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Boston Fed releases report, source code of digital currency prototype study

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Re: Boston Fed releases report, source code of digital currency prototype study

#31

Post by anm89 »

mjevans wrote: post #7

The mention of blockchain in the summary worries me. We have real world data that shows us this only leads to wasted electricity and fabricated silicon shortages/outrageously expensive computer hardware. The idea of a public ledger and distributed witness signatures is sound though, and that should be the basis of a government approved system of inter-reserve asset tracking.

The concept of a blockchain has ZERO connection to electricity usage.

Proof of work is the thing that uses the electricity. blockchains can use or not use proof of work.

Re: Boston Fed releases report, source code of digital currency prototype study

#32

Post by wizzwizz4 »

tryptophan wrote: post #11
skybrian wrote: post #3

Earlier quoted context omitted.

History hasn't been kind to either of Jefferson's opinions in that sentence. The US did abolish the central bank for a while and nothing good happened as a result. Also, military coups are a problem in many countries, but not the US.

Nothing good has happened after central banking was established either. It's been one financial crisis after another. Also fun fact - back when the US had private currencies, people WILLINGLY preferred to use them despite a gov currency existing. It is only after the government passed high taxes on these currencies(ie having to pay tax for each transaction to exchange them) that they went out of favor. If they were r…

> Also fun fact - back when the US had private currencies, people WILLINGLY preferred to use them despite a gov currency existing.

I'm not much of a historian, but are you referring to company stores? https://en.wikipedia.org/wiki/Company_store

> Saint Peter don't you call me 'cause I can't go // I owe my soul to the company store

— Johnny Cash, Sixteen Tons

Re: Boston Fed releases report, source code of digital currency prototype study

#33

Post by anm89 »

nabla9 wrote: post #26

Central bank digital currency efforts seem interesting. 1. They make it possible to deliver helicopter money directly to the consumers. Now central banks can only work trough banks or financial markets. Digital currency where everyone has access to central bank money can correct the errors in current systems. 2. Currency would be anchored in real economy with sound monetary policy. Nobody in their right mind takes Bi…

I don't understand what you are saying here

if point 1 is that it enables helicopter money, how is the conclusion in point 2 that it enables sound monetary policy?

Re: Boston Fed releases report, source code of digital currency prototype study

#34

Post by wayoutthere »

dragonelite wrote: post #28
cryptica wrote: post #14

CDBCs are going to be a goldmine for hackers. If implemented as centralized systems, some hackers and insiders are going to have access to unlimited free money. The fact is that nobody, no group of people on this planet is trustworthy enough to implement such an important system. Such people don't exist. Such centralized system is guaranteed to be corrupted. This is why such important financial systems MUST be decent…

I have been cashless for pretty much a decade, I'm more interested in what smart money that can be programmed can do. Like can i get paid instantly for every KWH i deliver back to the grid via solar panels. Can my salary or hourly contract be streamed to my bank account. These sort of things are all possible in crypto.

So is irrevocably draining your net worth in half a second if your vendor makes a mistake.

Re: Boston Fed releases report, source code of digital currency prototype study

#35

Post by notch656a »

skybrian wrote: post #23
tryptophan wrote: post #11

Earlier quoted context omitted.

Nothing good has happened after central banking was established either. It's been one financial crisis after another. Also fun fact - back when the US had private currencies, people WILLINGLY preferred to use them despite a gov currency existing. It is only after the government passed high taxes on these currencies(ie having to pay tax for each transaction to exchange them) that they went out of favor. If they were r…

This isn't good history. You should read more about wildcat banks and the financial crises of that era.

The federal government is the worst 'wildcat' bank as it's a wildcat bank who has refused to redeem dollars for the gold they said it was backed by (eventually in '71 totally reneging their obligation), at one point even outlawing private ownership of gold (the item the currency was backed by) and actually intentionally destroy the currency by target of at least 2% each year. A wildcat bank whos notes you are compelled to purchase, at pain of being in violation of tax law.

At least in the old wildcat banks, you had a shot of redeeming for specie if you went out to the sticks where the main branch was.

Re: Boston Fed releases report, source code of digital currency prototype study

#36

Post by SkyMarshal »

tryptophan wrote: post #11
skybrian wrote: post #3

Earlier quoted context omitted.

History hasn't been kind to either of Jefferson's opinions in that sentence. The US did abolish the central bank for a while and nothing good happened as a result. Also, military coups are a problem in many countries, but not the US.

Nothing good has happened after central banking was established either. It's been one financial crisis after another. Also fun fact - back when the US had private currencies, people WILLINGLY preferred to use them despite a gov currency existing. It is only after the government passed high taxes on these currencies(ie having to pay tax for each transaction to exchange them) that they went out of favor. If they were r…

Fwiw in hindsight it appears that structural regulation like Glass-Steagal is what stabilizes the banking system.

Separating banking, investment banking, and insurance into separate legal entities and preventing the banks from consolidating into mega-banks prevented another a Great Depression for ~70years. Then roughly 8yrs after we repealed all that, we unsurprisingly had another Great Depression level financial crisis.

The Fed’s lending support, along with govt stimulus, prevented the actual depression from happening, so you could argue that the Central Bank does have some impact on banking system stability. But it was only necessary because we removed the structural regulation that had maintained a stable banking system for over half a century.

Re: Boston Fed releases report, source code of digital currency prototype study

#37

Post by ur-whale »

Many people on HN claim that the rise of crypto-currencies is a social catastrophe.

Maybe so (I disagree), but wait until central-bank issued digital currencies become a reality, you'll very quickly learn the real meaning of social catastrophe.

Spending 10 seconds thinking about it, I can come up with the following scenarios:

    - complete and utter "financial deplatforming" if you don't behave as a citizen. This is basically China's CCP dream come true.

    - total loss of privacy: the absolute entirety of your financial interactions are an open book to the government. You won't be able to buy a pack of gums without big brother knowing about it, much less paying for your sex toys.

    - security nightmare : how do you guarantee the soundness of such a system when it is centralized. Just ask Sony how long they manage to keep their private keys secret on average.

    - security nightmare : preventing the leakage of citizen's private financial information. If the chain is public, there is none. If it is kept under lock and key by the govt: 1) no way to check what the actual supply is 2) subject to hackage and publishing the data publicly. Knowing the track records of governmental institutions when it comes to IT security, this is basically a guaranteed fuck-up within the first 5 years of such a system existing.

    - economic nightmare: running the printing press full steam is now instantaneous and gives the government even more unchecked power to spend money on brain-dead programs, without leaving any decision-making power to the citizens.
I don't think we will avoid the implementation of such an abomination, but I do believe that - like in everything political - if there's healthy competition from decentralized chains such as Bitcoin, the craziness will be kept in check because there will be an escape hatch to the govt. economic jail.

Re: Boston Fed releases report, source code of digital currency prototype study

#38

Post by mrkentutbabi »

ur-whale wrote: post #37

Many people on HN claim that the rise of crypto-currencies is a social catastrophe. Maybe so (I disagree), but wait until central-bank issued digital currencies become a reality, you'll very quickly learn the real meaning of social catastrophe. Spending 10 seconds thinking about it, I can come up with the following scenarios: - complete and utter "financial deplatforming" if you don't behave as a citizen. This is bas…

This is precisely why I am still a crypto believer despite all its flaws.

Re: Boston Fed releases report, source code of digital currency prototype study

#40

Post by nabla9 »

anm89 wrote: post #33
nabla9 wrote: post #26

Central bank digital currency efforts seem interesting. 1. They make it possible to deliver helicopter money directly to the consumers. Now central banks can only work trough banks or financial markets. Digital currency where everyone has access to central bank money can correct the errors in current systems. 2. Currency would be anchored in real economy with sound monetary policy. Nobody in their right mind takes Bi…

I don't understand what you are saying here if point 1 is that it enables helicopter money, how is the conclusion in point 2 that it enables sound monetary policy?

Sound monetary policy according to Fed mandate and goals is low unemployment rate and average inflation rate 2 percent over medium length period.

Many argue that helicopter money is better alternative to quantitative easing (buying bonds). Just give money to the people. Buying bonds is ineffective because bond holders don't consume. The velocity of money just drops and asset prices increase.

(you may picture helicopter money as trowing more money than is needed, but that's now what the idiom means. It means that the money lands on people, not banks).

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