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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

#21

Post by BaronVonSteuben »

garmaine wrote: post #4

> But what if central banks themselves entered the game? What would happen if the Federal Reserve, or the European Central Bank or the Bank of Japan used blockchain technology to create their own virtual currencies? Besides, that is, having some cryptocurrency fans’ heads explode? Maybe some of the wacko nut-jobs out there in cryptocurrency fandom. But most would welcome this with open arms. It would mean that you co…

I'm probably one of those "wacko nut-jobs out there" that you refer to, so you may just want to dismiss my point outright with ad hominem. However, I don't think any of us wacko nut-jobs would care about fed coin, as long as they don't go after competing coins. In fact, I welcome the competition. As long as it's free competition, may the better, less manipulable, coin(s) win.

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

#22

Post by dnomad »

wmf wrote: post #8
lettergram wrote: post #3

Pretty sure the USD is enough.

You can't transfer USD electronically without using banks or third-party services that are trying to skim basis points off the entire economy. In theory a well-implemented FedCoin could be more neutral and efficient.

There's no reason at all the government couldn't give every citizen a bank account and let them wire funds to each other. In fact this used to be exactly the case: any citizen could walk into the Post Office and open a savings account [1]. Like most services that didn't benefit the rich and actually benefited the poor it got shutdown once the neoliberals took over in the 70s. Nowadays 7-10 percent of the population is unbanked and forced to rely on criminal pay day lenders, check cashers or hiding money in their cars.

FedCoin would have one benefit though over a traditional banking system and that is surveillance. It'd be very interesting to have a public, error-free record of eactly how much money each citizen is receiving or has. If it ever did happen and people could see in perfect black and white just how ridiculously unequal the country is I don't think the republic would survive much longer after that.

Which is why this article is kinda hilarious. Even the central bankers, supposedly the smartest men on the planet, don't grasp that this is the whole reason private banks exist: to obfuscate cash and risk flows. Like that's the point [3]. We wouldn't have an economy if private banks couldn't do their thing. An economy based on any kind of public ledger without private banking (and private ledgers) would be radically different.

[1] https://en.wikipedia.org/wiki/United_States_Postal_Savings_S...

[2] https://www.americanprogress.org/issues/economy/reports/2014...

[3] https://www.interfluidity.com/v2/2669.html

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

#23

Post by clhodapp »

geofft wrote: post #19

What is a "blockchain"? To me, a blockchain is a way of solving double-spend problems in a Merkle tree maintained by open distributed consensus, by using some scheme to resist Sybil attacks. The scheme is not necessarily proof-of-work, but the fact that there's a double-spend problem and you're solving it is key to the idea. If you don't have a double-spend problem because all your transactions commute (e.g., Certifi…

It could be reasonable to somehow have control over things like the difficulty of mining or to be able to spawn new currency at a reduced cost via some sort of master certificate while still allowing transfer without communicating with a central coordinator system. A distributed system is a lot less likely to go down or become completely compromised.

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

#24

Post by mirimir »

zitterbewegung wrote: post #2

It could create FedCoin. But, instead it will allow the investment banks to make it for them and then sign off on whatever they makeup because they can not only make it legal but make it easy to use. Then the government would just let those coins that pass through this with open arms. Regulation now is the biggest part of an ICO and if you are an investment bank and want a big piece of the distributed ledger pie you…

> Expect a bunch of coins to disappear.

If the Feds can make it disappear, it was worthless anyway.

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

#25

Post by SI_Rob »

The basic premise of this headline represents a complete failure to grasp the point of a cryptocurrency, which is to take the power of money issuance away from incumbent authorities who can back it with physical force (that is, states), and devolve it into a first order power available to any social group. The paradoxical claim that a centralized bank could ever issue currency based on the presumption of decentralized support is epitome of misapprehension, or at least misappropriation of jargon.

The Fed already has "FedCoin" for all intents and purposes, and does not need the cooperative casino incentive system known as a blockchain in order to compel rules-compliant participation from its users.

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

#26

Post by GauntletWizard »

clhodapp wrote: post #23
geofft wrote: post #19

What is a "blockchain"? To me, a blockchain is a way of solving double-spend problems in a Merkle tree maintained by open distributed consensus, by using some scheme to resist Sybil attacks. The scheme is not necessarily proof-of-work, but the fact that there's a double-spend problem and you're solving it is key to the idea. If you don't have a double-spend problem because all your transactions commute (e.g., Certifi…

It could be reasonable to somehow have control over things like the difficulty of mining or to be able to spawn new currency at a reduced cost via some sort of master certificate while still allowing transfer without communicating with a central coordinator system. A distributed system is a lot less likely to go down or become completely compromised.

The properties of "unlikely to go down" don't require a trustless blockchain; the attributes of being resistant to a node being compromised don't require trust beyond consensus. git is unlikely to go down and verifiable. Copies of a git repo verified by gpg signatures and repos that only accept commits that pass verification requires only as much distribution as running three instances. The fed can do all of this without giving up any control.

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

#27

Post by marknadal »

geofft wrote: post #19

What is a "blockchain"? To me, a blockchain is a way of solving double-spend problems in a Merkle tree maintained by open distributed consensus, by using some scheme to resist Sybil attacks. The scheme is not necessarily proof-of-work, but the fact that there's a double-spend problem and you're solving it is key to the idea. If you don't have a double-spend problem because all your transactions commute (e.g., Certifi…

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 that definition. Why? Because a distributed ledger is only possible if writes are cryptographically signed. Else, it is too easy to fake, sybil, forge, exploit, manipulate, lie, or mutate the ledger in a public setting.

I've done a lot of work on commutative transformations (CRDTs, at https://github.com/amark/gun ), and while they are a very different (and more scalable) approach to arriving at consensus (through deterministic means), I still think it is appropriate to call such CRDT/DAG/Merkle/other cryptographically based systems a blockchain. Why? Simply because they can be used as a distributed ledger, and that is the point that most people actually talk about/intend.

At the end of the day, what people intend when they talk about "blockchain" isn't even cryptography or technology, it is simply an economic model. An economic model that doesn't require institutional trust.

So in that sense, would a FedCoin pass as being a "blockchain"? From a technology standpoint, sure, but not from an economic perspective.

Would love to hear your counter-thoughts!

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

#28

Post by JumpCrisscross »

dnomad wrote: post #15
garmaine wrote: post #6

Earlier quoted context omitted.

> 2018 will be the start of the enforcement For what it's worth, I've been hearing "X will be the year of regulatory enforcement" since 2014. So far all we've seen is a very level-headed and even-handed approach targeting just the outright scams. "year of regulatory enforcement" in the crypto currency space is becoming a bit like the "year of linux on the desktop" meme.

Yes, the SEC will continue to take a very light touch. There's no upside to them cracking down on ICOs. The only people losing money are the people who mostly understand the risks of cryptocurrencies and "invest" anyways. The SEC may get serious when grandmothers lose money or there's blood in the streets. Until then there's a kind of regulatory sovereignty that must be defended on a pro forma basis eg the slam-dunk…

> There's no upside to them cracking down on ICOs

To add: enforcement resources are limited. Every cryptocurrency fraud investigated is a bread and butter fraud ignored. While caveat emptor isn't the law of the land, justice is a slow-turning mechanism. What will be enforced in the long term need not be addressed in the short.

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

#29

Post by kchoudhu »

SI_Rob wrote: post #25

The basic premise of this headline represents a complete failure to grasp the point of a cryptocurrency, which is to take the power of money issuance away from incumbent authorities who can back it with physical force (that is, states), and devolve it into a first order power available to any social group. The paradoxical claim that a centralized bank could ever issue currency based on the presumption of decentralize…

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.

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

#30

Post by FreakLegion »

marknadal wrote: post #27
geofft wrote: post #19

What is a "blockchain"? To me, a blockchain is a way of solving double-spend problems in a Merkle tree maintained by open distributed consensus, by using some scheme to resist Sybil attacks. The scheme is not necessarily proof-of-work, but the fact that there's a double-spend problem and you're solving it is key to the idea. If you don't have a double-spend problem because all your transactions commute (e.g., Certifi…

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…

> A blockchain, is a cryptographically signed linked list.

I've always assumed this definition by analogy with Cipher Block Chaining (https://en.wikipedia.org/wiki/Block_cipher_mode_of_operation...), but of course where a word starts out and where it ends up can be two very different things.

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