Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Could the US Dollar Be Crypto's Killer App?

buildblockchain.tech

Post reply on HN
Print view View original

11–20 of 36 posts

Re: Could the US Dollar Be Crypto's Killer App?

#11

Post by shadowgovt »

solotronics wrote: post #6

I have been wondering why the US doesn't make a trial crypto dollar. If it doesn't work out what is the cost? Relatively nothing. If it does work out? it would strengthen the USD position as the global settlements layer and give the US control over a new monetary domain. For examples of this see LIBOR/"Eurodollar"

The US government is generally hyper-conservative in the financial space of what the Fed directly controls for myriad reasons. The bank of computers that reconcile transactions between banks still shuts down on the weekends because the law around its operation is based on the old law where human clerks were doing the reconciliation.

The cost if it doesn't work out is damage to the trust in the system and the stability of the dollar in general, which is the thing the Fed pathologically seeks to avoid.

And as the country that can mint the currency the IMF designates other countries' international debts in, the US doesn't generally see itself in need of further strengthening the USD's position in the world.

(Interestingly, when I lay it all out like that and add it up, the US monetary policy looks like a big business's bureaucratic system, the kind that'd be ripe for disruption by a startup. Of course, it's not quite so simple when we're talking nation-states and not Silicon Valley ventures).

Re: Could the US Dollar Be Crypto's Killer App?

#12

Post by shadowgovt »

coinward wrote: post #7

Arent stable coins just an appeal to central banks expansionary policy? Bitcoin was created as an alternative set of values and seems like cryptos killer app to me

The article is talking about cryptocurrencies in terms of adoption, not philosophy. By the metric of the article, if everyone adopts crypto because it makes it easier for them to trade in values pegged to fiat-backed dollars, that's still a win.

Compare and contrast open source's relative success vs. whether the Four Fundamental Freedoms / GPL model itself actually succeeded.

I haven't seen a metric by which BTC is considered a "killer app" (in any space other than "How can I buy things / conduct transactions my local government forbids or tightly regulates," and even that use case is falling by the wayside as the tools for LEO to datamine the blockchain for webs of criminal transaction activity have caught up...), and it's been around long enough that I think we can generally flag the BTC experiment specifically as "tried, found wanting." In this current global pandemic crisis, you'd think trust in central governments would be at an all-time low and people would be shifting their resources into BTC, and that doesn't appear to be happening at any grand scale.

Re: Could the US Dollar Be Crypto's Killer App?

#13

Post by shadowgovt »

tw04 wrote: post #9
shadowgovt wrote: post #3

Earlier quoted context omitted.

The key point in the article is that crypto (not BTC, but stablecoins pegged against dollar, euro, and/or yen values) offers a way for people who normally have few ways to access dollars to get their hands on them. It's not about the dollar-using world moving to crypto---it's about the citizens in world that doesn't use a currency strong enough to print their way out of a market implosion moving to the dollar via cry…

But they aren't getting their hands on dollars, they're getting their hands on crypto claiming to be tied to the dollar. Tether did the same - until they didn't. You can't be tied to the dollar without backing your coin with dollars. You can't possibly back your coin with sufficient dollars without US government approval. You aren't getting approval without following the same regulations as any other bank, which is w…

I agree. It might work, but I think that in the short run, it won't be trusted if there isn't a mechanism to funge those stablecoins into actual, mattress-stuffable USD.

Re: Could the US Dollar Be Crypto's Killer App?

#16

Post by ashtonkem »

solotronics wrote: post #6

I have been wondering why the US doesn't make a trial crypto dollar. If it doesn't work out what is the cost? Relatively nothing. If it does work out? it would strengthen the USD position as the global settlements layer and give the US control over a new monetary domain. For examples of this see LIBOR/"Eurodollar"

Why? What extra functionality does creating a cryptocurrency enable?

Re: Could the US Dollar Be Crypto's Killer App?

#17

Post by benmdi »

tw04 wrote: post #9
shadowgovt wrote: post #3

Earlier quoted context omitted.

The key point in the article is that crypto (not BTC, but stablecoins pegged against dollar, euro, and/or yen values) offers a way for people who normally have few ways to access dollars to get their hands on them. It's not about the dollar-using world moving to crypto---it's about the citizens in world that doesn't use a currency strong enough to print their way out of a market implosion moving to the dollar via cry…

But they aren't getting their hands on dollars, they're getting their hands on crypto claiming to be tied to the dollar. Tether did the same - until they didn't. You can't be tied to the dollar without backing your coin with dollars. You can't possibly back your coin with sufficient dollars without US government approval. You aren't getting approval without following the same regulations as any other bank, which is w…

> You can't be tied to the dollar without backing your coin with dollars.

Not exactly. There are projects like Maker and sUSD which create synthetic dollar equivalents via collateralization with native crypto assets. (Caveat here, Maker did recently add USDC, an IOU backed stablecoin, as collateral as an emergency measure. Unclear if that change will be permanent or not).

Re: Could the US Dollar Be Crypto's Killer App?

#18

Post by PKop »

tw04 wrote: post #9
shadowgovt wrote: post #3

Earlier quoted context omitted.

The key point in the article is that crypto (not BTC, but stablecoins pegged against dollar, euro, and/or yen values) offers a way for people who normally have few ways to access dollars to get their hands on them. It's not about the dollar-using world moving to crypto---it's about the citizens in world that doesn't use a currency strong enough to print their way out of a market implosion moving to the dollar via cry…

But they aren't getting their hands on dollars, they're getting their hands on crypto claiming to be tied to the dollar. Tether did the same - until they didn't. You can't be tied to the dollar without backing your coin with dollars. You can't possibly back your coin with sufficient dollars without US government approval. You aren't getting approval without following the same regulations as any other bank, which is w…

Exactly. Not sure how one could write this article without mentioning the risks of so-called stable coins. Quite simply, the huge existential risk is that the currency peg isn't maintained, for all sorts of reasons relating to trust, actual $ supply, regulation, centralization, politics, etc.

Simply proclaiming the stability of something doesn't guarantee it, or absolve one of tackling all the same problems of currencies in general. Else, a nation would simply call their own currencies "stable" and back them with $ reserves, which they already try to do.

Also, it is extremely stupid to say that a real-asset backed "crypto" somehow eliminates censorship. The "backing" is the only real item of value in this equation, and getting ones hands on that asset is of course vulnerable to censorship.

Re: Could the US Dollar Be Crypto's Killer App?

#19

Post by 3fe9a03ccd14ca5 »

Retric wrote: post #10
coinward wrote: post #7

Arent stable coins just an appeal to central banks expansionary policy? Bitcoin was created as an alternative set of values and seems like cryptos killer app to me

Bitcoin was created to solve micro transactions. https://bitcoin.org/bitcoin.pdf The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non- reversible services. It’s the community that pivoted to something else. PS: Two diffe…

The average bitcoin transaction cost was over $1.50 last month, and it can only handle a maximum of about 7 transactions a second. Why would bitcoin be good for small transaction?

https://ycharts.com/indicators/bitcoin_average_transaction_f...

Re: Could the US Dollar Be Crypto's Killer App?

#20

Post by npo9 »

shadowgovt wrote: post #11
solotronics wrote: post #6

I have been wondering why the US doesn't make a trial crypto dollar. If it doesn't work out what is the cost? Relatively nothing. If it does work out? it would strengthen the USD position as the global settlements layer and give the US control over a new monetary domain. For examples of this see LIBOR/"Eurodollar"

The US government is generally hyper-conservative in the financial space of what the Fed directly controls for myriad reasons. The bank of computers that reconcile transactions between banks still shuts down on the weekends because the law around its operation is based on the old law where human clerks were doing the reconciliation. The cost if it doesn't work out is damage to the trust in the system and the stabilit…

> Interestingly, when I lay it all out like that and add it up, the US monetary policy looks like a big business's bureaucratic system, the kind that'd be ripe for disruption by a startup. Of course, it's not quite so simple when we're talking nation-states and not Silicon Valley ventures

That’s because governments have the privilege of establishing itself as a monopoly. They control the rules of the marketplace via regulations.

Post reply on HN