RT @alanizBTC: The fed understands blockchain technology better than Roger Ver, Jihan Wu, the cRipple gang, the mETH addicts and just about every other weasel in crypto. Fascinating. https://t.co/OcfKdWpzdQ
Saying "The Fed" is misleading because that would assume this article is talking about a federal organisation - It's not, it's talking about The Federal Reserve. Which, despite the name - is not part of the federal government. Federal reserve banks operate like private companies.
They are the ones who print money, and have never undergone a real, independent audit (one of the things Crypto does really well is audit transparency). No shit they want no part in a national crypto.
There’s a private part and a government part. They also don’t print money, they regulate supply and demand big difference. It’s important for people to know correct information behind it so criticisms are based in reality. The independent banks do operate similar to companies though.
As for a national crypto, I would like to see something like an electronic usd, but for me it would never hold the utility of monero, I just think it could add some stability in the crypto world.
More to the point, they noted, a central bank cryptocurrency isn’t really a crypto-currency at all. If it’s not run on a “permissionless” network—with nodes free to join or leave as they wish—then effectively, it’s just centrally-managed electronic money, with an inconvenient blockchain component. “Once we remove the decentralized nature of a cryptocurrency, not much is left of it.”
good to know there's people with brains somewhere in the high ups. Its your turn, ripple.
Berensten and Schar observed that such centralized electronic money doesn’t even require a blockchain. In fact, “the technology for issuing virtual money in a centralized way existed long before the invention of the blockchain.” They concluded, “cryptocurrency is still a very young technology and there are large operational risks. Overall, we believe that the call for a ‘Fedcoin’ or any other central bank cryptocurrency is somewhat naïve.”
While I agree with your overall sentiment, I have one nit to pick:
A cryptocurrency literally is just a cryptographically enforced ledger. It doesn't have to include block chain, or any other P2P network. Theoretically, a cryptocurrency could live on a centrally controlled Fed database and still be a cryptographically enforced ledger.
Why do I bring this up? I don't like the idea of a "fed coin" any more than the next guy, but in theory, if the Fed made a cryptocurrency run on a central Fed database, the very nature of it's cryptographic construction would make it somewhat compatible with other cryptocurrencies. The idea being that the Fed could create a digital USD coin that can easily be transferred and exchanged for other cryptos. Of course the Fed would still probably enable censorship, arbitrary supply inflation, and all those other things we hate about fiat currencies, but it would at least be technologically compatible.
So the clarification really is that the Fed probably doesn't want a P2P public currency they can't control, but they may still be interested in a digital currency that they can centrally control while getting some of the benefits of digital currencies.