Fedcoin Rising? 127
giulioprisco writes US economists are considering a government-sponsored digital currency. On February 3, David Andolfatto, Vice President of the Federal Reserve Bank of St. Louis, wrote a blog post based on a presentation he gave at the International Workshop on P2P Financial Systems 2015 [YouTube video]. The title of the blog post is "Fedcoin: On the Desirability of a Government Cryptocurrency."
Of course (Score:5, Insightful)
So they have a system that allows you to pass around *coins as if they were US dollars (the exchange rate is pegged) but all the transactions are digitally tracked in real time? Fuck yeah the feds want that!
Re:Of course (Score:5, Insightful)
Not only that but with a click of a mouse they can confiscate all your money. It'll be like you never had it at all.
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Unfortunately this is such a bad, outdated idea that the government will probably go for it.
We already have digital currency - those bits that record our current balances, etc in our bank accounts, etc. It's not like the bank takes physical money and moves it from one drawer to the other, or that when you pay with a credit card that the credit card company sends the merchant a wad of cash and some coins.
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Unfortunately this is such a bad, outdated idea that the government will probably go for it.
We already have digital currency - those bits that record our current balances, etc in our bank accounts, etc. It's not like the bank takes physical money and moves it from one drawer to the other, or that when you pay with a credit card that the credit card company sends the merchant a wad of cash and some coins.
But we also have a situation where banks only trade those 1's and 0's with other banks they trust, and they (especially in the case of merchant transactions) charge you a handling fee to do it. The difference here is that the currency would be digital and P2P. There is actually a slim chance that there would be competition between payment systems besides just how many "cashbonus buckbacks" a particular provider can confuse you into thinking are valuable.
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There is actually a slim chance that there would be competition between payment systems besides just how many "cashbonus buckbacks" a particular provider can confuse you into thinking are valuable.
The potential down side is far bigger than any potential benefit. One of the whole reasons for the existence of Bitcoin was that transactions were supposed to be hard to track, just like cash. That didn't prove out to be true but it was the idea.
If currency ever becomes all-electronic, and/or under the thumb of government, you can kiss any freedom you once had goodbye. It's such a very bad idea I don't know where to begin.
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Unfortunately this is such a bad, outdated idea that the government will probably go for it.
We already have digital currency - those bits that record our current balances, etc in our bank accounts, etc. It's not like the bank takes physical money and moves it from one drawer to the other, or that when you pay with a credit card that the credit card company sends the merchant a wad of cash and some coins.
We do already have digital currency, and this is an incredibly poor idea.
What spawns such things from the government, you say? Why, they've seen the recent success of the homegrown crypto-currencies like the Bitcoin, and they want in because they confidently believe they should control all the money. The flaw in their venture is the basic lack of understanding of the principle tenet of Bitcoin: it is outside government meddling.
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The flaw in their venture is the basic lack of understanding of the principle tenet of Bitcoin: it was supposed to be outside government meddling.
There. FTFY. The government has already meddled.
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Not really - FINRA has issued guidance for those trying to stay legal; the government has made some high-profile arrests; the FBI has confiscated individual wallets through physical seizure of the machines they lived on. But overall, the government hasn't done (and realistically, can't do) a damned thing to substantially interfere with the core functionality of BitCoin.
Sure, they could impose some draconian "death penalty for using or posessing BTC or an
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But overall, the government hasn't done (and realistically, can't do) a damned thing to substantially interfere with the core functionality of BitCoin.
I didn't say they could or did. I wrote they "meddled". And they did.
They've tried to regulate it, they've helped to try to commoditize it and make it available on Wall Street, they've developed methods to track the chain of exchange, etc.
While they may not be able to do too much, they HAVE already meddled. And they were assisted in meddling by the development of exchanges, which weren't really part of the whole intended Bitcoin ecosphere. They probably should have been foreseen, but they weren't part
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"Give me control of a nation's money and I care not who makes it's laws" -- Rothschild
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Right now though if you have money not in the bank you actually control it. If they implement this then you have absolutely no control over any of it. And it's not about greed but about control. If they control all your wealth then you are essentially owned by them.
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Civil assets forfeiture says otherwise.
Biblical Prophecy, Anyone? (Score:1)
Okay. So, I realize I'll probably get modded down for this, but can anyone here at least admit that this seems to be leading more and more toward Revelation 13:17, regarding buying and selling?
We've had the technical means for years, but of course it would take the will (or complacency) of the people to allow the wheels of the Anti-Christ to spin; possibly in the name of security.
For personal transactions, wouldn't the most secure means to have be some sort of programmable device implanted directly into t
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I would believe that prediction even if I weren't a Christian.
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Revelation 14 says only 144,000 will be saved, and those 144K were those who were not defiled by women. So unless you're a virgin and one of those incredibly lucky few what's it matter? Well maybe women could not be virgins as it doesn't explicitly exclude them unless they're lesbians?
Of course if there is an exact number for the end times then everything is all pre determination and there is no free will. If the end has already been written, as a guy after you've been 'defiled' why should I bother with r
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Jesus is symbolic.
Where do you draw the line?
Ha! (Score:3)
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It's ironic: The existence of a completely untrustable cryptocurrency will dramatically improve the credibility of more trustworthy cryptocurrencies.
Yes because the ability for a currency to jump in value 10x from one month to the next and then .5x the month after that has the hallmarks of "trustworthy". I have some ukrainian hryvnia to sell you, and some russian rubles too! I will give you a great price.
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Buy low, sell high.
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You're saying the Ruble and Hryvnia, because they have fluctuated wildly like bitcoin have been known to do, are not real currencies?
Or are you saying that because real currencies can also fluctuate wildly, bitcoin is a real currency?
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It's ironic: The existence of a completely untrustable cryptocurrency will dramatically improve the credibility of more trustworthy cryptocurrencies.
Yes because the ability for a currency to jump in value 10x from one month to the next and then .5x the month after that has the hallmarks of "trustworthy"
I'm sorry what instability are you referring to again here? The US Stock Market? 2008 financial meltdown? Precious metals?
Surely you're not just being ignorant here and assuming that value cannot be vaporized damn near instantly in any currency due to greed and corruption, as if we've never seen that shit before...
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You realize, of course, that Rubles count as a pretty damned good deal right now? First, the Ruble usually varies pretty much directly with oil, which has pushed it waaay down on the short term; then Pooty's pissing around has given it another good hard kick down. Eventually, both of those factors will go away, and the Ruble will return to its former level.
"Buy low, sell high" doesn't mean "sell in a
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If a currency didn't have inflation then their wouldn't be economic growth, just rent seeking from those luck to be born with money. get over it.
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Inflation favors investment. If you are rich and you know that your money is loosing value, you are motivated to invest it into an promising business that could give you a good return. Deflation, on the other hand, favors hoarding. Why spend or invest your money if it just keeping it under your mattress for five years will cause it to triple in value? Deflation means no investment, and no investment means no growth for the economy as a whole. (Try getting a mortgage in an economy with deflating currency.)
Th
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Neither inflation nor deflation favors investment. Inflation does however favor borrowing whereas deflation encourages savings to finance capital investment. You don't understand how real people behave. It's a very rare oddball who keeps money under the mattress or buries it in the backyard. It's true that deflation increases the value of your money but investment does not preclude deflationary gains so why not get both?
Also Paul Krugman and Milton Friedman do not represent the entire gamut of economic thou
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I live in Argentina. We have 40% annual inflation and the vast majority of the upper and middle class buys US dollars in the black market and holds them under the mattress.
Also, there are two ways to study human behavior: one is through science and experimentation. The other is through the opinion of philosophers, magicians, prophets and alchemists. This second appr
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With inflation, I don't want to keep my money sitting there doing nothing, because it will lose value. Most of my non-material wealth is in owning things that aren't really money, like stocks and bonds, and hence I'm investing. If the dollar inflates, the dollar value of my stock goes up.
With deflation, owning things is risky, and keeping money under the mattress just increases its value. If deflation is 2%/year, any investment I make has to earn 2%/year in constant dollars to just stay even with my m
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Therefore, somebody wanting me to invest money has to make a considerably better case during deflation than inflation.
Not really. You just don't need to chase risky crap to get 7% returns. You can be quite comfortable taking low-risk investments running 3%, and netting greater real gains.
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Inflation favors a number of things, among which are the purchase of more stable currencies, malinvestment, and the purchase of anything that allows the purchaser to get out of his declining asset. When/if the inflation ends, investors will sell their "investments" to use their assets in a more desired fashion, and supply/demand destroys the price of the investment. Since the last person out loses everything, this encourages very rapid selling at the first hint of a downturn. That's volatility, and volatili
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If you don't have anything to hide you shouldn't need to worry. Big Brother is just looking at...I mean out for you.
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at least with bitcoin the user ID is not definitively linked with a particular human. Everyone can see what transactions were performed, but knowing who was involved is not as certain. Do you think a government sponsored currency will have even that much anonymity?
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...until someone asks for your name and makes the connection. It's not a very big jump to go from one to the other.
Untrusted computing (Score:2)
Comment removed (Score:5, Insightful)
Re:Brought to you by the same government (Score:5, Informative)
That arbitrarily seizes cash left and right because it is deposited in "structured deposits"
What are you, some sort of kook? That [nytimes.com] never [rt.com] happens [foxnews.com]!
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All of the money came from paychecks, he said, but he worried that when he deposited it in a bank, he would be forced to pay taxes on the money again. So he asked the bank teller what to do.
The teller was wrong, and should be fired, for telling him about how to avoid the reporting, and I don't have sympathy for anyone who's intention was to circumvent the law even if they wouldn't have had to pay taxes on it anyways.
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The teller was wrong ... I don't have sympathy for anyone who's intention was to circumvent the law
It's a good thing Slavery isn't still practiced. Law breaking isn't immoral.
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You're honestly equating helping slaves escape with tax-dodging?
They were property after all, I think he'd be more concerned about the use tax tbh. No sympathy for the law breaker after all.
His position is absolute. Would you prefer a godwin? This isn't Social Justice it's the argument that law breaking is immoral no matter what the law. Do you seriously not see the fallacy with equating laws with morality? It implies following laws makes one "good", no matter what the law. The law is the law after all! It became a moral argument when the word wrong was used, instead
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>You're honestly equating helping slaves escape with tax-dodging?
Libertarians always do. Their logic goes something like:
If I am forced to pay taxes, and my taxes are used to fund a welfare state - then I am basically forced to labour for lazy people ergo I am enslaved by the lazy people.
I'm paraphrasing (accurately) - those are not my views, I think it's as brainfuck stupid as you do, but they really do believe that. It's pretty much Ayn Rand, Murray Rothbard or Ludwig Von Mises in a nutshell.
They reall
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What is wrong with reducing ones taxes? I dont see anything wrong with it. If someone tells me, if I make deposits worth more than 10,000, I will be taxed a second time, I for sure will stop making deposits above 10,000. I would be stupid not to.
You have no sympathy for anyone trying to reduce their tax bill? You have a weird sense of morality.
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Then you are an idiot. Because that person is wrong. 10,000 just means it gets reported to the IRS. And if the money was in paychecks or whatever, it already is, and they cross-reference.
However, it is illegal to try to skirt the 10,000 reporting limit (by making many 9,999.99 deposits, for example). That's prima facia evidence you are trying to avoid reportin
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Sure, so you have no sympathy for idiots that listen to their bank teller, when they have no reason to not try and make deposits less than $10,000, even when they have paid their taxes correctly. Cool, glad we got that out the way.
They for sure deserve their money to be confiscated.
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I have no sympathy for idiots who think bank tellers are able to give tax advice. But certainly, if they do, their recourse should be against the bank if they trained the teller to answer like that.
Do I think they should get screwed... no. But am I concerned that they have to prove where the money came from if they are obviously trying to skirt the regulations? Not really. I like the idea of a law that says "don't go out of your way to avoid these reporting regulations."
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If you had ACTUALLY read the articles, you would know that at least the 3rd one had nothing whatsoever to do with avoiding taxes. The guy could only keep so much cash in his place of business for insurance reasons, thus frequent deposits under $10,000.
If you have $9800 in cash, do you hide it in your sock drawer of deposit it?
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"On average over the last several years, it's less than 200 cases," Koskinen said. "In 60 percent of those cases, the owner of the asset never shows up, which shows that they obviously had a criminal activity going on."
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Not surprised (Score:5, Insightful)
If this actually replaced hard currency and became a widely accepted standard, the government would eventually introduce legislation to ban the usage of all non-government cryptocurrencies. I'm not sure what the argument will be ("we can't afford it anymore", "terrorists used cash to commit atrocity X", etc.) but it would fit in with the model of our current system (the dollar is the only legal, federal U.S. currency).
Also, from the article: Understanding this, it is unlikely that Fedcoin will be the preferred vehicle to finance illegal activities. -- This would cast an unfair, "guilty until proven innocent" suspicion upon anyone wishing to still use cash. And there's no way in hell I'd trust the government to not abuse the privacy issues. They wouldn't be able to control themselves with that info...
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It would be tracked left, right, up, and down. Every movement of every citizen's wallet would get pumped straight into the FBI, DHS, ATF, IRS, Social Security, family courts, DMVs, and local PDs. Screw that. I'd rather pay for my Dunkin Donuts with blowjobs than with Fedcoin.
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I'm not sure what the argument will be
Same as for the current fiat currency - "we need to be able to print an unlimited amount of digital currency, but if anybody else does so it's counterfeiting, and your labor* is the collateral for paying back debts against creditors while we give away value to our politically connected friends. Because otherwise terrorists and child pornographers and Muslims."
A primary feature of the currently popular digital currencies is that the politicians can't manipulate it, and
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Bitcoin isn't legally currency, so that seems very improbable.
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You're confusing things. To the Feds, a bitcoin is a rather odd commodity, something vaguely like a stock certificate. It isn't, legally, money, despite the fact that it is used as such. There is nothing illegal about bitcoins.
It is illegal to evade income taxes using bitcoins, and since taxes are denominated in US dollars you have to keep adequate accounting records with values in dollars, and at some point you're going to have to trade bitcoins for dollars to pay taxes. If I were to hire you to do
Guy is a moron. (Score:1, Troll)
1) The government has no desire to do help people trade currency.
2) Only children under 10 would in fact believe that the government could not track the cryptocurrency they themselves created, even if it were open sourced.
3) There would be a market for it in foreign countries. The US government could pay spies, rebels etc. with said cryptocurrency, secure in the knowledge t
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Obviously the government wants people to trade currency, just not secretly.
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But to be honest, there are a couple reasons to do a cryptocurrency - it is faster than wiring money. But the main advantage is secrecy, which is why it is so popular among criminals, people that think the government is out to get them, and spies.
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1. This is fuckin dumb. Just dumb. High School Econ that nose picking morons need to graduate with a D average tells you that taxing commerce gives the government incentive to encourage commerce.
2. Nobody is suggesting that this would be an un-trackable currency. The long running joke that is bitcoin is proof enough of what happens when you can effectively execute transactions that have zero consequences. (No bitcoin isnt private, but the dozens and dozens of quickly folding scam- err.. exchanges is proof
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Ponzi schemes. Investment scams. All the classic shit that's been around since the concept of currency itself was created.
So, it has nothing to do with Bitcoin then. Glad that you've proven that.
Oh, and Bernie Madoff. SEC. That is all.
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This is at best a half-truth, and makes the silly assumption that the government would act rationally. Cigarette taxes are very high to discourage the use of cigarettes (and to rip off consumers.) Greenies promote high gasoline taxes to discourage diving gas-powered cars. Imported goods are taxed to discourage foreign goods (and encourage untaxed domestic producers.)
It's a Laffer Curve phenomenon, not that there's much recognition of that
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> The one and ONLY value of a cryptocurrency is that it can be reliably traded secretly. There is simply NO other reason to use one.
1) Bitcoin is in no way secret. The blockchain (record of all transactions) is public.
2) There are many other values of cryptocurrency... the main one is that you can conduct electronic transactions (over distance, etc) via P2P transfers (without a middleman taking a cut).
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2) There are many other values of cryptocurrency... the main one is that you can conduct electronic transactions (over distance, etc) via P2P transfers (without a middleman taking a cut).
Except a middle man does take a cut, because you pay to have the transaction written into the blockchain...
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1) Bitcoin is in no way secret. The blockchain (record of all transactions) is public.
Except, there is no requirement to tie a receiving address to a specific person. Not truly anonymous, but by using best practices, you can reasonably obfuscate what YOU are doing.
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Except that the Bitcoin middleman is doing quite a bit of expensive computation (if it weren't expensive, Bitcoin wouldn't work), and therefore either gets costs plus profit for this or will go out of business. Up to now, it appears that most of this compensation has been in the form of new Bitcoin, but that's going down while the size of the blockchain is going up, and the middlemen are going to have to charge transaction fees.
The banks, on the other hand, have to move numbers around somewhat securely*
Re:Guy is a moron. (Score:5, Informative)
- you can use it if you're under 18
- you can use it if the world bank hates your country
- you can use it to accept payments without paying a credit card gateway company a ton of money
- you can use it to take orders over the phone if your credit card processor thinks you're too young of a business to take card-not-present transactions
- it is virtually impossible to use a stolen wallet if the user encrypted it
And it most certainly, absolutely, is not "secret." It's is the polar opposite. It's all logged.
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Speaking Empirically:
1) People thought bitcoin was anonymous, and therefore a good way to buy drugs/steroids. If people didn't believe this, other people wouldn't have to constantly be pointing out that Bitcoin isn't anoynmous. Nobody points out that American Express isn't anonymous, because it's COMPLETELY FUCKING OBVIOUS. Even Ross Ulbricht apparently didn't think through how traceable bitcoin is.
2) There isn't a company that is able to block/refund payment to drug dealers/steroid users. Once the mone
Re:Guy is a moron. (Score:5, Informative)
The one and ONLY value of a cryptocurrency is that it can be reliably traded secretly. There is simply NO other reason to use one.
Cyrptocurrencies also ensure there are no forgeries. If a bill is printed with the hash on it, it can be verified easily. This is actually an excellent use of the cryptocurrency standards. Having the govt, as well as citizens and businesses, being able to track it publicly would be a benefit. Also, you're a moron.
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I hereby declare... (Score:4, Funny)
I hereby declare the number 90185349087539845793845389573985739485739487593857893 in the name of the King of Spain. What will you give me for that?
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I bid .0000001 btcoin.
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I would say "sold" but with BTC in the $250 range that works out to roughly $0.000025 so it isn't worth the hassle of setting up an account, and it's too small to withdraw. Besides, agents of His Majesty Felipe VI are the ones who really need to do the collecting.
Yeah! (Score:2)
Re:Yeah! (Score:5, Insightful)
Now we're going to have a government-backed currency with a central bank that can control interest rates! Anyone can exchange it at will! Of course, the institutions that monitor these transactions are going to have to follow a set of regulations, and probably have some sort of government-backed insurance for deposits...
You say this like it is a bad thing.
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So endeth the lesson (Score:1)
Will you be able to buy and sell anonymously as with cash, or will this become another eyeball in the already far too massive panopticon?
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We already have a digital currency. It's called "dollars". You can convert it to physical chits easily, but rarely do you need to.
And in other news: (Score:2)
"These are some really nice trees"
Government sanctioned monopolies don't want compet (Score:1)
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Dude, there are tons of competing currencies. You just cannot call them things like a "dollar" or a "quarter". You can also make a soda. You just cannot call it a "Coke" or a "Sprite".
I like this idea (Score:1)
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But digital currency is so easy to hack and steal. If you want to secure something, you usually disconnect it from the Internet. Everyone loves the convenience, but what about security of this currency? There are no known servers that are unhackable. Why should we trust our hard-earned money to this bitcoinesque technology?
But perhaps a govt cryptocoin can be more secure than bitcoin as it would run on centralized servers and not be distributed like Bitcoin. So if someone steals another person's money, it w
Only one question: (Score:2)
Can I use it over at that darkleaks site?
What if apples were oranges (Score:5, Interesting)
He goes off the rails right from the beginning with his definition of money. He says money cannot be a store of value; when in fact that is one of the most important properties of money. It is from there were he misses why bitcoin is taking off somewhat. He should know this as he points out it is deflationary and thus a good store of value. So he completely misses why it is cryptographic, and why that matters. Talks about the fed controlling the exchange on the one hand yet talks of mining or the fed mining on the other, so he obviously doesn't understand that the mining is the how of the supply of bitcoin, nor that the idea of bitcoins is to work without a trusted third party, which he puts back in as the FED.
Without that cryptographic underpinning that is impossible if the FED controls supply what is left? The fed distributes signed serial numbers that they generate with their special random number generator? And at any time they could release a near infinite supply of them and crash the market. Think of the possibility to perfectly counterfeit FEDCOIN if someone hacked the FED's key!
This would surprise me if the FED actually did this. Not even they are this stupid.
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Bitcoin, currently, is a lousy store of value since it's pretty volatile against the dollar. The dollar varies somewhat against real wealth, but it's not that much and it's reasonably predictable, so I have a fairly good idea how much $100 will buy next year, and a very vague idea how much 100 BTC will buy. This means that exchanges and other institutions have to have ways to charge for the risk they take by holding enough Bitcoin to operate.
The centralized nature of Fedcoin has good things and bad thi
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Just say no (Score:1)
The gubment has enough overreach as it is.