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Google once considered issuing currency - Eric Schmidt

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Re: Google once considered issuing currency - Eric Schmidt

#11

Post by jacquesm »

mrb wrote: post #10
jacquesm wrote: post #9

Earlier quoted context omitted.

> I wonder if it literally means they were thinking of duplicating the (world's first) digital peer-to-peer currency: http://www.bitcoin.org I think you forgot about digicash's product 'ecash'. Claiming a 'first' in any field is difficult, to claim a 'first' in payment systems is a very tricky affair. It may be that bitcoin is the first practical digital peer-to-peer currency but even that is up to interpretation, no…

ecash was not truly peer-to-peer. On the contrary, the concept relied crucially on centralization as ecash would have been withdrawn from existing banks & credit card companies: http://web.archive.org/web/19970111163957/http://www.digicas... In fact, bit gold, RPOW, and b-money (from respectively Nick Szabo, Hal Finney, and Wei Dai) were the only similar ideas predating Bitcoin, but none of them were ever implemented…

Here is a google books link documenting ecash's peer-to-peer capabilities:

http://books.google.nl/books?id=4TJtnkaWpp0C&pg=PA115&#3...

You could use your bank to host the software, but it was also possible to run your own.

Ecash was very much ahead of the curve at the time and it had features that we can only dream of today.

Re: Google once considered issuing currency - Eric Schmidt

#12

Post by ma2rten »

mrb wrote: post #2

> The idea was to implement a "peer-to-peer money" system. Wow. I wonder if it literally means they were thinking of duplicating the (world's first) digital peer-to-peer currency: http://www.bitcoin.org Or is Schmidt using the term "peer-to-peer" liberally? Edit: looks like I am right, a CNN article specifically mentions Bitcoin: http://money.cnn.com/2012/02/28/technology/google_future_of_...

What are you trying to say? It's not like Google invented the concept of a search engine either. I always use that example to explain to people that it is not about the idea, but about execution.

Re: Google once considered issuing currency - Eric Schmidt

#13

Post by mrb »

jacquesm wrote: post #11
mrb wrote: post #10

Earlier quoted context omitted.

ecash was not truly peer-to-peer. On the contrary, the concept relied crucially on centralization as ecash would have been withdrawn from existing banks & credit card companies: http://web.archive.org/web/19970111163957/http://www.digicas... In fact, bit gold, RPOW, and b-money (from respectively Nick Szabo, Hal Finney, and Wei Dai) were the only similar ideas predating Bitcoin, but none of them were ever implemented…

Here is a google books link documenting ecash's peer-to-peer capabilities: http://books.google.nl/books?id=4TJtnkaWpp0C&pg=PA115&#3... You could use your bank to host the software, but it was also possible to run your own. Ecash was very much ahead of the curve at the time and it had features that we can only dream of today.

I do understand that the transfers were peer-to-peer. I could hand you eCash in an offline way, from my device to yours, as if I was handing you a bill, without going through a bank/clearing house network to authorize and validate the transfer.

But the issuance of eCash was still done by the bank. This is what makes eCash not 100% decentralized... I would compare eCash to the "pseudo p2p" Napster file sharing network which still relied on a central server (gasp!) to index the files, which allowed authorities to shut down the "p2p" network by closing down that central server.

Re: Google once considered issuing currency - Eric Schmidt

#14

Post by justincormack »

JumpCrisscross wrote: post #8
jandrewrogers wrote: post #7

Interestingly, the relative weakness of reserve currencies has made this plausible in a real way. As the debt risk of countries becomes closer to the strongest multinationals it creates the possibility for the debt of multinationals to be lower risk than any currency it can be denominated in, which happened briefly a couple years ago for the first time ever. In effect, the debt instruments are currency. Right now, go…

Companies do have "currencies" that can hold value independent of FX - secured bonds. Otherwise, commodities take the role of liquid non-fiat value holders. Substituting a government-backed currency with a corporate-backed one is a terrible idea given that a corporate is subjugated to a sovereign (and pays its debt in sovereign currency [ignoring the marginal role in-kind bond payments play]). Thus, one is accepting…

Er, bonds are denominated in currencies. There is no independent value.

Re: Google once considered issuing currency - Eric Schmidt

#15

Post by JumpCrisscross »

justincormack wrote: post #14
JumpCrisscross wrote: post #8

Earlier quoted context omitted.

Companies do have "currencies" that can hold value independent of FX - secured bonds. Otherwise, commodities take the role of liquid non-fiat value holders. Substituting a government-backed currency with a corporate-backed one is a terrible idea given that a corporate is subjugated to a sovereign (and pays its debt in sovereign currency [ignoring the marginal role in-kind bond payments play]). Thus, one is accepting…

Er, bonds are denominated in currencies. There is no independent value.

One can just as easily say that currencies are denominated in assets. When valuing a currency one inevitably resorts to trade flow and capital production statistics. A better way to think of these flows is as swaps instead of "buying" things with money.

In the modern banking system Treasury bonds function just as much as money as Federal Reserve notes (which are technically a debt). Before the crisis AAA corporate bonds were accepted as collateral nearly on par with Treasury bonds.

Re: Google once considered issuing currency - Eric Schmidt

#16

Post by mrb »

ma2rten wrote: post #12
mrb wrote: post #2

> The idea was to implement a "peer-to-peer money" system. Wow. I wonder if it literally means they were thinking of duplicating the (world's first) digital peer-to-peer currency: http://www.bitcoin.org Or is Schmidt using the term "peer-to-peer" liberally? Edit: looks like I am right, a CNN article specifically mentions Bitcoin: http://money.cnn.com/2012/02/28/technology/google_future_of_...

What are you trying to say? It's not like Google invented the concept of a search engine either. I always use that example to explain to people that it is not about the idea, but about execution.

I imply nothing negative. I am simply saying it is a significant endorsement of the concept of Bitcoin, when Larry and Sergei look at it and think "maybe we should do something similar".

Re: Google once considered issuing currency - Eric Schmidt

#17

Post by jacquesm »

mrb wrote: post #13
jacquesm wrote: post #11

Earlier quoted context omitted.

Here is a google books link documenting ecash's peer-to-peer capabilities: http://books.google.nl/books?id=4TJtnkaWpp0C&pg=PA115&#3... You could use your bank to host the software, but it was also possible to run your own. Ecash was very much ahead of the curve at the time and it had features that we can only dream of today.

I do understand that the transfers were peer-to-peer. I could hand you eCash in an offline way, from my device to yours, as if I was handing you a bill, without going through a bank/clearing house network to authorize and validate the transfer. But the issuance of eCash was still done by the bank. This is what makes eCash not 100% decentralized... I would compare eCash to the "pseudo p2p" Napster file sharing network…

"Real" cash is also issued centrally but nobody doubts that it can be used in a 'peer to peer' fashion for payments.

Anyway, I think we're well into 'no true Scotsman' territory here.

Re: Google once considered issuing currency - Eric Schmidt

#18

Post by gaius »

jandrewrogers wrote: post #7

Interestingly, the relative weakness of reserve currencies has made this plausible in a real way. As the debt risk of countries becomes closer to the strongest multinationals it creates the possibility for the debt of multinationals to be lower risk than any currency it can be denominated in, which happened briefly a couple years ago for the first time ever. In effect, the debt instruments are currency. Right now, go…

I believe under either Solvency II or Basel III regulations, a corporation can't have a higher credit rating than its sovereign (e.g. whose currency its debt is issued in). But nevertheless, you are correct - it can have a better rating than sovereigns other than its own. Would you rather be holding BMW or Greek bonds right now, tho' they are both denominated in Euros.

Re: Google once considered issuing currency - Eric Schmidt

#19

Post by arethuza »

jacquesm wrote: post #9
mrb wrote: post #2

> The idea was to implement a "peer-to-peer money" system. Wow. I wonder if it literally means they were thinking of duplicating the (world's first) digital peer-to-peer currency: http://www.bitcoin.org Or is Schmidt using the term "peer-to-peer" liberally? Edit: looks like I am right, a CNN article specifically mentions Bitcoin: http://money.cnn.com/2012/02/28/technology/google_future_of_...

> I wonder if it literally means they were thinking of duplicating the (world's first) digital peer-to-peer currency: http://www.bitcoin.org I think you forgot about digicash's product 'ecash'. Claiming a 'first' in any field is difficult, to claim a 'first' in payment systems is a very tricky affair. It may be that bitcoin is the first practical digital peer-to-peer currency but even that is up to interpretation, no…

Although not itself a currency, Mondex provided peer-to-peer cash transfers in the mid 90s:

http://en.wikipedia.org/wiki/Mondex

As far as I recall, you could various devices to transfer cash from one card to another - including over telephone lines, but I think it died before anyone thought of doing Mondex over the Internet.

Re: Google once considered issuing currency - Eric Schmidt

#20

Post by danmaz74 »

jandrewrogers wrote: post #7

Interestingly, the relative weakness of reserve currencies has made this plausible in a real way. As the debt risk of countries becomes closer to the strongest multinationals it creates the possibility for the debt of multinationals to be lower risk than any currency it can be denominated in, which happened briefly a couple years ago for the first time ever. In effect, the debt instruments are currency. Right now, go…

National currencies are legal tender in the issuing nation (or in EU Euro states, in case of the Euro), while everything else isn't. This makes a lot of difference.
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