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Boston Fed releases report, source code of digital currency prototype study
- _xnmw 5y ago- Maximum demonstrated throughput ~1.2M transactions per second. - Geo-replicated latency <1 second. Amazing technical feat. [1] https://github.com/mit-dci/opencbdc-tx https://github.com/mit-dci/opencbdc-tx
- jonathan-adly 5y agoIt’s ironic that they named it project Hamilton. He is probably rolling in his grave now thinking that Jefferson would be finally proven right with CBDC and the insane ever increasing Public debt. "banking institutions are more dangerous to our liberties than standing armies," Thomas Jefferson
- skybrian 5y agoHistory hasn't been kind to either of Jefferson's opinions in that sentence. The US did abolish the central bank for a while and nothing good happened as a result. Also, military coups are a problem in many countries, but not the US.
- culturestate 5y ago> History hasn't been kind to either of Jefferson's opinions in that sentence...military coups are a problem in many countries, but not the US. In fairness, if Jefferson had his way, there wouldn't be much of a military around to plot a coup in the first place. He'd also be considered a staunch non-interventionist were he alive today - "peace, commerce, and honest friendship with all nations and entangling alliances with none." Not much use for a standing army when that’s how you see your role in global affairs.
- wolverine876 5y ago> if Jefferson had his way, there wouldn't be much of a military around to plot a coup in the first place That was the general approach of the United States until ~ the early 20th century. Before that, the 'standing' military was generally tiny, the employer of last resort (criminals, drunks, etc.), and was greatly expanded by volunteers in times of warfare.
- sp332 5y agoI think that argument had more power before a bunch of Canadians set the White House on fire.
- soperj 5y agothe US started that war.
- skybrian 5y agoThis despite being mostly unprepared: https://en.wikipedia.org/wiki/War_of_1812#Unpreparedness https://en.wikipedia.org/wiki/War_of_1812#Unpreparedness Apparently having a very small army didn't help when Jefferson's party wanted a war. I guess they over-rated state militias? A lot of the founders' ideas didn't work out they way they hoped. (For example, they tried to prevent political parties and failed utterly.) When people quote American founders out of context, it's as if it settles things, but they were just making it up at the time, often based just on what sounds good. Jefferson in particular was often a rather impractical man, but a popular politician who promoted a lot of bad ideas (and a few good ones) that made for good politics at the time. He's hardly the only one.
- tryptophan 5y agoNothing good has happened after central banking was established either. It's been one financial crisis after another. Also fun fact - back when the US had private currencies, people WILLINGLY preferred to use them despite a gov currency existing. It is only after the government passed high taxes on these currencies(ie having to pay tax for each transaction to exchange them) that they went out of favor. If they were really so terrible, why did the gov feel the need to kill them? Central banking is nothing but a power grab. The "it stabilizes the baking system" is nothing but a lie.
- wolverine876 5y ago> Nothing good has happened after central banking was established either. It's been one financial crisis after another. That's not what happened. After the Great Depression, we have not had any crises matching was a a regular cycle before then.
- edgyquant 5y agoYou’re entirely wrong here. We haven’t had a depression in over a century and our currency no longer rapidly swings in value depending on the year.
- bjelkeman-again 5y agoDo you have any good documentation that backs up your statement that is a lie? I’d be curious to read it.
- skybrian 5y agoThis isn't good history. You should read more about wildcat banks and the financial crises of that era.
- notch656a 5y agoThe federal government is the worst 'wildcat' bank as it's a wildcat bank who has refused to redeem dollars for the gold they said it was backed by (eventually in '71 totally reneging their obligation), at one point even outlawing private ownership of gold (the item the currency was backed by) and actually intentionally destroy the currency by target of at least 2% each year. A wildcat bank whos notes you are compelled to purchase, at pain of being in violation of tax law. At least in the old wildcat banks, you had a shot of redeeming for specie if you went out to the sticks where the main branch was.
- voakbasda 5y agoThe high level of individual gun ownership in the US makes a coup a very risky proposition.
- pphysch 5y agoWhat does civilians owning firearms have to do with a well-trained military force taking over the seats of power?
- ur-whale 5y ago> What does civilians owning firearms have to do with a well-trained military force taking over the seats of power? Such a military force would be facing a very well armed citizen-led guerilla response. Given the amount of private gun ownership in the US, holding on to power after a coup would prove a rather difficult proposition.
- krapp 5y ago>Such a military force would be facing a very well armed citizen-led guerilla response. Unless enough citizens were on the side of the coup. I don't know why no one ever seems to acknowledge that as a possibility, especially after Jan. 6. Gun owners are just as driven by politics and ideology as anyone else. Plus just because you have a gun in a safe and maybe sometimes shoot watermelons in the backyard with it doesn't mean you'll be effective in guerilla warfare against an actual military. I know Americans like to bring up Afghanistan and Vietnam as examples of guerilla warfare succeeding against the US, but fighters in both cases still went through training that would break the average American gun owner.
- zozbot234 5y agoThe flip side is that many people in the military would absolutely sabotage the coup. Keep in mind that everyone in the military is bound by an oath to defend the Constitution from enemies foreign and domestic.
- chewzerita 5y ago> military coups are a problem in many countries, but not the US I wonder why
- wolverine876 5y agoThey are generally not a risk in any advanced democracy.
- goodluckchuck 5y agoPrivately owned banks. Private, untraceable, accurate, high capacity banks.
- dragonwriter 5y ago> Also, military coups are a problem in many countries, but not the US Standing armies’ threat to liberty isn't exclusively, or even mostly, via military coup, it's through acting without effective oversight against citizens when employed in a domestic security role, heightened by the separate culture and us-vs- them attitude standing forces create. And, since the mid-19th century, it's mostly been realized in the US through standing paramilitary police forces rather than an normal standing military, as the former were established as permanent entities before regular standing armies in the US, and displaced regular standing armies from the dangerous domestic role that is the main underpinning of them being in Jefferson’s statement.
- Kalanos 5y agoIt's apt, not ironic. https://www.newyorkfed.org/aboutthefed/history_article.html https://www.newyorkfed.org/aboutthefed/history_article.html
- randomhodler84 5y ago21st Century Jefferson would be stacking sats and telling everyone they knew about BTC. The antidote to 21st Century Hamilton CBDCs.
- jonathan-adly 5y agoI actually think both will be stacking sats. Hamilton was a practical libertarian, Jefferson was “we must have a revolution every now and then to show the government who is boss” libertarian.
- psswrd12345 5y agoIt was named after Margaret Hamilton, not Alexander
- mjevans 5y agoThe mention of blockchain in the summary worries me. We have real world data that shows us this only leads to wasted electricity and fabricated silicon shortages/outrageously expensive computer hardware. The idea of a public ledger and distributed witness signatures is sound though, and that should be the basis of a government approved system of inter-reserve asset tracking.
- jlarocco 5y agoI think you may be confusing "blockchain" with "bitcoin". A blockchain is just blocks of data linked together using hash functions to guarantee the authenticity of previous blocks. There's no mining, and only a tiny amount of electricity used.
- jonathan-adly 5y agoThe anti-crypto bros don’t need that kind of nuance. Blockchains = bad, we don’t need to complicate their simple world with big words.
- whimsicalism 5y agoWhy not just be charitable and not malign entire classes of people with certain opinions?
- skybrian 5y agoIsn't that a Merkle tree? "Blockchain" is not commonly used for what git does.
- throwthere 5y agoShould name it PowellCoin— This is what happens when the Fed governors won’t let him print USD any more. I jest, it actually is kind of interesting and could allow an even closer look at the day to day operations of banks if the ledger was in fact published.
- newaccount2021 5y ago
- cryptica 5y agoCDBCs are going to be a goldmine for hackers. If implemented as centralized systems, some hackers and insiders are going to have access to unlimited free money. The fact is that nobody, no group of people on this planet is trustworthy enough to implement such an important system. Such people don't exist. Such centralized system is guaranteed to be corrupted. This is why such important financial systems MUST be decentralized, at least to the extent that anyone should be able to verify the correctness of the system's state independently.
- whimsicalism 5y agoYou seem to be conflating hacked contracts and hacked coins. AFAIK, none of the major cryptocurrencies have ever been "hacked."
- skybrian 5y agoBanks are centralized systems. They do guard against attacks from hackers. It doesn't seem to result in unlimited free money. How is this different?
- macksd 5y agoA national currency would be even more centralized, and centralized banking systems have not been free of problems either. They acted irresponsibly for years and then many got bailed out because they were "too big to fail". And people that society doesn't approve of can get screwed over if the payment processors choose not to do business with them. Moving in the direction of eliminating cash for these people scares me.
- RandomLensman 5y agoHas anyone ever hacked normal central bank vs bank pipes and injected new balances, for example? Or wholesale siphoned off stuff from payment systems? Why would a decentralized system be stronger? Would really more people care to actively monitor it?
- annoyingnoob 5y agoIts clear that current implementations of decentralized finance are also deregulated. There is a reason that we have some regulation, every single financial scam that is regulated in centralized systems is currently active in decentralized systems. Your concept of decentralization has been corrupted from the start.
- nabla9 5y agoCentral bank digital currency efforts seem interesting. 1. They make it possible to deliver helicopter money directly to the consumers. Now central banks can only work trough banks or financial markets. Digital currency where everyone has access to central bank money can correct the errors in current systems. 2. Currency would be anchored in real economy with sound monetary policy. Nobody in their right mind takes Bitcoin denominated 10 year mortgage.
- notahacker 5y agoHelicopter money has always been theoretically possible to deliver direct to [most] consumers, with a bit of help from authorities responsible for tax/benefits/pensions, albeit somewhat inefficiently. But half the problem of monetary policy (the more relevant half in the immediate future) is reducing the money in the system when inflationary pressure is high. That's where channelling monetary policy through changes in the interest rate starts to make sense (the reduction is a natural one as people and corporations borrow less, which is a lot less politically painful than withdrawing a direct subsidy or even debiting people's accounts)
- nikanj 5y agoDidn't we just recently mail everyone a check? Solid 19th century tech
- nabla9 5y agoThe difference between fiscal and monetary policy.
- anm89 5y agoI don't understand what you are saying here if point 1 is that it enables helicopter money, how is the conclusion in point 2 that it enables sound monetary policy?
- nabla9 5y agoSound monetary policy according to Fed mandate and goals is low unemployment rate and average inflation rate 2 percent over medium length period. Many argue that helicopter money is better alternative to quantitative easing (buying bonds). Just give money to the people. Buying bonds is ineffective because bond holders don't consume. The velocity of money just drops and asset prices increase. (you may picture helicopter money as trowing more money than is needed, but that's now what the idiom means. It means that the money lands on people, not banks).
- ur-whale 5y agoMany people on HN claim that the rise of crypto-currencies is a social catastrophe. Maybe so (I disagree), but wait until central-bank issued digital currencies become a reality, you'll very quickly learn the real meaning of social catastrophe. Spending 10 seconds thinking about it, I can come up with the following scenarios: - complete and utter "financial deplatforming" if you don't behave as a citizen. This is basically China's CCP dream come true. - total loss of privacy: the absolute entirety of your financial interactions are an open book to the government. You won't be able to buy a pack of gums without big brother knowing about it, much less paying for your sex toys. - security nightmare : how do you guarantee the soundness of such a system when it is centralized. Just ask Sony how long they manage to keep their private keys secret on average. - security nightmare : preventing the leakage of citizen's private financial information. If the chain is public, there is none. If it is kept under lock and key by the govt: 1) no way to check what the actual supply is 2) subject to hackage and publishing the data publicly. Knowing the track records of governmental institutions when it comes to IT security, this is basically a guaranteed fuck-up within the first 5 years of such a system existing. - economic nightmare: running the printing press full steam is now instantaneous and gives the government even more unchecked power to spend money on brain-dead programs, without leaving any decision-making power to the citizens. I don't think we will avoid the implementation of such an abomination, but I do believe that - like in everything political - if there's healthy competition from decentralized chains such as Bitcoin, the craziness will be kept in check because there will be an escape hatch to the govt. economic jail.
- logicalmonster 5y agoGood list, and I'd add something crazy sounding to the long list of potential nightmare problems with some kind of future centralized digital currency: forced spending through expiring money. Keynesian economists that dominate a lot of official politics have a hard-on for viewing consumption as the root of all goodness and prosperity. In the midst of a future economic crisis with a central digital currency, it would be trivial for the politicians to start blaming a lack of spending for the problems and to force people to spend received money within X amount of time or it disappears from your digital wallet and thereby incentivize desired behavior. No real saving for the future possible: citizens would be turned into a cattle-like consumption class.
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- beefman 5y ago"In our design users interact with a central transaction processor using digital wallets storing cryptographic keys. ... Despite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals. Specifically, a distributed ledger does not match the trust assumptions in Project Hamilton's approach, which assumes that the platform would be administered by a central actor."
- asabjorn 5y agoTo see how tyranny can be instituted by combining a non anonymous transaction system with vaccine passport look at the promo video for Bill Gates funded wallet Thales https://youtu.be/PxvNzzgoJX8 https://youtu.be/PxvNzzgoJX8 All across the world a China style social credit score called ESG is now being adopted by banks. https://youtu.be/8f1Z57hwbWY https://youtu.be/8f1Z57hwbWY What happens when they decide you used up your quota? No flight, no meat or no car ride for you because they won’t let you spend your money.
- lvl100 5y agoThis is right to some extent. They can have distributed ledger in virtual sense.
- slickrick216 5y agoIsn’t this somewhat like hyperledger where it’s a permissioned federated blockchain?
- tylersmith 5y agoThat's basically a requirement for a CBDC. They're certainly not going to promote a coin they don't control the consensus rules for.
- DennisP 5y agoThis doesn't sound all that different from the banking system we have now.
- lvl100 5y agoI wasn’t aware they would make this open. It’s a great way to play around with toy digital currency implementation. There goes my plans for rest of weekend.
- ur-whale 5y agoFWIW: https://github.com/mit-dci/opencbdc-tx https://github.com/mit-dci/opencbdc-tx Detailed architecture: https://github.com/mit-dci/opencbdc-tx/blob/trunk/docs/architecture.md https://github.com/mit-dci/opencbdc-tx/blob/trunk/docs/archi... Some remarks: - Seems to be implemented in C++ - Looks like they reused bits and pieces from the Bitcoin code base (bech32, secp256k1, sha256) - Claim of being able to handle 1.7M TPS - Experimented with UTXO-style (Bitcoin-like) but seem to have bet on something called "unspent hashes" instead. - I found very little on things that matter (policy-related): - How is the "central authority" implemented - How is the coin supply managed
- _-david-_ 5y agoWill this basically mean the federal government would have a record of all our transactions?
- hnaccount141 5y agoThey already do, they just have to ask Visa/AmEx/Mastercard nicely.
- _-david-_ 5y agoNot if you pay in cash. The problem with many of these proposals are that the backers also want to start limiting the use of cash.
- tantalor 5y agoIt depends on how Congress writes the law that would enable CDBC. They could simply copy & paste the existing laws regarding banking privacy, e.g., RFPA. https://en.wikipedia.org/wiki/Right_to_Financial_Privacy_Act https://en.wikipedia.org/wiki/Right_to_Financial_Privacy_Act
- uncletammy 5y agoAs if the FISA courts wouldn't be employed to circumvent any constraints placed on the system by congress.
- tantalor 5y agoThat's already the case with existing banks so not much of a useful distinction to make here.
- rvense 5y agoThis is a legal problem, not a technical one.
- kangaroozach 5y agoFIAT
- warabe 5y agoi was wondering ... what if we circulate coin infinitely to harass central system? like keep exchanging coin between A and B. Can we halt entire system down?
- bhawks 5y agoThere are probably scores of abuse vectors waiting to be exposed. Getting caught exposing or exercising them might land you in a place where you can never have money again or worse.
- wolverine876 5y agoAny system is vulnerable to exploits. One advantage to having the government run the system is they have the power of law, law enforcement, and enormous resources to stop attackers. The financial system isn't dependent on someone's technical defenses.
- ur-whale 5y agoWell, if this monstrosity ever come about, just run an experiment: try to do it and see how long they let you do it before deplatforming you from the entire economy.