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Can someone more versed in this explain what the concept is? As far as I'm concerned the Euro is already digital, based on banks' ledgers. I haven't used a phys

Can someone more versed in this explain what the concept is? As far as I'm concerned the Euro is already digital, based on banks' ledgers. I haven't used a physical bank note in years.

pintxo 5y ago
> Both the Eurosystem TARGET Instant Payment Settlement (TIPS) and alternatives such as blockchain were proven capable of processing more than 40,000 transactions per second. The experiments also suggested that architectures combining centralised and decentralised elements are possible. Sounds like they are evaluating to make Bank accounts obsolete? Sidenotes: > Experiments were conducted in the four following areas: the digital euro ledger; privacy and anti-money laundering; limits on digital euro in circulation; end-user access while not connected to the internet and facilitating inclusiveness with appropriate devices. No major technical obstacles were identified to any of the assessed design options. I am interested to hear about a system providing privacy and anti-money-laundering capabilities at the same time. Aren't they mutually exclusive? > According to these experiments, a digital euro core infrastructure would be environmentally friendly: for the architectures that were tested, the power used to run tens of thousands of transactions per second is negligible compared with the energy consumption of crypto-assets such as bitcoin. Bitcoins power usage per transaction is outrageous, if they choose this as their benchmark, it sounds like their transactions are quite power hungry compared to the status quo?
- rfd4sgmk8u 5y ago
  It is only outrageous if you don't understand why we spend the energy on security. Decentralization is an expensive endeavor. Centralized solutions are generally cheaper in every way. Bitcoiners believe that energy is essential for the security of the chain, to ensure it is decentralized and censorship resistant. When and if you come to understand this, you see growing energy usage as a good thing, infact, the best thing. It is too simple to think of it as 'energy per tx', this is a bad metric, and illogical. One must consider the energy being used to secure every block and transaction that came before it in an externally observable fashion.
  - atoav 5y ago
    > When and if you come to understand this, you see growing energy usage as a good thing, infact, the best thing. I guess that depends on whether one values decentralization of currency higher than other topics like e.g. climate change/the survival of the human race/biodiversity etc. Bitcoin depends on a proof of work, so unsurprisingly energy usage is a natural property of the thing. It is literally a answer to the question which resource is scarce/limited in the digital domain.
    - rfd4sgmk8u 5y ago
      The enemies of decentralization will use things like "climate change" as an excuse against PoW. I personally believe that arguments against using energy are ridiculous. Humans will be using 100x the energy we use today in 20 years. However I do believe we should do it as cleanly as possible! Solar, Wind, Geothermal -- all good! Trying to limit how humans spend energy is like trying to dictate what they will eat for lunch. All we can do is generate that energy cleanly, safely. Energy usage itself should be an orthogonal issue to climate change -- indeed, for the survival of human race we need to spend lots of energy, as cleanly as possible!
      - atoav 5y ago
        Your statement frames this, as if there wasn't extensive studies done precisely on these questions. It is a very comforting believe that we just can make our energy systems greener, our houses/machines more efficient, spend energy however we like and we somehow manage to maintain a liveable planet or reach our (quite unambitious) climate goals, but it is also wrong. And I really wish it wouldn't be. Sorry for not having the time to cite some studies here, but I assure you that your statement sounds overly optimistic or maybe even naive to anybody who has insight into current climate science.
- knuthsat 5y ago
  If a wallet is issued by government and you are the only one that can see the amounts, then government can ask for a view key with which they can confirm your balance. This way there’s no way for anyone to store digital euros outside of government issued wallets. I guess you could also do zero knowledge proofs to allow more privacy preserving queries compared to a view key. But currently it is certainly possible to keep amounts and transactions private while at the same time have mechanism where a third party can inspect the true details but not require privacy preserving keys.
rfd4sgmk8u 5y ago
Every time you spend money via a payment card network, or do a SEPA transfer, you are interacting with (digital) private bank money. Private bank money is equivalent to cash printed by the state or held in the central bank accounts, however it can be created out of nothing by the banks as liabilities on loaned cash (private fractional reserve banking leads to inflation of the private monetary base). As long as people can pay their debts, the carnival ride continues. The state has requirements of the banks to store a fraction of their reserves. The state wants to maybe one day stop printing physical cash money, but also does not want private banks to control the production of money entirely-- so they create a psuedo-cryptocurrency in which the state can issue tokens. This ideally provides a cash like experience with the easy of use of private digital payment schemes. We call these "Central Bank Digital Currencies" or CBDCs. What does this mean in practice? The state has visibility of all monetary transactions in real time, and can enforce their own fiscal policies (such as negative interest rates, the money will melt in your phone if it is not spent). It is awful, and we should reject state issued digital currencies. Buy bitcoin (before it is too late!).
trompetenaccoun 5y ago
There are a lot of misunderstandings about it. The European Commission, the ECB and other bodies have had groups researching blockchains and digital money for years. They've gotten a bit more serious about it recently and started floating the idea of a "digital Euro", after other governments proposed the same for their respective currencies (and the EU always copies the homework of other governments). They've talked to and polled citizens, banks and the industry regarding how to exactly implement it. They still have no idea what it actually is they want, so far they've just found out it needs to be 'secure', 'environmentally friendly', and similar buzzwords. It's important to understand that the Euro currently is not digital. What you're using digitally is not legal tender but like you rightly said based on private bank ledgers. This may sound like nitpicking and many don't understand there's even a difference, because they're so used to these sort of IOUs being accepted as money, but it's not the same as a printed Euro bank note. It's as a side-note for this very reason banks among themselves do not settle in this money but through accounts at the central bank, where they're required to at least have a part of it in actual physical cash. Which may sound funny because the banknotes themselves can be printed at will by the issuing government/central bank - but that's another story. A digital Euro would be digital money issued by the ECB itself. This already exists in a way when they credit money to themselves to for example pay for buying bonds as part of the current QE politics. Most money is created that way. But for us regular people, money exists either in the form of the bank IOUs (so called "book money") or physical cash. We've never seen actual digital Euros they don't exist outside the ECB servers. Digital Euros could be credited the your digital wallet directly by the ECB, for example if they were giving out helicopter money to citizens. Depending on how the system is implemented, it could also be tracked by them, or frozen. There are some who want to introduce it as a way to "fight crime" (I think we all know where this would be going). Others stress it's important it implemented in a privacy preserving way, to make it a sort of digital cash. It could be run on a centralized ledger the ECB controls, or be blockchain based. Both concepts are being considered and researched, they haven't really said anything about which they favor so far. Imo this is an important topic people should look into, it's about the future of our money. It could be a really cool thing and make things easier, or we could end up with a dystopian system where they monitor and control all our financial transactions. It's not unlikely printed bank notes will be abolished in the near future, if we don't have a digital replacement by then goodbye privacy and welcome total surveillance.

Can someone more versed in this explain what the concept is? As far as I'm concerned the Euro is already digital, based on banks' ledgers. I haven't used a physical bank note in years.

pintxo 5y ago

> Both the Eurosystem TARGET Instant Payment Settlement (TIPS) and alternatives such as blockchain were proven capable of processing more than 40,000 transactions per second. The experiments also suggested that architectures combining centralised and decentralised elements are possible. Sounds like they are evaluating to make Bank accounts obsolete? Sidenotes: > Experiments were conducted in the four following areas: the digital euro ledger; privacy and anti-money laundering; limits on digital euro in circulation; end-user access while not connected to the internet and facilitating inclusiveness with appropriate devices. No major technical obstacles were identified to any of the assessed design options. I am interested to hear about a system providing privacy and anti-money-laundering capabilities at the same time. Aren't they mutually exclusive? > According to these experiments, a digital euro core infrastructure would be environmentally friendly: for the architectures that were tested, the power used to run tens of thousands of transactions per second is negligible compared with the energy consumption of crypto-assets such as bitcoin. Bitcoins power usage per transaction is outrageous, if they choose this as their benchmark, it sounds like their transactions are quite power hungry compared to the status quo?

rfd4sgmk8u 5y ago
It is only outrageous if you don't understand why we spend the energy on security. Decentralization is an expensive endeavor. Centralized solutions are generally cheaper in every way. Bitcoiners believe that energy is essential for the security of the chain, to ensure it is decentralized and censorship resistant. When and if you come to understand this, you see growing energy usage as a good thing, infact, the best thing. It is too simple to think of it as 'energy per tx', this is a bad metric, and illogical. One must consider the energy being used to secure every block and transaction that came before it in an externally observable fashion.
- atoav 5y ago
  > When and if you come to understand this, you see growing energy usage as a good thing, infact, the best thing. I guess that depends on whether one values decentralization of currency higher than other topics like e.g. climate change/the survival of the human race/biodiversity etc. Bitcoin depends on a proof of work, so unsurprisingly energy usage is a natural property of the thing. It is literally a answer to the question which resource is scarce/limited in the digital domain.
  - rfd4sgmk8u 5y ago
    The enemies of decentralization will use things like "climate change" as an excuse against PoW. I personally believe that arguments against using energy are ridiculous. Humans will be using 100x the energy we use today in 20 years. However I do believe we should do it as cleanly as possible! Solar, Wind, Geothermal -- all good! Trying to limit how humans spend energy is like trying to dictate what they will eat for lunch. All we can do is generate that energy cleanly, safely. Energy usage itself should be an orthogonal issue to climate change -- indeed, for the survival of human race we need to spend lots of energy, as cleanly as possible!
    - atoav 5y ago
      Your statement frames this, as if there wasn't extensive studies done precisely on these questions. It is a very comforting believe that we just can make our energy systems greener, our houses/machines more efficient, spend energy however we like and we somehow manage to maintain a liveable planet or reach our (quite unambitious) climate goals, but it is also wrong. And I really wish it wouldn't be. Sorry for not having the time to cite some studies here, but I assure you that your statement sounds overly optimistic or maybe even naive to anybody who has insight into current climate science.
knuthsat 5y ago
If a wallet is issued by government and you are the only one that can see the amounts, then government can ask for a view key with which they can confirm your balance. This way there’s no way for anyone to store digital euros outside of government issued wallets. I guess you could also do zero knowledge proofs to allow more privacy preserving queries compared to a view key. But currently it is certainly possible to keep amounts and transactions private while at the same time have mechanism where a third party can inspect the true details but not require privacy preserving keys.

rfd4sgmk8u 5y ago

Every time you spend money via a payment card network, or do a SEPA transfer, you are interacting with (digital) private bank money. Private bank money is equivalent to cash printed by the state or held in the central bank accounts, however it can be created out of nothing by the banks as liabilities on loaned cash (private fractional reserve banking leads to inflation of the private monetary base). As long as people can pay their debts, the carnival ride continues. The state has requirements of the banks to store a fraction of their reserves. The state wants to maybe one day stop printing physical cash money, but also does not want private banks to control the production of money entirely-- so they create a psuedo-cryptocurrency in which the state can issue tokens. This ideally provides a cash like experience with the easy of use of private digital payment schemes. We call these "Central Bank Digital Currencies" or CBDCs. What does this mean in practice? The state has visibility of all monetary transactions in real time, and can enforce their own fiscal policies (such as negative interest rates, the money will melt in your phone if it is not spent). It is awful, and we should reject state issued digital currencies. Buy bitcoin (before it is too late!).

trompetenaccoun 5y ago

There are a lot of misunderstandings about it. The European Commission, the ECB and other bodies have had groups researching blockchains and digital money for years. They've gotten a bit more serious about it recently and started floating the idea of a "digital Euro", after other governments proposed the same for their respective currencies (and the EU always copies the homework of other governments). They've talked to and polled citizens, banks and the industry regarding how to exactly implement it. They still have no idea what it actually is they want, so far they've just found out it needs to be 'secure', 'environmentally friendly', and similar buzzwords. It's important to understand that the Euro currently is not digital. What you're using digitally is not legal tender but like you rightly said based on private bank ledgers. This may sound like nitpicking and many don't understand there's even a difference, because they're so used to these sort of IOUs being accepted as money, but it's not the same as a printed Euro bank note. It's as a side-note for this very reason banks among themselves do not settle in this money but through accounts at the central bank, where they're required to at least have a part of it in actual physical cash. Which may sound funny because the banknotes themselves can be printed at will by the issuing government/central bank - but that's another story. A digital Euro would be digital money issued by the ECB itself. This already exists in a way when they credit money to themselves to for example pay for buying bonds as part of the current QE politics. Most money is created that way. But for us regular people, money exists either in the form of the bank IOUs (so called "book money") or physical cash. We've never seen actual digital Euros they don't exist outside the ECB servers. Digital Euros could be credited the your digital wallet directly by the ECB, for example if they were giving out helicopter money to citizens. Depending on how the system is implemented, it could also be tracked by them, or frozen. There are some who want to introduce it as a way to "fight crime" (I think we all know where this would be going). Others stress it's important it implemented in a privacy preserving way, to make it a sort of digital cash. It could be run on a centralized ledger the ECB controls, or be blockchain based. Both concepts are being considered and researched, they haven't really said anything about which they favor so far. Imo this is an important topic people should look into, it's about the future of our money. It could be a really cool thing and make things easier, or we could end up with a dystopian system where they monitor and control all our financial transactions. It's not unlikely printed bank notes will be abolished in the near future, if we don't have a digital replacement by then goodbye privacy and welcome total surveillance.