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What is the fuss over central-bank digital currencies?

economist.com

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Re: What is the fuss over central-bank digital currencies?

#101

Post by burundi_coffee »

zadler wrote: post #90
ryukafalz wrote: post #87

Here's what I'm most interested in here: right now, if I'm using an alternative mobile OS (besides iOS or Android), it's basically impossible for me to implement digital payments through existing payment networks. On the other hand, because cryptocurrencies are FOSS and very well-standardized, it's very possible to implement a cryptocurrency wallet. If central-bank digital currencies are closer to cryptocurrencies in…

I’d wager that only very progressive and liberal countries would have this degree of openness. Think Switzerland and Holland. Most countries will distribute their own apps (which may also spy on you) and/or use preferred technology partners.

Another point of order: Switzerland might be financially liberally oriented but the political landscape is largely conservative and right leaning.

Re: What is the fuss over central-bank digital currencies?

#102

Post by thendrill »

gillesjacobs wrote: post #84
thendrill wrote: post #76

Earlier quoted context omitted.

Uhh.. Where do you think this number that you call "value" comes from? It comes from the crypto exchanges. The value. Is the latest settled sale. So when someone sets a sell price and someone buys at that btc, is when the value is set. So yeh. You absolutely need new buyers for its value to increase.

Needing new buyers for price to increase is not the definition of a Ponzi scheme. Because that is true for any speculative asset due to the price setting mechanism. Your argument entails that the price of Bitcoin is highly inflated over its fundamental value, i.e. that it is a speculative bubble. Speculative bubbles are very different from Ponzi schemes. A Ponzi scheme has the following definition according to the SE…

What about the bit coin whales?

The btc-e money the Mt gox coins. Satoshish original coins and all the gpu miners pre 2012?

There are plenty of people walking around with btc wallets with hundreds to thousands of coins that are basically funny money to them.

For every btc price cycle there is more usd and less coins in circulation.

Selling off 10 btc at the moment on any exchange would tank the price with about 10k usd....

Re: What is the fuss over central-bank digital currencies?

#103

Post by doomroot »

aero- wrote: post #100

I think the notion that BTC or Ethereum are actually decentralized digital currencies is the biggest farce of the last 5 years. A small concentration of miners (mostly based in china) control the vast majority transactions and will continue to so based on the increased difficulity that only large economies of scale will profit from. Middlemen(brokers and exchanges) charge fees just like banks do to transact and store…

Hfsp

Re: What is the fuss over central-bank digital currencies?

#104

Post by gillesjacobs »

thendrill wrote: post #102
gillesjacobs wrote: post #84

Earlier quoted context omitted.

Needing new buyers for price to increase is not the definition of a Ponzi scheme. Because that is true for any speculative asset due to the price setting mechanism. Your argument entails that the price of Bitcoin is highly inflated over its fundamental value, i.e. that it is a speculative bubble. Speculative bubbles are very different from Ponzi schemes. A Ponzi scheme has the following definition according to the SE…

What about the bit coin whales? The btc-e money the Mt gox coins. Satoshish original coins and all the gpu miners pre 2012? There are plenty of people walking around with btc wallets with hundreds to thousands of coins that are basically funny money to them. For every btc price cycle there is more usd and less coins in circulation. Selling off 10 btc at the moment on any exchange would tank the price with about 10k u…

> Selling off 10 btc at the moment on any exchange would tank the price with about 10k usd....

That's just not true and I don't even see any reason how it could be. I am looking at the Binance BTC order book and depth chart and 24 BTC sell orders at 56500 just went through. Price is not crashing.

Mining and whale centralisation are huge problems and downside in crypto depending on how prevalent it is. I am not saying that Bitcoin is not a dangerous investment, that there it is not a speculative bubble. I am just saying that it does not meet the definition of a Ponzi scheme.

There is indeed a lot to critique about the current crypto market but at least make sure the arguments are founded on facts.

Re: What is the fuss over central-bank digital currencies?

#105

Post by surfsvammel »

headmelted wrote: post #74
surfsvammel wrote: post #35

Earlier quoted context omitted.

Central bank digital currencies can be blockchain based, they can be decentralised etc. In fact, he central banks that I have spoken to would rather have a decentralised currency, because it would mean less work for them. The motivation of a central bank is easy; make sure the currency is liquid, make sure they can use the currency to affect inflation and so forth. Whatever setup gives them the best ability to meet t…

I could see CBDCs using blockchain solely because someone utterly non-technical, at some higher level in the bureaucracy, insisted that they make a blockchain-based cryptocurrency “so as to not get left behind” or “because we need to compete with Bitcoin”. Clearly neither of those two rationales make any sense whatsoever - and they might even seem like a downright ridiculous suggestion to some readers of this respons…

That’s not me. I but can see how a DLT could work very well as means of a currency.

We could have the commercial banks, and others if necessary, run nodes. They could verify payments on “accounts”, or addresses, (if we want to keep the old meaning of bank account, that’s fine, then we could instead call these addresses) which are held by the commercial banks. These addresses could be non-anonymous such that requirement for know-your-customer still reside with the commercial banks (the central banks really don’t want to have to get anyway near KYC requirements). Each such “account”/address could be linked to addresses of currency at the CB, which at that point was anonymous.

The CB could then have full control of the issuance of currency, control interest directly on the currency itself, everything being anonymous to the CB.

Re: What is the fuss over central-bank digital currencies?

#106

Post by rglullis »

aero- wrote: post #100

I think the notion that BTC or Ethereum are actually decentralized digital currencies is the biggest farce of the last 5 years. A small concentration of miners (mostly based in china) control the vast majority transactions and will continue to so based on the increased difficulity that only large economies of scale will profit from. Middlemen(brokers and exchanges) charge fees just like banks do to transact and store…

The concentration, though undesired, is accidental and not coordinated. That's the difference.

Re: What is the fuss over central-bank digital currencies?

#107

Post by Viliam1234 »

wsc981 wrote: post #68
bawolff wrote: post #43

Earlier quoted context omitted.

Fair enough. I guess it feels almost unbelievable that all this fuss is over something so mundane. I guess i dont really understand why though. It sounds like the central bank is thinking about becoming, well, a normal bank. We already have normal banks. Governments can already transfer cash to accounts in normal banks. Governments can already sell bonds to people who want some sort of very stable investment backed b…

> I guess i dont really understand why though. Accounts at central banks might make taxation easier for governments, especially if other current (and possibly savings) accounts at normal banks would be banned. Also it would be easier for governments to select policies based on someones income. E.g. tax high income people more and provide financial benefits for low income people. Also a universal basic income would be…

It would also be easier to watch and seize the transations of people who oppose the governments. Maybe your tax would depend on your social score.

It would allow to automatically punish not only the targets directly, but also everyone who interacts with them. Like, not only would the undesirables not be allowed to get a good job or study at university, they couldn't even buy an ice cream at the corner, because the vendor would be warned that if they accept their money, the vendor's social score will be reduced in turn. (And there is no way to accept the payment without the system seeing the transaction.) The companies would be warned that if they hire them, their tax rate will be increased. The government could enforce social ostracism even if most people wouldn't mind the thoughtcrime per se.

Re: What is the fuss over central-bank digital currencies?

#108

Post by atleta »

charcircuit wrote: post #91
geraldbauer wrote: post #47

Earlier quoted context omitted.

Important note: bitcoin is a ponzi [1] and not digital gold. Learn how the investment fraud works. [1] https://github.com/openblockchains/bitcoin-ponzi

By that definition literally all investments are ponzis. You buy something hoping that someone else will be willing to buy it from you at a higher price. Oops the cryptocurrency bubble popped. Oops the company went bankrupt and your stocks are worthless. Oops a natural disaster happened and the house and land lose a lot of value. Oops pokemon is no longer popular and all the TCG cards you have become worthless. Oops…

Not really. Company stocks indeed do have an intrinsic value: companies pay dividends. Now they can go bankrupt, sure, but that's an independent issue. Indeed the very fact that they can go bankrupt (in which case your stock will probably be worth 0) shows that they have an intrinsic value.

So, as opposed to BTC, you don't have to buy it in order to sell it to someone else at a higher price. You can hold it and still make a real profit. (As opposed to the price increase, which you'll only realize if/when you do sell.) And since this is the case, it will mostly anchor the price in the long term to the profit (dividend) making capabilities of the stock.

So no, it's not always a bubble. You could argue that 'fiat' money is a ponzi/bubble but that also has intrinsic value (as the issuing central bank/government will stand up for it, e.g. force every merchant to accept it, you can pay taxes in it, etc.). But if you say that gold is a similar ponzi/bubble, then your probably right. While gold also does have intrinsic value (for its usage as a base material e.g. in electronics), its price is, as far as I can understand a lot higher than what that use would guarantee. (We use relatively little compared to how much we keep in safes.)

Re: What is the fuss over central-bank digital currencies?

#109

Post by jayd16 »

ryukafalz wrote: post #87

Here's what I'm most interested in here: right now, if I'm using an alternative mobile OS (besides iOS or Android), it's basically impossible for me to implement digital payments through existing payment networks. On the other hand, because cryptocurrencies are FOSS and very well-standardized, it's very possible to implement a cryptocurrency wallet. If central-bank digital currencies are closer to cryptocurrencies in…

Can't you just use the many existing web payment frameworks? Do you have some more specific requirement?

Re: What is the fuss over central-bank digital currencies?

#110

Post by walterbell »

IMF video clip with BIS director on CBDCs (at 24:00), https://meetings.imf.org/en/2020/Annual/Schedule/2020/10/19/...

> With cash, we don't know who is using the 100 dollar bill today ... a key difference with CBDC is that the central bank will have absolute control on the rules and regulations that determine the expression of that central bank liability .. also we will have the technology to enforce that ... if an advanced economy issues a CBDC, and someone in a 3rd country wants to use it, it will require the consent of the central bank of the residence of that person, therefore the degree of control will be far bigger.

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