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Crypto != digital. A digital currency can be a database at The Fed. I feel like too many people confuse the two, but it's fundamentally different, in every me

Crypto != digital. A digital currency can be a database at The Fed. I feel like too many people confuse the two, but it's fundamentally different, in every meaningful way.

madballster 5y ago
Exactly this. We already have digital currencies. They are called US Dollar and Euro. They exist as numbers in bank accounts, transfers are safe and very efficient.
astrange 5y ago
The explanation of a digital currency, when you get past the paranoia about an increase in tracking you[1], sounds exactly like a "narrow bank". But the Fed has always been against those, because they think customer banks will be too poorly capitalized if everyone uses a government bank directly. That seems like the best reason we wouldn't get one. A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still. [1] mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse…
- civilized 5y ago
  > The explanation of a digital currency, when you get past the paranoia about an increase in tracking you[1], sounds exactly like a "narrow bank". But the Fed has always been against those, because they think customer banks will be too poorly capitalized if everyone uses a government bank directly. This sounds uncomfortably similar to the "reason" the IRS can't do our own taxes for us and send us the bill.
  - astrange 5y ago
    Sort of, but TurboTax actually lobbies for that. A lot of large banks don't even want you as a customer in the first place, but the government makes them do it. Also, everyone here is arguing "the government shouldn't know about my finances", and I feel like "the government should do my taxes for me" conflicts with that?
- rvense 5y ago
  I still think (hope!) the real reason central banks (and governments) want a digital currency is that they're not sure completely replacing cash-infrastructure with one or more privately-owned, possibly foreign-owned, alternatives is such a great idea.
- forum_ghost 5y ago
  Why is that paranoia? If you are OK with tracking, please put a live video feed into you washroom. You have nothing to hide there, do you?
  - nonameiguess 5y ago
    Why is it not put your transaction history into a database that the government can subpoena if they want to know what you've been buying, which all of us have already been doing if you're not conducting transactions in cash? I have a lot of facts about myself I'd like to keep mostly hidden, but are not hidden from law enforcement officers who can get a warrant.
  - astrange 5y ago
    Since I don't have any lawyers on hand, I'm not qualified to design a private system so I don't feel like making one up[1]. But since I remember how bank transfers work right now (hint: they go through the government), I can say people claiming they have some right now are wrong. [1] for instance, I don't remember the legal status of mailing cash through USPS, but pretty sure it's different privacy-wise even though it's "the government"
  - RC_ITR 5y ago
    Why do you want to watch me take a dump so bad?
    - matheusmoreira 5y ago
      I have no doubt someone somewhere on the internet would pay money for such footage. Maybe it'll be a business rival seeking to publicly humiliate you.
- AnthonyMouse 5y ago
  > A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still. That seems like a good reason to not have them. Sending people checks is profoundly simple 17th century technology. Putting people who can't even master that in charge of securing against stealing an arbitrarily large amount of money over the internet is like that xkcd about voting software: https://xkcd.com/2030/ https://xkcd.com/2030/ Just no.
  - astrange 5y ago
    Inability to send you a check is a sign of privacy. It means they don't know your address or bank account number.
  - kevin_thibedeau 5y ago
    The issue isn't the inability to send checks. Many Americans can't get bank accounts to deposit checks into.
    - selfhoster11 5y ago
      That's literally an American problem. Here in the UK, it's extremely easy to set up a bank account even if you don't earn very much, or if you recently declared bankruptcy. If America wanted to help the unbanked, they have every opportunity to do so.
      - jacobr1 5y ago
        There are plenty of ways for the unbanked to get an account. From online banks with $0 deposit requirements, to local banks with $25minimums. While there certainly are literacy or accessibility issues, the number one cause of not having a bank account, according to FDIC surveys is not trusting banks.
        5y ago
- prohobo 5y ago
  > mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse… That's one way to look at it. Another way is to see that tracking will be backed up by efficient enforcement and control. That's more than a step further, that's something that completely re-organizes society. You could argue that something like that is necessary in the 21st century, but besides the paranoia there's concern about who controls a system like that.
walterbell 5y ago
Swiss BIS (Bank of International Settlements, the central bank for all central banks, including US and UK) Director Carstens on CBDCs at an IMF meeting in 2020, https://www.youtube.com/watch?v=mVmKN4DSu3g&t=1451s https://www.youtube.com/watch?v=mVmKN4DSu3g&t=1451s > With cash, we don't know who is using the 100 dollar bill today ... a key difference with CBDC is that the central bank will have absolute control on the rules and regulations that determine the expression of that central bank liability .. also we will have the technology to enforce that ... if an advanced economy issues a CBDC, and someone in a 3rd country wants to use it, it will require the consent of the central bank of the residence of that person, therefore the degree of control will be far bigger. June 2021 in the UK, https://www.msn.com/en-gb/money/other/bank-of-england-tells- https://www.msn.com/en-gb/money/other/bank-of-england-tells-... > Tom Mutton, a director at the Bank of England, said during a conference on Monday that programming could become a key feature of any future central bank digital currency ... what happens if one of the participants in a transaction puts a restriction on [future use of the money]? ... Sir Jon Cunliffe, a deputy Governor at the Bank, said digital currencies could be programmed for commercial or social purposes ... “You could think of giving your children pocket money, but programming the money so that it couldn’t be used for sweets. There is a whole range of things that money could do, programmable money, which we cannot do with the current technology.”
- matheusmoreira 5y ago
  > if an advanced economy issues a CBDC, and someone in a 3rd country wants to use it, it will require the consent of the central bank of the residence of that person This is so terrible. There are countries who try really hard to control the USD exchange rate of their own currency. In practice, it means anyone getting paid in USD has their money confiscated and forcibly exchanged for their own nearly worthless local currency at absolutely terrible rates. I've seen people posting about it here on HN: they claimed the government was pocketing about 50% of their earnings through this process and that bitcoin is a better proposition. https://news.ycombinator.com/item?id=30141563 https://news.ycombinator.com/item?id=30141563 These CBDCs would empower governments to do so much worse.
  - TameAntelope 5y ago
prohobo 5y ago
That's not what they're working on though. No one is dumb enough to try to make a central (and traditional) database/system for digital money. They could do it, and if they do it eventually will get hacked. They will use blockchain technology because of the security benefits (encryption, redundancy, validation). The part they're removing is the decentralized aspect.
- dtech 5y ago
  > No one is dumb enough to try to make a central (and traditional) database/system for digital money. Uhm, isn't that what literally every bank in the world is nowadays?...
  - rswail 5y ago
    What do you think the Federal Reserve Bank does? Every bank in the US has an account with the Federal Reserve. The Fed maintains a central database of the transactions between those accounts. The only difference between a blockchain and a traditional database is that a blockchain has an inherit audit trail due to the use of crypto algorithms and digital signatures. A traditional database can have similarly immutable record keeping with digital signatures as well.
    - deleted 5y ago
      [deleted]
  - deleted 5y ago
    [deleted]
  - prohobo 5y ago
    Okay, I may have went too far there. I didn't properly think that through, but I still think it's a bad idea to not use a blockchain for a new currency.
dominojab 5y ago

Crypto != digital. A digital currency can be a database at The Fed. I feel like too many people confuse the two, but it's fundamentally different, in every meaningful way.

madballster 5y ago

Exactly this. We already have digital currencies. They are called US Dollar and Euro. They exist as numbers in bank accounts, transfers are safe and very efficient.

astrange 5y ago

The explanation of a digital currency, when you get past the paranoia about an increase in tracking you[1], sounds exactly like a "narrow bank". But the Fed has always been against those, because they think customer banks will be too poorly capitalized if everyone uses a government bank directly. That seems like the best reason we wouldn't get one. A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still. [1] mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse…

civilized 5y ago
> The explanation of a digital currency, when you get past the paranoia about an increase in tracking you[1], sounds exactly like a "narrow bank". But the Fed has always been against those, because they think customer banks will be too poorly capitalized if everyone uses a government bank directly. This sounds uncomfortably similar to the "reason" the IRS can't do our own taxes for us and send us the bill.
- astrange 5y ago
  Sort of, but TurboTax actually lobbies for that. A lot of large banks don't even want you as a customer in the first place, but the government makes them do it. Also, everyone here is arguing "the government shouldn't know about my finances", and I feel like "the government should do my taxes for me" conflicts with that?
rvense 5y ago
I still think (hope!) the real reason central banks (and governments) want a digital currency is that they're not sure completely replacing cash-infrastructure with one or more privately-owned, possibly foreign-owned, alternatives is such a great idea.
forum_ghost 5y ago
Why is that paranoia? If you are OK with tracking, please put a live video feed into you washroom. You have nothing to hide there, do you?
- nonameiguess 5y ago
  Why is it not put your transaction history into a database that the government can subpoena if they want to know what you've been buying, which all of us have already been doing if you're not conducting transactions in cash? I have a lot of facts about myself I'd like to keep mostly hidden, but are not hidden from law enforcement officers who can get a warrant.
- astrange 5y ago
  Since I don't have any lawyers on hand, I'm not qualified to design a private system so I don't feel like making one up[1]. But since I remember how bank transfers work right now (hint: they go through the government), I can say people claiming they have some right now are wrong. [1] for instance, I don't remember the legal status of mailing cash through USPS, but pretty sure it's different privacy-wise even though it's "the government"
- RC_ITR 5y ago
  Why do you want to watch me take a dump so bad?
  - matheusmoreira 5y ago
    I have no doubt someone somewhere on the internet would pay money for such footage. Maybe it'll be a business rival seeking to publicly humiliate you.
AnthonyMouse 5y ago
> A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still. That seems like a good reason to not have them. Sending people checks is profoundly simple 17th century technology. Putting people who can't even master that in charge of securing against stealing an arbitrarily large amount of money over the internet is like that xkcd about voting software: https://xkcd.com/2030/ https://xkcd.com/2030/ Just no.
- astrange 5y ago
  Inability to send you a check is a sign of privacy. It means they don't know your address or bank account number.
- kevin_thibedeau 5y ago
  The issue isn't the inability to send checks. Many Americans can't get bank accounts to deposit checks into.
  - selfhoster11 5y ago
    That's literally an American problem. Here in the UK, it's extremely easy to set up a bank account even if you don't earn very much, or if you recently declared bankruptcy. If America wanted to help the unbanked, they have every opportunity to do so.
    - jacobr1 5y ago
      There are plenty of ways for the unbanked to get an account. From online banks with $0 deposit requirements, to local banks with $25minimums. While there certainly are literacy or accessibility issues, the number one cause of not having a bank account, according to FDIC surveys is not trusting banks.
      - 5y ago
prohobo 5y ago
> mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse… That's one way to look at it. Another way is to see that tracking will be backed up by efficient enforcement and control. That's more than a step further, that's something that completely re-organizes society. You could argue that something like that is necessary in the 21st century, but besides the paranoia there's concern about who controls a system like that.

walterbell 5y ago

Swiss BIS (Bank of International Settlements, the central bank for all central banks, including US and UK) Director Carstens on CBDCs at an IMF meeting in 2020, https://www.youtube.com/watch?v=mVmKN4DSu3g&t=1451s https://www.youtube.com/watch?v=mVmKN4DSu3g&t=1451s > With cash, we don't know who is using the 100 dollar bill today ... a key difference with CBDC is that the central bank will have absolute control on the rules and regulations that determine the expression of that central bank liability .. also we will have the technology to enforce that ... if an advanced economy issues a CBDC, and someone in a 3rd country wants to use it, it will require the consent of the central bank of the residence of that person, therefore the degree of control will be far bigger. June 2021 in the UK, https://www.msn.com/en-gb/money/other/bank-of-england-tells- https://www.msn.com/en-gb/money/other/bank-of-england-tells-... > Tom Mutton, a director at the Bank of England, said during a conference on Monday that programming could become a key feature of any future central bank digital currency ... what happens if one of the participants in a transaction puts a restriction on [future use of the money]? ... Sir Jon Cunliffe, a deputy Governor at the Bank, said digital currencies could be programmed for commercial or social purposes ... “You could think of giving your children pocket money, but programming the money so that it couldn’t be used for sweets. There is a whole range of things that money could do, programmable money, which we cannot do with the current technology.”

matheusmoreira 5y ago
> if an advanced economy issues a CBDC, and someone in a 3rd country wants to use it, it will require the consent of the central bank of the residence of that person This is so terrible. There are countries who try really hard to control the USD exchange rate of their own currency. In practice, it means anyone getting paid in USD has their money confiscated and forcibly exchanged for their own nearly worthless local currency at absolutely terrible rates. I've seen people posting about it here on HN: they claimed the government was pocketing about 50% of their earnings through this process and that bitcoin is a better proposition. https://news.ycombinator.com/item?id=30141563 https://news.ycombinator.com/item?id=30141563 These CBDCs would empower governments to do so much worse.
- TameAntelope 5y ago

prohobo 5y ago

That's not what they're working on though. No one is dumb enough to try to make a central (and traditional) database/system for digital money. They could do it, and if they do it eventually will get hacked. They will use blockchain technology because of the security benefits (encryption, redundancy, validation). The part they're removing is the decentralized aspect.

dtech 5y ago
> No one is dumb enough to try to make a central (and traditional) database/system for digital money. Uhm, isn't that what literally every bank in the world is nowadays?...
- rswail 5y ago
  What do you think the Federal Reserve Bank does? Every bank in the US has an account with the Federal Reserve. The Fed maintains a central database of the transactions between those accounts. The only difference between a blockchain and a traditional database is that a blockchain has an inherit audit trail due to the use of crypto algorithms and digital signatures. A traditional database can have similarly immutable record keeping with digital signatures as well.
  - deleted 5y ago
    [deleted]
- deleted 5y ago
  [deleted]
- prohobo 5y ago
  Okay, I may have went too far there. I didn't properly think that through, but I still think it's a bad idea to not use a blockchain for a new currency.

dominojab 5y ago