Fedcoin (Proposed Digital Dollar)

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dualstow
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Fedcoin (Proposed Digital Dollar)

Post by dualstow » Wed Mar 24, 2021 8:47 am

I don’t know if I get this. As the article states, it’s very similar to the way money already works. Bitcoin advocates might not like it, and I certainly don’t like it because some of my favorite individual stocks are payment companies: Visa, Paypal, Square.
So...this has the same value as the dollar we know?

(you may need to activate reader mode)
https://www.bloomberg.com/news/articles ... all-street

Why are they thinking of doing this?
Treasury Secretary Janet Yellen said such a project could help Americans who don’t have access to the banking system.
Ok, but...hmm.
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kriegsspiel » Wed Mar 24, 2021 9:10 am

I don't get it either, it's just digital currency like we have now, but on a blockchain? So you have to keep it in a wallet, instead of an FDIC insured bank?

How many Americans don't have access to the banking system?
dualstow wrote:
Wed Mar 24, 2021 8:47 am
(you may need to activate reader mode)
https://www.bloomberg.com/news/articles ... all-street
This has been archived.
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
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Re: Fedcoin (Proposed Digital Dollar)

Post by dualstow » Wed Mar 24, 2021 9:33 am

Kriegsspiel wrote:
Wed Mar 24, 2021 9:10 am
How many Americans don't have access to the banking system?
That’s a good question to ask. I know that check cashing is a huge ripoff for the unbanked, some 4% when I checked several years ago. However, I can think of more cynical reasons for starting up Fedcoin.
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kbg » Wed Mar 24, 2021 10:04 am

If you are shocked governments are going to take over digital currencies, don't be. It's a given. There's likely been a government in the entire history of mankind where this is not the case. No need to be cynical, it is all about the economic power that comes with it and they aren't going to relinquish it willingly. In addition to military and police forces it's how all governments exert most of their control.
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kriegsspiel » Wed Mar 24, 2021 10:11 am

Kbg wrote:
Wed Mar 24, 2021 10:04 am
If you are shocked governments are going to take over digital currencies, don't be. It's a given. There's likely been a government in the entire history of mankind where this is not the case. No need to be cynical, it is all about the economic power that comes with it and they aren't going to relinquish it willingly. In addition to military and police forces it's how all governments exert most of their control.
I meant in a more practical sense, what's the point in doing it?
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
- John Maynard Keynes
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kriegsspiel » Wed Mar 24, 2021 10:12 am

dualstow wrote:
Wed Mar 24, 2021 9:33 am
Kriegsspiel wrote:
Wed Mar 24, 2021 9:10 am
How many Americans don't have access to the banking system?
That’s a good question to ask. I know that check cashing is a huge ripoff for the unbanked, some 4% when I checked several years ago. However, I can think of more cynical reasons for starting up Fedcoin.
Yea, it would seem that unless they put in the same protocols that banks have to follow, then it's targetted nearly 100% at illegal immigrants.
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
- John Maynard Keynes
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kbg » Wed Mar 24, 2021 11:04 am

Kriegsspiel wrote:
Wed Mar 24, 2021 10:11 am
Kbg wrote:
Wed Mar 24, 2021 10:04 am
If you are shocked governments are going to take over digital currencies, don't be. It's a given. There's likely been a government in the entire history of mankind where this is not the case. No need to be cynical, it is all about the economic power that comes with it and they aren't going to relinquish it willingly. In addition to military and police forces it's how all governments exert most of their control.
I meant in a more practical sense, what's the point in doing it?
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kriegsspiel » Wed Mar 24, 2021 11:11 am

It seems like the competition for fedcoin is banks and payment processors.

Well, I guess it's a competitor to BTC in the sense of being different currencies. But if BTC is digital gold, a defense against the dollar devaluation, then how does making the dollar digital make it compete better against BTC?
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
- John Maynard Keynes
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Re: Fedcoin (Proposed Digital Dollar)

Post by dualstow » Wed Mar 24, 2021 11:22 am

Also, not that there's much privacy in using credit cards- Insurance companies know you bought that extra bottle of rum this month - but it seems like there would be even less privacy using Fedcoin.
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Re: Fedcoin (Proposed Digital Dollar)

Post by pugchief » Wed Mar 24, 2021 12:32 pm

dualstow wrote:
Wed Mar 24, 2021 11:22 am
Also, not that there's much privacy in using credit cards- Insurance companies know you bought that extra bottle of rum this month - but it seems like there would be even less privacy using Fedcoin.
Naive question (maybe): If you buy liquor or cigarettes or whatever at Costco or Kroger, does your auto insurer actually find that out from your bankcard company. Seems far fetched, and a violation of privacy. Even at the liquor store for that matter.
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kriegsspiel » Wed Mar 24, 2021 12:49 pm

pugchief wrote:
Wed Mar 24, 2021 12:32 pm
dualstow wrote:
Wed Mar 24, 2021 11:22 am
Also, not that there's much privacy in using credit cards- Insurance companies know you bought that extra bottle of rum this month - but it seems like there would be even less privacy using Fedcoin.
Naive question (maybe): If you buy liquor or cigarettes or whatever at Costco or Kroger, does your auto insurer actually find that out from your bankcard company. Seems far fetched, and a violation of privacy. Even at the liquor store for that matter.
I think credit card companies have long aggregated data and sold it to, for instance, insurance companies. So when they comb through the data and find that people in your zip code buy more alcohol than elsewhere, they will want to raise your rates.
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
- John Maynard Keynes
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Re: Fedcoin (Proposed Digital Dollar)

Post by pugchief » Wed Mar 24, 2021 12:50 pm

Kriegsspiel wrote:
Wed Mar 24, 2021 12:49 pm
pugchief wrote:
Wed Mar 24, 2021 12:32 pm
dualstow wrote:
Wed Mar 24, 2021 11:22 am
Also, not that there's much privacy in using credit cards- Insurance companies know you bought that extra bottle of rum this month - but it seems like there would be even less privacy using Fedcoin.
Naive question (maybe): If you buy liquor or cigarettes or whatever at Costco or Kroger, does your auto insurer actually find that out from your bankcard company. Seems far fetched, and a violation of privacy. Even at the liquor store for that matter.
I think credit card companies have long aggregated data and sold it to, for instance, insurance companies. So when they comb through the data and find that people in your zip code buy more alcohol than elsewhere, they will want to raise your rates.
That I knew. But that's a lot different from knowing that I specifically bought this or that.
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Re: Fedcoin (Proposed Digital Dollar)

Post by dualstow » Wed Mar 24, 2021 2:43 pm

Probably not.
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Re: Fedcoin (Proposed Digital Dollar)

Post by whatchamacallit » Wed Mar 24, 2021 5:07 pm

Conspiracy theory is they can use it for negative interest rates.

Good thing I can think is 1st amendment protected banking.

Wasn't Trump recently kicked from some banks?

Banks are also kicking gun makers and shops.
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kbg » Thu Mar 25, 2021 8:46 am

Kriegsspiel wrote:
Wed Mar 24, 2021 11:11 am
It seems like the competition for fedcoin is banks and payment processors.

Well, I guess it's a competitor to BTC in the sense of being different currencies. But if BTC is digital gold, a defense against the dollar devaluation, then how does making the dollar digital make it compete better against BTC?
I always find digital money at a fundamental level to be quite amazing. So much so that it is almost hard for me to get my head around it. I've used the example a couple of times of tapping my phone on a piece of plastic and walking out with real stuff...that really is amazing I think.

Putting speculation aside, I've read a lot about the real and useful commercial purposes of secure digital currencies. I've read very little that says BITC is it due it's limitations. Not a popular statement on the board, but if one would just step back and ask themselves the question why have all fixed amount currencies been abandoned openly, without political bias, and look for the answer then the same applies to both gold and BITC.

If your statement/question is what you are looking for, then the digital dollar isn't going to be it as I imagine inflation will be part of the scheme if/when needed for macroeconomic purposes...but if you dive into it deeply you will discover that gold is not that great a defense against inflation. IIRC there's no correlation statistically. (I could be wrong. Don't think I am...but I should say my memory could be bad.) However, noncorrelation in the context of a portfolio is a good thing so for me that's why I like it in the PP. It's way too early to know if BITC will be a good inflation hedge or not. I'll be dead before that is known with any statistical validity. Right now it's pure speculation that it might be.

I suspect there will be some very fierce opposition to a government backed digital currency if it puts at risk some of the current financial mechanisms currently in place like credit cards, pay pal etc. Going back to money...imagine if we went back 50 years and there was this guy between you and the cash register clerk who told you (or the merchant) that they had to give him .02 for every 1.00 or the transaction wasn't going to happen. As a consumer, that two cents is a good deal in that it is known payment will occur conveniently with some fraudulent transaction insurance baked in. However, is that insurance worth 2% of every transaction. IDK, that's the real question. Can you get the same security for less in fees? If you can, then eventually whatever does that will butt out the current players or they will have to lower fees to compete.
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Re: Fedcoin (Proposed Digital Dollar)

Post by dualstow » Thu Mar 25, 2021 8:53 am

Kbg wrote:
Thu Mar 25, 2021 8:46 am
Putting speculation aside, I've read a lot about the real and useful commercial purposes of secure digital currencies. I've read very little that says BITC is it due it's limitations.

Could you clarify that last sentence. Bitcoin is “it”?
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kbg » Thu Mar 25, 2021 9:10 am

dualstow wrote:
Thu Mar 25, 2021 8:53 am
Kbg wrote:
Thu Mar 25, 2021 8:46 am
Putting speculation aside, I've read a lot about the real and useful commercial purposes of secure digital currencies. I've read very little that says BITC is it due it's limitations.

Could you clarify that last sentence. Bitcoin is “it”?
"It" means being the bombdigity as a digital currency. The typical objections are:

Not enough of it for price stability (which is actually a huge factor for an economically useful currency/unit of measure)

Not acceptable as legal tender by governments (also a pretty key characteristic for an economically useful currency)

To me those two are the most compelling...recently there has been more mention of the expense of its production (e.g. electricity burned to mine more of it.)

The list above is in order of what I find more persuasive as arguments against.

To be very clear, what I'm talking about is something that is very widely used for a majority of all financial transactions. You won't see me arguing against BITC as a niche thing or a speculative instrument. People will trade whatever is legal (or illegal) if they chose to trade it.
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Re: Fedcoin (Proposed Digital Dollar)

Post by Mark Leavy » Thu Mar 25, 2021 9:14 am

Nassim Taleb had a small twitter rant this morning, basically saying "stop calling bitcoin a currency until you see physical goods with prices that are denominated in bitcoin." Tesla accepting bitcoin doesn't count because the price is still in dollars.

But Taleb on a rant isn't unusual :)
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Re: Fedcoin (Proposed Digital Dollar)

Post by Kbg » Thu Mar 25, 2021 2:20 pm

Going back to my tap an iphone on a plastic thing and get food anecdote, we already have digital currencies and they're ubiquitous. So technically we are probably down to "best security" (as in secure) and culturally/commercially who sets the rules. The guys who own the courts and pay for the armies and navies are going to determine the last one. I think we have a couple of hard core libertarians on the board, I'm a hard core realist in the domestic and international political science sense.

And unlike libertarianism, realism works and explains things. >:D
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Re: Fedcoin (Proposed Digital Dollar)

Post by dualstow » Thu Mar 25, 2021 2:53 pm

Mark Leavy wrote:
Thu Mar 25, 2021 9:14 am
Nassim Taleb had a small twitter rant this morning, basically saying "stop calling bitcoin a currency until you see physical goods with prices that are denominated in bitcoin." Tesla accepting bitcoin doesn't count because the price is still in dollars.

But Taleb on a rant isn't unusual :)
It's his normal state.
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Re: Fedcoin (Proposed Digital Dollar)

Post by Mark Leavy » Thu Mar 25, 2021 3:00 pm

dualstow wrote:
Thu Mar 25, 2021 2:53 pm
Mark Leavy wrote:
Thu Mar 25, 2021 9:14 am
Nassim Taleb had a small twitter rant this morning, basically saying "stop calling bitcoin a currency until you see physical goods with prices that are denominated in bitcoin." Tesla accepting bitcoin doesn't count because the price is still in dollars.

But Taleb on a rant isn't unusual :)
It's his normal state.
He did point out something, though. Elon Musk isn't so dumb. You can buy your TESLA with bitcoin, but if you decide to return it within the free return period, TESLA reserves the right to repay you in either bitcoin or dollars. Their choice. That gives them a free option. Obviously if Bitcoin falls relative to the dollar you will be repaid in bitcoin - and vice versa.
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Re: Fedcoin (Proposed Digital Dollar)

Post by dualstow » Thu Mar 25, 2021 3:03 pm

Crafty!
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Re: Fedcoin (Proposed Digital Dollar)

Post by pugchief » Thu Mar 25, 2021 3:12 pm

Mark Leavy wrote:
Thu Mar 25, 2021 3:00 pm
dualstow wrote:
Thu Mar 25, 2021 2:53 pm
Mark Leavy wrote:
Thu Mar 25, 2021 9:14 am
Nassim Taleb had a small twitter rant this morning, basically saying "stop calling bitcoin a currency until you see physical goods with prices that are denominated in bitcoin." Tesla accepting bitcoin doesn't count because the price is still in dollars.

But Taleb on a rant isn't unusual :)
It's his normal state.
He did point out something, though. Elon Musk isn't so dumb. You can buy your TESLA with bitcoin, but if you decide to return it within the free return period, TESLA reserves the right to repay you in either bitcoin or dollars. Their choice. That gives them a free option. Obviously if Bitcoin falls relative to the dollar you will be repaid in bitcoin - and vice versa.
I wonder how many people return their cars. I was so enthralled with my Model 3, I can't imagine anyone doing that.
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