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Even democratic control can be concerning. If we want to maximize liberty and opportunity for the unfortunate and other minorities, giving 60% of the population

Even democratic control can be concerning. If we want to maximize liberty and opportunity for the unfortunate and other minorities, giving 60% of the population the ability to favor themselves isn't great (see: tariffs, propping up housing prices, licensing, youth unemployment). Democracy is the best system, but it still needs to be checked in different ways. Like individual rights. I'm open to the idea that currency competition could be interesting.

kqr 5y ago
The US had currency competition relatively recently. It's normally described as a compatibility nightmare with each city issuing their own currency, but this perception is mostly based on a few extreme anecdotes. In practise, it worked somewhat well -- it had some benefits over the current system, but also some downsides. The term to search for is free banking.
- pharmakom 5y ago
  Technology can solve many of the inconveniences free banking had. I don’t care what the currency a product is priced in if I’m paying via an app.
- hakfoo 5y ago
  One of the big differences here is that the "currency competition", particularly prior to the 1860s, was still trying to leverage the same basic semantics. Both legitimate and questionable issuers were both claiming to supply "dollars", either directly or as an IOU for government-issued ones. There was consumer confusion baked right in, and probably to the great benefit of dishonest players. Some privately issued coins during the gold rush were a bit underweight, and a lot of private paper currency traded well below face value. A whole system of newsletters and discounting rates evolved to document exactly whose "dollars" were legitimate. A new currency competition environment in 2021 has this sort of awareness built in. We're not in a newly cleared Homestead Act town dealing with stopgap measures for a lack of government issued currency. Anything but a FedCoin, even a Tether-style linked product, is clearly a private product and has a documented exchange rate. There isn't the same "information travels slowly in 1860" gaps to keep fraudulent products afloat. I wonder how much of the interest in alternative currencies was based on hoping to exploit that sort of timing gap. The existing ones that don't have a built-in exploit system-- the "labour pool" ones denominated in hours, the "keep the money local" closed-loop currencies, don't seem to get huge momentum beyond local enthusiasts. In a way, the current crypto FOMO mania smells of similar "trying to stay ahead of the information flow" plays. It's less that the issuers are hoping to pass 80 cents of gold as a dollar, but more speculators buying them at 40 cents, not really knowing what they're actually worth, but hoping they will settle at 80 some day. I wonder what happens once prices stabilize-- will interest fade away if they're back to competing on technical merit rather than the possibility of moonshot gains?

kqr 5y ago

The US had currency competition relatively recently. It's normally described as a compatibility nightmare with each city issuing their own currency, but this perception is mostly based on a few extreme anecdotes. In practise, it worked somewhat well -- it had some benefits over the current system, but also some downsides. The term to search for is free banking.

pharmakom 5y ago
Technology can solve many of the inconveniences free banking had. I don’t care what the currency a product is priced in if I’m paying via an app.
hakfoo 5y ago
One of the big differences here is that the "currency competition", particularly prior to the 1860s, was still trying to leverage the same basic semantics. Both legitimate and questionable issuers were both claiming to supply "dollars", either directly or as an IOU for government-issued ones. There was consumer confusion baked right in, and probably to the great benefit of dishonest players. Some privately issued coins during the gold rush were a bit underweight, and a lot of private paper currency traded well below face value. A whole system of newsletters and discounting rates evolved to document exactly whose "dollars" were legitimate. A new currency competition environment in 2021 has this sort of awareness built in. We're not in a newly cleared Homestead Act town dealing with stopgap measures for a lack of government issued currency. Anything but a FedCoin, even a Tether-style linked product, is clearly a private product and has a documented exchange rate. There isn't the same "information travels slowly in 1860" gaps to keep fraudulent products afloat. I wonder how much of the interest in alternative currencies was based on hoping to exploit that sort of timing gap. The existing ones that don't have a built-in exploit system-- the "labour pool" ones denominated in hours, the "keep the money local" closed-loop currencies, don't seem to get huge momentum beyond local enthusiasts. In a way, the current crypto FOMO mania smells of similar "trying to stay ahead of the information flow" plays. It's less that the issuers are hoping to pass 80 cents of gold as a dollar, but more speculators buying them at 40 cents, not really knowing what they're actually worth, but hoping they will settle at 80 some day. I wonder what happens once prices stabilize-- will interest fade away if they're back to competing on technical merit rather than the possibility of moonshot gains?