US $ Crypto Currency by Federal Reserve • Hacker News Board

Re: US $ Crypto Currency by Federal Reserve

#11

Post by tphyahoo » Sat, Jan 04, 2014, 4:09 PM UTC

There seems to be a lot of hostility to this idea, but I think it's probably going to happen if crypto currency is a success.

There is no security issue, it could be open source, and as secure and anonymous (or not anonymous) as bitcoin itself.

In fact, the USD crypto currency could even run on top of bitcoin for transport, by using coloredcoin or some moral equivalent.

Centralized issuer crypto currencies, including government currencies but also apple money, amazon money, etc, will compete with crypto currency, and possibly interoperate using coin coloring above.

It's going to be interesting.

Re: US $ Crypto Currency by Federal Reserve

#12

Post by tphyahoo » Sat, Jan 04, 2014, 4:10 PM UTC

lucb1e wrote: post #7

Any currency controlled by any one individual is either (1) used by only one individual, or (2) not a crypto currency. As for making the USD easier to use on the web, I think we call this system PayPal. Except it should be less evil.

If we have doggycoin now, we'll have US Government coin someday.

Re: US $ Crypto Currency by Federal Reserve

#13

Post by nhaehnle » Sat, Jan 04, 2014, 4:21 PM UTC

lucb1e wrote: post #7

Any currency controlled by any one individual is either (1) used by only one individual, or (2) not a crypto currency. As for making the USD easier to use on the web, I think we call this system PayPal. Except it should be less evil.

There have been proposals for anonymous payment that relied on a bank issuing tokens. That is certainly a kind of "crypto currency" despite the central control.

Re: US $ Crypto Currency by Federal Reserve

#14

Post by midnitewarrior » Sat, Jan 04, 2014, 4:22 PM UTC

Well, I know you said this is "up for debate", but really, any form of digital currency issued by the Federal Reserve wouldn't be anything any consumer would want.

The "Federal Reserve" is a federation of privately-owned banks authorized by the US Government as the banking monopoly that is permitted to issue its currency. The Federal Reserve is the bank that US government borrows from, and the private banks that issue the funds to the US Government make profit off of the loan. Excess profits (outside of legally stated limits) get returned to the tax payers. The saying goes -- there "Federal Reserve" is as "Federal" as "Federal Express (FedEx)".

Understanding this, the banks that make up the Federal Reserve are the banks that issue credit cards and make money off of financial transfers. The Federal Reserve is not going to do anything to endanger the profits of its member banks. So while the Federal Reserve could create a crypto currency, assume it would be laden with an oppressive fee structure, issued and collected by its member banks. Every bank covered by the FDIC is a member bank / Federal Reserve.

The only things consumers could get out of this is convenience. Banks are hungry for profits, so there would be fees, there would be advanced currency tracking (think FBI / NSA), there would be no privacy, there would be electronic fraud that may or may not be able to be reversed.

Re: US $ Crypto Currency by Federal Reserve

#15

Post by netman21 » Sat, Jan 04, 2014, 4:30 PM UTC

I was thinking about this very idea. The Federal Reserve introduces a crypto currency that is centrally controlled and replaces the dollar (over time). Next, income taxes and State sales tax are eliminated and the revenue is replaced with a transaction fee. The beuatiful thing would be that this would give the Federal Reserve a real control over the economy. Things heating up? twist a knob and increase the transaction fee. Recession on the horizon? Twist it the other way and reduce the transaction fee. So, I looked into what transaction percentage would be required to replace current government receipts. Well, the US takes in $10 Trillion a year. Since GDP is only $15 Trillion the whole idea blows up. A 66% transaction fee just won't work. (I know that GDP is not the same as Total of All Transactions. Is it velocity x GDP?)

Re: US $ Crypto Currency by Federal Reserve

#16

Post by dobbsbob » Sat, Jan 04, 2014, 4:30 PM UTC

Canada is testing this http://business.financialpost.com/2013/09/19/canadian-mint-p...

One bonus of having gov digital currency is quick and easy transfers avoiding bank fees/delays and fraud of ach and wires. Another bonus is you can use Fedcoins in a decentralized p2p exchange to trade them for other coins.

Re: US $ Crypto Currency by Federal Reserve

#17

Post by rikacomet » Sat, Jan 04, 2014, 4:32 PM UTC

adam222 wrote: post #8

rikacomet wrote: post #5

Earlier quoted context omitted.

wider problems include: - Recent revelations about NSA activities, make out any cryptocurrency designed by USA, to be unsafe. It is the biggest single damage done to trust factor of US tech industries. - Sooner or later, diplomatic pressure would be made upon smaller countries to have their forex reserves in crypto currency, and sooner that pressure will spread to bigger countries. Some will oblige, some will build w…

>or worst case scenario, to someone who gets access to weakness in the cryptocurrency. Resulting in world economic chaos. we are talking here about the same measures and standards, taken to make sure there are no counterfeit paper currency in the market.

I didn't get your reference. Can you elaborate?

Re: US $ Crypto Currency by Federal Reserve

#18

Post by wirelessest » Sat, Jan 04, 2014, 4:39 PM UTC

netman21 wrote: post #15

I was thinking about this very idea. The Federal Reserve introduces a crypto currency that is centrally controlled and replaces the dollar (over time). Next, income taxes and State sales tax are eliminated and the revenue is replaced with a transaction fee. The beuatiful thing would be that this would give the Federal Reserve a real control over the economy. Things heating up? twist a knob and increase the transactio…

I think current tax receipts are 2.5 trillion, so this is a bit more manageable.

Re: US $ Crypto Currency by Federal Reserve

#19

Post by ceejayoz » Sat, Jan 04, 2014, 4:48 PM UTC

netman21 wrote: post #15

I was thinking about this very idea. The Federal Reserve introduces a crypto currency that is centrally controlled and replaces the dollar (over time). Next, income taxes and State sales tax are eliminated and the revenue is replaced with a transaction fee. The beuatiful thing would be that this would give the Federal Reserve a real control over the economy. Things heating up? twist a knob and increase the transactio…

> Well, the US takes in $10 Trillion a year.

No, it doesn't. Federal revenue runs about 2.5-3.0 trillion.

Re: US $ Crypto Currency by Federal Reserve

#20

Post by edward » Sat, Jan 04, 2014, 4:55 PM UTC

Central banks operate provide real-time gross settlement (RTGS) systems. This allows transfers to settle in real time.

See https://en.wikipedia.org/wiki/Real-time_gross_settlement

Domestic banks have accounts with the central bank and can move money using RTGS. If the central banks allowed individuals and non-bank companies to open accounts then they could use the RTGS to transfer money instantly.

There would be no blockchain, the central bank acts as a trusted third party. The central bank can see all transactions.