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While they can technically accept money without being a fed member, they must keep that money with a fed member. They need to keep money (printed by the fed) w
by thebean11 5y ago
While they can technically accept money without being a fed member, they must keep that money with a fed member.
They need to keep money (printed by the fed) with a bank controlled by the fed. If you don’t see why that is a centralized system then not sure there’s much to discuss.
It’s distinct from reserve requirement, which doesn’t force you to store your money with a member of a single organization.
- lottin 5y agoSo, if they had auditors to check that banks comply with the reserve requirements (instead of requiring them to hold a deposit somewhere), the banking system would cease to be centralised? Is that what you're saying? And what about a smart contract that requires participants to make a deposit with the smart contract itself? According to what you're saying such smart contracts are by definition centralised. Am I getting this right?
- thebean11 5y agoThat would be less centralized, yes. The fact that one organization, the fed, has the unilateral and exclusive authority to create more money (essentially unlimited) would still be a very important point of centralization though. > And what about a smart contract that requires participants to make a deposit with the smart contract itself? What do you mean "requires"? Is there forced participation? Presumably anybody could make a competitor to this smart contract. I think I'd need a more specific example to understand exactly what you mean here. It also depends on the contract itself. A contract that has an owner encoded into it who can make unilateral decisions is more centralized than an ownerless / immutable one.