatism buffered the change.

I would argue that large parts of the financial system actually failed 13 years ago. Bailouts restored them. Without bailouts, many large institutions would have become defunct and a new generation would have taken their place. This change is occuring regardless, just more slowly. Robinhood's upcoming IPO is an example though possibly a trite example.

Cryptocurrency (also crypto-stocks/bonds/etc.) role is still anyone's guess. I reckon it creates an opportunity to bypass the old, evolved "structure" of the financial industry. How clearinghouses work, who controls them. All that immovable, weird, invisible stuff determining how financial markets work may finally change.

Also... Monetarism seems to have ended. That's a big deal and its hard to guess where this leads. Fiscal and monetary policies are no longer bound by the same constraints, and it's not obvious what the new constraints are. There isn't an obvious monetarism replacement.

The end of monetarism is most alarming for the eurozone. The whole system is basically premised on it. Most plausible successors to monetarism treat fiscal and/or tax policies as part of the monetary system in some way. The eurozone has a hard structural separation between these.

In any case, monetary "revolutions" aren't that uncommon. They happen every couple of generations. We're due.

Re: The Incoming Currency War

#8

Post by the-dude »

ksec wrote: post #6

Another day, another "Error establishing a database connection." Could someone tell me why Caching is not on by default for blogging platform?

Because there are 2 very hard things in IT : naming things, cache invalidation and off-by-one errors.

I am not making this up. Easier to leave the cache off.

Re: The Incoming Currency War

#9

Post by specialist »

Agree with all in this article. +1 for link to Democracy for Realists.

If there's one silver lining today, it's that we're coming to terms with our multitude of "folk theories". An encyclopedia spanning critical reassessment of common knowledge and common sense.

For more of same: historian Jill Lepore's The Last Archive podcast blew my mind. Highest recommendation. For example, TIL anti-vax is as old as vax. Same talking points, same tribes, same consequences. TIL the privacy battle was fought, and lost, 50+ years ago.

https://www.thelastarchive.com

--

My first exposure to the idea of "misinformation" was Raine Eisler's "The Chalice and the Blade" https://www.amazon.com/Chalice-Blade-Our-History-Future/dp/0.... Eisler explains how victors didn't just write history, they actively rewrote it. Actively seeking out and obliterating any contrary narratives. Remything (repurposing) stories for their own purposes.

Then Orwell's "1984", of course.

--

Younger me was probably a postmodern and Popperian hybrid. I really thought the truth was knowable and would eventually be discovered. The major hurdles were effort and "science progresses one funeral at a time". I applauded the skeptics debunking pseudoscience and so forth.

Now I am starting to acknowledge and recognize reactionaries and unbelief. Constant. Overwhelming. Exhausting.

Worse, any progress begats pushback, backlash, doubling down.

It's like we can't win.

Today, I subscribe to David Graeber's theories for making social progress. Work in the margins. Push forward where you can, strategically. Don't storm the castle. Conserve your strength. Pick your battles. Take the (really) long view.

Re: The Incoming Currency War

#10

Post by jeroenhd »

The EU is already working on a "digital euro". As for the comparisons with blockchain, the free nature of it is an illusion. Someone is paying dit the power and data the networks consume, but those costs are abstracted away in electricity bills, nnetwork subscription costs and incentives for as long as processing and mining makes business sense.

At the moment, the banks and payment processors get paid small amounts to run what in crypto terms would be the payment processing network.

Decentralised currencies are not in the interest if governments and most citizens. While they allow some people to live "off the grid", they also make money laundering trivial through mixers and anonymous wallets. Whatever decentralised equivalent you come uo with, you'd need to subject to massive privacy infringing rules to prevent all kinds of fraud. No government will give away the limited fraud prevention methods they've fought hard for to get back.

What you're left with is a network similar to what we have now, with individually run processing nodes instead of centralised bank nodes, and a nation state's ability to secretly inflate another bloc's currency by suddenly turning on a massive mining/processing super computer plant.

Instead of looking at crypto to revolutionise the ecosystem, we should look into evolving the current system to make transactions easier. We've already standardised bank account numbers through IBAN. Transferring money between banks connected in the right way already takes literal seconds and is free. If we integrate these systems into each other, we can have EU or even worldwide money transfer with no transaction costs, no delays, and barely any extra costs in total. The "digital euro" may be a solution to this system, allowing for easy bank to bank transfers while still interfacing with customers.

As for the currency war, that's been going on since the beginning of trade. The EU threatened to use the Euro as an oil currency to trade with Iran, angering the US greatly. Only in countries with bad or mediocre banking systems will there be any risk of currency wars, but the governments will likely make sure that no stores accept the "wrong" currency if a digital currency ever becomes widespread.

In practice, you can't just create your own currency, as Bernard von NotHaus found out the hard way. Crypto is a nice way for people to speculate and lose money in, but it won't replace the existing currencies any time soon.

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