Former top official says Fed should ‘Maybe’ create ‘FedCoin’ to rival Bitcoin

I think the actual facts you gave regarding enforcement support my point, don't they? All we've seen so far is very targeted, specific actions against the most egregious offenders, whether it is outright scams and ponzi schemes or a financial institution handling billions of dollars worth of transactions while trying to avoid reporting anything.

Basically if you're running a ponzi scheme, an investor con, an unlicensed custodial bank, a non-conforming public securities offering, or a money-laundering operation, expect some agency of the Feds to come calling. But, uh.. duh? That has nothing to do with whether you are handling crypto currency or not.

So far we haven't seen action against legitimately innovative, non-scammy operations in this space. Just the offenders that are quite clearly and quite brazenly flipping their middle finger to the regulations.

They should create it just to show that it will be a failure.

Yes, the SEC will continue to take a very light touch. There's no upside to them cracking down on ICOs. The only people losing money are the people who mostly understand the risks of cryptocurrencies and "invest" anyways. The SEC may get serious when grandmothers lose money or there's blood in the streets. Until then there's a kind of regulatory sovereignty that must be defended on a pro forma basis eg the slam-dunk enforcement actions and various announcements that "some ICOs are securities but we won't say which, never the less it's our decision to make and nobody else's." The only real risk to the SEC is that some other regulator like the NFA or the CFTC will step in and say "these coins are currencies and we're gonna regulate them" or "these coins are commodities and we're gonna regulate them."

Answer: No thanks.

What is a "blockchain"?

To me, a blockchain is a way of solving double-spend problems in a Merkle tree maintained by open distributed consensus, by using some scheme to resist Sybil attacks. The scheme is not necessarily proof-of-work, but the fact that there's a double-spend problem and you're solving it is key to the idea.

If you don't have a double-spend problem because all your transactions commute (e.g., Certificate Transparency), you don't have a blockchain, just a Merkle tree. Which is great, you don't have to incur the costs of mining at all, nor do you need to think about mining incentives and structures.

If you're not using distributed consensus because you have a central coordinator, you don't have a blockchain either, and again, you get to not think about mining. Whichever transaction reaches the coordinator first wins, so double-apend becomes irrelevant.

If the Fed wants to build FedCoin, I don't see any reason why they should refuse to be the central coordinaor and instead outsource consensus to the internet. I don't see any reason why they would, if they want to influence monetary policy at all—70% of Bitcoin mining last year was in China, which meant that it would have been straightforward for China to (globally!) freeze a Bitcoin address, and a little more complicated but still possible to prioritize or throttle certain transactions.

Maybe being protocol-compatible with Bitcoin or ERC20 or something would help, but fundamentally this would be an API to transfer USD, not a decentralized system.

See also patio11's Tweet https://twitter.com/patio11/status/583698553614143488 "Most advantages of Bitcoin which matter are captured by, and improved upon by, a LAMP app which simply holds account balances." If the Fed wants to build that app, great!