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What is the fuss over central-bank digital currencies?

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

#131

Post by marcosdumay »

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…

If the problem is "I have a bank account, now I want to receive payments automatically without depending on anything else", you are looking for a money transfer protocol. The Brazilian Pix is quite interesting, as an open protocol, but I don't known of any read made FOSS client for it yet.

There are other nationwide protocols around, some open, but most closed, some closed with publicly accessible middleman. Now we are mostly missing some protocol for international settlement between those.

Honestly, I don't get the point of state sponsored e-money. They looks like me-too projects by people that don't understand what they are doing.

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

#132

Post by WEFwoof »

brobdingnagians wrote: post #36
danialtz wrote: post #24

Earlier quoted context omitted.

Privacy is ranked the second after security in a recent survey from ECB, so it is a known demand and design criteria for both sides. CBDC will co-exist with cash for years to come. Fully monitored CBDC will be at a high disadvantage by citizens specially in modern world, while fully private one would not be allowed by CBs due to need for transparency. Here also comes the product builders. We could design a CBDC that…

"privacy" as defined by the grocery store down the street can't see your history of purchases or privacy as in the government doesn't have every detail of every sexual fetish you've ever paid for? The FBI has been stockpiling that for decades. Those are very different things, and from Europe's approach to the GDPR, I think it is the first.

Rather privacy as there can't be a direct connection between you and each one of your transactions, nor can the ECB refuse and cancel transaction of yours or completely exclude you from the system altogether.

The former is almost a given that it will in fact be possible. The latter was raised as an added benefit of the system either by BIS's Carstens or IMF's Georgieva -- can't recall with certainty currently. Both are promoted as weapons against black markets, corruption, and terrorism.

Yet those who are willing to give up liberty for safety, and all that.

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

#133

Post by WEFwoof »

imtringued wrote: post #129
WEFwoof wrote: post #17

Earlier quoted context omitted.

"Welcome To 2030: I Own Nothing, Have No Privacy And Life Has Never Been Better" https://www.weforum.org/agenda/2016/11/how-life-could-change... Some people call that utopia "technocratic collectivism", and others still salivate at the mere thought. In any case, it's part of the "new normal" championed by Schwab's WEF.

I remember this article being posted on HN. My response was basically: What prevents a single individual from taking all the free stuff and using it in a wasteful manner? E.g. you get a car for free, only use it for one trip, scrap it and get another car for the next trip.

In the context of the post/video, I'd say the social credit system (the "calories card"). If you abuse the resources, your card gets zeroed out, and you're effectively banished from society.

In the example of the car that you give: cars are pooled anyway, and assigned for a trip, then returned to the pool. So essentially you always get another car for each trip, but you don't own it.

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

#134

Post by jmnicolas »

imtringued wrote: post #124
jmnicolas wrote: post #3

Digital currencies allow for full tracking of every transactions and are a privacy nightmare. They allow applying negative interest rate on everybody and they would facilitate neverending hyperinflation (no need to print new bills at great expense). Hence they can't coexist with cash so say goodbye to cash. I don't like where we're going.

>They allow applying negative interest rate on everybody and they would facilitate neverending hyperinflation (no need to print new bills at great expense). The central bank doesn't have hyperinflation as a policy goal though. If you are worried about hyperinflation ask yourself this: Will the economy will suddenly have a collapse in production capacity (nimbys cough cough)? If yes, then expect inflation higher than…

Hyperinflation might be a (not so) sneaky way to pay public debts without defaulting.

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

#135

Post by charcircuit »

imtringued wrote: post #120
charcircuit wrote: post #91

Earlier quoted context omitted.

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…

> 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. Stocks aren't ponzis. Companies pay out dividends all the time and sometimes (very rare nowadays) they pay for stock buybacks out of their own pockets from the pro…

>Companies pay out dividends all the time and sometimes (very rare nowadays) they pay for stock buybacks out of their own pockets from the profit they have accumulated

Not, all stocks do that though. I just checked the FAANG stocks and only Apple pays dividends. Even so Apple has a yield of 0.63% That means you have to hold it for almost 159 years to recoup that investment. Meanwhile if you bought a year ago, by now the stock price has doubled which can allow you to recoup your investment because you can sell it to the "greater fool." Eventually dividends go down, the company goes bankrupt, or some other thing happens and you don't want to be the fool holding the bag.

In cryptocurrency there also exists yield farming and buy backs.

>That's how you get bubbles.

There will always be bubbles. It's like a video game. You need to be minmaxing. Find what bubbles currently exist and figure out how to profit off of them.

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

#136

Post by diroussel »

marcosdumay wrote: post #131
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…

If the problem is "I have a bank account, now I want to receive payments automatically without depending on anything else", you are looking for a money transfer protocol. The Brazilian Pix is quite interesting, as an open protocol, but I don't known of any read made FOSS client for it yet. There are other nationwide protocols around, some open, but most closed, some closed with publicly accessible middleman. Now we a…

There are a lot of cost savings to be made in a move to a national digital currency. Just settlement alone could be made way cheaper. Swift could be cut out as the middleman. It would be a good cost saving innovation.

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

#137

Post by brobdingnagians »

notsureaboutpg wrote: post #121
dgellow wrote: post #118

Earlier quoted context omitted.

Switzerland isn't considered progressive in any way, in fact it's a very conservative country compared to its neighbors (source: I'm from there).

Progressive used to mean you were concerned with the freedom and liberty of individuals and with transparency in government. That seems closest to "Libertarian" in American terms, and Switzerland, as a neutral country along with other European style politics, seems to fit that bill

Classical "liberals" were similar. Believed in free speech, free markets, rule by law. Languages change in interesting ways when people all pile on to a "positive word" that they want to be, but that changes the meaning of the word. It's like iterative word redefinition.

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

#138

Post by charcircuit »

atleta wrote: post #108
charcircuit wrote: post #91

Earlier quoted context omitted.

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…

>companies pay dividend

Not all companies do that though. $GOOG has no voting rights nor dividends yet is worth more than $2100. It does literally nothing as far as I can tell, making it useless compared to even something like bitcoin. Despite this, you could have made a lot of money by just buying the stock years ago and selling it now.

>You can hold it and still make a real profit

That would take 33 years to happen with the stock that currently has the highest yield assuming that yield is constant over those 33 years which is probably a bad assumption. Who wants to get a profit 33 years in the future? If I could not resell it, it would be worthless to me.

With cryptocurrency you can also yield farm to make some money while you are just holding by essentially loaning them and having interest paid to you.

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

#139

Post by surfsvammel »

imtringued wrote: post #117
surfsvammel wrote: post #105

Earlier quoted context omitted.

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 requireme…

The question is, why would banks run nodes? How do they get money to pay for the datacenters?

Well. Same as they do today. Lend money, borrow money (savings), finance ventures and mortgages, services.

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

#140

Post by surfsvammel »

anm89 wrote: post #40
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…

The central bank is CENTRAL. They want to CENTRALLY coordinate monetary activity. They are never going to sign up to decentralize their one policy tool. I don't disagree that it is technically feasible to implement these on a block chain, and I think it is possible that there may be some effort to tokenize a currency to track it on a block chain in a secondary way, but that is very different from the block chain bein…

I do not agree. And I think the fact that almost every central bank around is showing interest in the idea, and some perusing it more than others, could be seen as arguments against your position.

I think it’s very simple. The central banks are given an assignment and a goal by the government, in many ways it has become harder for them to do that; making sure the currency is liquid and people have means of payment, for example in situations of crisis, is much harder today when people are paying less in hard cash monies, and most stuff is electronic or how affecting inflation by means of repo-rates have become much slower and much harder. They need to do something. Having it as a DLT might give them more control, not less, since they could for example add interest rates directly on the currency to affect inflation, rather than having to take the route via the commercial banks.

I am not an expert, but I have though quiet a bit about it, and I have a bit of experience with a couple of European central banks. I really do think that we will see this, at least in some placss, it’s just a matter of time.

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