9 ms·

If this is the financial world you want, you just need a government database (ledger) of who has what currency and an API. Would be a lot simpler than blockchai

If this is the financial world you want, you just need a government database (ledger) of who has what currency and an API. Would be a lot simpler than blockchain which is designed to be de-centralized. Using blockchain for this is putting a square peg in a round hole.

narrator 9y ago
Indeed. That, and you'd be able to process a lot more than 7 transactions a second!
gizmo686 9y ago
There is an arguement to be made for starting with a secure system and adding in regulatory features. For instance, if we adopt the articles proposed regulatory node idea, where the only role of the trusted nodes is to approve transactions, then a complete compromise of the trusted systems would only allow an attacker to perform a DOS attack or bypass the regulatory checks. In contrast, in a traditional system, compromising the central party gives you the keys to the kingdom.
- JumpCrisscross 9y ago
  > compromising the central party gives you the keys to the kingdom What does this look like in practice? The Federal Reserve being hacked? Why would an immutable blockchain make that more pleasant than our current, reversible system where something like the 1933 eight-day bank holiday [1] is possible? Practically speaking, central banks get compromised by political factors much more frequently than by hackers. [1] https://en.wikipedia.org/wiki/Emergency_Banking_Act https://en.wikipedia.org/wiki/Emergency_Banking_Act
  - nske 9y ago
    Slightly off-topic but something doesn't have to be hacked to be compromised. In my book, manipulation by government for political or plain self-interest reasons counts as compromising.
    - JumpCrisscross 9y ago
      > manipulation by government for political or plain self-interest reasons counts as compromising Some countries, e.g. the Cayman Islands or Zimbabwe, peg (or have pegged) their currency to a foreign currency [1]. There has also been discussion of rule-based monetary policy [2], where central bankers' discretion is limited. A blockchain would be a stricter form of both, amplifying their benefits as well as downsides. TL; DR We don't understand monetary policy well enough, broadly enough, to have a set of rules everyone agrees are good. Such strictures are better than an economy being left to incompetent central bankers, or in certain limited cases (e.g. Hong Kong or Bermuda's financial proximity to much-larger economies). For general cases, or in a permanent structure such as a blockchain, however, much more work needs to be done. [1] https://en.wikipedia.org/wiki/Currency_board https://en.wikipedia.org/wiki/Currency_board [2] http://www.frbsf.org/education/publications/doctor-econ/2001/april/monetary-policy-fixed-money-supply-taylor-rule/ http://www.frbsf.org/education/publications/doctor-econ/2001...
      - nske 9y ago
        Interesting information. I just think that the benefits of a trustless system are such that will warrant working around any downsides -even though we're not there yet.
      - DenisM 9y ago
        The Federal Reserve acts algorithmically. New money is only created when new loans are requested by big commercial banks, and those loans are demanded on behalf of retail loans, which are initiated in proportion with economic activity by economic actors. The only discretion involved is the interest rates on those loans, which indirectly controls people’s willingness to take out loans.
        smokeyj 9y ago
        > The Federal Reserve acts algorithmically .. only discretion involved is the interest rates I built a self driving car. The only human discretion is the steering wheel.
    - 9y ago
  - alokashtikar 9y ago
    It is more synonymous to banks being hacked than Federal Reserve if at all. However, the idea is to have a secure system as much as possible. By layering it with a secure regulatory system, we get what you are asking for. If you like, have an eight-day bank holiday (if your jurisdiction wants that).

narrator 9y ago

Indeed. That, and you'd be able to process a lot more than 7 transactions a second!

gizmo686 9y ago

There is an arguement to be made for starting with a secure system and adding in regulatory features. For instance, if we adopt the articles proposed regulatory node idea, where the only role of the trusted nodes is to approve transactions, then a complete compromise of the trusted systems would only allow an attacker to perform a DOS attack or bypass the regulatory checks. In contrast, in a traditional system, compromising the central party gives you the keys to the kingdom.

JumpCrisscross 9y ago
> compromising the central party gives you the keys to the kingdom What does this look like in practice? The Federal Reserve being hacked? Why would an immutable blockchain make that more pleasant than our current, reversible system where something like the 1933 eight-day bank holiday [1] is possible? Practically speaking, central banks get compromised by political factors much more frequently than by hackers. [1] https://en.wikipedia.org/wiki/Emergency_Banking_Act https://en.wikipedia.org/wiki/Emergency_Banking_Act
- nske 9y ago
  Slightly off-topic but something doesn't have to be hacked to be compromised. In my book, manipulation by government for political or plain self-interest reasons counts as compromising.
  - JumpCrisscross 9y ago
    > manipulation by government for political or plain self-interest reasons counts as compromising Some countries, e.g. the Cayman Islands or Zimbabwe, peg (or have pegged) their currency to a foreign currency [1]. There has also been discussion of rule-based monetary policy [2], where central bankers' discretion is limited. A blockchain would be a stricter form of both, amplifying their benefits as well as downsides. TL; DR We don't understand monetary policy well enough, broadly enough, to have a set of rules everyone agrees are good. Such strictures are better than an economy being left to incompetent central bankers, or in certain limited cases (e.g. Hong Kong or Bermuda's financial proximity to much-larger economies). For general cases, or in a permanent structure such as a blockchain, however, much more work needs to be done. [1] https://en.wikipedia.org/wiki/Currency_board https://en.wikipedia.org/wiki/Currency_board [2] http://www.frbsf.org/education/publications/doctor-econ/2001/april/monetary-policy-fixed-money-supply-taylor-rule/ http://www.frbsf.org/education/publications/doctor-econ/2001...
    - nske 9y ago
      Interesting information. I just think that the benefits of a trustless system are such that will warrant working around any downsides -even though we're not there yet.
    - DenisM 9y ago
      The Federal Reserve acts algorithmically. New money is only created when new loans are requested by big commercial banks, and those loans are demanded on behalf of retail loans, which are initiated in proportion with economic activity by economic actors. The only discretion involved is the interest rates on those loans, which indirectly controls people’s willingness to take out loans.
      - smokeyj 9y ago
        > The Federal Reserve acts algorithmically .. only discretion involved is the interest rates I built a self driving car. The only human discretion is the steering wheel.
  - 9y ago
- alokashtikar 9y ago
  It is more synonymous to banks being hacked than Federal Reserve if at all. However, the idea is to have a secure system as much as possible. By layering it with a secure regulatory system, we get what you are asking for. If you like, have an eight-day bank holiday (if your jurisdiction wants that).