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The key question for FedCoin will be how the supply is managed. If it's only an electronic USD, ok, useful but added value is rather little. If, on the other

The key question for FedCoin will be how the supply is managed. If it's only an electronic USD, ok, useful but added value is rather little. If, on the other hand there is a pre-defined supply curve/schedule that is out of the hands of the people who open the spigot wide at every hint of an economic downturn, it would really be a competitor to BTC.

toomuchtodo 6y ago
I assume the Fed is not interested in relinquishing their control of the monetary supply simply because how the rows in the database are stored evolves.
- ur-whale 6y ago
  Thereby making the whole Fedcoin proposition a rather boring affair: - already exists in other forms - brings little added value (a little less friction) - brings huge downside (USistan now can see every cent moving and potentially freeze it).
rank0 6y ago
I disagree. I think digital USD would be far more valuable than any blockchain tech I’ve seen so far.
arcticbull 6y ago
Why on earth would you want the supply not to be actively managed to help temper a downturn? That's a feature. People don't like losing the entire value of their investments due to transient mass panic.
- alexmingoia 6y ago
  USD has lost more than 90% value in just 50 years. Savings is a prerequisite for investment.
  - arcticbull 6y ago
    The whole point is that it's supposed to lose 90% of its value in 50 years, Alex. It says so right on the tin. The fed targets a 2% rate of inflation. (0.955**50 = 0.1). The minute you invest it in anything inflation no longer applies - instead inflation-adjusted ROI is your marker. That's part of why we have inflation - the productive allocation of capital. Money only has value when it moves, it has no value stuffed under your mattress. Inflation is part of the pressure that ensures money doesn't spend time in your mattress. Repeat after me the ECON-101 mantra: Nobody is supposed to save dollars. Nobody. It's an intentionally lossy, temporary store of value and medium of exchange. You're supposed to save value. And you do that through investment. USD is not an investment. Currencies aren't an asset class! Rainy day fund? Sure. Otherwise? NO! Savings is a prerequisite to investment in a very limited sense, but at 2% per annum if it takes you 1 year to scrape together the cash to buy an SPY share you still have ninety eight percent of that value. If it takes you 50 years, ok, yeah, less. But it doesn't take most people 50 years to scrape together checks notes $395 dollars - 2021 dollars! 50 years ago that would be $39.50. And that of course avoids the use of fractional shares. It's so frustrating seeing this lack of basic understanding of economics here on HN from a group trying to overhaul it at the same time! At least understand before you tear up. Wages kept pace with inflation, real estate kept pace with inflation (or exceeded in major metros), stocks vastly outperformed inflation. Interest rates fell. Just who do you think missed out in the last 50 years exactly?
    - ur-whale 6y ago
      > Wages kept pace with inflation Yeah, well ... not so sure about this one. Most of the folks around me would also disagree, based on personal experience (their purchasing power took a serious nosedive in the last 20 years or so). I'll grant you this is circumstantial, so I ask: source for the claim? [EDIT]: and there are folks who strongly disagree with you: https://dailyreckoning.com/revealing-real-rate-inflation-crash-system/ https://dailyreckoning.com/revealing-real-rate-inflation-cra... Also: >It says so right on the tin. I'd also disagree with this. Many folks I know who are essentially either clueless or simply uninterested in finance are entirely oblivious to the fact that they're being slowly but surely being bled dry via inflation. You can claim they should pay attention and if they don't too bad, but I'd retort that the system is being disingenuous, especially towards the lower strata of the economic system who are the less likely to understand these things.

toomuchtodo 6y ago

I assume the Fed is not interested in relinquishing their control of the monetary supply simply because how the rows in the database are stored evolves.

ur-whale 6y ago
Thereby making the whole Fedcoin proposition a rather boring affair: - already exists in other forms - brings little added value (a little less friction) - brings huge downside (USistan now can see every cent moving and potentially freeze it).

rank0 6y ago

I disagree. I think digital USD would be far more valuable than any blockchain tech I’ve seen so far.

arcticbull 6y ago

Why on earth would you want the supply not to be actively managed to help temper a downturn? That's a feature. People don't like losing the entire value of their investments due to transient mass panic.

alexmingoia 6y ago
USD has lost more than 90% value in just 50 years. Savings is a prerequisite for investment.
- arcticbull 6y ago
  The whole point is that it's supposed to lose 90% of its value in 50 years, Alex. It says so right on the tin. The fed targets a 2% rate of inflation. (0.955**50 = 0.1). The minute you invest it in anything inflation no longer applies - instead inflation-adjusted ROI is your marker. That's part of why we have inflation - the productive allocation of capital. Money only has value when it moves, it has no value stuffed under your mattress. Inflation is part of the pressure that ensures money doesn't spend time in your mattress. Repeat after me the ECON-101 mantra: Nobody is supposed to save dollars. Nobody. It's an intentionally lossy, temporary store of value and medium of exchange. You're supposed to save value. And you do that through investment. USD is not an investment. Currencies aren't an asset class! Rainy day fund? Sure. Otherwise? NO! Savings is a prerequisite to investment in a very limited sense, but at 2% per annum if it takes you 1 year to scrape together the cash to buy an SPY share you still have ninety eight percent of that value. If it takes you 50 years, ok, yeah, less. But it doesn't take most people 50 years to scrape together checks notes $395 dollars - 2021 dollars! 50 years ago that would be $39.50. And that of course avoids the use of fractional shares. It's so frustrating seeing this lack of basic understanding of economics here on HN from a group trying to overhaul it at the same time! At least understand before you tear up. Wages kept pace with inflation, real estate kept pace with inflation (or exceeded in major metros), stocks vastly outperformed inflation. Interest rates fell. Just who do you think missed out in the last 50 years exactly?
  - ur-whale 6y ago
    > Wages kept pace with inflation Yeah, well ... not so sure about this one. Most of the folks around me would also disagree, based on personal experience (their purchasing power took a serious nosedive in the last 20 years or so). I'll grant you this is circumstantial, so I ask: source for the claim? [EDIT]: and there are folks who strongly disagree with you: https://dailyreckoning.com/revealing-real-rate-inflation-crash-system/ https://dailyreckoning.com/revealing-real-rate-inflation-cra... Also: >It says so right on the tin. I'd also disagree with this. Many folks I know who are essentially either clueless or simply uninterested in finance are entirely oblivious to the fact that they're being slowly but surely being bled dry via inflation. You can claim they should pay attention and if they don't too bad, but I'd retort that the system is being disingenuous, especially towards the lower strata of the economic system who are the less likely to understand these things.