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

81–90 of 112 posts

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

#81

Post by whataretensors »

paulgb wrote: post #68
whataretensors wrote: post #58

Earlier quoted context omitted.

> 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?

> What's the equivalent bank run? Bitconnect is sure to be one of the first of many examples. https://en.wikipedia.org/wiki/Bitconnect

I'm more curious how the sporadic economy and capital flight will hit our existing centralized structures. They haven't been load tested against hyper-liquidity of cryptocurrency with mass adoption.

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

#82

Post by dingo_bat »

bufferoverflow wrote: post #69
geofft wrote: post #19

What is a "blockchain"? To me, a blockchain is a way of solving double-spend problems in a Merkle tree maintained by open distributed consensus, by using some scheme to resist Sybil attacks. The scheme is not necessarily proof-of-work, but the fact that there's a double-spend problem and you're solving it is key to the idea. If you don't have a double-spend problem because all your transactions commute (e.g., Certifi…

> which meant that it would have been straightforward for China to (globally!) freeze a Bitcoin address No. It's not like all the Chinese miners are controlled by the government. It's not some monolithic agency. And then, there are many other coins.

It's a safe assumption that everything is under government control in China. If not today, maybe tomorrow.

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

#83

Post by paulgb »

DennisP wrote: post #78
gmueckl wrote: post #57

Earlier quoted context omitted.

As the proliferation of newly created digital currencies should tell you, printing new bills at will has been replaced by creating new currencies at will.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.

> 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.

I'm not sure what evidence we should even be looking for here, but certainly the share of Bitcoin in the cryptocurrency markets has dropped alongside its value[1]. Anecdotally, most people I've talked to holding, say, ETH, would be holding more BTC otherwise, so it's hard to argue that the competition doesn't depress the price.

As for the Hayek reference, I have some thoughts on that: https://paulbutler.org/archives/stop-dragging-hayek-into-bit...

1: https://coinmarketcap.com/charts/#dominance-percentage

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

#84

Post by 0x445442 »

If I can't buy, let's say... heroine completely anonymously with FedCoin then I think the whole spirit of the initial vision has been violated. Call me crazy but I don't think this is what's envisioned by those that would advocate for something like FedCoin.

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

#85

Post by lukeschlather »

zerostar07 wrote: post #80
comboy wrote: post #67

Earlier quoted context omitted.

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.

The whole point of having a national currency is that the money administrators answer to Congress, not the businesses who borrow and lend money. "Decentralization" means taking power away from Congress and giving it to Goldman Sachs and the other big banks.

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

#86

Post by 0x445442 »

bitreality wrote: post #76
MorbidCuriosity wrote: post #56

Earlier quoted context omitted.

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 smar…

I've enjoyed your posts in this thread but I have a question. How are the projects you allude to fundamentally different than PayPal, iPay, GooglePay, Venmo or just strait up Visa or MC?

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

#87

Post by bitreality »

0x445442 wrote: post #86
bitreality wrote: post #76

Earlier quoted context omitted.

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 smar…

I've enjoyed your posts in this thread but I have a question. How are the projects you allude to fundamentally different than PayPal, iPay, GooglePay, Venmo or just strait up Visa or MC?

Crypto-currency is different in the sense that it is decentralized. Paypal and other payment systems can and do freeze people's balances at will. Many countries have features disabled. Some countries are flat out discluded.

At the end of the day, there is no button that can be pressed to remove your access to the system.

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

#88

Post by wmf »

clhodapp wrote: post #70
GauntletWizard wrote: post #26

Earlier quoted context omitted.

The properties of "unlikely to go down" don't require a trustless blockchain; the attributes of being resistant to a node being compromised don't require trust beyond consensus. git is unlikely to go down and verifiable. Copies of a git repo verified by gpg signatures and repos that only accept commits that pass verification requires only as much distribution as running three instances. The fed can do all of this wit…

There is a tremendous difference between "we have three servers so our stuff probably won't go down" and "the system could theoretically remain in use forever even if we disappeared from the world".

And that difference is gigawatts of power. A system that's "only" as reliable as Fedwire or SWIFT but uses 99% less power than cryptocurrency is an interesting tradeoff.

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

#89

Post by diegocerdan »

bitreality wrote: post #76
MorbidCuriosity wrote: post #56

Earlier quoted context omitted.

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 smar…

MakerDAO is a great example of a decentralized stablecoin on the Ethereum network. I personally own some DAI tokens that are pegged to the dollar.

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

#90

Post by diegocerdan »

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…

Their value is so volatile because their total valuation is not big enough to make them stable. Multiply Bitcoin's or Ethereum's total valuation by 100 and suddenly you have a much more stable asset at the price range of gold. And being stable makes them way more valuable so their price would keep increasing just because of that.

To solve proof-of-work consuming too much electricity, Ethereum is upgrading to proof-of-stake which is on the roadmap and consumes a negligible amount of power.

Post reply on HN