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US Digital Currency

blog.samaltman.com

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Re: US Digital Currency

#81

Post by gwbas1c »

bastawhiz wrote: post #26

How would this be better than what we have now? If the answer is "cryptocurrency increases in value," I can assure you that's a terrible reason. Cryptocurrency is slower than card networks. It's more expensive than practically any other way of sending money. And as far as scale goes, it would need to become orders of magnitude more efficient to handle even a small percentage of consumer transactions. After all, what'…

> If this is meant to replace bonds or other government issued securities, what problem is it solving? I can't think of one.

It's a legal pump and dump scheme!

Re: US Digital Currency

#82

Post by otakucode »

nostrademons wrote: post #59
soperj wrote: post #55

Earlier quoted context omitted.

>that's not really cryptocurrency anymore Why not?

The "crypto" in "cryptocurrency" refers to the use of encryption primitives and digital signatures to ensure the authenticity of one's balance without needing to trust a central authority. If you're trusting a central authority anyway, then all this is unnecessary, and you can replace it all with an API over a database, as paulmd's post suggests. But then you've eliminated the whole reason why people use cryptocurren…

What differentiates it from Visa is that there is literally nothing behind Visas numbers. They could be pure fiction right now and no one but Visa would know. Also, Visa takes a cut. As more and more of the whole economy flows through payment processors, they have become de facto taxing bodies. Their fees drain the economy, and can be used to manipulate the economy to Visas whim. A government-backed cryptocurrency would be provably legitimate, and would cut Visa out of the loop.

Re: US Digital Currency

#83

Post by gwbas1c »

raesene9 wrote: post #23

As others have already commented, existing currencies are already "digital". On my most recent trip abroad (to Copenhagen) I took some physical currency, and didn't use it at all. Every transaction was digital and instantaneous (I use a Monzo Mastercard). I got a smartphone notification within 5 seconds of having approved the transaction. The original promise of "cryptocurrencies" appeared, to me, to be decentralizat…

Take the time to read the original Bitcoin paper. It discusses various other electronic currency systems and why they weren't good enough.

The short answer, though, is that if you have a trusted 3rd party managing the monetary system, there's really no need for cyptocurrency. (Edit) Cryptocurrency solves the trust problem.

Overall, we can trust our government, thus there's no need for cryptocurrency.

Re: US Digital Currency

#84

Post by ojr »

bastawhiz wrote: post #26

How would this be better than what we have now? If the answer is "cryptocurrency increases in value," I can assure you that's a terrible reason. Cryptocurrency is slower than card networks. It's more expensive than practically any other way of sending money. And as far as scale goes, it would need to become orders of magnitude more efficient to handle even a small percentage of consumer transactions. After all, what'…

there are new blockchain tech releasing this year that will scale to thousands of transaction per second and provides free transactions for end users. Companies like Consensys provides infrastructure so you don't have to run a full node but just connect to a full node with a light client. You need USDC to escape from volatility. The crypto market needs a stable currency with the assurance the peg doesn't break. Digital currency solves the problem with inbound/outbound wire fees in which cost me a few hundred last year...

Re: US Digital Currency

#85

Post by kekeblom »

WhiteOwlLion wrote: post #56

You have to decide if you want inflation or a fixed supply? Even with a fixed supply, transaction fees eat away at the available supply (aside from hodlers) which means the value could potentially rise from scarcity. That's not good for commerce if you need a currency that needs a stable value. If there is a government backed currency, I think there should be no transaction fees. A USDC could also mean tax jurisdicti…

The transaction fees would end up going to someone (e.g. miners but some implementations might have some other system in place) and eventually they would end up spending them. At least that is how current cryptocurrencies work.

Re: US Digital Currency

#86

Post by vkou »

vinniejames wrote: post #79
bastawhiz wrote: post #26

How would this be better than what we have now? If the answer is "cryptocurrency increases in value," I can assure you that's a terrible reason. Cryptocurrency is slower than card networks. It's more expensive than practically any other way of sending money. And as far as scale goes, it would need to become orders of magnitude more efficient to handle even a small percentage of consumer transactions. After all, what'…

I just had to pay $8 to convert USD to another currency. The fee is less than $1, and often less than $0.10 to make an exchange like this via cryptocurrency. In order to move money out of my own bank account, digitally, into another account, it is impossible to do instantly. Many banks charge a substantial fee, even for a 3 day turnaround[1]. Looking only at card networks, while ignoring the greater banking system is…

> I just had to pay $8 to convert USD to another currency.

That's the cost of the spread.

If you tried to convert $10000 BTC to USD today, you would pay anywhere between -$200 and $200 (Or ????$, if the market decides to go crazy), depending on the exchange rate when your transaction would clear. With a forex transaction through a bank, the bank fixes the exchange rate (And charges you money for it.)

Re: US Digital Currency

#87

Post by joejohnson »

Amazing that someone so naive could be given such a platform. Oh, silicon valley :)

>> A tricky part of this would be how to balance letting the network have control over itself and letting the government have some special degree of input on ‘monetary policy’. It’s certainly ok for the government to have some, but I think the network needs to be mostly in charge (e.g., the government couldn’t be allowed to arbitrarily inflate the currency when it wanted to).

Being able to "arbitrarily inflate" the currency is one of the many tools governments use to stabilize the economy ("monetary policy"). In the US, this ability has been hard fought (removal of the gold standard) and regardless of how you may feel about this, control of the money supply is viewed as a necessary power of the government by the vast majority of macro economist across the political spectrum. So good luck getting the US or any government to adopt a cryptocurrency that removes this control.

Re: US Digital Currency

#88

Post by mikro2nd »

gwbas1c wrote: post #83
raesene9 wrote: post #23

As others have already commented, existing currencies are already "digital". On my most recent trip abroad (to Copenhagen) I took some physical currency, and didn't use it at all. Every transaction was digital and instantaneous (I use a Monzo Mastercard). I got a smartphone notification within 5 seconds of having approved the transaction. The original promise of "cryptocurrencies" appeared, to me, to be decentralizat…

Take the time to read the original Bitcoin paper. It discusses various other electronic currency systems and why they weren't good enough. The short answer, though, is that if you have a trusted 3rd party managing the monetary system, there's really no need for cyptocurrency. (Edit) Cryptocurrency solves the trust problem. Overall, we can trust our government, thus there's no need for cryptocurrency.

You (and I'm guessing/assuming you're an American citizen, here, forgive me if I have it wrong) might be able to trust your government. Many of us in the Shithole Countries can not. Then, too, you may be able to trust your government at the present time (or, at least, believe you're able to) but that does not account for some future time when that might not be true.

Re: US Digital Currency

#89

Post by nostrademons »

otakucode wrote: post #82
nostrademons wrote: post #59

Earlier quoted context omitted.

The "crypto" in "cryptocurrency" refers to the use of encryption primitives and digital signatures to ensure the authenticity of one's balance without needing to trust a central authority. If you're trusting a central authority anyway, then all this is unnecessary, and you can replace it all with an API over a database, as paulmd's post suggests. But then you've eliminated the whole reason why people use cryptocurren…

What differentiates it from Visa is that there is literally nothing behind Visas numbers. They could be pure fiction right now and no one but Visa would know. Also, Visa takes a cut. As more and more of the whole economy flows through payment processors, they have become de facto taxing bodies. Their fees drain the economy, and can be used to manipulate the economy to Visas whim. A government-backed cryptocurrency wo…

Up-thread, the proposal is to fix the scalability & energy usage issues by having a trusted authority such as the U.S. government run a database with a payment API on top.

Under such a system - how do you know that there is anything behind the government's numbers? They could be pure fiction right now and no one but the government would know. Also, the government takes a cut. As the whole economy flows through their currency, they become a de jure taxing body. Their taxes drain the economy, and can be used to manipulate the economy to the government's whim.

It may shock you to learn that not everybody trusts the U.S. government. The growth of cryptocurrencies worldwide is largely fueled by the fact that the set of people who don't trust the U.S. government is larger than the set of people who do - and in fact, they've seen their biggest up-take in societies like Zimbabwe and Venezuela where trust in civil monetary authority has completely collapsed.

Re: US Digital Currency

#90

Post by nobrains »

joejohnson wrote: post #87

Amazing that someone so naive could be given such a platform. Oh, silicon valley :) >> A tricky part of this would be how to balance letting the network have control over itself and letting the government have some special degree of input on ‘monetary policy’. It’s certainly ok for the government to have some, but I think the network needs to be mostly in charge (e.g., the government couldn’t be allowed to arbitraril…

There are two problems with this control (QE) that the citizens are concerned about:

1. It reduces their cash savings by the ratio of the amount of new money injected to the total supply

2. It is unfair, as the first receipients of this new money get free money. (Inflation increases as that money flows through to everyone, however, the first receipients of this money don't get to face the inflation).

The second issue is solvable. The money should be distributed equally to all citizens, via some tax break or something.

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