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A quick breakdown of what SWIFT is and why it matters
341–350 of 496 posts
Re: A quick breakdown of what SWIFT is and why it matters
#342Earlier quoted context omitted.
Yes. Money means nothing without trust. I do not think we can have civilisation without trust
"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." -- Satoshi Nakamoto
All currency is fiat. No medium of exchange that isn't strictly bartering is of arbitrary value.
Re: A quick breakdown of what SWIFT is and why it matters
#343Earlier quoted context omitted.
"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." -- Satoshi Nakamoto
All currency is fiat. No medium of exchange that isn't strictly bartering is of arbitrary value.
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Re: A quick breakdown of what SWIFT is and why it matters
#344Earlier quoted context omitted.
Just to make sure we are speaking the same language: If I have $1 in a checking account in a US bank, do I have one dollar, or do I have a dollar-denominated asset of $1 face value, backed by a dollar-denominated liability of the bank?
Reserve requirements at US banks are regulated by the US government as one of many mechanisms used to control the money supply. So... yes, sure. It's complicated, but a dollar at a US bank is a "dollar", because that's what "dollar" means. The contention upthread was that foreign banks could do the same thing to print dollars. And, again, it's complicated. They sorta can, but only in the sense of placing a gargantuan…
Oh oh, next do the Depository Trust Company and how people don't actually own their stock shares of most public stocks either :)
Re: A quick breakdown of what SWIFT is and why it matters
#345The way people write things on Twitter amuses me. Is this person a SWIFT expert or did they just google all this stuff to be able to tweet about it? Plus.. I can't read it all because Twitter throws a sign up modal.
I can tell you something you can’t Google in 2 seconds: have a close friend who’s also a programmer that worked on SWIFT: the transactions are conducted through XML files on FTP(!) drops.
Re: A quick breakdown of what SWIFT is and why it matters
#346Earlier quoted context omitted.
> I hate this trend of "well he's an expert so he might be wrong". Trotting out an expert who you agree with, to end discussion, is just as bad. You can find reasonable experts on all sides of issues. It's almost always used as a rhetorical technique to shut down debate.
Trotting out an expert is far better than just random comments from uninformed people. I'd just rather say "I have this expert I agree with" vs "I'm a SWE that has no background in this and my opinions are somehow weighted the same" or "this expert is wrong despite the fact that I have no understanding of this subject"
Might be worth considering that some of the people in this conversation are well versed in foreign policy debates and don't need to cite to names to invoke reasonable ideas.
Re: A quick breakdown of what SWIFT is and why it matters
#347Earlier quoted context omitted.
"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." -- Satoshi Nakamoto
All currency is fiat. No medium of exchange that isn't strictly bartering is of arbitrary value.
Fiat currency here is obviously being used to refer to currencies created by government decree.
Plenty of other moneys come into existence emergently, most obviously gold and silver without any authority mandating their use. Money is an emergent property of human society, not a gift handed down by our divinely established kings.
The idea that money can only exist by government decree is patently absurd.
Re: A quick breakdown of what SWIFT is and why it matters
#348Earlier quoted context omitted.
A reminder that two of Western Europe's militaries are nuclear, which hardly makes them "a joke". You seem to be projecting the state of Germany's military to all European forces, which is... questionable.
The nuclear arsenals of France and the UK are a bit meager relative to Russia and the US. That doesn't mean that they can't inflict a good bit of damage but MAD isn't in play with them unless the US is backing them up with its own nuclear arsenal.
Keep in mind that most modern nuclear warheads are MIRV weapons, which dramatically amplifies the scope of the damage. These aren't Truman's nukes anymore.
Re: A quick breakdown of what SWIFT is and why it matters
#349Earlier quoted context omitted.
> How does the system guarantee that nobody's creating money without notifying everyone? Through a series of regulations regarding minimum liquidity/capital [1] and/or reserve [2] requirements. > Furthermore, does the system guarantee that the central banks of each country are correctly adjusting their books in consequence? By requiring them to periodically report on their assets and liabilities, checking for complia…
So it's all trust based? We have to trust that all the governments of the world, who pinky promised to follow the rules, aren't secretly cheating internally and reporting false numbers to everyone else?
Pretty much all human interaction is trust based.
Re: A quick breakdown of what SWIFT is and why it matters
#350Earlier quoted context omitted.
> It can't be just a number on a computer in a bank, right? It really is, but to answer your second question, it's important to consider *which* bank. There's reserves (i.e. balances of banks at the Federal Reserve) and bank deposits (which really are just numbers in banks' databases). Having an account at the former is effectively what makes numbers in the database of the latter "real USD". > Otherwise some Russian…
So reading this: Banks are basically a necessary "evil" to make the current money system work. When I read how banks works, their technology, and how money works in general.. It makes me think: Is this really the way we want it to work. I'm not sure if crypto is currently ready. But one BIG reason for it to succeed, is that the current system is just old... We have all these fintech startups improving money flow, and…
See, the thing is that you will need trust at some point. Back in the day you had to trust that your business partner didn't just whip out a sword and kill you to take your money.
Then you had to trust that they didn't hand you false coins. After that came false checks. Nowadays you need to trust that online shops aren't trying to scam you.
Essentially whenever you do business there will be one person that needs to make the first move, crypto or fiat, someone always needs to deliver first. But if these two business partners don't trust one another then they need a third party they can both trust.
In our world these are most often banks or notaries. People that will take money from person A hold it till person B delivers then pass it on. If person B doesn't deliver person A gets their money back, if person A doesn't pay person B doesn't deliver.
Now, crypto is trying to claim that smart contracts will solve this in crypto world but that raises the question of who executes these smart contracts and who feeds them information. After all this once again feeds back into the trust problem.
Essentially you need banks not because they are modern or technologically up to date or fast, but because they are in fact fully capable of clawing money back if the laws allow them to, unlike crypto where your money is secured by math.
Because even if some people don't like it, the chance of the average person being scammed is far higher than your bank or the government misusing the trust you have given them and taking your money.