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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 reason

by 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.
littlestymaar 9y ago
> In my book, manipulation by government for political or plain self-interest reasons counts as compromising. The problem is that «manipulation» by governments as you call it, is part of its toolkit, and a lot of empirical evidences shows that the cost of doing nothing when something should have been done is orders of magnitude worse than «manipulation for political reasons». Take for instance Germany is the 1920s: the hyper-inflation during the early 20s was a huge mess, but it had much lower consequences than the inaction after the crisis of 1929 with a huge economic slowdown caused by deflation. A government not controlling its currency is catastrophic when something go wrong, you can see what happened to southern Europe during the last decade. I'm not saying the Quantitative Easing is the best way to go out of a financial crisis, but for sure it's better than doing nothing and waiting for the market to correct itself.[1] Imo, people afraid of the Government and wanting to drastically limit its power are a bit like anti-vaxer: vaccines can indeed cause problems (and they do, a few people have dramatic secondary effects, like with any medicine) and must be controlled, but wanting to abolish them is suicidal. The anti-state psychology was understandable during the cold war, as people had a good example of what can happen when a government has total power on the economy and society as a whole, yet this irrational fear is really polluting the debate when it comes to defining the economic policies. [1]: scientific evidences are hard to find in Economics, but this particular topic was the point of the Keynes / Hayek controversy during the great depression and, on this particular topic, Keynes proved right.
- Zak 9y ago
  > Imo, people afraid of the Government and wanting to drastically limit its power are a bit like anti-vaxer I should remind you that 11 months ago, Donald Trump became the head of what's arguably the most powerful government in the world. I'm glad there are restrictions on the power of that government and very much concerned that they're not stringent enough. While I do have some sympathy for anarchist positions, I don't think a complete abolition of government as we know it is likely to be pretty. That certainly doesn't mean government should have unlimited power. If we're using the last century or so to source our examples, the governments we've seen fail with disastrous results had fewer limits on their power than those that are still with us.

by 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.

littlestymaar 9y ago

> In my book, manipulation by government for political or plain self-interest reasons counts as compromising. The problem is that «manipulation» by governments as you call it, is part of its toolkit, and a lot of empirical evidences shows that the cost of doing nothing when something should have been done is orders of magnitude worse than «manipulation for political reasons». Take for instance Germany is the 1920s: the hyper-inflation during the early 20s was a huge mess, but it had much lower consequences than the inaction after the crisis of 1929 with a huge economic slowdown caused by deflation. A government not controlling its currency is catastrophic when something go wrong, you can see what happened to southern Europe during the last decade. I'm not saying the Quantitative Easing is the best way to go out of a financial crisis, but for sure it's better than doing nothing and waiting for the market to correct itself.[1] Imo, people afraid of the Government and wanting to drastically limit its power are a bit like anti-vaxer: vaccines can indeed cause problems (and they do, a few people have dramatic secondary effects, like with any medicine) and must be controlled, but wanting to abolish them is suicidal. The anti-state psychology was understandable during the cold war, as people had a good example of what can happen when a government has total power on the economy and society as a whole, yet this irrational fear is really polluting the debate when it comes to defining the economic policies. [1]: scientific evidences are hard to find in Economics, but this particular topic was the point of the Keynes / Hayek controversy during the great depression and, on this particular topic, Keynes proved right.

Zak 9y ago
> Imo, people afraid of the Government and wanting to drastically limit its power are a bit like anti-vaxer I should remind you that 11 months ago, Donald Trump became the head of what's arguably the most powerful government in the world. I'm glad there are restrictions on the power of that government and very much concerned that they're not stringent enough. While I do have some sympathy for anarchist positions, I don't think a complete abolition of government as we know it is likely to be pretty. That certainly doesn't mean government should have unlimited power. If we're using the last century or so to source our examples, the governments we've seen fail with disastrous results had fewer limits on their power than those that are still with us.