[HN Gopher] Boston Fed releases report, source code of digital c...
       ___________________________________________________________________
        
       Boston Fed releases report, source code of digital currency
       prototype study
        
       Author : 60654
       Score  : 107 points
       Date   : 2022-02-06 16:05 UTC (6 hours ago)
        
 (HTM) web link (www.bostonfed.org)
 (TXT) w3m dump (www.bostonfed.org)
        
       | mjevans wrote:
       | The mention of blockchain in the summary worries me. We have real
       | world data that shows us this only leads to wasted electricity
       | and fabricated silicon shortages/outrageously expensive computer
       | hardware.
       | 
       | The idea of a public ledger and distributed witness signatures is
       | sound though, and that should be the basis of a government
       | approved system of inter-reserve asset tracking.
        
         | RandomLensman wrote:
         | They opted against the use of DLT, so ok for now, I suppose.
         | After all, it is something explicitly under central control.
        
         | anm89 wrote:
         | The concept of a blockchain has ZERO connection to electricity
         | usage.
         | 
         | Proof of work is the thing that uses the electricity.
         | blockchains can use or not use proof of work.
        
         | jlarocco wrote:
         | I think you may be confusing "blockchain" with "bitcoin".
         | 
         | A blockchain is just blocks of data linked together using hash
         | functions to guarantee the authenticity of previous blocks.
         | There's no mining, and only a tiny amount of electricity used.
        
           | skybrian wrote:
           | Isn't that a Merkle tree? "Blockchain" is not commonly used
           | for what git does.
        
             | macksd wrote:
             | "Block chaining" is absolutely used to refer to that
             | concept in cryptography, and pre-dates cryptocurrency.
        
               | erosenbe0 wrote:
               | Correct. Block cipher, block list, block chain, block
               | vector, array of blocks -- I'm sure you can find them all
               | decades ago.
        
           | acdha wrote:
           | There's a fair amount of confusion around that term, however:
           | for example, Bitcoin proponents spent most of a decade saying
           | that only proof-of-waste systems were true blockchains
           | because they knew that anyone picking a different mechanism
           | would have much better performance and cost numbers.
        
           | jonathan-adly wrote:
           | The anti-crypto bros don't need that kind of nuance.
           | Blockchains = bad, we don't need to complicate their simple
           | world with big words.
        
             | whimsicalism wrote:
             | Why not just be charitable and not malign entire classes of
             | people with certain opinions?
        
         | ur-whale wrote:
         | > We have real world data that shows us this only leads to
         | wasted electricity
         | 
         | You are either ill-informed and should educate yourself on the
         | subject (blockchain != proof of work-based consensus) or
         | willingly creating confusion by mixing up concepts.
         | 
         | Let's assume the first, shall we?
        
         | politician wrote:
         | There are different classes of blockchains. For example, the
         | data structure managed by `git` is a blockchain. So, in and of
         | themselves, blockchains are not problematic. When you raise
         | those criticisms you probably meant to address the security
         | function of the consensus mechanism for distributed
         | decentralized ledgers. The security function there is crazy not
         | because the people are evil scammers and con artists, but
         | because Byzantine Fault Tolerance [1] is a hard CS problem,
         | like AI.
         | 
         | Tiered systems for central bank digital currencies that allow
         | complete tracking of all transactions are an active area of
         | interest by central banks. For instance, the PBoC has filed
         | over 80 patents on the subject. You can be sure that these
         | systems don't attempt to solve BFT, don't use as much
         | electricity, and don't protect the peasants from the abuses of
         | the rulers.
         | 
         | [1] https://decrypt.co/resources/byzantine-fault-tolerance-
         | what-...
        
           | bratwurst3000 wrote:
           | Isnt git a merkle tree? And a blockchain a special case of a
           | merkle tree? More like a merkle chain ^.^
        
             | erosenbe0 wrote:
             | Adding signatures or a cipher to nodes is basically the
             | difference.
        
             | tylersmith wrote:
             | That's exactly what a blockchain is. Blockchain being the
             | "secret sauce" has always been a misconception; as noted
             | git is exactly a blockchain. What we call refs in git are
             | blocks in Bitcoin.
             | 
             | Nakamoto consensus was the innovation, the major energy
             | consumer, and not necessary for cryptographic data
             | integrity like a CBDC or git repo needs.
        
               | bratwurst3000 wrote:
               | Interesting side fact. Proof of work was used before in
               | 2004 to prevent spam but it failed. Nakamoto put that
               | concept in a merkle tree.
               | 
               | https://m-cacm.acm.org/magazines/2019/8/238347-the-
               | history-o...
        
       | beefman wrote:
       | "In our design users interact with a central transaction
       | processor using digital wallets storing cryptographic keys. ...
       | Despite using ideas from blockchain technology, we found that a
       | distributed ledger operating under the jurisdiction of different
       | actors was not needed to achieve our goals. Specifically, a
       | distributed ledger does not match the trust assumptions in
       | Project Hamilton's approach, which assumes that the platform
       | would be administered by a central actor."
        
         | DennisP wrote:
         | This doesn't sound all that different from the banking system
         | we have now.
        
           | tadfisher wrote:
           | The key words here are "central transaction processor". Being
           | able to interact with the financial system without going
           | through intermediaries would eliminate an incredible amount
           | of waste in the form of most of the payments industry.
        
             | rmbyrro wrote:
             | Would also eliminate an incredible last grain of financial
             | privacy people have.
             | 
             | When every transaction goes through FED, the government
             | won't need to call or subpoena anyone to know where your
             | money come and go.
        
               | djbusby wrote:
               | How does the Post remain private, since the Government
               | runs that too?
        
               | mistrial9 wrote:
               | one secret there is, they can photo record every source
               | addr<->dest addr from the post item face, for some or all
               | of the delivery, for years and years without fail, keep
               | those records, and then do investigative work from that.
        
               | dghlsakjg wrote:
               | With mail, the only information that is verifiable is the
               | address that received the mail.
               | 
               | The return address can be made up. Although the general
               | area it is sent from is recorded in the form of zip code.
               | 
               | The contents of the letter are also not known.
               | 
               | So even if that info got out, there's really not much
               | information beyond the fact that mail was received, and
               | we probably know who sent it.
               | 
               | Thats a world of difference from cryptographically signed
               | transactions between known parties with known amounts.
        
               | salawat wrote:
               | They never open the package, and technically, they are
               | quasi-public.
               | 
               | Public enough that they can't play fast and loose like
               | everyone else, but private where it matters in terms of
               | not having literal Federally administered databases all
               | just eafer for the reaping.
        
               | wbsss4412 wrote:
               | The fed is quasi public too? It's actually less public
               | than the postal service, the postal service is a fully
               | public agency, the fed is partially governed by private
               | banks.
        
               | djbusby wrote:
               | Right. So, couldn't the central ledger be similar?
        
               | DennisP wrote:
               | If they don't require KYC for accounts, and maybe even
               | use privacy tech like Monero or ZCash, then sure. How
               | likely do you think that is?
        
               | drusepth wrote:
               | So what you're saying is they can finally just do my
               | taxes for me?
        
               | goodluckchuck wrote:
               | A distributed ledger could prevent the central banks from
               | cooking the books. Anyone and everyone could audit the
               | fed. Can't have that.
        
             | melony wrote:
             | It is better for the government to run financial
             | infrastructure. The restrictions imposed by PayPal and the
             | banks on certain types of businesses can then be challenged
             | in court.
        
         | lvl100 wrote:
         | This is right to some extent. They can have distributed ledger
         | in virtual sense.
        
           | slickrick216 wrote:
           | Isn't this somewhat like hyperledger where it's a
           | permissioned federated blockchain?
        
         | tylersmith wrote:
         | That's basically a requirement for a CBDC. They're certainly
         | not going to promote a coin they don't control the consensus
         | rules for.
        
         | triangleman wrote:
         | Reading Matt Levine's latest column on this CBDC was sort of
         | mind blowing. With a truly centralized digital currency the Fed
         | would basically monopolize all bank deposits (why store money
         | in the bank at all when your digital wallet is perfectly safe)
         | and destroy the entire banking sector.
         | 
         | So they are forced to decentralize the currency to some extent,
         | so that banks are the ones to actually issue the currency
         | (after borrowing it from the fed).
        
           | 6gvONxR4sf7o wrote:
           | Or couldn't it force banks to offer better rates on accounts?
           | If the Fed will store your money for free, then the banks
           | would have to offer a few percent return to get you to lend
           | to them.
        
           | pessimizer wrote:
           | This is literally the only reason I support it. Banking,
           | debit cards, and paypal are just private taxes.
        
             | rvense wrote:
             | Exactly. CBDC is not a response to cryptocurrencies. It is
             | a (belated) response to the fact that the way cashless
             | economies have evolved has basically privatized money-as-
             | infrastructure.
             | 
             | The privacy implications of CDBC are a real problem, but
             | the rapidly approaching end game of the current slippery
             | slope is one in which, among other things, all
             | participation in the economy is gated entirely by private
             | banks. No sovereign country should accept that. And yes,
             | any real implementation of a blockchain as a day-to-day
             | cash replacement will have the same problem. These are
             | legal problem requiring a legal solution, not a technical
             | one.
        
       | throwthere wrote:
       | Should name it PowellCoin-- This is what happens when the Fed
       | governors won't let him print USD any more.
       | 
       | I jest, it actually is kind of interesting and could allow an
       | even closer look at the day to day operations of banks if the
       | ledger was in fact published.
        
       | ur-whale wrote:
       | Many people on HN claim that the rise of crypto-currencies is a
       | social catastrophe.
       | 
       | Maybe so (I disagree), but wait until central-bank issued digital
       | currencies become a reality, you'll very quickly learn the real
       | meaning of social catastrophe.
       | 
       | Spending 10 seconds thinking about it, I can come up with the
       | following scenarios:                   - complete and utter
       | "financial deplatforming" if you don't behave as a citizen. This
       | is basically China's CCP dream come true.              - total
       | loss of privacy: the absolute entirety of your financial
       | interactions are an open book to the government. You won't be
       | able to buy a pack of gums without big brother knowing about it,
       | much less paying for your sex toys.              - security
       | nightmare : how do you guarantee the soundness of such a system
       | when it is centralized. Just ask Sony how long they manage to
       | keep their private keys secret on average.              -
       | security nightmare : preventing the leakage of citizen's private
       | financial information. If the chain is public, there is none. If
       | it is kept under lock and key by the govt: 1) no way to check
       | what the actual supply is 2) subject to hackage and publishing
       | the data publicly. Knowing the track records of governmental
       | institutions when it comes to IT security, this is basically a
       | guaranteed fuck-up within the first 5 years of such a system
       | existing.              - economic nightmare: running the printing
       | press full steam is now instantaneous and gives the government
       | even more unchecked power to spend money on brain-dead programs,
       | without leaving any decision-making power to the citizens.
       | 
       | I don't think we will avoid the implementation of such an
       | abomination, but I do believe that - like in everything political
       | - if there's healthy competition from decentralized chains such
       | as Bitcoin, the craziness will be kept in check because there
       | will be an escape hatch to the govt. economic jail.
        
         | RandomLensman wrote:
         | Most points could already apply in current payments and banking
         | systems with only a few big players (basically security,
         | privacy).
         | 
         | The economic nightmare is maybe a degree up, but not really
         | more. Generally speaking, it also tends not to be just "the
         | government" doing stuff that no-one wants - there will be
         | people liking whatever the policy is.
         | 
         | The only real new point is that CDBCs with any kind of
         | programming would effectively be vouchers, not money (ie your
         | first point).
        
         | koshergweilo wrote:
         | Your comment ignores the fact that we already have centralized
         | digital transactions and they're all run by private, for-profit
         | entities. I'm just some random dude with no other
         | qualifications than I read the article, but here are my
         | thoughts on your worries.
         | 
         | > complete and utter "financial deplatforming" if you don't
         | behave as a citizen. This is basically China's CCP dream come
         | true.
         | 
         | This problem has nothing to do with having a digital currency,
         | if the government wanted to punish people "if you don't behave
         | as a citizen", it has plenty of tools to do that already.
         | Something like this would be huge government overreach and
         | frankly a violation of the first amendment, I doubt if any law
         | suggested this it would even make it to the supreme court.
         | 
         | Also the current centralized currencies such as PayPal and
         | Banks already do this, if anything this gives deplatformed
         | people more freedom as they have a viable digital alternative
         | to purchase.
         | 
         | > total loss of privacy: the absolute entirety of your
         | financial interactions are an open book to the government. You
         | won't be able to buy a pack of gums without big brother knowing
         | about it, much less paying for your sex toys
         | 
         | Banks already know this information and the government could
         | audit the banks if it wants to. What's stopping a banker from
         | publishing your purchase history? Many Decentralized currencies
         | would also publicly show this. That said I think it's a totally
         | valid point.
         | 
         | > security nightmare : preventing the leakage of citizen's
         | private financial information.
         | 
         | This is true, hence why JP thinks "It's more important to do
         | this right than to do it fast". As I said before though, banks
         | and private companies already leak this kind of information.
         | 
         | > economic nightmare: running the printing press full steam is
         | now instantaneous and gives the government even more unchecked
         | power to spend money on brain-dead programs
         | 
         | I don't see how this changes anything. The Fed can already run
         | the money printer to whatever throughput it needs. This doesn't
         | change that. Only thing this changes is that it would be easier
         | to give direct aid to citizens, especially the lowest 5% who
         | don't own bank accounts.
         | 
         | >if there's healthy competition from decentralized chains such
         | as Bitcoin, the craziness will be kept in check because there
         | will be an escape hatch to the govt
         | 
         | Yeah that's why I kind of think this is a good idea. We already
         | have private versions of this and we could always... Just use
         | those if we don't want to use whatever Powell coin turns out to
         | be. It only gives us more options. Also it would be great to
         | have digital transactions without the $.35 fees
        
         | 6gvONxR4sf7o wrote:
         | > complete and utter "financial deplatforming" if you don't
         | behave as a citizen.
         | 
         | We live in a world with prisons. Stopping your spending is
         | nothing compared to literally locking you up.
        
         | mrkentutbabi wrote:
         | This is precisely why I am still a crypto believer despite all
         | its flaws.
        
         | pphysch wrote:
         | This is overwhelming one-sided...
         | 
         | Why CBDC is good:
         | 
         | - Efficiency: much of the legacy financial institutions are no
         | longer needed in current form (going as far as the Fed and
         | IRS). Opportunity to reform finance as a whole and remove
         | legacy waste.
         | 
         | - Fraud detection: money laundering and financial crime becomes
         | very difficult to hide
         | 
         | - Observability: much better data & insight into economic
         | trends
         | 
         | - Security: Infra being controlled by a public org that can be
         | held more accountable than a decentralized mess of private
         | corporations (see endless Equifax leaks, etc)
         | 
         | - Responsiveness: can rapidly implement policy changes in
         | response to crises
        
         | pessimizer wrote:
         | We already have all of this. The government can tell your bank
         | to do something, and your bank will do it. What a government
         | digital currency would do is end the subsidy of banks as the
         | only "safe" place to park money. If I have a government account
         | with my money, banks don't get to gamble with it for their own
         | benefit. If I want to do that, I could withdraw the cash from
         | where it is safe and consciously put it at risk, rather than
         | the government backstopping the finance industry.
         | 
         | If government bits are just the beginning of a banning of cash,
         | that's the real problem; but there's no reason they can't ban
         | cash _now._
         | 
         | The benefit to some sort of government semi-distributed ledger
         | would be that independent people could set up ATMs. Otherwise,
         | I'd just be happy with postal checking/savings. We already have
         | a bunch of post offices.
        
           | reese_john wrote:
           | We already have all of this. The government can tell your
           | bank to do something, and your bank will do it.
           | 
           | But can the government do that at scale ? I thought they
           | needed at least a subpoena to get your bank records.
           | 
           | It's different from the mass surveillance that a CBDC
           | enables.
        
             | pessimizer wrote:
             | That's assuming that your bank cares about keeping your
             | transactions private enough not to voluntarily submit to
             | anything asked of it.
             | 
             | If you hate the idea, you'd still be free to park your cash
             | with some rando that promises to keep it safe, just without
             | subsidy. Hell, the existence of a gov digital currency
             | might ironically stabilize bitcoin or a bitcoin-like.
        
             | rvense wrote:
             | Why is it you think a CDBC can't be set up, legally, to
             | require subpoenas?
        
       | newaccount2021 wrote:
        
       | kangaroozach wrote:
       | FIAT
        
       | nabla9 wrote:
       | Central bank digital currency efforts seem interesting.
       | 
       | 1. They make it possible to deliver helicopter money directly to
       | the consumers. Now central banks can only work trough banks or
       | financial markets. Digital currency where everyone has access to
       | central bank money can correct the errors in current systems.
       | 
       | 2. Currency would be anchored in real economy with sound monetary
       | policy. Nobody in their right mind takes Bitcoin denominated 10
       | year mortgage.
        
         | anm89 wrote:
         | I don't understand what you are saying here
         | 
         | if point 1 is that it enables helicopter money, how is the
         | conclusion in point 2 that it enables sound monetary policy?
        
           | nabla9 wrote:
           | Sound monetary policy according to Fed mandate and goals is
           | low unemployment rate and average inflation rate 2 percent
           | over medium length period.
           | 
           | Many argue that helicopter money is better alternative to
           | quantitative easing (buying bonds). Just give money to the
           | people. Buying bonds is ineffective because bond holders
           | don't consume. The velocity of money just drops and asset
           | prices increase.
           | 
           | (you may picture helicopter money as trowing more money than
           | is needed, but that's now what the idiom means. It means that
           | the money lands on people, not banks).
        
       | ur-whale wrote:
       | FWIW:
       | 
       | https://github.com/mit-dci/opencbdc-tx
       | 
       | Detailed architecture:
       | 
       | https://github.com/mit-dci/opencbdc-tx/blob/trunk/docs/archi...
       | 
       | Some remarks:                   - Seems to be implemented in C++
       | - Looks like they reused bits and pieces from the Bitcoin code
       | base (bech32, secp256k1, sha256)         - Claim of being able to
       | handle 1.7M TPS         - Experimented with UTXO-style (Bitcoin-
       | like) but seem to have bet on something called "unspent hashes"
       | instead.         - I found very little on things that matter
       | (policy-related):            - How is the "central authority"
       | implemented            - How is the coin supply managed
        
       | [deleted]
        
       | _-david-_ wrote:
       | Will this basically mean the federal government would have a
       | record of all our transactions?
        
         | tantalor wrote:
         | It depends on how Congress writes the law that would enable
         | CDBC.
         | 
         | They could simply copy & paste the existing laws regarding
         | banking privacy, e.g., RFPA.
         | 
         | https://en.wikipedia.org/wiki/Right_to_Financial_Privacy_Act
        
         | rvense wrote:
         | This is a legal problem, not a technical one.
        
       | lvl100 wrote:
       | I wasn't aware they would make this open. It's a great way to
       | play around with toy digital currency implementation. There goes
       | my plans for rest of weekend.
        
       | jonathan-adly wrote:
       | It's ironic that they named it project Hamilton. He is probably
       | rolling in his grave now thinking that Jefferson would be finally
       | proven right with CBDC and the insane ever increasing Public
       | debt.
       | 
       | "banking institutions are more dangerous to our liberties than
       | standing armies," Thomas Jefferson
        
         | randomhodler84 wrote:
         | 21st Century Jefferson would be stacking sats and telling
         | everyone they knew about BTC. The antidote to 21st Century
         | Hamilton CBDCs.
        
           | jonathan-adly wrote:
           | I actually think both will be stacking sats. Hamilton was a
           | practical libertarian, Jefferson was "we must have a
           | revolution every now and then to show the government who is
           | boss" libertarian.
        
         | skybrian wrote:
         | History hasn't been kind to either of Jefferson's opinions in
         | that sentence. The US did abolish the central bank for a while
         | and nothing good happened as a result. Also, military coups are
         | a problem in many countries, but not the US.
        
           | chewzerita wrote:
           | > military coups are a problem in many countries, but not the
           | US
           | 
           | I wonder why
        
             | goodluckchuck wrote:
             | Privately owned banks.
             | 
             | Private, untraceable, accurate, high capacity banks.
        
           | tryptophan wrote:
           | Nothing good has happened after central banking was
           | established either. It's been one financial crisis after
           | another.
           | 
           | Also fun fact - back when the US had private currencies,
           | people WILLINGLY preferred to use them despite a gov currency
           | existing. It is only after the government passed high taxes
           | on these currencies(ie having to pay tax for each transaction
           | to exchange them) that they went out of favor. If they were
           | really so terrible, why did the gov feel the need to kill
           | them?
           | 
           | Central banking is nothing but a power grab. The "it
           | stabilizes the baking system" is nothing but a lie.
        
             | wizzwizz4 wrote:
             | > _Also fun fact - back when the US had private currencies,
             | people WILLINGLY preferred to use them despite a gov
             | currency existing._
             | 
             | I'm not much of a historian, but are you referring to
             | company stores? https://en.wikipedia.org/wiki/Company_store
             | 
             | > Saint Peter don't you call me 'cause I can't go // I owe
             | my soul to the company store
             | 
             | -- Johnny Cash, _Sixteen Tons_
        
               | [deleted]
        
               | cgriswald wrote:
               | That's not a Johnny Cash song although he did release a
               | cover of it:
               | 
               | https://en.m.wikipedia.org/wiki/Sixteen_Tons
        
               | shkkmo wrote:
               | There was an extended period when state chartered banks
               | could print their own currency.
               | https://en.m.wikipedia.org/wiki/Free_Banking_Era
        
             | SkyMarshal wrote:
             | Fwiw in hindsight it appears that structural regulation
             | like Glass-Steagal is what stabilizes the banking system.
             | 
             | Separating banking, investment banking, and insurance into
             | separate legal entities and preventing the banks from
             | consolidating into mega-banks prevented another a Great
             | Depression for ~70years. Then roughly 8yrs after we
             | repealed all that, we unsurprisingly had another Great
             | Depression level financial crisis.
             | 
             | The Fed's lending support, along with govt stimulus,
             | prevented the actual depression from happening, so you
             | could argue that the Central Bank does have some impact on
             | banking system stability. But it was only necessary because
             | we removed the structural regulation that had maintained a
             | stable banking system for over half a century.
        
               | tryptophan wrote:
               | > Fwiw in hindsight it appears that structural regulation
               | like Glass-Steagal is what stabilizes the banking system.
               | 
               | This is not at all clear.
               | 
               | > Separating banking, investment banking, and insurance
               | into separate legal entities and preventing the banks
               | from consolidating into mega-banks prevented another a
               | Great Depression for ~70years. Then roughly 8yrs after we
               | repealed all that, we unsurprisingly had another Great
               | Depression level financial crisis.
               | 
               | Are we forgetting the inflationary period in the 70s? How
               | the gold standard was lost during this time? All the
               | emerging market crises? How the USD has lost 98% of its
               | value since the 70s? How inequality is sky high due to
               | interest rate suppression causing asset price inflation?
               | How we have a massive trade defect leading to an
               | extremely large negative net-foreign-investment balance?
               | Does it makes sense to you that countries that are much
               | "poorer" than us are lending us money?
               | 
               | > The Fed's lending support, along with govt stimulus,
               | prevented the actual depression from happening, so you
               | could argue that the Central Bank does have some impact
               | on banking system stability. But it was only necessary
               | because we removed the structural regulation that had
               | maintained a stable banking system for over half a
               | century.
               | 
               | We trade depression for inflation then. Is this good?
               | Bad? Not sure. We are living in that experiment though.
               | One day this excessive debt and money printing will catch
               | up with us. It has happened to every single fiat currency
               | in history.
        
               | pessimizer wrote:
               | > How we have a massive trade defect leading to an
               | extremely large negative net-foreign-investment balance?
               | Does it makes sense to you that countries that are much
               | "poorer" than us are lending us money?
               | 
               | If you're against this, what you want is more inflation,
               | not less. This is the entirely intentional result of the
               | strong dollar policy.
        
               | CrazyStat wrote:
               | >How the USD has lost 98% of its value since the 70s?
               | 
               | By what metric has the USD lost 98% of its value since
               | the 70s?
        
               | pessimizer wrote:
               | It's hyperbole referring to how much US dollars stored in
               | a mattress 50 years ago would be worth now. If, instead,
               | you earned money from wages and/or invested in
               | stocks/bonds/real estate/comic books, nothing of the sort
               | happened.
        
               | sgerenser wrote:
               | Even if "the 70s" means 1970, it's still not 98%, more
               | like about 86% according to:
               | https://www.usinflationcalculator.com/
        
               | pessimizer wrote:
               | That's why I said "hyperbole." I should have said "mild
               | hyperbole," but I didn't bother to look up the actual
               | numbers.
        
             | skybrian wrote:
             | This isn't good history. You should read more about wildcat
             | banks and the financial crises of that era.
        
               | notch656a wrote:
               | The federal government is the worst 'wildcat' bank as
               | it's a wildcat bank who has refused to redeem dollars for
               | the gold they said it was backed by (eventually in '71
               | totally reneging their obligation), at one point even
               | outlawing private ownership of gold (the item the
               | currency was backed by) and actually intentionally
               | destroy the currency by target of at least 2% each year.
               | A wildcat bank whos notes you are compelled to purchase,
               | at pain of being in violation of tax law.
               | 
               | At least in the old wildcat banks, you had a shot of
               | redeeming for specie if you went out to the sticks where
               | the main branch was.
        
               | tryptophan wrote:
               | https://www.alt-m.org/2021/07/06/the-fable-of-the-cats/
        
             | SantalBlush wrote:
             | >Nothing good has happened after central banking was
             | established either. It's been one financial crisis after
             | another.
             | 
             | The US financial crises--terrible as they are--are not even
             | remotely comparable to the damage inflicted by a military
             | coup. Putting these two things in the same category is a
             | nonstarter.
        
             | bjelkeman-again wrote:
             | Do you have any good documentation that backs up your
             | statement that is a lie? I'd be curious to read it.
        
           | culturestate wrote:
           | _> History hasn 't been kind to either of Jefferson's
           | opinions in that sentence...military coups are a problem in
           | many countries, but not the US._
           | 
           | In fairness, if Jefferson had his way, there wouldn't be much
           | of a military around to plot a coup in the first place.
           | 
           | He'd also be considered a staunch non-interventionist were he
           | alive today - "peace, commerce, and honest friendship with
           | all nations and entangling alliances with none." Not much use
           | for a standing army when that's how you see your role in
           | global affairs.
        
             | sp332 wrote:
             | I think that argument had more power before a bunch of
             | Canadians set the White House on fire.
        
               | soperj wrote:
               | the US started that war.
        
               | skybrian wrote:
               | This despite being mostly unprepared:
               | 
               | https://en.wikipedia.org/wiki/War_of_1812#Unpreparedness
               | 
               | Apparently having a very small army didn't help when
               | Jefferson's party wanted a war. I guess they over-rated
               | state militias?
               | 
               | A lot of the founders' ideas didn't work out they way
               | they hoped. (For example, they tried to prevent political
               | parties and failed utterly.)
               | 
               | When people quote American founders out of context, it's
               | as if it settles things, but they were just making it up
               | at the time, often based just on what sounds good.
               | Jefferson in particular was often a rather impractical
               | man, but a popular politician who promoted a lot of bad
               | ideas (and a few good ones) that made for good politics
               | at the time. He's hardly the only one.
        
           | voakbasda wrote:
           | The high level of individual gun ownership in the US makes a
           | coup a very risky proposition.
        
             | pphysch wrote:
             | What does civilians owning firearms have to do with a well-
             | trained military force taking over the seats of power?
        
               | ur-whale wrote:
               | > What does civilians owning firearms have to do with a
               | well-trained military force taking over the seats of
               | power?
               | 
               | Such a military force would be facing a very well armed
               | citizen-led guerilla response.
               | 
               | Given the amount of private gun ownership in the US,
               | holding on to power after a coup would prove a rather
               | difficult proposition.
        
               | klyrs wrote:
               | How do guerilla forces defend themselves against Predator
               | drones?
        
               | krapp wrote:
               | >Such a military force would be facing a very well armed
               | citizen-led guerilla response.
               | 
               | Unless enough citizens were on the side of the coup. I
               | don't know why no one ever seems to acknowledge that as a
               | possibility, especially after Jan. 6. Gun owners are just
               | as driven by politics and ideology as anyone else.
               | 
               | Plus just because you have a gun in a safe and maybe
               | sometimes shoot watermelons in the backyard with it
               | doesn't mean you'll be effective in guerilla warfare
               | against an actual military. I know Americans like to
               | bring up Afghanistan and Vietnam as examples of guerilla
               | warfare succeeding against the US, but fighters in both
               | cases still went through training that would break the
               | average American gun owner.
        
               | goodluckchuck wrote:
               | > Unless enough citizens were on the side of the coup.
               | 
               | That was kinda the whole point of the revolutionary war.
               | #DemocracySpeaksManyLanguages
        
               | selectodude wrote:
               | It would be interesting to see how these "3 percenters"
               | would do living in the mountains and eating bush meat for
               | five years.
        
               | zozbot234 wrote:
               | The flip side is that many people in the military _would_
               | absolutely sabotage the coup. Keep in mind that
               | _everyone_ in the military is bound by an oath to defend
               | the Constitution from enemies foreign and domestic.
        
               | AutumnCurtain wrote:
               | Purely anecdotal, but from discussion with my military
               | friends there is widespread belief more than half of
               | enlisted soldiers would've supported the Jan 6th coup
               | attempt militarily. That percentage is far smaller along
               | officers. With two exceptions though the people telling
               | me this are officers and that will slant their view.
        
               | culturestate wrote:
               | _> Such a military force would be facing a very well
               | armed citizen-led guerilla response._
               | 
               | As well-armed as the citizenry may be, the military is
               | _infinitely_ more so - they have, you know, tanks and
               | planes and smart bombs - and in this fantasy civil war-
               | esque scenario I don't think the junta would be shy about
               | exploiting that advantage.
        
               | jimbob45 wrote:
               | That's a weird argument. Yes, _obviously_ the US
               | government can win any engagement against anyone,
               | including its own civilians, by nuking them at any time.
               | Clearly there is additional nuance to this argument since
               | the US didn 't just nuke the Vietnamese, Iraqis, or Jan 6
               | protesters from the get-go.
        
               | salawat wrote:
               | ...All of which require extensive logistics to employ
               | that have hitherto been predicated in the Armed Forces
               | _not_ being on the wrong side of the American public 's
               | ire. I.e. you can handle hostile logistics in Afghanistan
               | because it isn't that hard to get the raw materials
               | stateside, and move them through Allied supply chains.
               | 
               | Remove the part where it's easy to get things Stateside,
               | and I assure you, a U.S. military coup/junta will be
               | fighting a two sided war as well. Both internal from the
               | populace, and external from former Allies who in no way,
               | shape, or form are going to sit idly by and be threatened
               | by a militaristic U.S. Armed Forces that's even remotely
               | controversial enough to even be considered a coup by the
               | populace.
               | 
               | People forget: The Army Sabotage Manual is public domain.
               | 
               | The military knows exactly the hell it will be entrenched
               | in if it ever goes against the public's wishes. They
               | literally wrote the book.
        
               | acdha wrote:
               | > The military knows exactly the hell it will be
               | entrenched in if it ever goes against the public's
               | wishes. They literally wrote the book.
               | 
               | The entire public's wishes, yes. Now consider what would
               | have happened if the military leadership hadn't resisted
               | the call to join the January 6th insurrection -- it's
               | much easier to imagine something like 90s Serbia where a
               | substantial fraction of the population hopped up on
               | propaganda supports the military efforts and will keep
               | their neighbors from forming an effective resistance.
        
               | EL_Loco wrote:
               | Yeah, that's a complete fantasy. Since in US society the
               | riot police doesn't come around with tanks and machine
               | guns mowing down protesters, people have created this
               | delusionthat that if they grabbed a couple of hundred M4s
               | they could take on a government with a full blown army,
               | and that when the shit hit the fan that army would still
               | choose to fight with just shields and batons. There is a
               | clip from the January invasion where a woman is fleeing
               | the scene crying, because of the a 'violent' response
               | from the police. I even think she just got pepper-sprayed
               | (can't remember exactly). When asked what was she doing
               | there, she said she went there to start a revolution.
               | There's a passage in a book (can't remember now either)
               | about the Mexican revolution, where a man hopped on a
               | donkey and left his tiny village to join the armed
               | struggle. About 5 miles from a conflict site, he heard
               | the boom of a cannon going off. He stopped, turned the
               | donkey 180 degrees and went back to his village.
        
               | brimble wrote:
               | I haven't seen any real-world evidence that high levels
               | of individual firearm ownership correlate with the
               | preservation of liberty and democracy. Most examples
               | people like to bring out are resistance to a _foreign_
               | occupation, typically with _external assistance_ from a
               | real military and /or shipments of military arms. And,
               | perhaps tellingly, the result after the occupiers leave
               | is rarely democracy.
               | 
               | Meanwhile improvised bombs seem to be far more important
               | to and effective for a modern insurgency than firearms.
               | 
               | Add in that it sure seems to be more common to read about
               | private militias _aiding_ an authoritarian coup than
               | _successfully resisting_ it and I think the pro-
               | widespread-individual-firearm-ownership faction has an
               | uphill battle just to demonstrate that the practice is a
               | _wash_ , let alone beneficial to the preservation of
               | liberty and democracy.
               | 
               | There are a few cases of private arms being used in anti-
               | corruption "wars" or stand-offs in the US, but at least
               | as many in which they're used for essentially the
               | opposite purpose (supporting anti-liberty, and especially
               | racist, policies and actions). In any case, the national
               | guard stepping in tends to end these in a hurry.
               | 
               | The notion that the 2nd amendment is vital to the
               | preservation of liberty and democracy in 2022 seems to be
               | dubious at best. I'm not in favor of a blanket gun ban
               | but I think that particular argument in favor of gun
               | rights--which seems to be what anti-gun-regulation folks
               | fall back on very quickly, when challenged, which makes
               | sense as it's the reason given in founders' writings and,
               | arguably, in the constitution--is, at best, pretty weak.
        
               | gscott wrote:
               | Mexico
        
           | dragonwriter wrote:
           | > Also, military coups are a problem in many countries, but
           | not the US
           | 
           | Standing armies' threat to liberty isn't exclusively, or even
           | mostly, via military coup, it's through acting without
           | effective oversight against citizens when employed in a
           | domestic security role, heightened by the separate culture
           | and us-vs- them attitude standing forces create.
           | 
           | And, since the mid-19th century, it's mostly been realized in
           | the US through standing paramilitary police forces rather
           | than an normal standing military, as the former were
           | established as _permanent_ entities _before_ regular standing
           | armies in the US, and displaced regular standing armies from
           | the dangerous domestic role that is the main underpinning of
           | them being in Jefferson's statement.
        
         | psswrd12345 wrote:
         | It was named after Margaret Hamilton, not Alexander
        
         | Kalanos wrote:
         | It's apt, not ironic.
         | https://www.newyorkfed.org/aboutthefed/history_article.html
        
       | cryptica wrote:
       | CDBCs are going to be a goldmine for hackers. If implemented as
       | centralized systems, some hackers and insiders are going to have
       | access to unlimited free money. The fact is that nobody, no group
       | of people on this planet is trustworthy enough to implement such
       | an important system. Such people don't exist. Such centralized
       | system is guaranteed to be corrupted.
       | 
       | This is why such important financial systems MUST be
       | decentralized, at least to the extent that anyone should be able
       | to verify the correctness of the system's state independently.
        
         | skybrian wrote:
         | Banks are centralized systems. They do guard against attacks
         | from hackers. It doesn't seem to result in unlimited free
         | money. How is this different?
        
           | macksd wrote:
           | A national currency would be even more centralized, and
           | centralized banking systems have not been free of problems
           | either. They acted irresponsibly for years and then many got
           | bailed out because they were "too big to fail". And people
           | that society doesn't approve of can get screwed over if the
           | payment processors choose not to do business with them.
           | Moving in the direction of eliminating cash for these people
           | scares me.
        
         | RandomLensman wrote:
         | Has anyone ever hacked normal central bank vs bank pipes and
         | injected new balances, for example? Or wholesale siphoned off
         | stuff from payment systems? Why would a decentralized system be
         | stronger? Would really more people care to actively monitor it?
        
         | annoyingnoob wrote:
         | Its clear that current implementations of decentralized finance
         | are also deregulated. There is a reason that we have some
         | regulation, every single financial scam that is regulated in
         | centralized systems is currently active in decentralized
         | systems. Your concept of decentralization has been corrupted
         | from the start.
        
         | dragonelite wrote:
         | I have been cashless for pretty much a decade, I'm more
         | interested in what smart money that can be programmed can do.
         | 
         | Like can i get paid instantly for every KWH i deliver back to
         | the grid via solar panels. Can my salary or hourly contract be
         | streamed to my bank account. These sort of things are all
         | possible in crypto.
        
           | wayoutthere wrote:
           | So is irrevocably draining your net worth in half a second if
           | your vendor makes a mistake.
        
           | SkipperCat wrote:
           | Can you not get paid for every KWH you deliver to the grid
           | right now? My friend has a solar power setup at his house and
           | he gets credits to his bill when he produces more than he
           | consumes. That would be pretty simple to make into an ACH to
           | his bank account.
           | 
           | It just seems to me that everything you can do with crypto
           | you can do with the existing financial system. Maybe not 100%
           | of crypto's features, but easily what a huge majority of
           | people and institutions rely on and use today.
        
           | pavlov wrote:
           | They are also possible with the instantaneous bank transfer
           | system that exists in Europe. If an employer wanted to pay
           | you once an hour, they could. I'm not sure what the point is,
           | though.
        
             | vmception wrote:
             | SEPA is often heralded as being that convenient but this
             | isn't complete information.
             | 
             | Basically there is a parallel _instant_ SEPA that is only
             | partially implemented in between certain banks in some
             | countries. Cross border SEPA between two SEPA system
             | countries is much more likely to be just as slow as the US
             | ACH system.
             | 
             | So the only way people could possibly believe this works is
             | if they and their friends use the same banks. Which is
             | basically the case, most Europeans don't even use the SEPA
             | system to another European country compared to using a few
             | big banks in their single tiny country with their friends
             | and local businesses. But if an outsider wanted to do
             | business in the European banking system, wanting to believe
             | the experience Europeans come on forums to talk about, they
             | likely wont be able to experience it.
             | 
             | Expect 3 - 7 business days and some questions for your
             | banking partners who might not know where the transaction
             | currently is.
        
         | whimsicalism wrote:
         | You seem to be conflating hacked contracts and hacked coins.
         | 
         | AFAIK, none of the major cryptocurrencies have ever been
         | "hacked."
        
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