Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

nytimes.com

Post reply on HN
Print view View original

71–80 of 112 posts

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

#71

Post by 21 »

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…

Bitcoin is also backed by the same physical force of the state.

Otherwise armed groups would seize the miners or break into the exchanges and use physical force to steal the bitcoin.

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

#72

Post by ghthor »

DoctorOetker wrote: post #55

"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 t…

Pretty much nails this on the head. The FED failed at its mission and is due for disruption. Considering how poorly our democratic system is working, it's too going to come from private or open source industry.

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

#73

Post by 21 »

garmaine wrote: post #53
BaronVonSteuben wrote: post #21

Earlier quoted context omitted.

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.

It is. You either store value in dollars, euros, gold, real estate, art or bitcoin.

You can't "dobule spend" the same value.

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

#74

Post by bitreality »

gmueckl wrote: post #57
bitreality wrote: post #52

Earlier quoted context omitted.

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.

The incentive to create new currencies has really only taken major effect over the past year. Up until then, the term "ICO" hardly even existed. Since that time we've seen a goldrush to launch separate blockchains and sell ICO's.

But that's just a natural by-product of crypto currency's evolution. The amounts being raised in ICO's has been steadily decreasing. In summer 2017, you could raise $100M on a half decent project. Today, you're lucky to raise $10M. Investors are also demanding more transparency and deliverables from the projects.

This trend will continue as the market matures. Fundraising will continuously become more difficult once investors get burned a few times. This is all very new, people have no idea what they're doing. Eventually the fools will go broke and the smart money will remain.

The reality is that with so many scams / useless projects being launched every day, investors need to do more and more research to get positive ROI.

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

#75

Post by stephen_g »

mikro2nd wrote: post #64

Not sure why NYT is taking some "former governor's" opinion on this. Let's take a look at what the Fed itself (themselves?) think. Quite recently (2018-04-16): "The Case for Central Bank Electronic Money and the Non-case for Central Bank Cryptocurrencies" at https://research.stlouisfed.org/publications/review/2018/02/... In a nutshell, the St. Louis Fed thinks there's no good case for central banks to get involved in…

It's worth noting that most central banks already do have electronic money (called 'central bank reserves'), which commercial banks use for settling inter-bank payments between each other, as well as transfers to and from the Government (Government spending into private bank accounts, tax transfers to the Government from private bank accounts, and the purchasing of Government bonds and securities).

What the linked paper is talking about (it's also part of the Swiss proposal) is to provide accounts for private individuals (not just banks and large financial institutions) to access this kind of money. The advantage is zero risk of losing your money (unlike commercial banks it wouldn't require the Government having to bail anyone out or insure anything), but the downside is reserves don't attract any interest.

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

#76

Post by bitreality »

MorbidCuriosity wrote: post #56
bitreality wrote: post #54

Earlier quoted context omitted.

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…

Definitely one issue with crypto-currencies today is that they have volatile pricing which makes them difficult to use in commerce. There are several projects working to use smart contracts in order to peg the value of the coin to currencies like USD, EUR, etc. As liquidity increases in decentralized exchange formats, such as atomic swaps and DEX applications, there will be enough volume to properly manage these smart contracts to peg coins to fiat currencies.

A unit of account from my understanding simply means that other people are willing to price their goods/services in your currency. This is a by-product of people participating and using the token, and it being stable enough. So once there is a "stablecoin" that gains traction, this will surely follow.

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

#77

Post by jrq »

Isn't that what a line of credit is? Or a debit card? It's got a history of spending, it's very hard to double spend, and its completely traceable?

Sometimes I think fed has learned from Bitcoin that they don't trust us with Bitcoin, and they shouldn't trust us with cash either. I don't feel like they really give a shit about what a distributed ledger actually accomplishes and how it protects users.

Additionally, mining. Mining is a huge problem in my eyes because it wastes a ridiculous amount of energy to not produce anything. I'd love to just buy-in with my credit card or with cash, and have those coins generated (until supply is depleted) to meet the value at that time. If fedcoin worked like that, that'd be neat. Otherwise, it's just an energy sink, and I think we should start being more conscious at where all this energy is going.

Side question, HNers who use Bitcoin, why are you using bitcoin? Why aren't you using monero? If it's just convention, then switch! That's how conventions change!

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

#78

Post by DennisP »

gmueckl wrote: post #57
bitreality wrote: post #52

Earlier quoted context omitted.

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.

It remains to be seen how that will work out. If your equivalency were correct, we'd expect the issuance of new currencies to reduce the value of old ones, and so far we're not seeing much evidence of that.

Hayek wrote a book arguing that a system of competing privately-issued currencies would ultimately result in currencies with stable value. Of course we haven't yet seen evidence for that either.

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

#79

Post by jerezzprime »

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

For no reason? You pay visa (or more correctly, the merchant pays) to run a network so you can use your card anywhere, to put time and energy into integrating with merchants and to provide a layer of fraud protection.

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

#80

Post by zerostar07 »

comboy wrote: post #67
cslarson wrote: post #66

Earlier quoted context omitted.

This really misses the picture of what's going on. Fedcoin could be coordinated by the federal but live on or be connected to a public smart contract platform where that, now digitised asset, could be used programmatically and interdependently with many other systems in a much more efficient and easy to assemble way than can now be done. This may not sound like a good idea to most on hn but it's at least new.

The Fed can create unlimited money out of nowhere and doesn't have to answer questions about it from anybody. I don't think they dream is a transparent blockchain and money supply limited by an algorithm.

They don't want to be seen as "not having to answer to anyone" , so they would be going the blockchain rule, i.e. semi-accountability , i.e. stealing some of bitcoin's "decentralized" fame.
Post reply on HN