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It feels to me like a logical conclusion would be to have a government manage such a stablecoin. But at that point, it's just normal money but less convenient.

obilgic 4y ago
well normal money, but in a revolutionary form factor. metal coin usd -> paper usd -> crypto usd Smaller jump then gold -> usd -> btc which actually means changing the global reserve currency. If you think about it didn't the U.S. government did a similar thing by gold. USD was pegged to gold initially, then they changed it.
- jimmydorry 4y ago
  I think you missed a step: metal coin usd -> paper usd -> digital usd (closed, permissioned system) -> crypto usd (transparant, permissionless system) The jump is a lot less between digital and crypto should be small.
  - obilgic 4y ago
    true, revolutionary (compared to even digital usd) as in It shouldn't require a third party (aka bank etc) for 2 individuals to transact.
    - scq 4y ago
      No bank involved, but for every transaction you burn down an unspecified amount of the Amazon rainforest. But hey, you win some, you lose some.
    - tsimionescu 4y ago
      You always need a 3rd party for two individuals to transact. It's banks for dollars, miners + the whole infrastructure for crypto. In principle, miners or the infrastructure maintainers could be forced to never mine your transactions (well, transactions to/from particular wallet IDs), by the way. It would be of course harder, since your money is in a single bank, but all miners would have to agree to the ban for it to work.
throwawaycities 4y ago
>It feels to me like a logical conclusion would be to have a government manage such a stablecoin. I think you give Governments far to much credit, they can’t even manage to peg the penny to 1cent or a nickel to 5cents. In 2020 a penny cost 1.76cents and a nickel cost 7.42cents.
- mikeyouse 4y ago
  You’re confusing seniorage with value..
  - throwawaycities 4y ago
    Seniorage is the profit between cost of producing currency and the value of the currency. Technically there is no seniorage when there is a loss, historically it was called an inflationary tax, meaning a loss in value to the existing money supply you hold.
    - mikeyouse 4y ago
      I think you're mistaken -- seigniorage is the difference between the cost and the value, it doesn't need to be a profit. Negative seigniorage is still seigniorage and many such papers treat it as such, e.g.; https://sci-hubtw.hkvisa.net/10.2307/3552184 https://sci-hubtw.hkvisa.net/10.2307/3552184
      - throwawaycities 4y ago
        >Negative seigniorage is still seigniorage and many such papers treat it as such Notice how you qualify your statement as many such papers treat it as such. Yes, you can find some people, articles that refer to a loss as seniorage, but that’s a misuse and inconsistent with the actual definition. That’s also why when they do use the term improperly they typically add “negative”, specifically because the definition of Seniorage refers specifically to revenue/profit from printing money.
- ackbar03 4y ago
thedstrat 4y ago
Why do you think this would be best facilitated by a government as opposed to a large group of stakeholders?
- turtledove 4y ago
  Because if it's that central to the economy, representing half of all outstanding dollars, it needs to be managed centrally or bad things are gonna happen?
- nsonha 4y ago
  I mean who watch the watcher, we have democracy for the government right. Even that's an oversimplification, we have the 3 branches and check and balance so that everyone watches everyone else.
  - logicchains 4y ago
    >Even that's an oversimplification, we have the 3 branches and check and balance so that everyone watches everyone else. The Federal Reserve, which manages the current currency, was explicitly made independent of such checks and balances.
- tfehring 4y ago
  Because it’s easy to credibly promise someone their claim is worth X dollars when you (and you alone) control the creation of dollars.
pjc50 4y ago
I've been annoying people lately by referring to Black Wednesday as "the collapse of the stablepound against the algorithmic stablecoin the ERM". https://en.wikipedia.org/wiki/Black_Wednesday https://en.wikipedia.org/wiki/Black_Wednesday

obilgic 4y ago

well normal money, but in a revolutionary form factor. metal coin usd -> paper usd -> crypto usd Smaller jump then gold -> usd -> btc which actually means changing the global reserve currency. If you think about it didn't the U.S. government did a similar thing by gold. USD was pegged to gold initially, then they changed it.

jimmydorry 4y ago
I think you missed a step: metal coin usd -> paper usd -> digital usd (closed, permissioned system) -> crypto usd (transparant, permissionless system) The jump is a lot less between digital and crypto should be small.
- obilgic 4y ago
  true, revolutionary (compared to even digital usd) as in It shouldn't require a third party (aka bank etc) for 2 individuals to transact.
  - scq 4y ago
    No bank involved, but for every transaction you burn down an unspecified amount of the Amazon rainforest. But hey, you win some, you lose some.
  - tsimionescu 4y ago
    You always need a 3rd party for two individuals to transact. It's banks for dollars, miners + the whole infrastructure for crypto. In principle, miners or the infrastructure maintainers could be forced to never mine your transactions (well, transactions to/from particular wallet IDs), by the way. It would be of course harder, since your money is in a single bank, but all miners would have to agree to the ban for it to work.

throwawaycities 4y ago

>It feels to me like a logical conclusion would be to have a government manage such a stablecoin. I think you give Governments far to much credit, they can’t even manage to peg the penny to 1cent or a nickel to 5cents. In 2020 a penny cost 1.76cents and a nickel cost 7.42cents.

mikeyouse 4y ago
You’re confusing seniorage with value..
- throwawaycities 4y ago
  Seniorage is the profit between cost of producing currency and the value of the currency. Technically there is no seniorage when there is a loss, historically it was called an inflationary tax, meaning a loss in value to the existing money supply you hold.
  - mikeyouse 4y ago
    I think you're mistaken -- seigniorage is the difference between the cost and the value, it doesn't need to be a profit. Negative seigniorage is still seigniorage and many such papers treat it as such, e.g.; https://sci-hubtw.hkvisa.net/10.2307/3552184 https://sci-hubtw.hkvisa.net/10.2307/3552184
    - throwawaycities 4y ago
      >Negative seigniorage is still seigniorage and many such papers treat it as such Notice how you qualify your statement as many such papers treat it as such. Yes, you can find some people, articles that refer to a loss as seniorage, but that’s a misuse and inconsistent with the actual definition. That’s also why when they do use the term improperly they typically add “negative”, specifically because the definition of Seniorage refers specifically to revenue/profit from printing money.
ackbar03 4y ago

thedstrat 4y ago

Why do you think this would be best facilitated by a government as opposed to a large group of stakeholders?

turtledove 4y ago
Because if it's that central to the economy, representing half of all outstanding dollars, it needs to be managed centrally or bad things are gonna happen?
nsonha 4y ago
I mean who watch the watcher, we have democracy for the government right. Even that's an oversimplification, we have the 3 branches and check and balance so that everyone watches everyone else.
- logicchains 4y ago
  >Even that's an oversimplification, we have the 3 branches and check and balance so that everyone watches everyone else. The Federal Reserve, which manages the current currency, was explicitly made independent of such checks and balances.
tfehring 4y ago
Because it’s easy to credibly promise someone their claim is worth X dollars when you (and you alone) control the creation of dollars.

pjc50 4y ago

I've been annoying people lately by referring to Black Wednesday as "the collapse of the stablepound against the algorithmic stablecoin the ERM". https://en.wikipedia.org/wiki/Black_Wednesday https://en.wikipedia.org/wiki/Black_Wednesday