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BRICS Digital Currency: Cryptocurrency on a Public Blockchain

7 points by iluxonchik 2y ago

iluxonchik 2y ago
This articles covers how the proposed BRICS digital currency can be realized as a cryptocurrency, thus challenging the claims made in the 'Digital Money Options for the BRICS' paper. The article explores how a public blockchain with smart contracts, combined with Zero-Knowledge Proof protocols like zkSNARKs and zkSTARKs, provides a natural fit for implementing the BRICS currency. It covers how the dynamic supply mechanism, legal compliance on-chain, and the integration with DeFi and zkLocus for authenticated private geolocation can be materialized. It also explans how the BRICS nations can leverage these technologies for a more decentralized, interoperable, and efficient financial system aligned with Web3 principles. I’m curious to hear the community's feedback on this. Is there something you disagree on?
- thefounder 2y ago
  Unless it has AI it’s not worth our attention. Blockchain is so 2021
  - iluxonchik 2y ago
    I'm not sure how far along you got in the article, but have you ever heard about zkML?
- godzillabrennus 2y ago
  If you have a centralized authority of any kind doing the issuance of the asset, managing the infrastructure, and doing redemption, you don't need a blockchain. It's truly pointless.
  - logicchains 2y ago
    You don't have one authority, you have multiple issuing authorities (the BRICS countries) with sometimes competing objectives. It's in the interests of these countries to have a "trust free" mechanism in the sense that it minimises the ability of the other countries to screw them over.
    - iluxonchik 2y ago
      Yes, indeed! I would also expand on how the implementation of this on a public blockchain, expands the "trust free" feature to the general public, as derivatives can be easily created on a smart contract based blockchain.
  - iluxonchik 2y ago
    Hello and thank you for your comment. I'm not sure how far along you got in the article, but I cover all of these points in the "BRICS Digital Currency as a Cryptocurrency on a Public Blockchain" section. Blockchain is utilized as an authenticated, integrity assured, and trustless state machine and storage layer controlled by a programmable execution layer. The issuance the currency is performed on a public blockchain through a smart contract. In the article I also cover how the proposed solution would not require any infrastructure management at all. The infrastructure is the blockchain, and the blockchain is run publicly via a consensus protocol. If you are curious about how this is possible in more detail, check out our whitepaper on zkSafeZones - a solution aiming to reduce civilian casualties in conflict areas, by leveraging zkLocus, Zero-Knowlegde protocols and the blockchain: https://zklocus.dev/zkSafeZones/ https://zklocus.dev/zkSafeZones/ Still regarding the issuance of the asset, one can leverage zkSNARKs or zkSTARKs to trivially bridge data onto the blockchain from any source, such as your typical HTTPS endpoint. And thanks to their verifiable computation model properties, the correctness of this process can be verified by any third-party, including you and me. Looking forward to your reply.
shmerl 2y ago
Why would anyone trust anything where Russia is involved. It's like "currency of the Axis" or something.
- iluxonchik 2y ago
  Could you please expand on your concerns, namely in the context of the proposed implementation of BRICS currency as a cryptocurrency?
  - shmerl 2y ago
    BRICS exists as an attempt by Putin and Co. to reduce dependency on global economy. Given Putin is waging what's basically a WW III, BRICS is simply his tool of war (not really effective and DOA in practice, but still). So as above, any kind of currency plans for it should be seen through that context.
    - iluxonchik 2y ago
      While I appreciate your reply, it feels that you expressing your subjective view on geopolitics, rather than expanding on the shortcomings of the BRICS digital currency, when implemented as a cryptocurrency on a public blockchain as described in the article. Perhaps you could elaborate on how precisely you see proposed architecture as a misfit, and explain how existing solutions are better? Thanks!
      - shmerl 2y ago
        You can't separate one from another. It's like imagine Nazi Germany would have invented "currency for the Axis". That's about it. What's the point in debating its technical merits, except for analysis of how it's used as a weapon.
        iluxonchik 2y ago
        Of how it's used as a weapon?
lottin 2y ago
As an economist, it's clear to me that the article has been written by someone who's thoroughly unfamiliar with the subject matter of economics. If you want to write about these topics, and be taken seriously, you need to study a lot, and I mean A LOT, before you can even begin to understand the challenges posed by a monetary union, let alone coming up with a brand new design for a monetary system. I don't mean to be harsh, but this is the way it is.
- iluxonchik 2y ago
  Hello economist and thank you for your feedback, You've made claims questioning my knowledge level and suggested that my opinions should not be disregarded, yet you haven't presented any arguments on where exctly my economic understanding is ill. Could you please expand on those arguments?
  - lottin 2y ago
    Well, I don't even know where to start. I will give you just one example: "The BRICS currency supply formula aims to maintain a constant or increasing value of the currency, while having a dynamic supply. This is achieved by adjusting the supply based on the economic performance of the member nations, ensuring that the value of the BRICS currency reflects the underlying economic value of the BRICS bloc." The underlying assumption here, and through the entire article, is that the supply in circulation is controlled by the issuer of the currency. In a modern economy (i.e., one with a financial sector) money is primarily created by the private banking system, in a decentralised fashion, not by the central bank. As a result, the central bank, which is technically the issuer of the currency (more precisely, the issuer of reserves) does NOT have direct control of the money supply. Instead the central bank attempts to influence the money supply through interest rates. If you replace the central bank with something else, you're going to have the same problem. You'll have to figure a way to control the money supply, in an indirect fashion. Yet in the model that you present, the issuer has direct control of the money supply, indicating a complete lack of understanding on your part about how the monetary system works.
    - 2y ago
liampulles 2y ago
If the value of the currency is jointly tied to the economic performance of all member states, I wonder if that then lessens the penalty of bad economic decisions of worse performing member governments?
- iluxonchik 2y ago
  If designed & implemented correctly - absolutely. In fact, as I outline in the article, this is one of its most exciting value propositions. I'm not sure how far along you've got, but your question is answered in the following sections: - Supply, Demand, Value & Oranges - BRICS Supply During Economic Boom - BRICS Suppply During Economic Downturn
senectus1 2y ago
I dont understand enough about economics to confidently argue about this. But it does seem laughable to me to expect BRICS to do anything cohesively. China/Russia are not friends, they do not trust each other and even recently China was stealing land back from Russia. India is very much out for itself and has made a habit of fence sitting and flipping positions on a whim. UAE are power brokers and not a mover and shaker on their own. Most the rest of BRICS are powerless or fickle or too broken to reliably make changes or be relied upon if changes are instigated by the more senior members... Cryptocurrencies are not going to change any of that.
- Hock88sdx 2y ago
  They dont have to do things cohesively. They just have to not use USD to transact and use BRICs dollars (or digital yuan or other members money to transact DITECTLY). If they can't, then use gold. Right now, many paper gold traders got spooked because every gold transaction must be deliver physically to Shanghai. This has never happen before where physical deliveries usually waived and then paper gold just go back into the system recycled. If you want to buy oil, you tap on Russian shadow fleet via rubble-yuan. This is NOT recorded in any western books. If you want to buy Tesla and BYD, the final conversion rate remit into China is Yuan. If you need refined shadow fleet oil from India, you pay Indian in rupees. For the first time massively since 1970s, USD no longer been transacted actively in Asia. You can check financial data now, a huge 40% gone missing and had to be estimated because no indication of USD transactions. There is now no direct data how much Russian-China doing business with other than estimated. The same goes with BRICs members internal payments of non-USD since mid last year. The closest estimate is done via accounting of what USD transactions should have "grown" or "loss" year over year. And that is where 40% comes in. Get a friend in FED. You will know more.

7 points by iluxonchik 2y ago

This articles covers how the proposed BRICS digital currency can be realized as a cryptocurrency, thus challenging the claims made in the 'Digital Money Options for the BRICS' paper. The article explores how a public blockchain with smart contracts, combined with Zero-Knowledge Proof protocols like zkSNARKs and zkSTARKs, provides a natural fit for implementing the BRICS currency. It covers how the dynamic supply mechanism, legal compliance on-chain, and the integration with DeFi and zkLocus for authenticated private geolocation can be materialized. It also explans how the BRICS nations can leverage these technologies for a more decentralized, interoperable, and efficient financial system aligned with Web3 principles. I’m curious to hear the community's feedback on this. Is there something you disagree on?

thefounder 2y ago
Unless it has AI it’s not worth our attention. Blockchain is so 2021
- iluxonchik 2y ago
  I'm not sure how far along you got in the article, but have you ever heard about zkML?
godzillabrennus 2y ago
If you have a centralized authority of any kind doing the issuance of the asset, managing the infrastructure, and doing redemption, you don't need a blockchain. It's truly pointless.
- logicchains 2y ago
  You don't have one authority, you have multiple issuing authorities (the BRICS countries) with sometimes competing objectives. It's in the interests of these countries to have a "trust free" mechanism in the sense that it minimises the ability of the other countries to screw them over.
  - iluxonchik 2y ago
    Yes, indeed! I would also expand on how the implementation of this on a public blockchain, expands the "trust free" feature to the general public, as derivatives can be easily created on a smart contract based blockchain.
- iluxonchik 2y ago
  Hello and thank you for your comment. I'm not sure how far along you got in the article, but I cover all of these points in the "BRICS Digital Currency as a Cryptocurrency on a Public Blockchain" section. Blockchain is utilized as an authenticated, integrity assured, and trustless state machine and storage layer controlled by a programmable execution layer. The issuance the currency is performed on a public blockchain through a smart contract. In the article I also cover how the proposed solution would not require any infrastructure management at all. The infrastructure is the blockchain, and the blockchain is run publicly via a consensus protocol. If you are curious about how this is possible in more detail, check out our whitepaper on zkSafeZones - a solution aiming to reduce civilian casualties in conflict areas, by leveraging zkLocus, Zero-Knowlegde protocols and the blockchain: https://zklocus.dev/zkSafeZones/ https://zklocus.dev/zkSafeZones/ Still regarding the issuance of the asset, one can leverage zkSNARKs or zkSTARKs to trivially bridge data onto the blockchain from any source, such as your typical HTTPS endpoint. And thanks to their verifiable computation model properties, the correctness of this process can be verified by any third-party, including you and me. Looking forward to your reply.

shmerl 2y ago

Why would anyone trust anything where Russia is involved. It's like "currency of the Axis" or something.

iluxonchik 2y ago
Could you please expand on your concerns, namely in the context of the proposed implementation of BRICS currency as a cryptocurrency?
- shmerl 2y ago
  BRICS exists as an attempt by Putin and Co. to reduce dependency on global economy. Given Putin is waging what's basically a WW III, BRICS is simply his tool of war (not really effective and DOA in practice, but still). So as above, any kind of currency plans for it should be seen through that context.
  - iluxonchik 2y ago
    While I appreciate your reply, it feels that you expressing your subjective view on geopolitics, rather than expanding on the shortcomings of the BRICS digital currency, when implemented as a cryptocurrency on a public blockchain as described in the article. Perhaps you could elaborate on how precisely you see proposed architecture as a misfit, and explain how existing solutions are better? Thanks!
    - shmerl 2y ago
      You can't separate one from another. It's like imagine Nazi Germany would have invented "currency for the Axis". That's about it. What's the point in debating its technical merits, except for analysis of how it's used as a weapon.
      - iluxonchik 2y ago
        Of how it's used as a weapon?

lottin 2y ago

As an economist, it's clear to me that the article has been written by someone who's thoroughly unfamiliar with the subject matter of economics. If you want to write about these topics, and be taken seriously, you need to study a lot, and I mean A LOT, before you can even begin to understand the challenges posed by a monetary union, let alone coming up with a brand new design for a monetary system. I don't mean to be harsh, but this is the way it is.

iluxonchik 2y ago
Hello economist and thank you for your feedback, You've made claims questioning my knowledge level and suggested that my opinions should not be disregarded, yet you haven't presented any arguments on where exctly my economic understanding is ill. Could you please expand on those arguments?
- lottin 2y ago
  Well, I don't even know where to start. I will give you just one example: "The BRICS currency supply formula aims to maintain a constant or increasing value of the currency, while having a dynamic supply. This is achieved by adjusting the supply based on the economic performance of the member nations, ensuring that the value of the BRICS currency reflects the underlying economic value of the BRICS bloc." The underlying assumption here, and through the entire article, is that the supply in circulation is controlled by the issuer of the currency. In a modern economy (i.e., one with a financial sector) money is primarily created by the private banking system, in a decentralised fashion, not by the central bank. As a result, the central bank, which is technically the issuer of the currency (more precisely, the issuer of reserves) does NOT have direct control of the money supply. Instead the central bank attempts to influence the money supply through interest rates. If you replace the central bank with something else, you're going to have the same problem. You'll have to figure a way to control the money supply, in an indirect fashion. Yet in the model that you present, the issuer has direct control of the money supply, indicating a complete lack of understanding on your part about how the monetary system works.
  - 2y ago

liampulles 2y ago

If the value of the currency is jointly tied to the economic performance of all member states, I wonder if that then lessens the penalty of bad economic decisions of worse performing member governments?

iluxonchik 2y ago
If designed & implemented correctly - absolutely. In fact, as I outline in the article, this is one of its most exciting value propositions. I'm not sure how far along you've got, but your question is answered in the following sections: - Supply, Demand, Value & Oranges - BRICS Supply During Economic Boom - BRICS Suppply During Economic Downturn

senectus1 2y ago

I dont understand enough about economics to confidently argue about this. But it does seem laughable to me to expect BRICS to do anything cohesively. China/Russia are not friends, they do not trust each other and even recently China was stealing land back from Russia. India is very much out for itself and has made a habit of fence sitting and flipping positions on a whim. UAE are power brokers and not a mover and shaker on their own. Most the rest of BRICS are powerless or fickle or too broken to reliably make changes or be relied upon if changes are instigated by the more senior members... Cryptocurrencies are not going to change any of that.

Hock88sdx 2y ago
They dont have to do things cohesively. They just have to not use USD to transact and use BRICs dollars (or digital yuan or other members money to transact DITECTLY). If they can't, then use gold. Right now, many paper gold traders got spooked because every gold transaction must be deliver physically to Shanghai. This has never happen before where physical deliveries usually waived and then paper gold just go back into the system recycled. If you want to buy oil, you tap on Russian shadow fleet via rubble-yuan. This is NOT recorded in any western books. If you want to buy Tesla and BYD, the final conversion rate remit into China is Yuan. If you need refined shadow fleet oil from India, you pay Indian in rupees. For the first time massively since 1970s, USD no longer been transacted actively in Asia. You can check financial data now, a huge 40% gone missing and had to be estimated because no indication of USD transactions. There is now no direct data how much Russian-China doing business with other than estimated. The same goes with BRICs members internal payments of non-USD since mid last year. The closest estimate is done via accounting of what USD transactions should have "grown" or "loss" year over year. And that is where 40% comes in. Get a friend in FED. You will know more.