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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

#51

Post by bitreality »

masterbit wrote: post #45
Jasper_ wrote: post #36

Earlier quoted context omitted.

What? There is no mechanism to "detect and punish rule-breakers" in either Ethereum or Bitcoin. Bitcoin's only mechanism is to push global human-readable alerts, or to pressure rule-breakers to stop through a blog post, as in the case of SPV mining: https://bitcoin.org/en/alert/2015-07-04-spv-mining . If you define "rule-breaker" as "generates invalid blocks", then the only punishment rule-breakers receive is that...…

Blockchain coordinates databases over different legal entities. That's the magic. It's still your DB in your Datacenter when you run your own node. You have autonomy over your own records with your keys. And you have visibility of all other records. A big central DB is under the control of a central body. With a blockchain the central control is / could be limited.

Definitely, but this is a feature that a centralized authority like the fed would prefer to do without. Whatever technology is behind any sort of "FedCoin" would certainly not be blockchain. They will not relinquish control of their currency, doing so would make themselves obsolete.

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

#52

Post by bitreality »

kchoudhu wrote: post #29
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.

Well, ultimately a decentralized blockchain tackles the issue in a much different way. In the 1800s, if you were a money issuer, you could print any amount you wanted. In a truly decentralized blockchain, there are defined rules for how new currency enters the system. You cannot just print new money. The amount that exists is fully visible by anyone.

Transparency is everything. This also explains why a currency like XRP is not a real blockchain. Beware these pseudo-blockchain projects, because they are much more similar to your example from the 1800s.

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

#53

Post by garmaine »

BaronVonSteuben wrote: post #21
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.

Why competition? This isn’t a zero sum game.

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

#54

Post by bitreality »

mozumder wrote: post #33
kchoudhu wrote: post #29

Earlier quoted context omitted.

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.

... while minimizing the wasteful environmental impact of blockchains due to the power requirements of each transaction. This is probably the one "feature" of blockchains that will kill it, since they're based on proof-of-lots=of-work, and work needs power.

Blockchain as it exists today is a proof of concept. It shows that people can use code to create a monetary system. The system does not need to be backed by any government or physical good guaranteeing its value.

This proof of concept can now manifest itself in a variety of formats. Many of which we cannot fathom today, because they haven't yet been invented. There are many intelligent people now working on this problem and improving the way a blockchain works, or even pulling from that proof of concept and rethinking the solution without traditional blockchain.

People are too heavily focused on what the technology is capable of right now. That is irrelevant. The industry is in its infancy. Up until 5 years ago, the only blockchains that still exist today in any meaningful format are Bitcoin and Litecoin. Litecoin is just a Bitcoin clone.

Just wait and see how this space will develop over the next 10, 20, 30 years. The proof of concept is that people will assign value to digital assets without any authority backing them. That's the most important development.

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

#55

Post by DoctorOetker »

"It would be quite a twist if a technology whose most ardent fans are motivated by distrust of central banks became a key tool for those banks."

It's the other way around: the fact that publicly provable and verifiable financial systems are possible, yet the central banks didn't work this out (what they should have been striving for from the start), nor improve on it for another decade now is what fuels distrust of the old blindly trusted financial systems.

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

#56

Post by MorbidCuriosity »

bitreality wrote: post #54
mozumder wrote: post #33

Earlier quoted context omitted.

... while minimizing the wasteful environmental impact of blockchains due to the power requirements of each transaction. This is probably the one "feature" of blockchains that will kill it, since they're based on proof-of-lots=of-work, and work needs power.

Blockchain as it exists today is a proof of concept. It shows that people can use code to create a monetary system. The system does not need to be backed by any government or physical good guaranteeing its value. This proof of concept can now manifest itself in a variety of formats. Many of which we cannot fathom today, because they haven't yet been invented. There are many intelligent people now working on this prob…

No cryptocurrency is a monetary system, they aren't even a functioning currency. For that to happen they would need to fulfill three functions that currently none do. Namely:

A means of exchange A unit of account A store of value

They satisfy the first but not the other two. I cannot know for sure what value my coins have on any given day, let alone what they are likely to be valued at by next year. Thus they do not act as a store of value nor a unit of account.

If it takes the electricity consumption of Denmark to secure less than $10bn in transactions, how much will it take to replace the $6tn daily Forex volumes?

Honestly I wish people would realise how utterly pointless crypto is as a currency. Maybe then I'll get a cheap graphics card.

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

#57

Post by gmueckl »

bitreality wrote: post #52
kchoudhu wrote: post #29

Earlier quoted context omitted.

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.

Well, ultimately a decentralized blockchain tackles the issue in a much different way. In the 1800s, if you were a money issuer, you could print any amount you wanted. In a truly decentralized blockchain, there are defined rules for how new currency enters the system. You cannot just print new money. The amount that exists is fully visible by anyone. Transparency is everything. This also explains why a currency like…

As the proliferation of newly created digital currencies should tell you, printing new bills at will has been replaced by creating new currencies at will. So a series of new bills in the old system is now equivalent to a new blockchain. While we have thus the well perpetuated illusion of an ever fixed amount of currency, the system moves towards massive inflation due to an incentive to create new currencies.

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

#58

Post by whataretensors »

kchoudhu wrote: post #29
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.

> We tried the "anyone can issue money" model in the 1800s, all it led to was bank runs and scams.

And now it's back with technology behind it. A lot of people call ICOs scams. What's the equivalent bank run? Perhaps a panic flee from fiat reserves?

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

#59

Post by kuschku »

aserafini wrote: post #39
alex_young wrote: post #16

How about fedDigitalCash? It's crazy that I pay a few percent of every transaction to visa for no reason every time I buy anything in 2018

Yes, paying a few % on every transaction to move kilobytes of information over a network is absurd. The true cost is less than pennies but the EMV cartel led by VISA has successfully kept the price many orders of magnitude higher, employing anti-competitive tricks like: hiding the cost to consumers by contracually preventing retailers from increasing prices for VISA payments.

The funny part is that EC (a German-only card network that stands for the E in EMV, with MasterCard and VISA being the M and V) has less than 0.125% fees for the smaller retailers, and even less for larger ones – you basically only pay the interchange fees.

This is why e.g. ALDI for many years only took EC, but not MasterCard or VISA.

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

#60

Post by pjc50 »

whataretensors wrote: post #58
kchoudhu wrote: post #29

Earlier quoted context omitted.

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.

> We tried the "anyone can issue money" model in the 1800s, all it led to was bank runs and scams. And now it's back with technology behind it. A lot of people call ICOs scams. What's the equivalent bank run? Perhaps a panic flee from fiat reserves?

The equivalent is exit scams and flash crashes; a lot of people keep pointing out that Tether is a non backed token pretending to be a backed one.
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