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

nytimes.com

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

#101

Post by dnomad »

geofft wrote: post #95
cslarson wrote: post #66

Earlier quoted context omitted.

This really misses the picture of what's going on. Fedcoin could be coordinated by the federal but live on or be connected to a public smart contract platform where that, now digitised asset, could be used programmatically and interdependently with many other systems in a much more efficient and easy to assemble way than can now be done. This may not sound like a good idea to most on hn but it's at least new.

Smart contracts are cool, but I don't think smart contracts and blockchain are the same technology. (Indeed, Bitcoin does not meaningfully support smart contracts, so we should use different words because they're different concepts.) It's certainly possible to implement centralized, non-proof-of-work smart contracts: publicly send the Fed's API a Lua script. Whenever the Fed changes their ledger, they run your Lua sc…

Again, there are perfectly fine and very useful blockchains that do not provide any kind of trustlessness. See corda.net. This insistence that a blockchain cannot be permissioned is not accepted by most people. It's silly to keep insisting a word means some restrictive value of X when a great many people do not use it as such. A FedCoin could be highly centralized and still provide enormous value as a trustworthy, distributed database.

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

#102

Post by Yizahi »

comboy wrote: post #67
cslarson wrote: post #66

Earlier quoted context omitted.

This really misses the picture of what's going on. Fedcoin could be coordinated by the federal but live on or be connected to a public smart contract platform where that, now digitised asset, could be used programmatically and interdependently with many other systems in a much more efficient and easy to assemble way than can now be done. This may not sound like a good idea to most on hn but it's at least new.

The Fed can create unlimited money out of nowhere and doesn't have to answer questions about it from anybody. I don't think they dream is a transparent blockchain and money supply limited by an algorithm.

> create unlimited money out of nowhere and doesn't have to answer questions about it from anybody

So, Tether?

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

#103

Post by Yizahi »

bitreality wrote: post #52
kchoudhu wrote: post #29

Earlier quoted context omitted.

We tried the "anyone can issue money" model in the 1800s, all it led to was bank runs and scams. The current system exists for a reason. If the blockchain crowd wants to relearn those lessons, they are welcome to, as long as they keep their shenanigans out of the real economy and away from people who don't want anything to do with the experiment.

Well, ultimately a decentralized blockchain tackles the issue in a much different way. In the 1800s, if you were a money issuer, you could print any amount you wanted. In a truly decentralized blockchain, there are defined rules for how new currency enters the system. You cannot just print new money. The amount that exists is fully visible by anyone. Transparency is everything. This also explains why a currency like…

Tether?

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

#104

Post by MorbidCuriosity »

bitreality wrote: post #76
MorbidCuriosity wrote: post #56

Earlier quoted context omitted.

No cryptocurrency is a monetary system, they aren't even a functioning currency. For that to happen they would need to fulfill three functions that currently none do. Namely: A means of exchange A unit of account A store of value They satisfy the first but not the other two. I cannot know for sure what value my coins have on any given day, let alone what they are likely to be valued at by next year. Thus they do not…

Definitely one issue with crypto-currencies today is that they have volatile pricing which makes them difficult to use in commerce. There are several projects working to use smart contracts in order to peg the value of the coin to currencies like USD, EUR, etc. As liquidity increases in decentralized exchange formats, such as atomic swaps and DEX applications, there will be enough volume to properly manage these smar…

The problem is a catch 22, you cannot be stable until you gain volume and you cannot gain volume until you are stable.

Simply using a smart contract between two parties doesn't give the underlying coin stability, and it introduces the risk that one party ends up with an undervalued/overvalued coin. The average person will still earn in dollars, shop in dollars, pay tax in dollars and do accounts in dollars. The demand for crypto as a result will be restricted to speculators, criminals and (some) geeks. I cannot see stability anywhere on the horizon.

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

#105

Post by contingencies »

China already has WeChat money. It's literally everywhere. To the point where, you often spend days without touching money. People now sigh and groan and ask for the manager to get the key to open the till if you insist on paying with cash.

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

#106

Post by mozumder »

bitreality wrote: post #54
mozumder wrote: post #33

Earlier quoted context omitted.

... while minimizing the wasteful environmental impact of blockchains due to the power requirements of each transaction. This is probably the one "feature" of blockchains that will kill it, since they're based on proof-of-lots=of-work, and work needs power.

Blockchain as it exists today is a proof of concept. It shows that people can use code to create a monetary system. The system does not need to be backed by any government or physical good guaranteeing its value. This proof of concept can now manifest itself in a variety of formats. Many of which we cannot fathom today, because they haven't yet been invented. There are many intelligent people now working on this prob…

Yah and that proof-of-concept shows that you need insane amounts of power per transaction, killing the idea completely and making it unusable.

> There are many intelligent people now working on this problem and improving the way a blockchain works, or even pulling from that proof of concept and rethinking the solution without traditional blockchain.

In other words, no blockchain is better than blockchain.

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

#107

Post by zitterbewegung »

garmaine wrote: post #11
zitterbewegung wrote: post #9

Earlier quoted context omitted.

Except IRS has guidance on ICOs and it has become a real big problem that bullshit ICOs are out there. If large investment banks are interested in the space then regulation will eventually come forth. Remember that Coinbase was asked to reveal people who made trades over $10,000. I was at a conference with someone who gave a speech saying that ~80% of all ICOs are fraudulent. I think that is a bit low in my opinion.

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 unlicens…

Up to this point yes . Sorry I think I read your post too fast . Right now at this time you are right . I think I may be changing my concept of what will eventually happen. I thought it was a sure thing but now it’s something completely different .

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

#108

Post by garmaine »

zitterbewegung wrote: post #107
garmaine wrote: post #11

Earlier quoted context omitted.

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 unlicens…

Up to this point yes . Sorry I think I read your post too fast . Right now at this time you are right . I think I may be changing my concept of what will eventually happen. I thought it was a sure thing but now it’s something completely different .

Yeah, I was myself quite shocked at the (lack of) enforcement against some of the wild west ICOs in the ethereum space, and the ethereum founders & foundation especially. Even rather annoyed -- I've for years been saying they'll go to jail, and turning down very lucrative opportunities by people in that space that would have made me very wealthy today, because I thought they were certain to see massive fines and possible jail time. But they actually got a grandfathered exception and not even a slap on the wrist. Doesn't exactly motivate me to conservatively follow the rules in the future :(

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

#110

Post by marknadal »

geofft wrote: post #94
marknadal wrote: post #27

Earlier quoted context omitted.

There is already a word for what you are talking about, and you used it: Consensus. So I counter your argument. It is useless to call "Blockchain" something that must necessarily have consensus. Or else we should just call it a consensus mechanism, not a blockchain. So instead, I propose the following: A blockchain, is a cryptographically signed linked list. Note, things like "a distributed ledger" aren't included in…

"Consensus" was a word used in the distributed systems literature for all sorts of problems well before the Bitcoin paper. (As was "Sybil-attack-resistant", which is another phrase I ~used that was also in common use.) Bitcoin is interesting because it allows reasonably trustworthy consensus in a Sybil-attack-resistant way for a particular problem, namely, a distributed ledger that permits anyone to participate witho…

You bring up so really good and fair points, specifically around the double-spend problem.

BitTorrent doesn't need to solve the double-spend problem. Yes, it wasn't the cryptographic signatures that solved that in Bitcoin, BUT at the same time, they could have used PAXOS/RAFT to "elect" a random leader to prevent double-spend AND you'd still have consensus.

But it isn't the "consensus" alone, as you note, that makes Bitcoin special - but this is exactly my point in the previous post about why "blockchain" should mean something other than just consensus. It was the ability, as you say, to get consensus without using leader-election algorithms (that would ultimately depend upon trusting that random leader).

Now, if you suggest, instead, that "blockchain" should mean specifically that, a trustless non-leader double-spend solution, I think I can buy that. However, immediately PoS and similar algorithms have to be thrown out as not blockchains then (which hey, I'm okay with that).

This is exactly where, according to what I think you are saying, then things like CRDTs/DAGs could still match your definition, despite being commutative. Sybil-attacks become irrelevant (because the CRDT/DAG approach only cares about the validity of signatures, not who is trading/mining/elected the most, which might be vulnerable to Sybil-attacks), because if a 1000 extra peers/bots commute the same operation, it doesn't change its significance compared to a single peer that commutes the operation.

So wouldn't that match even your own "blockchain" definition?

Oh, I'm glad you found that explainer! I'm glad you enjoyed it :).

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