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In other words, they've created yet another stablecoin --- where the value is a mystery and the backing doesn't matter. Since they effectively control the mark

In other words, they've created yet another stablecoin --- where the value is a mystery and the backing doesn't matter. Since they effectively control the market and their books aren't open, you have no choice but to take their word for everything.

PaulHoule 3y ago
I went to a conference in New York City put on by an accounting association early in the crypto phenomenon where someone from the DTCC described a blockchain-based system they were developing for trading gold in London which supported scenarios such as "I have a claim on some gold bar in a vault" and "I have a claim on a specific gold bar in a vault". I also saw a demo of a swap trading system running on a private Ethereum instance, I thought that was interesting because I was making demos around swap regulation at that time.
- jqpabc123 3y ago
  "I have a claim on some gold bar in a vault" Which for all practical purposes really means, "I have a claim --- which may or may not be redeemable at some future time at some price set by others in an undisclosed and indeterminate manner". Judging from crypto, I would expect redemptions to be suspended at the first sign of trouble.
  - PaulHoule 3y ago
    It's a concern even if you're using some other kind of ledger. It took a while for Germany to repatriate gold held in US vaults: https://archive.ph/wMNsk https://archive.ph/wMNsk Real goldbugs like physical gold in their possession but it is an appealing target for people to nick.
    - jqpabc123 3y ago
      It's a concern even if you're using some other kind of ledger. Absolutely. With no insight or verification, the ledger type doesn't much matter. But the mere fact that they choose blockchain as a marketing gimmick makes this even more suspect in my mind.
      - PaulHoule 3y ago
        My takeaway from that conference is that permissioned blockchains would make sense for finance as we know it. There is no need to have 10,000 Bitcoin nodes but having 12 nodes run by the 12 branches of the Federal Reserve could make a lot of sense.
        jqpabc123 3y ago
        Already in place. FedNow provides instant, low cost fiat payments and transfers run by the 12 nodes of the Federal Reserve --- minus blockchain. A privately controlled blockchain is really a duck out of water. If control is centralized (like with the Federal Reserve), blockchain becomes just another database --- a highly inefficient one. https://www.federalreserve.gov/paymentsystems/fednow_about.htm https://www.federalreserve.gov/paymentsystems/fednow_about.h...

PaulHoule 3y ago

I went to a conference in New York City put on by an accounting association early in the crypto phenomenon where someone from the DTCC described a blockchain-based system they were developing for trading gold in London which supported scenarios such as "I have a claim on some gold bar in a vault" and "I have a claim on a specific gold bar in a vault". I also saw a demo of a swap trading system running on a private Ethereum instance, I thought that was interesting because I was making demos around swap regulation at that time.

jqpabc123 3y ago
"I have a claim on some gold bar in a vault" Which for all practical purposes really means, "I have a claim --- which may or may not be redeemable at some future time at some price set by others in an undisclosed and indeterminate manner". Judging from crypto, I would expect redemptions to be suspended at the first sign of trouble.
- PaulHoule 3y ago
  It's a concern even if you're using some other kind of ledger. It took a while for Germany to repatriate gold held in US vaults: https://archive.ph/wMNsk https://archive.ph/wMNsk Real goldbugs like physical gold in their possession but it is an appealing target for people to nick.
  - jqpabc123 3y ago
    It's a concern even if you're using some other kind of ledger. Absolutely. With no insight or verification, the ledger type doesn't much matter. But the mere fact that they choose blockchain as a marketing gimmick makes this even more suspect in my mind.
    - PaulHoule 3y ago
      My takeaway from that conference is that permissioned blockchains would make sense for finance as we know it. There is no need to have 10,000 Bitcoin nodes but having 12 nodes run by the 12 branches of the Federal Reserve could make a lot of sense.
      - jqpabc123 3y ago
        Already in place. FedNow provides instant, low cost fiat payments and transfers run by the 12 nodes of the Federal Reserve --- minus blockchain. A privately controlled blockchain is really a duck out of water. If control is centralized (like with the Federal Reserve), blockchain becomes just another database --- a highly inefficient one. https://www.federalreserve.gov/paymentsystems/fednow_about.htm https://www.federalreserve.gov/paymentsystems/fednow_about.h...