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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

#41

Post by voakbasda »

skybrian wrote: post #3
jonathan-adly wrote: post #2

It’s ironic that they named it project Hamilton. He is probably rolling in his grave now thinking that Jefferson would be finally proven right with CBDC and the insane ever increasing Public debt. "banking institutions are more dangerous to our liberties than standing armies," Thomas Jefferson

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.

The high level of individual gun ownership in the US makes a coup a very risky proposition.

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

#42

Post by tryptophan »

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.

https://www.alt-m.org/2021/07/06/the-fable-of-the-cats/

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

#43

Post by RandomLensman »

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…

Most points could already apply in current payments and banking systems with only a few big players (basically security, privacy).

The economic nightmare is maybe a degree up, but not really more. Generally speaking, it also tends not to be just "the government" doing stuff that no-one wants - there will be people liking whatever the policy is.

The only real new point is that CDBCs with any kind of programming would effectively be vouchers, not money (ie your first point).

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

#44

Post by beefman »

"In our design users interact with a central transaction processor using digital wallets storing cryptographic keys. ... Despite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals. Specifically, a distributed ledger does not match the trust assumptions in Project Hamilton's approach, which assumes that the platform would be administered by a central actor."

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

#45

Post by pphysch »

voakbasda wrote: post #41
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.

The high level of individual gun ownership in the US makes a coup a very risky proposition.

What does civilians owning firearms have to do with a well-trained military force taking over the seats of power?

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

#46

Post by tryptophan »

SkyMarshal wrote: post #36
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…

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 cri…

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

This is not at all clear.

> 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.

Are we forgetting the inflationary period in the 70s? How the gold standard was lost during this time? All the emerging market crises? How the USD has lost 98% of its value since the 70s? How inequality is sky high due to interest rate suppression causing asset price inflation? How we have a massive trade defect leading to an extremely large negative net-foreign-investment balance? Does it makes sense to you that countries that are much "poorer" than us are lending us money?

> 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.

We trade depression for inflation then. Is this good? Bad? Not sure. We are living in that experiment though. One day this excessive debt and money printing will catch up with us. It has happened to every single fiat currency in history.

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

#47

Post by lvl100 »

beefman wrote: post #44

"In our design users interact with a central transaction processor using digital wallets storing cryptographic keys. ... Despite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals. Specifically, a distributed ledger does not match the trust assumptions in Project Hamilton's approach, which assumes that the…

This is right to some extent. They can have distributed ledger in virtual sense.

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

#48

Post by pphysch »

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 overwhelming one-sided...

Why CBDC is good:

- Efficiency: much of the legacy financial institutions are no longer needed in current form (going as far as the Fed and IRS). Opportunity to reform finance as a whole and remove legacy waste.

- Fraud detection: money laundering and financial crime becomes very difficult to hide

- Observability: much better data & insight into economic trends

- Security: Infra being controlled by a public org that can be held more accountable than a decentralized mess of private corporations (see endless Equifax leaks, etc)

- Responsiveness: can rapidly implement policy changes in response to crises

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

#49

Post by tylersmith »

beefman wrote: post #44

"In our design users interact with a central transaction processor using digital wallets storing cryptographic keys. ... Despite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals. Specifically, a distributed ledger does not match the trust assumptions in Project Hamilton's approach, which assumes that the…

That's basically a requirement for a CBDC. They're certainly not going to promote a coin they don't control the consensus rules for.

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

#50

Post by erosenbe0 »

bratwurst3000 wrote: post #30
politician wrote: post #12

Earlier quoted context omitted.

There are different classes of blockchains. For example, the data structure managed by `git` is a blockchain. So, in and of themselves, blockchains are not problematic. When you raise those criticisms you probably meant to address the security function of the consensus mechanism for distributed decentralized ledgers. The security function there is crazy not because the people are evil scammers and con artists, but be…

Isnt git a merkle tree? And a blockchain a special case of a merkle tree? More like a merkle chain ^.^

Adding signatures or a cipher to nodes is basically the difference.
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